---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-Q

(Mark One)
  [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended June 30, 2010

or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
For the transition period from ______________ to
_______________

Commission File Number 000-53692

HELI ELECTRONICS
CORP.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | N/A                              
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

No. 50 Fengxiang South Road, Jinaggao Town, Baiyun
District, Guangzhou, P.R. China(Address of principal executive
offices) (Zip Code)

(86) 020-36356228(Registrants telephone
number, including area code)

N/A(Former name, former address and former
fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act

Large accelerated filer [ ]
    
    Accelerated filer [ ]Non-accelerated filer [ ]
    (Do not check if a smaller reporting company)
    Smaller reporting company [ X ]


Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act[ ] YES [ X ] NO

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).[ ] YES [ ] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.[ ] YES [ ]
NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date. 266,000,000
common shares issued and outstanding as of August 10, 2010

---

Table of Contents

|Part I  FINANCIAL INFORMATION | 3                                                                                          
|------------------------------ | -------------------------------------------------------------------------------------------
|Item 1.                        | Financial Statements                                                                       
|Item 2.                        | Managements Discussion and Analysis of Financial Condition
      and Results of Operations
|Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk                                 
|Item 4.                        | Controls and Procedures                                                                    
|PART II  OTHER INFORMATION    | 14                                                                                         
|Item 1.                        | Legal Proceedings                                                                          
|Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds                                
|Item 3.                        | Defaults Upon Senior Securities                                                            
|Item 4.                        | [Removed and Reserved]                                                                     
|Item 5.                        | Other Information                                                                          
|Item 6.                        | Exhibits                                                                                   

2

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PART I  FINANCIAL INFORMATION

|Item 1. | Financial Statements
|------- | --------------------

3

---

|Heli Electronics Corp.     
|---------------------------
|Consolidated Balance Sheets

|                                                                                                                                                                                                                                                                                                |   | June 30,    |  |   | December 31, |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- |  | - | ------------ | -
|                                                                                                                                                                                                                                                                                                |   | 2010        |  |   | 2009         |  
|                                                                                                                                                                                                                                                                                                |   | (Unaudited) |  |   |              |  
|                                                                                                                                                                                                                                                                                                |   |             |  |   |              |  
|Assets                                                                                                                                                                                                                                                                                          |   |             |  |   |              |  
|Current Assets                                                                                                                                                                                                                                                                                  |   |             |  |   |              |  
|Cash and cash equivalents                                                                                                                                                                                                                                                                       | $ | 682,054     |  | $ | 270,775      |  
|Accounts
      receivable, net                                                                                                                                                                                                                                                                  |   | 11,916,057  |  |   | 3,335,423    |  
|VAT receivable                                                                                                                                                                                                                                                                                  |   | 277,477     |  |   | -            |  
|Inventories, net                                                                                                                                                                                                                                                                                |   | 3,649,152   |  |   | 1,084,061    |  
|Advance to suppliers                                                                                                                                                                                                                                                                            |   | 734,926     |  |   | 183,661      |  
|Total current assets                                                                                                                                                                                                                                                                            |   | 17,259,666  |  |   | 4,873,920    |  
|Property and equipment,
      net                                                                                                                                                                                                                                                               |   | 20,677      |  |   | 15,338       |  
|Total Assets                                                                                                                                                                                                                                                                                    | $ | 17,280,343  |  | $ | 4,889,258    |  
|                                                                                                                                                                                                                                                                                                |   |             |  |   |              |  
|Liabilities and Shareholders' Equity                                                                                                                                                                                                                                                            |   |             |  |   |              |  
|Current Liabilities                                                                                                                                                                                                                                                                             |   |             |  |   |              |  
|Accounts
      payable                                                                                                                                                                                                                                                                          | $ | 8,372,331   |  | $ | 1,782,663    |  
|Accrued liabilities                                                                                                                                                                                                                                                                             |   | 133,682     |  |   | 62,868       |  
|Income tax
      payable                                                                                                                                                                                                                                                                        |   | -           |  |   | 742,959      |  
|Total current
      liabilities                                                                                                                                                                                                                                                                 |   | 8,506,013   |  |   | 2,588,490    |  
|Due to
      related parties                                                                                                                                                                                                                                                                    |   | 2,963,559   |  |   | -            |  
|Total Liabilities                                                                                                                                                                                                                                                                               |   | 11,469,572  |  |   | 2,588,490    |  
|                                                                                                                                                                                                                                                                                                |   |             |  |   |              |  
|Shareholders' Equity                                                                                                                                                                                                                                                                            |   |             |  |   |              |  
|Preferred Stock, $0.00001 par
      value, 100,000,000 shares
                  
      authorized, 0 shares outstanding at June 30, 2010
                  
      and December 31, 2009, respectively                                                                                           |   | -           |  |   | -            |  
|Common Stock
      $0.0001 par value, 12,000,000,000 shares
                  
      authorized, 266,000,000 shares issued and outstanding at June 30,
      2010 
                   and
      144,280,000 shares issued and outstanding at December 31,
      2009,              respectively |   | 2,660       |  |   | 1,443        |  
|Additional paid-in capital                                                                                                                                                                                                                                                                      |   | 47,340      |  |   | 70,632       |  
|Accumulated other
      comprehensive income (loss)                                                                                                                                                                                                                                             |   | 18,662      |  |   | (4,129       | )
|Statutory reserve fund                                                                                                                                                                                                                                                                          |   | 223,421     |  |   | 223,421      |  
|Retained earnings                                                                                                                                                                                                                                                                               |   | 5,518,688   |  |   | 2,009,401    |  
|Total shareholders' equity                                                                                                                                                                                                                                                                      |   | 5,810,771   |  |   | 2,300,768    |  
|Total Liabilities and Shareholders'
      Equity                                                                                                                                                                                                                                                | $ | 17,280,343  |  | $ | 4,889,258    |  

The accompanying notes are an integral part of these
consolidated financial statements

4

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|Heli Electronics Corp.                                              
|--------------------------------------------------------------------
|Consolidated Statements of Operations and
      Comprehensive Income

|                                                             |   | Three Months ended |   |   | Six Months ended |  
|------------------------------------------------------------ | - | ------------------ | - | - | ---------------- | -
|                                                             |   | June 30,           |   |   | June 30,         |  
|                                                             |   | 2010               |   |   | 2009             |  
|                                                             |   | (Unaudited)        |   |   | (Unaudited)      |  
|                                                             |   |                    |   |   |                  |  
|                                                             |   |                    |   |   |                  |  
|Revenue                                                      | $ | 24,852,753         |   | $ | 7,617,186        |  
|Cost of Goods Sold                                           |   | (21,756,454        | ) |   | (6,618,793       | )
|Gross Profit                                                 |   | 3,096,299          |   |   | 998,393          |  
|                                                             |   |                    |   |   |                  |  
|General and administrative                                   |   |                    |   |   |                  |  
|Selling Expenses                                             |   | 219,175            |   |   | 82,405           |  
|General
      and administrative                             |   | 227,614            |   |   | 103,319          |  
|Depreciation                                                 |   | 1,126              |   |   | 631              |  
|Total operating expenses                                     |   | 447,915            |   |   | 186,355          |  
|                                                             |   |                    |   |   |                  |  
|Income before income taxes                                   |   | 2,648,384          |   |   | 812,038          |  
|Income taxes                                                 |   | (664,872           | ) |   | (203,010         | )
|                                                             |   |                    |   |   |                  |  
|Net income                                                   | $ | 1,983,512          |   | $ | 609,028          |  
|                                                             |   |                    |   |   |                  |  
|Other Comprehensive Income                                   |   |                    |   |   |                  |  
|Foreign
      currency translation adjustment                |   | 11,222             |   |   | (3,617           | )
|Comprehensive Income                                         | $ | 1,994,734          |   | $ | 605,411          |  
|                                                             |   |                    |   |   |                  |  
|Earnings per share - basic and diluted                       | $ | 0.01               |   | $ | 0.00             |  
|                                                             |   |                    |   |   |                  |  
|Weighed-average shares outstanding - basic and
      diluted |   | 187,082,637        |   |   | 144,280,000      |  

The accompanying notes are an integral part of these
consolidated financial statements

5

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|Heli Electronics Corp.                                          
|----------------------------------------------------------------
|Consolidated Statements of Changes in Shareholders'
      Equity
|For the six months ended June 30, 2010                          

|                                                                      |  |              |  |   |            |  |   |               |   |   |             |  |   | **Accumulated**   |   |   |                |  |   |                   |  
|--------------------------------------------------------------------- |  | ------------ |  | - | ---------- |  | - | ------------- | - | - | ----------- |  | - | ----------------- | - | - | -------------- |  | - | ----------------- | -
|                                                                      |  | Common Stock |  |   | Additional |  |   | **Statutory** |   |   | **Other**   |  |   | **Retained**      |   |   | **Total**      | 
|                                                                      |  |              |  |   |            |  |   | Paid-in       |   |   | **Reserve** |  |   | **Comprehensive** |   |   | **Earnings**   |  |   | **Shareholders'** |  
|                                                                      |  | Shares       |  |   | Amount     |  |   | **Capital**   |   |   | Fund        |  |   | Income            |   |   | (Unrestricted) |  |   | Equity            |  
|                                                                      |  |              |  |   |            |  |   |               |   |   |             |  |   |                   |   |   |                |  |   |                   |  
|                                                                      |  |              |  |   |            |  |   |               |   |   |             |  |   |                   |   |   |                |  |   |                   |  
|                                                                      |  |              |  |   |            |  |   |               |   |   |             |  |   |                   |   |   |                |  |   |                   |  
|Balances, December 31,
      2009                                     |  | 144,280,000  |  |   | 1,443      |  |   | 70,632        |   |   | 223,421     |  |   | (4,129            | ) |   | 2,009,401      |  |   | 2,300,768         |  
|Retain of 121,720,000 shares by original Dong
      Fang shareholders |  | 121,720,000  |  |   | 1,217      |  |   | (23,292       | ) |   | -           |  |   | -                 |   |   | -              |  |   | (22,075           | )
|Foreign currency translation
      adjustment                         |  |              |  |   |            |  |   | -             |   |   | -           |  |   | 22,791            |   |   | -              |  |   | 22,791            |  
|Net income for the three months ended June
      30, 2010 (unaudited) |  |              |  |   |            |  |   | -             |   |   | -           |  |   | -                 |   |   | 3,509,287      |  |   | 3,509,287         |  
|Balance at June 30, 2010
      (Unaudited)                            |  | 266,000,000  |  | $ | 2,660      |  | $ | 47,340        |   | $ | 223,421     |  | $ | 18,662            |   | $ | 5,518,688      |  | $ | 5,810,771         |  

The accompanying notes are an integral part of these
consolidated financial statements

6

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|Heli Electronics Corp.               
|-------------------------------------
|Consolidated Statements of Cash Flows

|                                                                                                                  |   | Three Months ended |  
|----------------------------------------------------------------------------------------------------------------- | - | ------------------ | -
|                                                                                                                  |   | June 30,           |  
|                                                                                                                  |   | 2010               |  
|                                                                                                                  |   | (Unaudited)        |  
|                                                                                                                  |   |                    |  
|Cash Flows From Operating Activities                                                                              |   |                    |  
|Net Income                                                                                                        | $ | 3,509,287          |  
|Adjustments
      to reconcile net income to net cash provided by (used in) operating
                activities: |   |                    |  
|Depreciation                                                                                                      |   | 2,036              |  
|Changes in
      operating assets and liabilities:                                                                |   |                    |  
|Accounts receivable, net                                                                                          |   | (8,566,723         | )
|VAT Receivable                                                                                                    |   | (277,477           | )
|Advance to suppliers                                                                                              |   | (550,499           | )
|Inventories, net                                                                                                  |   | (2,560,570         | )
|Accounts payable and accrued liabilities                                                                          |   | 6,652,785          |  
|Customer deposit                                                                                                  |   | -                  |  
|Corporate tax payable                                                                                             |   | (746,058           | )
|Net cash provided by (used in) operating
      activities                                                         |   | (2,537,219         | )
|                                                                                                                  |   |                    |  
|Cash Flows From Investing Activities                                                                              |   |                    |  
|Purchase of equipment                                                                                             |   | (7,284             | )
|Net cash used in investing activities                                                                             |   | (7,284             | )
|                                                                                                                  |   |                    |  
|Cash Flows From Financing Activities                                                                              |   |                    |  
|Net proceeds of share issuance                                                                                    |   | (22,075            | )
|Due to related
      parties                                                                                      |   | 2,963,559          |  
|Net cash provided by financing activities                                                                         |   | 2,941,484          |  
|                                                                                                                  |   |                    |  
|Effect of exchange rate changes on cash                                                                           |   | 14,298             |  
|Net increase in cash and cash
      equivalents                                                                   |   | 411,279            |  
|Cash and cash equivalents, beginning of period                                                                    |   | 270,775            |  
|                                                                                                                  |   |                    |  
|Cash and cash equivalents, end of period                                                                          | $ | 682,054            |  
|                                                                                                                  |   |                    |  
|                                                                                                                  |   |                    |  
|Supplemental disclosure information:                                                                              |   |                    |  
|Income taxes paid                                                                                                 | $ | 1,486,670          |  
|Interest paid                                                                                                     | $ | -                  |  

The accompanying notes are an integral part of these
consolidated financial statements

7

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|Heli Electronics Corp.                       
|---------------------------------------------
|Notes to Financial Statements and disclosures
|For six months ended June 30, 2010           

NOTE 1. ORGANIZATION AND BUSINESS OPERATION

On June 14, 2010, the Heli and Heli BVI entered into a Share
Exchange Agreement whereby, Heli agreed to acquire all of the share capital in
Heli BVI in exchange for 144,280,000 shares of Helis common stock. The
transaction was accounted for as a reverse merger and recapitalization whereby
the Heli BVI was considered the accounting acquirer.

Prior to the consummation of the share exchange and the
issuances and cancellations contemplated therein, Heli Electronics had
720,720,000 shares common stock issued and outstanding following a 120 for 1
forward split. Upon the closing of the transactions contemplated by the Share
Exchange Agreement Heli Electronics issued 144,280,000 shares of common stock to
the Heli Shareholders and cancelled an aggregate of 599,000,000 shares of common
stock held by its former director and officers. Upon completion, Heli
Electronics had 266,000,000 shares of common stock issued and outstanding. Of
the 266,000,000 shares issued and outstanding as of the closing of the share
exchange, 121,720,000 were held by the former shareholders of Heli Electronics,
144,280,000 shares were held by the equity owners of Heli Guangzhou. Upon
closing, liabilities of Heli Electronics assumed by the Company were less than
$10,000.

The Company became a wholly owned subsidiary of Heli
Electronics upon the closing of the share exchange on June 15, 2010.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

**a.** Basis of presentation

The accounting policies and methods followed in preparing these  unaudited condensed consolidated financial statements are those used by Company  as described in Note 2 of the notes to consolidated financial statements  included in the Annual Report on Form 8K. The unaudited condensed consolidated  financial statements for the three- and six-month periods ended June 30, 2010  and 2009 have been prepared in accordance with accounting principles generally  accepted in the United States of America and the rules of the Securities and  Exchange Commission and do not conform in all respects to the disclosure and  information that is required for annual consolidated financial statements. The  year-end condensed consolidated balance sheet data was derived from audited  financial statements, but does not include all disclosures required by  accounting principles generally accepted in the United States of America.  These interim condensed consolidated financial statements should be read in  conjunction with the most recent annual consolidated financial statements of  the Company.

In the opinion of management, all adjustments, all of which are of a  normal recurring nature, considered necessary for fair statement have been  included in these interim condensed consolidated financial statements.  Operating results for the three- and six-month periods ended June 30, 2010 are  not indicative of the results that may be expected for the full year ending  December 31, 2010.

**b.** Basis of  consolidation

The  consolidated financial statements include the accounts of the Company and its  subsidiaries Heli Guangzhou and Xinde. All significant inter-company  transactions and balance have been eliminated upon consolidation.

8

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|Heli Electronics Corp.                       
|---------------------------------------------
|Notes to Financial Statements and disclosures
|For six months ended June 30, 2010           

**c.** Use of estimates

The  preparation of financial statements in conformity with generally accepted  accounting principles requires management to make estimates and assumptions  that affect the reported amounts of assets and liabilities, disclosure of  contingent assets and liabilities at the date of the financial statements, and  the reported amounts of revenues and expenses during the reporting year.  Because of the use of estimates inherent in the financial reporting process,  actual results could differ from those estimates.

d. Foreign currency translation

The exchange rates used for foreign currency translation were
as follows (USD$1 = HKD):

|Period
      Covered           | Balance Sheet Date Rates | Average Rates
|------------------------------ | ------------------------ | -------------
|                               |                          |              
|Year ended December 31, 2009   | 7.8000                   | 7.8000       
|Six months ended June 30, 2009 | 7.8000                   | 7.8000       
|Six months ended June 30, 2010 | 7.8000                   | 7.8000       

The exchange rates used for foreign currency translation were
as follows (USD$1 = RMB):

|Period
      Covered           | Balance Sheet Date Rates | Average Rates
|------------------------------ | ------------------------ | -------------
|                               |                          |              
|Year ended December 31, 2009   | 6.8540                   | 6.9372       
|Six months ended June 30, 2009 | 6.8446                   | 6.8227       
|Six months ended June 30, 2010 | 6.8087                   | 6.8171       

e. Recently issued accounting pronouncements

We do not expect the adoption of recently issued accounting
pronouncements to have a significant impact on our results of operations,
financial position or cash flow.

NOTE 3. INVENTORY

Inventory includes finished goods purchased from third party
suppliers. Inventory consists of the following:

June 30,
    
    
    December312010
    
    
    2009DVD
    $
    57,955
    
    $
    47,654Stereo
    
    3,591,197
    
    
    1,036,407Inventory, net
    $
    3,649,152
    
    $
    1,084,061


NOTE 4. INCOME TAX

Heli Information Tech. (Guangzhou) Co., Ltd. was established in
Guangzhou, PRC and was entitled to a preferential Enterprise Income Tax (EIT)
rate. Heli Information Tech. (Guangzhou) Go., Ltd. is governed by the Income Tax
Law of the PRC concerning the private-run enterprises, which are generally
subject to tax at a statutory rate of 25% on income reported in the statutory
financial statements after appropriate tax adjustments in 2010 and 2009. As of
June 30, 2010 and December 31, 2009, the Company had tax payable of $0 and
$742,959, respectively.

9

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|Heli Electronics Corp.                       
|---------------------------------------------
|Notes to Financial Statements and disclosures
|For six months ended June 30, 2010           

The provision for taxes on earnings consisted of:

Six months ended June 30,2010
    
    
    2009Current income taxes expenses:PRC Enterprises Income Taxes:
    $
    1,175,118
    
    $
    355,037United States Federal Income Taxes
    
    -
    
    
    -Total
    $
    1,175,118
    
    $
    355,037


A reconciliation between the income tax computed at the U.S.
statutory rate and the Companys provision for income tax is as follows:

Six Months ended June 30,2010
    
    
    2009U.S. statutory rate
    
    34%
    
    
    34%Foreign income not recognized in the U.S.
    
    -34%
    
    
    -34%PRC preferential enterprise income tax rate
    
    25%
    
    
    25%Permanent differences related to other expenses
    
    0%
    
    
    0%Provision for income tax
    
    25%
    
    
    25%


Accounting for Uncertainty in Income Taxes

The Company accounts for uncertainty in income taxes in
accordance with applicable accounting standards, which prescribe a recognition
threshold and measurement process for financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return.
These accounting standards also provide guidance on de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition.

Based on the Companys evaluation, the Company has concluded
that there are no significant uncertain tax positions requiring recognition in
its financial statements.

The Company may from time to time be assessed interest or
penalties by major tax jurisdictions. In the event it receives an assessment for
interest and/or penalties, it will be classified in the financial statements as
tax expense.

NOTE 5. RELATED PARTY BALANCE AND TRANSCATION

On 9th May of 2010, Mr. Qiu, Xin, President, Chief Executive
Officer and Director of the Company loaned approximately $2.9 million to the
Company. This loan is non-interest bearing and has no maturity date.

10

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|Item 2. | Managements Discussion and Analysis of
      Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------------

Forward Looking Statements

This quarterly report on Form 10-Q contains forward-looking
statements that involve risks and uncertainties. These statements relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology including "could", "may",
"will", "should", "expect", "plan", "anticipate", "believe", "estimate",
"predict", "potential" and the negative of these terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially.

While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested in this report.

Results of Operations  Three months Ended June 30, 2010 and
2009

The following summary of our results of operations should be
read in conjunction with our financial statements for the three month period
ended June 30, 2010 which are included herein.

Our operating results for the three months ended June 30, 2010,
for the three months ended June 30, 2009 and the changes between those periods
for the respective items are summarized as follows:

Three months Ended June 30,
      2010 $
    Three months Ended June 30,
      2009 $
    Change
      Between Three Month Period Ended June 30,
      2010 and June 30, 2009 $Revenue
    24,852,753
    7,617,186
    17,235,567Cost of Goods Sold
    21,756,454
    6,618,793
    15,137,661Selling expenses
    219,175
    82,405
    136,770General and administrative
    227,614
    103,319
    124,295Depreciation
    1,126
    631
    495Net income for the period
    1,983,512
    609,028
    1,374,484


Revenues

We had revenues of $24,852,753 during the three months ended
June 30, 2010 as compared to revenues of $7,617,186 during the three months
ended June 30, 2009. The increase is a result of higher market demand for
existing customers and the development of ten new customers during the
period.

Cost of Sales

Our cost of sales for the three months ended June 30, 2010 were
$21,756,454 compared to $6,618,793 for the three months ended June 30, 2009. The
increase in our cost of sales is mainly due to the increase in sales and our
gross margin was relatively consistent with the prior year.

11

---

Selling Expenses

We had selling expenses of $219,175 during the three months
ended June 30, 2010 as compared to selling expenses of $82,405 during the three
months ended June 30, 2009. The increase is mainly due to an expansion of sales
personnel, an increase in transportation expenses and quarterly bonuses.

General and Administrative

We had general and administrative expenses of $227,614 during
the three months ended June 30, 2010 compared to general and administrative
expenses of $103,319 during the three months ended June 30, 2009. The increase
is mainly due to the expansion of our business to keep up with the increased
demand of our products. In addition, we incurred additional administrative expenses,
such as embankment protection cost levied by the local government and stamp tax, which are due  to the increase in
sales.

Results of Operations  Six months Ended June 30, 2010 and
2009

The following summary of our results of operations should be
read in conjunction with our financial statements for the Six month period ended
June 30, 2010 which are included herein.

Our operating results for the Six months ended June 30, 2010,
for the Six months ended June 30, 2009 and the changes between those periods for
the respective items are summarized as follows:

Six
      months Ended June 30, 2010 $
    Six
      months Ended June 30, 2009 $
    Change
      Between Six Month Period Ended June 30, 2010 and
      June 30, 2009 $Revenue
    43,693,579
    14,023,300
    29,670,279Cost of Goods Sold
    38,229,970
    12,246,822
    25,983,148Selling expenses
    403,751
    152,920
    250,831General and administrative
    373,417
    211,435
    161,982Depreciation
    2,036
    988
    1,048Net income for the period
    3,509,287
    1,056,098
    2,453,189


Revenues

We had revenues of $43,693,579 during the six months ended June
30, 2010 as compared to revenues of $14,023,300 during the three months ended
June 30, 2009. The increase is a result of higher market demand for existing
customers and the development of 17 new customers during the period.

Cost of Sales

Our cost of sales for the six months ended June 30, 2010 were
$38,229,970, compared to our cost of sales for the six months ended June 30,
2009, which were $12,246,822. The increase in our cost of sales is mainly due to
the increase in sales and our gross margin was relatively consistent with the
prior year.

Selling Expenses

We had selling expenses of $403,751 during the six months ended
June 30, 2010 as compared to selling expenses of $152,920 during the six months
ended June 30, 2009. The increase is a result of: 1) more sales persons were
hired thus more wages and benefit costs. 2) more sales results in more cost for
carrier and delivery. 3) higher commission expenses were paid to sales persons
due to rapid growth of sales revenue.

12

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General and Administrative

We had general and administrative expenses of $373,417 during
the six months ended June 30, 2010 compared to general and administrative
expenses of $211,435 during the six months ended June 30, 2009. The increase is
mainly due to the expansion of our business to keep up with the increased demand
of our products. In addition, we incurred additional administrative expenses,
such as embankment protection cost levied by the local government and stamp tax, which are due  to the increase in
sales.

Liquidity and Financial Condition

Working Capital

|                    |   | At            |  |   | At           | 
|------------------- | - | ------------- |  | - | ------------ | 
|                    |   | June 30, 2010 |  |   | December 31, | 
|                    |   |               |  |   | 2009         | 
|Current assets      | $ | 17,259,666    |  | $ | 4,873,920    | 
|Current liabilities |   | 8,506,013     |  |   | 2,588,490    | 
|Working capital     | $ | 8,753,653     |  | $ | 2,285,430    | 

Cash Flows

|                                                            |   | Six months Ended |  
|----------------------------------------------------------- | - | ---------------- | -
|                                                            |   | June 30          |  
|                                                            |   | 2010             |  
|Cash flows provided by (used in) operating
      activities | $ | (2,537,219       | )
|Cash flows provided by (used in) investing activities       |   | (7,284           | )
|Cash flows provided by (used in) financing
      activities |   | 2,941,484        |  
|Effect of exchange rate changes on cash                     |   | 14,298           |  
|Increase (decrease) in cash and cash equivalents            | $ | 411,279          |  

Operating Activities

Net cash used by operating activities was $2,537,219 for the
six months ended June 30, 2010 compared with cash provided by operating
activities of $1,973,224 in the same period in 2009. The difference was largely
due to increased purchases of inventory during 2010, and our accounts receivable
balance increased significantly in 2010.

Investing Activities

Net cash used in investing activities was $7,284 for the six
months ended June 30, 2010 compared to net cash used in investing activities of
$11,491 in the same period in 2009.

Financing Activities

Net cash provided by financing activities for the six months
ended June 30, 2010 was $2,941,484 compared to $Nil for the six months ended
June 30, 2009. The increase was mainly attributable to a $2,941,484 loan from
shareholder in 2010.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.

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Critical Accounting Policies

Revenue Recognition

Our company generates revenues from the sales of audio and
video electronic products. Sales are recognized when the following four revenue
criteria are met: persuasive evidence of an arrangement exists, delivery has
occurred, the selling price is fixed or determinable, and collectability is
reasonably assured. Sales are presented net of value added tax (VAT). No return
allowance is made as product returns are insignificant based on historical
experience.

|Item 3. | Quantitative and Qualitative Disclosures
      About Market Risk
|------- | ----------------------------------------------------------------

Not applicable.

|Item 4. | Controls and Procedures
|------- | -----------------------

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (also
our principal executive officer, principal financial officer and principal
accounting officer) to allow for timely decisions regarding required disclosure.

As of June 30, 2010, the end of our second quarter covered by
this report, we carried out an evaluation, under the supervision and with the
participation of our president (also our principal executive officer, principal
financial officer and principal accounting officer), of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on the
foregoing, our president (also our principal executive officer, principal
financial officer and principal accounting officer) concluded that our
disclosure controls and procedures were effective in providing reasonable
assurance in the reliability of our financial reports as of the end of the
period covered by this quarterly report.

Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended June 30, 2010 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II  OTHER INFORMATION

|Item 1. | Legal Proceedings
|------- | -----------------

We are not aware of any legal proceedings to which we are a
party or of which our property is the subject. None of our directors, officers,
affiliates, any owner of record or beneficially of more than 5% of our voting
securities, or any associate of any such director, officer, affiliate or
security holder are (i) a party adverse to us in any legal proceedings, or (ii)
have a material interest adverse to us in any legal proceedings. We are not
aware of any other legal proceedings that have been threatened against us.

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

None.

|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.

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|Item 4. | [Removed and Reserved]
|------- | ----------------------
|        |                       
|Item 5. | Other Information     

None.

|Item 6. | Exhibits
|------- | --------

|Exhibit | Exhibit                                                                                                                                                                       
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                   
|        |                                                                                                                                                                               
|31.1    | Certification
      pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
      1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |                                                                                                                                                                               
|32.1    | Certification
      pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002                                                    

15

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SIGNATURES

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

|                      | HELI ELECTRONICS CORP.                                         
|--------------------- | ---------------------------------------------------------------
|                      | (Registrant)                                                   
|                      |                                                                
|                      | /s/
      Xin Qiu                                              
|Date: August 13, 2010 | Xin Qiu                                                        
|                      | President, Chief Executive Officer and Director                
|                      | (Principal Executive Officer, Principal
      Financial Officer
|                      | and Principal Accounting Officer)                              

16

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