---

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 September 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) 020-36356928(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. 272,000,000
common shares issued and outstanding as of November 5, 2010

---

Table of Contents

|Part
      I  FINANCIAL INFORMATION | 1                                                                                          
|------------------------------------ | -------------------------------------------------------------------------------------------
|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    | 6                                                                                          
|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
|------- | --------------------

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

|                                                                                                                                                                                                                                                                   |   | September 30, |  |   | December 31, |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ------------- |  | - | ------------ | -
|                                                                                                                                                                                                                                                                   |   | 2010          |  |   | 2009         |  
|                                                                                                                                                                                                                                                                   |   | (Unaudited)   |  |   |              |  
|                                                                                                                                                                                                                                                                   |   |               |  |   |              |  
|Assets                                                                                                                                                                                                                                                             |   |               |  |   |              |  
|Current Assets                                                                                                                                                                                                                                                     |   |               |  |   |              |  
|Cash and
      cash equivalents                                                                                                                                                                                                                                    | $ | 1,121,625     |  | $ | 270,775      |  
|Accounts receivable, net                                                                                                                                                                                                                                           |   | 16,724,185    |  |   | 3,335,423    |  
|VAT
      receivable                                                                                                                                                                                                                                               |   | 64,360        |  |   | -            |  
|Inventories, net                                                                                                                                                                                                                                                   |   | 3,083,314     |  |   | 1,084,061    |  
|Advance
      to suppliers                                                                                                                                                                                                                                         |   | 1,116,455     |  |   | 183,661      |  
|Total current assets                                                                                                                                                                                                                                               |   | 22,109,939    |  |   | 4,873,920    |  
|Property and equipment,
      net                                                                                                                                                                                                                                  |   | 25,087        |  |   | 15,338       |  
|Total Assets                                                                                                                                                                                                                                                       | $ | 22,135,026    |  | $ | 4,889,258    |  
|                                                                                                                                                                                                                                                                   |   |               |  |   |              |  
|Liabilities and Shareholders' Equity                                                                                                                                                                                                                               |   |               |  |   |              |  
|Current Liabilities                                                                                                                                                                                                                                                |   |               |  |   |              |  
|Accounts payable                                                                                                                                                                                                                                                   | $ | 9,495,574     |  | $ | 1,782,663    |  
|Accrued
      liabilities                                                                                                                                                                                                                                          |   | 268,840       |  |   | 62,868       |  
|Income tax payable                                                                                                                                                                                                                                                 |   | 859,122       |  |   | 742,959      |  
|Total current
      liabilities                                                                                                                                                                                                                                    |   | 10,623,536    |  |   | 2,588,490    |  
|Due to related parties                                                                                                                                                                                                                                             |   | 2,905,631     |  |   | -            |  
|Total Liabilities                                                                                                                                                                                                                                                  |   | 13,529,167    |  |   | 2,588,490    |  
|                                                                                                                                                                                                                                                                   |   |               |  |   |              |  
|Shareholders' Equity                                                                                                                                                                                                                                               |   |               |  |   |              |  
|Preferred Stock, $0.00001 par
      value, 100,000,000 shares
               authorized, 0 shares
      outstanding at September 30, 2010
               and December 31,
      2009, respectively                                                                 |   | -             |  |   | -            |  
|Common Stock $0.0001 par
      value, 12,000,000,000 shares
               authorized,
      272,000,000 shares issued and outstanding at September 30, 2010
               and 144,280,000
      shares iussed and outstanding at December 31, 2009, respectively |   | 2,720         |  |   | 1,443        |  
|Additional paid-in capital                                                                                                                                                                                                                                         |   | 347,305       |  |   | 70,632       |  
|Accumulated other
      comprehensive income (loss)                                                                                                                                                                                                                |   | 216,253       |  |   | (4,129       | )
|Statutory reserve fund                                                                                                                                                                                                                                             |   | 223,421       |  |   | 223,421      |  
|Retained earnings                                                                                                                                                                                                                                                  |   | 7,816,160     |  |   | 2,009,401    |  
|Total shareholders' equity                                                                                                                                                                                                                                         |   | 8,605,859     |  |   | 2,300,768    |  
|Total Liabilities and Shareholders'
      Equity                                                                                                                                                                                                                   | $ | 22,135,026    |  | $ | 4,889,258    |  

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

F-1

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

|                                                             |   | Three Months ended |   |   | Nine Months ended |  
|------------------------------------------------------------ | - | ------------------ | - | - | ----------------- | -
|                                                             |   | September 30,      |   |   | September 30,     |  
|                                                             |   | 2010               |   |   | 2009              |  
|                                                             |   | (Unaudited)        |   |   | (Unaudited)       |  
|                                                             |   |                    |   |   |                   |  
|                                                             |   |                    |   |   |                   |  
|Revenue                                                      | $ | 32,066,034         |   | $ | 7,987,833         |  
|Cost of Goods Sold                                           |   | (28,097,447        | ) |   | (7,005,046        | )
|Gross Profit                                                 |   | 3,968,587          |   |   | 982,787           |  
|                                                             |   |                    |   |   |                   |  
|                                                             |   |                    |   |   |                   |  
|General and administrative                                   |   |                    |   |   |                   |  
|Selling Expenses                                             |   | 295,788            |   |   | 81,792            |  
|General and administrative                                   |   | 526,589            |   |   | 115,123           |  
|Depreciation                                                 |   | 1,253              |   |   | 890               |  
|Total operating expenses                                     |   | 823,630            |   |   | 197,805           |  
|                                                             |   |                    |   |   |                   |  
|Income before income taxes                                   |   | 3,144,957          |   |   | 784,982           |  
|Income taxes                                                 |   | (847,485           | ) |   | (196,246          | )
|                                                             |   |                    |   |   |                   |  
|Net income                                                   | $ | 2,297,472          |   | $ | 588,736           |  
|                                                             |   |                    |   |   |                   |  
|Other Comprehensive Income                                   |   |                    |   |   |                   |  
|Foreign currency translation adjustment                      |   | 197,591            |   |   | 4,722             |  
|Comprehensive Income                                         | $ | 2,495,063          |   | $ | 593,458           |  
|                                                             |   |                    |   |   |                   |  
|Earnings per share - basic and
      diluted                 | $ | 0.01               |   | $ | 0.00              |  
|                                                             |   |                    |   |   |                   |  
|Weighed-average shares outstanding -
      basic and diluted |   | 268,901,099        |   |   | 144,280,000       |  

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

F-2

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|Heli Electronics Corp. and Subsidiaries                         
|----------------------------------------------------------------
|Consolidated Statements of Changes in Shareholders'
      Equity
|For the nine months ended September 30, 2010                    

|                                                                          |  |              |  |   |            |  |   |                 |   |   |               |  |   | Accumulated |   |   |                |  |   |           |  
|------------------------------------------------------------------------- |  | ------------ |  | - | ---------- |  | - | --------------- | - | - | ------------- |  | - | ----------- | - | - | -------------- |  | - | --------- | -
|                                                                          |  |              |  |   |            |  |   |                 |   |   | Statutory     |  |   | Other       |   |   | Retained       |  |   | Total     |  
|                                                                          |  | Common Stock |  |   | Additional |  |   | Reserve         |   |   | Comprehensive |  |   | Earnings    |   |   | Shareholders'  | 
|                                                                          |  | Shares       |  |   | Amount     |  |   | Paid-in 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   | )
|Issuance of 6,000,000 shares at $0.05 per
      share                     |  | 6,000,000    |  |   | 60         |  |   | 299,965         |   |   | -             |  |   | -           |   |   | -              |  |   | 300,025   |  
|Foreign currency translation adjustment                                   |  | -            |  |   | -          |  |   | -               |   |   | -             |  |   | 220,382     |   |   | -              |  |   | 220,382   |  
|Net income for the nine months ended
      September 30, 2010 (unaudited) |  | -            |  |   | -          |  |   | -               |   |   | -             |  |   | -           |   |   | 5,806,759      |  |   | 5,806,759 |  
|Balance at September 30, 2010 (Unaudited)                                 |  | 272,000,000  |  | $ | 2,720      |  | $ | 347,305         |   | $ | 223,421       |  | $ | 216,253     |   | $ | 7,816,160      |  | $ | 8,605,859 |  

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

F-3

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

|                                                                                                    |   | Nine Months ended |  
|--------------------------------------------------------------------------------------------------- | - | ----------------- | -
|                                                                                                    |   | September 30,     |  
|                                                                                                    |   | 2010              |  
|                                                                                                    |   | (Unaudited)       |  
|                                                                                                    |   |                   |  
|Cash Flows From Operating Activities                                                                |   |                   |  
|Net Income                                                                                          | $ | 5,806,759         |  
|Adjustments to reconcile net
        income to net cash provided by (used in) operating activities: |   |                   |  
|Depreciation                                                                                        |   | 3,323             |  
|Changes in operating assets
        and liabilities:                                                |   |                   |  
|Accounts receivable, net                                                                            |   | (13,310,314       | )
|VAT receivable                                                                                      |   | (64,360           | )
|Advance to suppliers                                                                                |   | (928,474          | )
|Inventories, net                                                                                    |   | (1,973,756        | )
|Accounts payable and accrued
        liabilities                                                    |   | 7,875,476         |  
|Customer deposit                                                                                    |   | -                 |  
|Corporate tax payable                                                                               |   | 98,689            |  
|Net cash provided by (used in) operating
        activities                                         |   | (2,492,657        | )
|                                                                                                    |   |                   |  
|Cash Flows From Investing Activities                                                                |   |                   |  
|Purchase of equipment                                                                               |   | (12,476           | )
|Net cash used in investing activities                                                               |   | (12,476           | )
|                                                                                                    |   |                   |  
|Cash Flows From Financing Activities                                                                |   |                   |  
|Net proceeds of share issuance                                                                      |   | 277,950           |  
|Due to related parties                                                                              |   | 2,905,631         |  
|Net cash provided by financing activities                                                           |   | 3,183,581         |  
|                                                                                                    |   |                   |  
|Effect of exchange rate changes on cash                                                             |   | 172,402           |  
|Net increase in cash and cash
        equivalents                                                   |   | 850,850           |  
|Cash and cash equivalents, beginning of period                                                      |   | 270,775           |  
|                                                                                                    |   |                   |  
|Cash and cash equivalents, end of period                                                            | $ | 1,121,625         |  
|                                                                                                    |   |                   |  
|                                                                                                    |   |                   |  
|Supplemental disclosure information:                                                                |   |                   |  
|Income taxes paid                                                                                   | $ | 1,906,440         |  
|Interest paid                                                                                       | $ | -                 |  

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

F-4

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

NOTE 1. DESCRIPTION OF BUSINESS AND ORGANIZATION

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 preparation

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 nine-month periods ended September 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 nine-month periods ended September 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, Xinde, Heli Hong Kong and Heli
BVI. All significant inter-company transactions and balance have been eliminated
upon consolidation.

F-5

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|Heli Electronics Corp.                       
|---------------------------------------------
|Notes to Financial Statements and disclosures
|For nine months ended September 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         | 7.7551                   | 7.7522       
|Nine months ended September 30, 2009 | 7.7569                   | 7.7524       
|Nine months ended September 30, 2010 | 7.7582                   | 7.77172      

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       
|Nine months ended September 30, 2009 | 6.8176                   | 6.8217       
|Nine months ended September 30, 2010 | 6.6800                   | 6.7981       

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. 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
September 30, 2010 and December 31, 2009, the Company had tax payable of
$859,122 and $742,959, respectively.

The provision for taxes on earnings consisted of:

|                                   |   | Nine months ended September 30, | 
|---------------------------------- | - | ------------------------------- | 
|                                   |   | 2010                            | 
|Current income taxes expenses:     |   |                                 | 
|PRC Enterprises Income Taxes:      | $ | 2,022,603                       | 
|United States Federal Income Taxes |   | -                               | 
|Total                              | $ | 2,022,603                       | 

F-6

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

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

|                                                |  | Nine months ended
      September 30, | 
|----------------------------------------------- |  | ------------------------------------- | 
|                                                |  | 2010                                  | 
|U.S. statutory rate                             |  | 34%                                   | 
|Foreign income not recognized in the U.S.       |  | -34%                                  | 
|PRC preferential enterprise income tax rate     |  | 25%                                   | 
|Permanent differences related to other expenses |  | 0.8%                                  | 
|Provision for income tax                        |  | 26.0%                                 | 

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 4. RELATED PARTY BALANCE AND TRANSACTION

On 9th May of 2010, Mr. Xin Qiu, 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.

NOTE 5. SALES OF EQUITY

On August 17, 2010, we issued 6,000,000 common shares of our
common stock at $0.05 per share, raising gross proceeds of $300,025.

F-7

---

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 September 30,
2010 and 2009

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

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

Three months Ended
      September 30, 2010 $
    Three months Ended
      September 30, 2009 $
    Change Between Three Month
      Period Ended September 30, 2010 and
      September 30, 2009 $Revenue
    32,066,034
    7,987,833
    24,078,201Cost of Goods Sold
    (28,097,447)
    (7,005,046)
    (21,092,401)Selling expenses
    295,788
    81,792
    213,996General and
      administrative
    526,589
    115,123
    411,466Depreciation
    1,253
    890
    363Net income for the
      period
    2,297,472
    588,736
    1,708,736


Revenues

We had revenues of $32,066,034 during the three months ended
September 30, 2010 as compared to revenues of $7,987,833 during the three months
ended September 30, 2009. Our revenues increased significantly during the nine
month period ended September 30, 2010 compared to our nine month period ended
September 30, 2009. The increase is attributed to several factors, including, an
increase in product categories, customers and an improvement in the overall
economy.

Cost of Sales

Our cost of sales for the three months ended September 30, 2010
were ($28,097,447) compared to ($7,005,046) for the three months ended September
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.

3

---

Selling Expenses

We had selling expenses of $295,788 during the three months
ended September 30, 2010 as compared to selling expenses of $81,792 during the
three months ended September 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 $526,589 during
the three months ended September 30, 2010 compared to general and administrative
expenses of $115,123 during the three months ended September 30, 2009. The
increase is mainly due to the Company paid audit fees, legal fees and transfer
agent after Sales of 6,000,000 shares.

Results of Operations  Nine months Ended September 30, 2010
and 2009

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

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

Nine months Ended
      September 30, 2010 $
    Nine months Ended
      September 30, 2009 $
    Change Between Nine Month
      Period Ended September 30, 2010 and
      September 30, 2009 $Revenue
    75,759,613
    22,011,133
    53,748,480Cost of Goods Sold
    (66,327,417)
    (19,251,868)
    (47,075,549)Selling expenses
    699,539
    234,712
    464,827General and
      administrative
    900,006
    326,558
    573,448Depreciation
    3,289
    1,878
    1,411Net income for the
      period
    5,806,759
    1,644,834
    4,161,925


Revenues

We had revenues of $75,759,613 during the nine months ended
September 30, 2010 as compared to revenues of $22,011,133 during the nine months
ended September 30, 2009. Our revenues increased significantly during the nine
month period ended September 30, 2010 compared to our nine month period ended
September 30, 2009. The increase is attributed to several factors, including, an
increase in product categories, customers and an improvement in the overall
economy. We experienced an increase of 40 product categories during our nine
month period ended September 30, 2010 compared to our nine month period ended
September 30, 2009. We also obtained 14 new customers during the period in
2010.

Cost of Sales

Our cost of sales for the nine months ended September 30, 2010
were ($66,327,417), compared to our cost of sales for the nine months ended
September 30, 2009, which were ($19,251,868). 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.

4

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Selling Expenses

We had selling expenses of $699,539 during the nine months
ended September 30, 2010 as compared to selling expenses of $234,712 during the
nine months ended September 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.

General and Administrative

We had general and administrative expenses of $900,006 during
the nine months ended September 30, 2010 compared to general and administrative
expenses of $326,558 during the nine months ended September 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 and stamp tax, due
to the increase in sales. In addition, the Company paid audit fees, legal fees
and transfer agent after sales of 6,000,000 shares, the total of which amounted
to nearly $250,000.

Liquidity and Financial Condition

Working Capital

|                    |   | At            |  |   | At           | 
|------------------- | - | ------------- |  | - | ------------ | 
|                    |   | September 30, |  |   | December 31, | 
|                    |   | 2010          |  |   | 2009         | 
|Current assets      | $ | 22,109,939    |  | $ | 4,873,920    | 
|Current liabilities |   | 10,623,536    |  |   | 2,588,490    | 
|Working capital     | $ | 11,486,403    |  | $ | 2,285,430    | 

|Cash Flows                                                  |   |                   |   |   |         |  
|----------------------------------------------------------- | - | ----------------- | - | - | ------- | -
|                                                            |   | Nine months Ended |  
|                                                            |   | September 30      |  
|                                                            |   | 2010              |   |   | 2009    |  
|Cash flows provided by (used in) operating
      activities | $ | (2,492,657        | ) | $ | 890,573 |  
|Cash flows provided by (used in) investing activities       |   | (12,476           | ) |   | (12,013 | )
|Cash flows provided by (used in) financing
      activities |   | 3,183,581         |   |   | Nil     |  
|Increase (decrease) in cash and cash equivalents            | $ | 850,850           |   | $ | 879,887 |  

Working Capital

As at September 30, 2010 we had working capital of $11,486,403 compared to $2,285,430 as at December 31, 2009; an increase of $9,200,973.  The reason for the increase is mainly attributed to an increase of $17,236,019 in total current assets which consisted mainly of an increase of $13,388,762 in accounts receivable due to increased sales activity during the period in 2010 compared to 2009, offset by an increase of $8,035,046 in total current liabilities which consisted mainly of an increase of $7,712,911 in accounts payable due to increased purchases.

Operating Activities

Net cash used by operating activities was (2,492,657) for the nine months ended September 30, 2010 compared with cash provided by operating activities of $890,573 in the same period in 2009.  The increase in cash used on operating activities is mainly due to an approximately $13 million increase in accounts receivable, an approximately $2 million increase in inventory and an approximately $1 million increase in advances to suppliers, partially offset by an approximately $8 million increase in accounts payable.

5

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Investing Activities

Net cash used in investing activities was ($12,476) for the
nine months ended September 30, 2010 compared to net cash used in investing
activities of ($12,013) in the same period in 2009.

Financing Activities

Net cash provided by financing activities for the nine months
ended September 30, 2010 was $3,183,581compared to $Nil for the nine months
ended September 30, 2009. The difference was mainly attributable to a $2,883,556
loan from shareholder during 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.

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 September 30, 2010, the end of the 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 September 30, 2010
that have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

6

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

On August 17, 2010, we issued 6,000,000 common shares of our
common stock at $0.05 per share, raising gross proceeds of $300,025. We have
issued all of the securities to one (1) non-US person (as that term is defined
in Regulation S of the Securities Act of 1933) in an offshore transaction
relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

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

None.

|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                                                          

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: November ____, 2010 | Xin Qiu                                                        
|                          | President, Chief Executive Officer and Director                
|                          | (Principal Executive Officer, Principal
      Financial Officer
|                          | and Principal Accounting Officer)                              

7

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