UNITED STATES 
  SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (Amendment No. 1) [ X
  ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934 
  For the quarterly period ended: March 31, 2010 [     ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934 
  For the transition period from ____________ to _____________ Commission File No. 333-139660 CHINA TMK BATTERY SYSTEMS INC.(Name of Small Business Issuer in Its
  Charter) Nevada
      98-0506246(State or other
      jurisdiction of
      (I.R.S. Employer Identification No.)incorporation or
      organization) Sanjun Industrial Park 
  No. 2 Huawang Rd., Dalang Street 
  Bao'an District, Shenzhen 518109 
  People's Republic of China(Address of principal executive
  offices) (86) 75528109908(Registrants telephone number, including area code) 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. 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 [    ] Indicate by check
  mark whether the registrant is a large accelerated filer, an accelerated
  filer, a non-accelerated filer, or a smaller 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 [   ]
      Smaller reporting company[ X ](Do not check if a smaller reporting
      company) Indicate by check
  mark whether the registrant is a shell company (as defined in Rule 12b-2 of
  the Exchange Act). Yes
  [    ]             No [ X ] The number of
  shares outstanding of each of the issuers classes of common equity, as of May
  17, 2010 is as follows: Class of Securities
      Shares OutstandingCommon Stock, $0.001 par value
      34,171,000 
 TABLE OF CONTENTS PART IFINANCIAL INFORMATIONITEM 1. FINANCIAL
      STATEMENTS.
      3ITEM 2. MANAGEMENTS
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
      17ITEM 3. QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
      25ITEM 4. CONTROLS AND
      PROCEDURES.
      25PART IIOTHER INFORMATIONITEM 1. LEGAL
      PROCEEDINGS.
      26ITEM 1A. RISK FACTORS.
      26ITEM 2. UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
      26ITEM 3. DEFAULTS UPON
      SENIOR SECURITIES.
      26ITEM 4. (REMOVED AND
      RESERVED).
      26ITEM 5. OTHER
      INFORMATION.
      26ITEM 6. EXHIBITS.
      26 2 
 Explanatory Note On August 23, 2010, the board of directors ofChina TMK Battery Systems Inc. (the
  Company), after consultation with and upon
  recommendation from management of the Company, determined that the Companys
  previously issued unaudited financial statementsfor the
  quarter ended March 31, 2010  included in its
  Quarterly Report on Form 10-Q filed with the Securities and Exchange
  Commission on May 24, 2010 (the Original Filing) should no longer be relied
  upon and that disclosure should be made and action should be taken to prevent
  future reliance. The Company has restated its
  financial statements for the quarter ended March 31, 2010 due to issues raised
  byits independent accountants,
  MaloneBailey, LLP("MaloneBailey"), regarding
  the accounting treatment of certain reset provisions in  warrants to purchase3,401,320 shares of the Companys common stock (the Warrants),
  previously issued to investors in a February 10,
  2010 private placement (the Private Placement).  The Warrants issued in the
  Private Placement include an anti-dilution provision for adjustment if
  the Company issues or sells any shares of common stock or securities
  convertible into common stock for a consideration per share of common stock
  less than the then current exercise price, which is currently $1.60 per share.
  Because of the reset provision, the Warrants are not considered to be indexed
  to the Companys stock and therefore the Warrants were determined to be
  derivative liability under ASC 815-15 and ASC 815-20. 
  The question was raised in light of EITF 07-5,
  Determining Whether an Instrument (or Embedded Feature) Is Indexed to an
  Entitys Own Stock (FASB ASC 815-40-15-5) (ASC 815) effective as of January
  1, 2009, which outlines new guidance for being indexed to an entitys own
  stock and the resulting liability or equity classification based on that
  conclusion.  Reset provisions reduce the exercise price of a warrant or
  convertible instrument if a company either issues new warrants or convertible
  instruments that have a lower exercise price. The board of directors of the
  Company has performed a complete assessment of the Warrants and has concluded
  that they are within the scope of ASC 815 due to the reset provisions included
  in the terms of the agreements.  Accordingly, ASC 815 should have been adopted
  as of January 1, 2009 by classifying the Warrants as liability measured at
  fair value with changes in fair value recognized in earnings each reporting
  and recording a cumulative-effect adjustment to the opening balance of
  retained earnings.  The Company has calculated the fair value of the Warrants
  at the date of inception, as well as at the March 31, 2010 reporting period,
  utilizing multinomial lattice models.  Based on its
  calculations and assessment of the materiality, the Company concluded that its
  financial statements for the quarter ended March 31, 2010 included in the
  Original Filing required restatement and that the Original Filing should be
  amended. Except as described above
  and corresponding changes under the heading Managements Discussion and
  Analysis of Financial Condition and Results of Operations, no additions or
  modifications will be made to reflect facts or events occurring subsequent to
  the date of the Original Filing. PART I 
  FINANCIAL INFORMATION ITEM 1.FINANCIAL STATEMENTS CHINA TMK BATTERY SYSTEMS INC. 
  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 
  FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009 Contents
      Page(s)Consolidated Balance
      Sheets as of March 31, 2010 (unaudited) and December 31, 2009
      4Consolidated
      Statements of Income and Other Comprehensive Income for the three months
      ended March 31, 2010 and 2009 (unaudited)
      5 - 6Consolidated
      Statements of Changes in Equity (unaudited)
      7Consolidated
      Statements of Cash Flows for the three months ended March 31, 2010 and
      2009 (unaudited)
      8Notes to the
      Consolidated Financial Statements (unaudited)
      9 3 
 China TMK Battery Systems Inc. and Subsidiaries
Consolidated Balance Sheets March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)(Restated)AssetsCurrent AssetsCash and cash equivalents
    $
    289,361
    
    $
    185,590Trade receivables, net
    
    5,554,914
    
    
    2,909,234Advances to suppliers
    
    346,342
    
    
    215,689VAT recoverable
    
    115,938
    
    
    34,660Inventories, net
    
    3,680,244
    
    
    3,973,697Due from related parties
    
    15,213
    
    
    15,204Prepaid expenses and other receivables
    
    1,007,486
    
    
    -Restricted cash
    
    438,840
    
    
    438,780Total current
      assets
    
    11,448,338
    
    
    7,772,854Property, equipment and construction in progress, net
    
    11,241,793
    
    
    11,039,703Advances for property and equipment purchase
    
    19,292,743
    
    
    16,930,020Restricted cash
    
    263,304
    
    
    263,268Other assets
    
    109,323
    
    
    50,804Deposit for business acquisition
    
    3,172,656
    
    
    -Total Assets
    $
    45,528,157
    
    $
    36,056,649Liabilities and Shareholders' EquityCurrent LiabilitiesAccounts payable
    $
    3,342,730
    
    $
    1,832,737Accrued liabilities and other payable
    
    308,204
    
    
    519,129Customer deposits
    
    271,143
    
    
    179,272Wages payable
    
    505,334
    
    
    556,189Corporate tax payable
    
    235,207
    
    
    216,443Short-term bank loan
    
    3,688,371
    
    
    4,722,660Current portion of long-term bank loans
    
    1,843,165
    
    
    2,451,700Deferred revenue
    
    27,644
    
    
    36,854Due to related parties
    
    1,120,611
    
    
    17,691Total current liabilities
    
    11,342,409
    
    
    10,532,675Long-term bank loans
    
    9,969,611
    
    
    9,236,953Deferred tax liabilities
    
    594,058
    
    
    593,977Derivative liability
    
    2,943,977
    
    
    -Total Liabilities
    
    24,850,055
    
    
    20,363,605 Stockholders' EquityPreferred stock, $0.001 par value, 10,000,000 shares
      authorized, none issued and outstanding at March 31, 2010 and December 31,
      2009
    
    -
    
    
    -Common stock, $0.001 par value, 300,000,000
      shares authorized, 34,171,000 and 25,250,000 shares issued and outstanding
      at March 31, 2010 and December 31, 2009, respectively
    
    34,171
    
    
    25,250Common stock subscribed, 2,717,250
      shares at March 31, 2010
    
    2,717
    
    
    -Additional paid-in
      capital
    
    10,518,662
    
    
    1,193,591Accumulated other comprehensive income
    
    397,405
    
    
    365,187Subscription
      receivables
    
    (1,406,502
    )
    
    -Statutory reserves
    
    1,038,988
    
    
    1,038,988Retained earnings
      (unrestricted)
    
    10,092,661
    
    
    13,070,028Total stockholders' equity
    
    20,678,102
    
    
    15,693,044Total Liabilities & Stockholders'
      Equity
    $
    45,528,157
    
    $
    36,056,649 The accompanying notes are an integral part of these
consolidated financial statements. 4 
 China TMK Battery Systems Inc. and Subsidiaries
Consolidated Statements of Income(Unaudited) For the Three Months Ended**March 31,**2010
    
    
    2009(Restated)Revenue
    $
    13,264,472
    
    $
    9,900,656Cost of Goods Sold
    
    (10,105,697
    )
    
    (7,488,805
    )Gross Profit
    
    3,158,775
    
    
    2,411,851Operating Costs and ExpensesSelling expenses
    
    234,718
    
    
    191,388Depreciation
    
    17,505
    
    
    52,780General and
      administrative
    
    1,822,979
    
    
    269,126Research
      and development
    
    165,244
    
    
    112,009Total operating expenses
    
    2,240,446
    
    
    625,303Income from operations
    
    918,329
    
    
    1,786,548 Other income (expenses):Interest
      expense, net
    
    (241,907
    )
    
    (219,252
    )Other expense, net
    
    (60,381
    )
    
    (597
    )Change in
      fair value of embedded derivative
    
    (1,725,233
    )Total other expenses
    
    (2,027,521
    )
    
    (219,849
    )Income (loss) before income taxes
    
    (1,109,192
    )
    
    1,566,699Income taxes
    
    (358,175
    )
    
    (235,053
    )Net income (loss)
    $
    (1,467,367
    )
    $
    1,331,646Earnings (loss) per share - basic
    $
    ( 0.05
    )
    $
    0.05Weighted-average shares outstanding, basic
    
    30,206,111
    
    
    25,250,000Earnings (loss) per share - diluted
    $
    (0.05
    )
    $
    0.05Weighted-average shares outstanding, diluted
    $
    31,310,314
    
    
    25,250,000 The accompanying notes are an integral part of these
consolidated financial statements. 5 
 China TMK Battery Systems Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income(Unaudited) For the Three Months EndedMarch 31,
    
    
    March 31,2010
    
    
    2009(Restated)Net income (loss)
    $
    (1,467,367
    )
    $
    1,331,646Other comprehensive income, net of tax:Unrealized gain on
      foreign currency translation
    
    32,218
    
    
    19,432Comprehensive income (loss)
    $
    (1,435,149
    )
    $
    1,351,078 The accompanying notes are an integral part of these
consolidated financial statements. 6


China TMK Battery Systems Inc.
and Subsidiaries Consolidated Statement of Changes in Stockholders' EquityFor the
Three Months Ended March 31, 2010 (Unaudited) Common Stock
    
    
    
    
    
    
    
    
    Accumulated**Common Stock**
    
    
    Subscribed
    
    
    Additional
    
    
    
    
    
    Other
    
    
    
    
    
    Retained
    
    
    **Total**Paid-in
    
    
    **Subscription**
    
    
    Comprehensive
    
    
    Statutory
    
    
    Earnings
    
    
    Stockholders'**Share**
    
    
    Amount
    
    
    Share
    
    
    Amount
    
    
    Capital
    
    
    Receivables
    
    
    Income
    
    
    Reserves
    
    
    (Unrestricted)
    
    
    Equity**Balance at December 31,
      2009**
    
    25,250,000
    
    $
    25,250
    
    
    -
    
    $
    -
    
    $
    1,193,591
    
    $
    -
    
    $
    365,187
    
    $
    1,038,988
    
    $
    13,070,028
    
    $
    15,693,044Retained of 2,750,000 shares by original
      shell shareholders
    
    2,750,000
    
    $
    2,750
    
    
    -
    
    $
    -
    
    $
    (2,750
    )
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -
    
    
    -Issuance of 560,000 shares for acquisition fee
    
    560,000
    
    
    560
    
    
    
    
    
    
    
    
    699,440
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    700,000Issuance of 125,000 shares for consulting
      services
    
    125,000
    
    
    125
    
    
    
    
    
    
    
    
    156,125
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    156,250Issuance of 5,486,000 shares at 1.25 per share in private
      placement, net of offering costs
    
    5,486,000
    
    
    5,486
    
    
    
    
    
    
    
    
    6,297,467
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    6,302,953Common stock subscribed
    
    -
    
    
    -
    
    
    2,717,250
    
    
    2,717
    
    
    3,393,533
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    3,396,250Share subscription receivables
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (1,406,502
    )
    
    -
    
    
    -
    
    
    -
    
    
    (1,406,502
    )Distribution to owners - share purchase
      from former owners
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (1,510,000
    )
    
    (1,510,000
    )Embedded feature of equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,218,744
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,218,744
    )Foreign currency translation adjustment
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    32,218
    
    
    -
    
    
    -
    
    
    32,218Net income (loss) for the three months ended March 31, 2010
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (1,467,367
    )
    
    (1,467,367
    )Balance at March 31, 2010 - Restated
    
    34,171,000
    
    $
    34,171
    
    
    2,717,250
    
    $
    2,717
    
    $
    10,518,662
    
    $
    (1,406,502
    )
    $
    397,405
    
    $
    1,038,988
    
    $
    10,092,661
    
    $
    20,678,102 The accompanying notes are an integral part of these
consolidated financial statements. 7


China TMK Battery Systems Inc. and Subsidiaries 
  Consolidated Statements of Cash Flows(Unaudited) For the Three Months EndedMarch 31,2010
      
      
      2009(Restated)Cash Flows From
      Operating ActivitiesNet income
      (loss)
      $
      (1,467,367)
      
      $
      1,331,646Adjustments to
      reconcile net income to net cash provided by operating activities:Depreciation expense
      
      17,505
      
      
      52,780Common stocks
      for services provided
      
      856,250
      
      
      -Deferred income
      
      (9,238
      )
      
      -Change in fair
      value of embedded derivative
      
      1,725,233
      
      
      -Changes in
      operating assets and liabilities:Trade
      receivables
      
      (2,645,680
      )
      
      (258,247
      )Advance to
      suppliers
      
      (130,653
      )
      
      (118,660
      )Inventories, net
      
      295,135
      
      
      (431,414
      )Account
      payable - trade
      
      1,509,993
      
      
      1,172,094Accrued
      liabilities and other payables
      
      (210,925
      )
      
      486,490Customer
      deposits
      
      91,871
      
      
      220,668Other
      assets
      
      (58,519
      )Prepaid
      expenses and other receivables
      
      (1,007,486
      )
      
      (20,550
      )Wages
      payable
      
      (50,855
      )
      
      43,966Various
      taxes payable
      
      (62,514
      )
      
      186,568Net cashprovided by (used in) operating activities
      
      (1,147,250
      )
      
      2,665,341Cash Flows From
      Investing ActivitiesChange in
      restricted cash
      
      (96
      )
      
      (298,360
      )Purchases and
      advances of property and equipment
      
      (2,701,485
      )
      
      (5,257,505
      )Deposit for Hualian
      acquisition
      
      (3,172,656
      )
      
      -Collection of
      advances/loans - related parties
      
      -
      
      
      10,806Advances/loans -
      related parties
      
      -
      
      
      (153,277
      )Collection of
      short-term loan receivable
      
      -
      
      
      747,697Net cash used in
      investing activities
      
      (5,874,237
      )
      
      (4,950,639
      )Cash Flows From
      Financing ActivitiesBorrowing from bank
      notes
      
      -
      
      
      2,930,200Repayment of bank
      notes
      
      -
      
      
      (1,069,523
      )Borrowing from bank
      loans
      
      1,973,161
      
      
      7,206,677Repayment of bank
      loans
      
      (2,887,878
      )
      
      (3,925,527
      )Common stock
      subscribed
      
      1,989,748
      
      
      -Net proceeds from
      share issuance
      
      6,302,953
      
      
      -Distribution to
      former owners
      
      (1,510,000
      )
      
      (1,476,622
      )Proceeds from
      related parties
      
      1,120,611
      
      
      -Repayment to
      related parties
      
      (17,691
      )
      
      -Net cash provided
      by financing activities
      
      6,970,904
      
      
      3,665,205Effect of
      exchange rate changes on cash
      
      154,354
      
      
      (276,092
      )Net increase in cash and cash equivalents
      
      103,771
      
      
      1,103,815Cash and cash
      equivalents, beginning of period
      
      185,590
      
      
      186,463Cash and cash
      equivalents, end of period
      $
      289,361
      
      $
      1,290,278Supplemental
      disclosure information:Income taxes paid
      $
      339,411
      
      $
      460Interest paid
      $
      241,907
      
      $
      219,252 The
  accompanying notes are an integral part of these consolidated financial
  statements. 8 
 China TMK Battery System, Inc.
  and Subsidiaries 
  Notes to Consolidated Financial Statements 
  (Unaudited) NOTE 1: DESCRIPTION OF BUSINESS AND
  ORGANIZATION China TMK Battery System Inc. (TMK US, or
  the Company) (formerly Deerfield Resource, Ltd.) was incorporated under the
  laws of the State of Nevada on June 21, 2006. On February 10, 2010, we entered
  into and closed the Share Exchange Agreement with Leading Asia, a BVI company,
  and its sole stockholder, Unitech, a BVI company, pursuant to which we
  acquired 100% of the issued and outstanding capital stock of Leading Asia in
  exchange for 25,250,000 shares of our common stock, par value $0.001, which
  constituted 90.18% of our issued and outstanding capital stock on a
  fully-diluted basis as of and immediately after the consummation of the
  transactions contemplated by the Share Exchange Agreement. In connection with the reserve acquisition
  of Leading Asia, Deerfield also entered into the Cancellation Agreement with
  United Fertilisers, its controlling stockholder, whereby United Fertilisers
  agreed to the cancellation of 272,250,000 shares of China TMK's common stock
  owned by it. As a condition precedent to the consummation of the Share
  Exchange Agreement, on February 10, 2010, China TMK also entered into a
  termination and release agreement with ASK Prospecting & Guiding Inc.,
  pursuant to which Deerfield terminated that certain Mineral Claim Purchase
  Agreement, dated as of October 10, 2006. On February 10, 2010, Deerfield
  Resources, Ltd. changed its name to "China TMK Battery Systems Inc." to more
  accurately reflect its new business operations. The transaction has been treated as a
  recapitalization of Leading Asia and its subsidiaries, with China TMK Battery
  Systems Inc. (the legal acquirer of Leading Asia and its subsidiaries,
  including the consolidation of the TMK Power Industries Ltd.) considered the
  accounting acquiree, and Leading Asia whose management took control of China
  TMK Battery Systems Inc. (the legal acquiree of Leading Asia) considered the
  accounting acquirer. The Company did not recognize goodwill or any intangible
  assets in connection with the transaction. All costs related to the
  transaction are being charged to operations as incurred. The 25,250,000 shares
  of common stock issued to the shareholders and designees of China TMK BVI in
  conjunction with the Share Exchange have been presented as outstanding for all
  periods. The historical consolidated financial statements include the
  operations of the accounting acquirer for all periods presented. TMK US, through its wholly-owned subsidiary
  in the Peoples Republic of China (PRC), is engaged in the research,
  development, production, marketing and sales of environment-friendly batteries
  including nickel metal hydride batteries. TMK US and its subsidiaries - Leading Asia
  Pacific Investment Limited, Good Wealth Capital Investment Limited, TMK Power
  Industries (SZ) Co., Ltd., and Borou Industrial Co., Ltd  are collectively
  referred to as the Company. NOTE 2: RESTATEMENT The financial statements for the
  quarter ended March 31, 2010 filed with the SEC on May 24, 2010 contained an
  error related to the accounting treatment of certain reset provisions in 
  warrants to purchase3,401,320 shares of
  the Companys common stock (the Warrants), previously issued to investors in a February 10, 2010 private placement (the
  Private Placement).  The Warrants issued in the Private Placement include an
  anti-dilution provision for adjustment if the Company issues or sells
  any shares of common stock or securities convertible into common stock for a
  consideration per share of common stock less than the then current exercise
  price, which is currently $1.60 per share for
  private placement investors and $1.25 per share for Hudson Securities, Inc.
  and SHP Securities LLC. Because of the reset provision, the Warrants are not
  considered to be indexed to the Companys stock and therefore the
  Warrants were determined to be derivative liability under ASC 815-15 and ASC
  815-20.  The question was raised in light of EITF
  07-5, Determining Whether an Instrument (or Embedded Feature) Is Indexed to
  an Entitys Own Stock (FASB ASC 815-15) effective as of January 1, 2009,
  which outlines new guidance for being indexed to an entitys own stock and the
  resulting liability or equity classification based on that conclusion. At March 31, 2010, the
  derivative liability had a fair value of $2,943,977, which was determined
  using the Multinomial Lattice models. The multinomial lattice models that
  value the derivative liability within the warrants are based on a probability
  weighted discounted cash flow model.  The warrants were valued with the
  following assumptions: at February 10, 2010: annual volatility of 73%; term of
  5 years; risk free rate of 2.39%; target exercise price of $2.50 for the $1.25
  warrants and $3.00 for the $1.60 warrants; at March 31, 2010: annual
  volatility of 61%; term of 4.87 years; risk free rate of 2.34%; target
  exercise price of $2.50 for the $1.25 warrants and $3.00 for the $1.60
  warrants. In addition, the weighted
  average number of common shares outstanding is being restated to correct a
  clerical error. The impact of the error on the
  March 31, 2010 financial statements is reflected in the following tables: OriginallyFiled
    
    
    Adjustment
    
    
    RestatedMarch 31, 2010Derivative liability
    $
    -
    
    
    2,943,977
    
    $
    2,943,977Total Liabilities
    
    21,906,078
    
    
    2,943,977
    
    
    24,850,055Stockholders' EquityAdditional paid-in capital
    
    11,737,406
    
    
    (1,218,744
    )
    
    10,518,662Retained earnings (unrestricted)
    
    11,817,894
    
    
    (1,725,233
    )
    
    10,092,661Total stockholders' equity
    
    23,622,079
    
    
    (2,943,977
    )
    
    20,678,102Total Liabilities & Stockholders' Equity
    $
    45,528,157
    
    
    
    
    $
    45,528,157 OriginallyFiled
    
    
    Adjustment
    
    
    RestatedThree Months Ended March 31, 2010Other income (expenses):Change
      in fair value of embedded derivative
    
    -
    
    
    (1,725,233
    )
    
    (1,725,233
    )Total
      other expenses
    
    (302,288
    )
    
    (1,725,233
    )
    
    (2,027,521
    )Income (loss) before income taxes
    
    616,041
    
    
    (1,725,233
    )
    
    (1,109,192
    )Net income (loss)
    $
    257,866
    
    
    (1,725,233
    )
    $
    (1,467,367
    )Comprehensive income (loss)
    $
    290,084
    
    
    (1,725,233
    )
    $
    (1,435,149
    )Weighted average shares outstandingBasic
    
    26,472,055
    
    
    3,734,056
    
    
    30,206,111Diluted
    
    26,849,979
    
    
    4,460,335
    
    
    31,310,314Earnings (loss) per share - Basic
    $
    0.01
    
    
    (0.06
    )
    
    (0.05
    )Earnings (loss) per share - Diluted
    $
    0.01
    
    
    (0.06
    )
    
    (0.05
    ) OriginallyFiled
    
    
    Adjustment
    
    
    RestatedThree Months Ended March 31, 2010Cash Flows From Operating ActivitiesNet
      income (loss)
    $
    257,866
    
    $
    (1,725,233
    )
    $
    (1,467,367
    )Adjustments to reconcile net income to net
      cashprovided by operating activities:Change in fair value of embedded derivative
    
    -
    
    
    1,725,233
    
    
    1,725,233Net cash provided by (used in)
      operating activities
    
    (1,147,250
    )
    
    
    
    
    (1,147,250
  )Net cash used in investing activities
    
    (5,874,237
    )
    
    
    
    
    (5,874,237
  )Net cash provided by financing
      activities
    
    6,970,904
    
    
    
    
    
    6,970,904Effect of exchange rate changes on cash
    
    154,354
    
    
    
    
    
    154,354Net increase in cash and
      cash equivalents
    
    103,771
    
    
    
    
    
    103,771Cash and cash equivalents, beginning of
      period
    
    185,590
    
    
    
    
    
    185,590Cash and cash equivalents, end of
      period
    $
    289,361
    
    
    
    
    $
    289,361 NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES a.Basis of preparation The consolidated financial statements have
  been prepared in accordance with U.S. GAAP for interim financial information
  and the instructions to Form 10-Q and Article 10 of Regulation SX.
  Accordingly, they do not include all of the information and footnotes required
  by generally accepted accounting principles for complete financial statements.
  These consolidated financial statements should be read in conjunction with the
  consolidated financial statements of the Company for the year ended December
  31, 2009 and notes thereto contained in our Registration Statement on Form S-1
  filed with the United States Securities and Exchange Commission (the SEC) on
  May 24, 2010. Interim results are not necessarily indicative of the results
  for the full year. b.Foreign currency translation The functional currency of the Company is
  Renminbi (RMB). The Company maintains its financial statements using the
  functional currency. Monetary assets and liabilities denominated in currencies
  other than the functional currency are translated into the functional currency
  at rates of exchange prevailing at the balance sheet dates. Transactions
  denominated in currencies other than the functional currency are translated
  into the functional currency at the exchange rates prevailing at the dates of
  the transaction. Exchange gains or losses arising from foreign currency
  transactions are included in the determination of net income (loss) for the
  respective periods. 9 
 For financial reporting purposes, the
  financial statements of TMK Shenzhen and Borou, which are prepared in RMB, are
  translated into the Companys reporting currency, United States Dollars
  (USD). Balance sheet accounts are translated using the closing exchange rate
  in effect at the balance sheet date and income and expense accounts are
  translated using the average exchange rate prevailing during the reporting
  period. Adjustments resulting from the translation, if any, are included in
  accumulated other comprehensive income (loss) in stockholders equity. The exchange rates used for foreign currency
  translation were as follows (USD$1 = RMB): Period Covered
      
      Balance Sheet Date Rates
      
      
      Average RatesYear ended December
      31, 2009
      
      6.83720
      
      
      6.82082Quarter ended March
      31, 2009
      
      6.84556
      
      
      6.82547Quarter ended March
      31, 2010
      
      6.83620
      
      
      6.81896 The exchange rates used for foreign currency
  translation were as follows (USD$1 = HKD): Period Covered
      
      Balance Sheet Date Rates
      
      
      Average RatesYear ended December
      31, 2009
      
      7.80000
      
      
      7.80000Quarter ended March
      31, 2009
      
      7.80000
      
      
      7.80000Quarter ended March
      31, 2010
      
      7.80000
      
      
      7.80000 c. Reclassifications Certain amounts in the consolidated
  financial statements for the prior year have been reclassified to conform to
  the presentation of the current year for the comparative purposes. NOTE 4: Acquisition In January 4, 2010, the Company entered into
  a Memorandum of Understanding (MOU) with Hong Shenzhen DongFang Hualian
  Technology Ltd. (Hualian). The Company paid overall $3.2 million as deposit
  during January through March 2010, which shall be withdrawn based upon the MOU
  if Hualian fails the due diligence and external auditing which are currently
  under process and are expected to be completed by the end of the third quarter
  of 2010. In addition, the Company can withdraw the $3.2million deposit if the
  2009 net profit of Hualian is less than RMB 28 million (approximately
  $4,105,080). NOTE 5: ADVANCES FOR PROPERTY AND
  EQUIPMENT PURCHASE Advances for property and equipment purchase
  consist of the following: March 31, 2010
      
      
      December 31, 2009Advances for Property
      Purchase (1 unit located in Shihao Mansion)
      $
      3,024,522
      
      $
      3,024,108Advances for Equipment
      Purchase (5 vendors in Q1 2010 and 2 vendors in 2009)
      
      4,619,233
      
      
      2,989,816Advances for Property
      Purchase (3rd, 5th and 6th floor located in Jinli Building)
      
      11,648,988
      
      
      10,916,096Total Advances for
      Property Purchase
      $
      19,292,743
      
      $
      16,930,020 The Company entered into two agreements to
  purchase equipment from two vendors in 2009 and three agreements to purchase
  equipment from three vendors during first quarter of 2010. Based on the
  agreements, the Company is required to pay certain deposits prior to equipment
  delivery date. The remaining price is to be paid after trial-run of the
  equipment within certain acceptance period. The ownership of equipment will be
  transferred to the Company upon the receipt of full purchase price. 10 
 The Company is in the process of acquiring
  several properties and has entered into various property purchase agreements
  starting year 2009. These agreements generally require the Company to make
  installment payments and the title and possession transfers to the Company
  upon the final payment. For the properties listed in the table above, the
  final payment had not been made by March 31, 2010 and December 31, 2009 and as
  a result, the payments made through those respective dates were not recorded
  as properties. No depreciation was recorded related to these advances. NOTE 6: SHORT-TERM BANK LOANS Short term bank loans consist of the
  following: March 31, 2010
      
      
      December 31, 2009Bank Loans borrowed
      by TMK Shenzhen
      $
      
      
      $Bank of China Shenzhen
      Branch
      
      1,717,605
      
      
      2,382,500Bank of Ningbo
      Shenzhen Branch
      
      1,151,598
      
      
      1,170,080Bank Loans borrowed
      by BorouBank of Ningbo
      Shenzhen Branch
      
      819,168
      
      
      1,170,080Short-term loans
      $
      3,688,371
      
      $
      4,722,660 On August 24, 2009, Borou obtained a
  one-year term loan in the amount of RMB 8,000,000 (or approximately
  $1,170,080) from Bank of Ningbo Shenzhen Branch ("BN") bearing interest at
  approximately 6.37% with maturity date on August 23, 2010. The loan is
  personally guaranteed by Mr. Wu, Henian and Mr. Tu Jun and secured by Mr.
  Zhuang, Zehao's personal property. According to the loan agreement, BN has
  right to request Borou to repay the outstanding debt in full immediately if
  the Company does not meet any of the following: (a) Borou should repay 30% of
  principal within 6 months of receipt of the first borrowing; (b) Within term
  of loan, Borou should maintain certain amounts of cash deposits and cash
  withdrawals with the bank on monthly basis of not less than 30% of its
  revenue; (c) The Company as a whole (Borou and TMK Shenzhen)s total loans
  should not exceed $19,013,800 (RMB 130,000,000); (d) The Company as a whole (Borou
  and TMK Shenzhen)'s total revenue including VAT tax should not be less than
  $51,191,000 (RMB 350,000,000); (e) Borou cannot distribute any dividend or
  pledge using its assets, cannot add any additional borrowing within loan
  period; (f) Borou's total revenue including VAT tax should be maintained at
  not less than $51,191,000 (approximately RMB 350,000,000. Borou has met all of
  the above requirements and has repaid principal and interests due through
  March 2010, except item (f). BN has not requested Borou to pay off this loan,
  however, Borou was not able to obtain a waive letter from BN. On August 21, 2009, TMK Shenzhen obtained a
  one-year term loan in the amount of RMB 8,000,000 (appropriately $1,170,080)
  from Bank of Ningbo Shenzhen Branch ("BON") bearing interest at approximately
  6.37% with maturity date on August 20, 2010. The loan is personally guaranteed
  by Mr. Wu, Henian and secured by Mr. Zhuang, Zehao's personal property.
  According to the loan agreement, BN has right to request TMK Shenzhen to repay
  the outstanding debt in full immediately if the Company does not meet any of
  the following: (a) the Company cannot distribute any bonus or dividend; (b)
  The total financing amount cannot exceed $19,013,800 (RMB 130,000,000) and the
  total revenue should not be less than $51,191,000 (RMB 350,000,000), the
  revenue defined here includes VAT tax). As of the filing date, the Company is
  not in violation of any requirements stated above. On June 18, 2008, TMK
  Shenzhen entered into a credit agreement with Bank of China Shenzhen Branch
  (BOC) to obtain a line of credit in the amount of RMB 19,000,000
  (approximately $2,787,109). The loan bears interest at approximately 5.346%
  per annum and matures on June 18, 2010. The loan is personally guaranteed by
  Mr. Wu, Henian. The unused line of credit amounted to
  $1,061, 715 and $403,957 at March 31, 2010 and December 31, 2009,
  respectively. 11 
 NOTE 7: LONG-TERM BANK LOANS Long term bank loans consist of the
  following: March 31, 2010
      
      
      December 31, 2009DBS Bank
      $
      2,012,016
      
      $
      2,181,753China Construction Bank Shenzhen Branch
      
      3,949,560
      
      
      4,387,800Bank of China Shenzhen Branch
      
      5,851,200
      
      
      5,119,100Less current portion
      
      (1,843,165
      )
      
      (2,451,700
      )Long -term portion
      $
      9,969,611
      
      $
      9,236,953 On November 13, 2009, TMK Shenzhen obtained
  a 3-year term loan from DBS Bank (China) Limited Shenzhen Branch (DBS) in
  the amount of RMB 15,300,000 (approximately $2,237,778) bearing interest at
  approximately 130% of the prevailing prime rate at the time of the loan
  (approximately 7.02% per annum) paid monthly. The loan can only be used for
  equipment purchase (RMB 11,318,500) and working capital purpose (RMB
  3,981,500). DBS requires the Company to deposit RMB 3,000,000 (approximately
  $438,780) as security (will be refunded to the Company in 6 months if payments
  are made on timely basis). Based on agreement, DBS has right to request the
  Company to repay the outstanding balance immediately if the Company does not
  meet any of the following: (a) the Company should provide audited financial
  within six months of year-end; (b) the Company cannot pledge its account
  receivables to any other third parties without DBS permission; (c) the
  Company's account receivable settlements (cash collections) should be
  maintained at RMB 40,000,000 (approximately $5,850,400) annually and RMB
  10,000,000 (approximately $1,462,600) quarterly. The Company did not violate
  any of the above covenants at March 31, 2010. On August 05, 2009, Borou obtained a 3-year
  term loan from Bank of China Shenzhen Branch (BOC) in the amount of RMB
  40,000,000 (approximately $5,850.400) bearing interest at approximately 110%
  of the prevailing prime rate at the time of the loan (approximately 5.94% per
  annum) paid monthly. As of December 31, 2009, RMB 35,000,000
  (approximately$5,119,100) was received in August 2009 and the remaining RMB
  5,000,000 (approximately $731,100) was received in January 2010. Pursuant to
  the loan agreement, the loan can only be used for working capital purpose (RMB
  20,000,000) and fixed asset purchase purpose (RMB 20,000,000). If violated, a
  penalty will be charged at 100% of interest rate on the violated amount. The
  loan is guaranteed by TMK Shenzhen and secured by Mr. Wu Henian, Mr. Huang
  Junbiao, and Mr. Wang Zongfu's ownerships in TMK Shenzhen. In addition, the
  loan is secured by property owned by Deli Investment Limited Co. with fair
  value of RMB 20,000,000 (approximately $2,925,200) and one of Borous
  properties with fair value of RMB 20,000,000 (approximately $2,925,200). Based
  on loan agreement, BOC also has right to request the Company to repay the
  outstanding balance immediately if Borou does not meet any of the following:
  (a) Borou cannot distribute any bonus or dividend if it incurs an after-tax
  loss, or its pretax net income is not significant enough to pay for its prior
  year' loss. Any pretax net income should be used to pay off principal and
  interests; (b) Borou should pay off the Bank before it pays off borrowing from
  its shareholders and other debt; (c) Fixed assets purchase loan can only be
  used for equipment purchase. The proceeds will be sent to equipment vendor
  directly. Any new equipment purchased under the loan should be added to bank
  collateral 30 days after payment is made; (d) Prior to loan payoff date, Borou
  should maintain monthly purchase settlements of not less than RMB 8,000,000
  (approximately $1,170,080) with the bank (note purchase settlements are
  accounted for as the total of each cash-in and cash-out transaction amounts).
  Borou did not violate any of the above covenants as at March 31, 2010. In
  accordance with the loan agreement, Borou also agreed to pay RMB 1,200,000
  (approximately $175,512) of bank charge in 3 years with annual bank charge of
  RMB 400,000 made prior to August 30 each year. On December 30, 2008, TMK Shenzhen obtained
  a three-year term loan from China Construction Bank Shenzhen Branch (CCB) in
  the amount of RMB 30,000,000 (approximately $4,400,698) bearing interest at
  approximately 105% of the prevailing prime rate at the time of the loan
  (approximately 5.67% per annum and subject to adjustment every 12 months) paid
  monthly. Pursuant to the loan agreement, the principal needs to be made at a
  fixed amount of RMB 1,000,000 (approximately $146,260) starting from the 13th
  month until maturity date. In the event the Company defaulted on the loan, the
  interest rate will be increased to 150% of prime rate. In addition, the loan
  should be used for working capital purpose only. If violated, the interest
  rate will be increased to 200% of prime rate and the penalty will be computed
  at 11.34% of violated amount. The terms of the loan also called for a deposit
  of RMB 1,800,000 (approximately $263,268) to Shenzhen General Chamber of
  Commerce to secure the loan until the term loan repaid in full. The loan with
  CCB is personally guaranteed by Mr. Wang, Zongfu and Mr. Huang, Junbiao and
  secured by Ms. Tu, Lanzhen (CEOs Wife)'s personal property with fair value of
  RMB 3,000,000 (approximately $440,070) and the Company's equipment with fair
  value of RMB 20,030,700 (approximately $2,938,302). The Company did not
  violate any of the above covenants as of March 31, 2010. 12 
 The terms of the long-term bank loans
  require the Company to maintain a deposit at the bank to secure the loans as
  follows: March 31, 2010
      
      
      December 31, 2009DBS Bank
      $
      438,840
      
      $
      438,780Total Current Portion
      $
      438,840
      
      $
      438,780China Construction Bank
      $
      263,304
      
      $
      263,268Total Non-current Portion
      $
      263,304
      
      $
      263,268 NOTE 8: RELATED PARTY TRANSACTIONS The related parties consist of the
  following: Wu, Henian
      ChairmanWang, Zongfu
      Vice President and DirectorHuang, Junbiao
      R&D Director and DirectorLiu, Xiangjun
      Chief Executive OfficerTu, Lanzhen
      Wu, Henian's wifeTu, Jun
      Borou's chairmanQ-Lite Industrial Co., Ltd.
      Yu, Zhengfei (Wang Zongfu's wife) holds 25% of ownershipLi, Guifang
      Owner of Unitech Due from related parties Due from related parties consists of the
  following: March 31, 2010
      
      
      December 31, 2009Liu, Xiangjun
      $
      15,213
      
      $
      15,204 The above amounts are advances to various
  individuals for regularly business expensed to be paid by the individual on
  behalf of the Company. These amounts are non-secured, non-interest bearing,
  and are considered to be short-term. As of the date of this filing, in
  anticipation of being a U.S. public company, the due from balance has been
  repaid and no loans to Liu, Xiangjun are outstanding. 13 
 Due to related party Due to related party consists of the
  following: March 31, 2010
      
      
      December 31, 2009Wu, Henian
      
      474,141
      
      
      -Wang, Zongfu
      
      363,676
      
      
      -Huang, Junbiao
      
      180,570
      
      
      -Li, Guifang
      
      385
      
      
      -Q-Lite Industrial Co., Ltd
      
      101,839
      
      
      17,691$
      1,120,611
      
      $
      17,691 Ms. Yu, Zhengfei, Mr. Wang, Zongfus wife,
  holds 25% ownership of Q-Lite Industrial Co., Ltd. (Q-Lite). During the
  three months ended March 31, 2010 and for the year ended December 31, 2009,
  the Company sold products to Q-Lite in the amounts of $40,707 and $346,047
  respectively. NOTE 9: INCOME TAX Leading Asia is registered in BVI and under
  the current laws of the BVI, is not subject to income taxes. Good Wealth is a holding company registered
  in Hong Kong and has no operating profit for tax liabilities. TMK Shenzhen is registered in PRC and has
  tax advantages granted by local government for corporate income taxes and
  sales taxes commencing 2005. Borou is registered in PBC and is subject to
  regular corporate income tax rate. The assessment of its tax liabilities is
  combined with that of TMK Shenzhen. The effective tax rate for the Company for
  the three months ended March 31, 2010 and 2009 was 32% and 15%, respectively. Various Taxes The Company is subject to pay various taxes
  such as Value Added Tax (VAT), City Development Tax, and Education tax to the
  local government tax authorities. The VAT collected on sales is netted against
  the taxes paid for purchases of cost of goods sold to determine the amounts
  payable and refundable. The City Development Tax and Education Tax are
  expensed as general and administrative expense. NOTE 10 - PRIVATE PLACEMENT On February 10, 2010, concurrently with the
  close of the Share Exchange, the Company conducted a private placement
  transaction (the Private Placement) pursuant to which the Company sold an
  aggregate of 5,486,000 shares of common stock at $1.25 per share (the shares
  were sold in 54.86 units, each of which included 100,000 shares of common
  stock and 50,000 detachable common stock warrants with a five year maturity).
  As a result, the Company received gross proceeds in the amount of
  approximately $6.9 million. Hudson Securities, Inc. (Hudson) and its
  designees were paid a placement agent commission equal to 6.5% of the gross
  proceeds from the financing and the Company incurred an additional $108,810 in
  other fees and costs. In addition, the Company issued to Hudson and its
  designees 560,000 shares of common stock as partial consideration for advisory
  services provided in connection with the RTO transaction and a five-year
  warrant for the purchase of an amount of shares equal to 8% of the number of
  securities issued in the private placement, exercisable at an initial exercise
  price of $1.25 per share as partial consideration for placement agent services
  provided. In connection with the private placement, the Company also issued to
  Hayden Communications International, Inc. (Hayden), an investor relations
  consulting firm, 125,000 shares of Common Stock as partial consideration for
  the consulting services provided by Hayden. In addition, the Company evaluated the warrants
  under ASC 815 to determine whether there is embedded feature included in the
  warrant agreements that should be recorded as derivative liability, see Note
  13 for further discussion. 14 
 NOTE 11- COMMON STOCK WARRANTS In connection with the private placement,
  the Company had 2,743,000 shares of common stock issuable upon the exercise of
  five-year warrants issued to the investors in the private placement. In
  addition, the Company granted Hudson and SHP Securities LLC a five-year
  warrant for the purchase of an amount of shares equal to 8% of the number of
  securities issued in the private placement. The warrants have an exercise
  price of $1.25 per share, are currently exercisable and expire on February 9,
  2015. The Company agreed to register the 3,401,320 shares of common stock
  underlying the warrants in a Registration Statement. The Registration
  Statement was filed on May 24, 2010. A summary of the Companys warrant
  activities for the three months ended March 31, 2010 is as follows: Weighted averageWarrants
      
      
      Exercise PriceBalance December 31, 2009
      
      -
      
      $
      N/APrivate placement
      investors
      
      2,743,000
      
      $
      1.60Hudson Securities,
      Inc.
      
      553,020
      
      $
      1.25SHP Securities LLC
      
      105,300
      
      
      1.25Balance March 31, 2010
      
      3,401,320
      
      $
      1.53 NOTE 12 - COMMON STOCK SUBSCRIPTION The Company entered into common share
  subscription agreements with multiple employees to raise around $3.4 million
  capital in exchange for 2.7 million shares of common stock (at par value
  $0.001) . By March 31, 2010, approximately $2.0 million had been collected.
  These shares are not registered as of March 24, 2010. NOTE 13  DERIVATIVE LIABILITIES In June 2008, the FASB finalized ASC 815-15,
  "Determining Whether an Instrument (or Embedded Feature) is indexed to an
  Entity's Own Stock". The EITF lays out a procedure to determine if an
  equity-linked financial instrument (or embedded feature) is indexed to its own
  common stock. The EITF is effective for fiscal years beginning after December
  15, 2008. Pursuant to the Subsequent Equity Sales section under warrant
  agreement the Company granted, if and whenever on or after the date of
  inception and through the earlier to occur of (i) eighteen months from the
  date hereof and (ii) date that there is an effective registration statement on
  file with the Securities and Exchange Commission covering the resale of all of
  the Warrant Stock and all of the shares of common stock issued in the
  offering, the Company issues or sells any shares of common stock or securities
  convertible into common stock for a consideration per share of common stock
  less than the then current Exercise Price, then, the Exercise Price shall be
  multiplied by a fraction. Because of the reset provision, the warrant
  agreement is considered not indexed to the Companys stock and therefore the
  3,401,320 warrants were determined to be derivative liability under ASC 815-15
  and ASC 815-20. The fair value of these warrants at the inception of the
  private placement was $1,218,744.  At March 31, 2010, the derivative liability was
  valued at $2,943,977 using the Multinomial Lattice models. The $1,725,233
  change in fair value is reported in the Companys consolidated statement of
  operations as a loss on derivatives. The fair value hierarchy for the Companys
  derivative liability accounted for at fair value was: March 31, 2010
      
      December 31, 2009Level 1
      Level 2
      Level 3
      Total
      
      
      Level 1
      Level 2
      Level 3
      TotalLiabilitiesDerivative
      liability - embedded feature of equity
      $
      -
      2,943,977
      -
      2,943,977
      
      $
      -
      -
      -
      -Total
      liabilities
      $
      -
      2,943,977
      -
      2,943,977
      
      $
      -
      -
      -
      - NOTE 14: REVENUE INFORMATION AND
  GEOGRAPHIC INFORMATION The Company believes that it operates in one
  business segment (research, development, production, marketing and sales of
  electronic products) and in one geographical segment (China), as all of the
  Companys current operations are carried out in China. 15 
 The geographic information for revenue is as
  follows: Three Months Ended March 31,2010
      
      
      2009United States
      $
      69,178
      
      $
      57,900Ukraine
      
      32,439
      
      
      -Sweden
      
      67,517
      
      
      -Korea
      
      5,257
      
      
      -Japan
      
      1,712
      
      
      913Germany
      
      -
      
      
      143,021Australia
      
      7,489
      
      
      13,171Taiwan
      
      31,654
      
      
      34,605Hong Kong
      
      238,157
      
      
      88,405China
      
      12,811,069
      
      
      9,562,641Total
      $
      13,264,472
      
      $
      9,900,656 NOTE 15 - RECONCILIATION OF EARNINGS PER
  SHARE Three Months Ended March 31,2010
      
      
      2009Net income
      $
      (1,467,367)
      
      $
      1,331,646Denominator:Weighted-average
      shares outstanding for basic earnings per share
      
      30,206,111
      
      
      25,250,000Effect of dilutive
      securities:Common stock warrants
      
      1,104,203
      
      
      -Weighted-average
      shares outstanding for diluted earnings per share
      
      31,310,314
      
      
      25,250,000Net income per share:Basic
      $
      (0.05)
      
      $
      0.05Net income per share:Diluted
      $
      (0.05)
      
      $
      0.05 NOTE 16: SUBSEQUENT EVENT The Company planned to expand production
  capacity and signed an agreement with Shenzhen Xutang Economics and Business
  Ltd. (Xutang) at the end of March, 2010 to lease the A3 plant building (a
  four-storey building), A5 plant building (a four-storey building), C1 dorm (a
  six-storey building), and office building (a three-storey) located in
  Zhongcheng Industry Park, Shenzhen. The lease term is for five years from
  April 1, 2010 to March 31, 2015; the leased premises are currently under
  remodeling and are expected to be completed in the third quarter of 2010. 16 
 ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
  OPERATIONS. Special Note Regarding Forward Looking
  Statements This report contains forward-looking
  statements. The forward-looking statements are contained principally in the
  sections entitled Description of Business, Risk Factors, and Management's
  Discussion and Analysis of Financial Condition and Results of Operations.
  These statements involve known and unknown risks, uncertainties and other
  factors which may cause our actual results, performance or achievements to be
  materially different from any future results, performances or achievements
  expressed or implied by the forward-looking statements. These risks and
  uncertainties include, but are not limited to, the factors described in the
  section captioned Risk Factors of our Current Report on Form 8-K filed on
  February 12, 2010. In some cases, you can identify forward-looking statements
  by terms such as anticipates, believes, could, estimates, expects,
  intends, may, plans, potential, predicts, projects, should,
  would and similar expressions intended to identify forward-looking
  statements. Forward-looking statements reflect our current views with respect
  to future events and are based on assumptions and subject to risks and
  uncertainties. Given these uncertainties, you should not place undue reliance
  on these forward-looking statements. Also, forward-looking statements represent
  our estimates and assumptions only as of the date of this report. You should
  read this report and the documents that we reference and filed as exhibits to
  this report completely and with the understanding that our actual future
  results may be materially different from what we expect. Except as required by
  law, we assume no obligation to update any forward-looking statements
  publicly, or to update the reasons actual results could differ materially from
  those anticipated in any forward-looking statements, even if new information
  becomes available in the future. Use of Terms Except where the context otherwise requires
  and for the purposes of this report only: the Company, we, us, and our refer to
    the combined business of China TMK Battery Systems Inc., a Nevada
    corporation (formerly, Deerfield Resources, Ltd.), and its wholly owned
    subsidiaries, Leading Asia Pacific Investment Limited, or Leading Asia, a
    BVI company, Good Wealth Capital Investment Limited, or Good Wealth, a
    Hong Kong company, and Shenzhen TMK Power Industries Ltd., or TMK, a PRC
    limited company, as the case may be;
    BVI refers to the British Virgin Islands;
    Exchange Act refers the Securities Exchange
    Act of 1934, as amended;
    Hong Kong refers to the Hong Kong Special
    Administrative Region of the People's Republic of China;
    PRC, China, and Chinese, refer to the
    People's Republic of China;
    Renminbi and RMB refer to the legal
    currency of China;
    SEC refers to the Securities and Exchange
    Commission;
    Securities Act refers to the Securities Act
    of 1933, as amended; and
    U.S. dollars, dollars and $ refer to
    the legal currency of the United States. Throughout this report, we have
    converted RMB to USD as follows: March 31, 2010Balance sheet
      RMB 6.83620 to US$1.00Statement of income
      and comprehensive income
      RMB 6.81896 to US$1.00March 31, 2009Balance sheet
      RMB 6.84556 to US$1.00Statement of income
      and comprehensive income
      RMB 6.82547 to US$1.00 17 
 Overview We were incorporated under the laws of the
  State of Nevada on June 21, 2006. We were originally formed as an exploration
  stage company to engage in the search for mineral deposits or reserves. From
  inception through September 2007, we conducted preliminary exploration
  activities on certain properties in White Bay, Newfoundland, Canada, on which
  we held six gold mining claims, pursuant to the Claim Purchase Agreement. Our
  activities included the conduct of preliminary geological mapping and
  trenching on the properties, which determined that there were no economic
  quantities of minerals or reserves whatsoever on any of the properties. From
  September 2008 through to the date of our reverse acquisition, discussed
  below, we were a shell company with no operations and our sole purpose was to
  locate and consummate a merger or acquisition with a private entity. As a
  result of the reverse acquisition transaction, discussed below, we terminated
  the Claim Purchase Agreement and are now engaged in the design, development,
  manufacture and sale of environmentally-friendly nickel-metal hydride cell, or
  Ni-MH, rechargeable batteries in China, through our wholly owned PRC
  subsidiary, TMK. We produce and sell high-rate SC, C, D, and
  F Ni-MH batteries primarily to manufacturers that produce mechanical devices,
  such as Siemens, LG, Electrolux, Bosch, Venom, and Changhong. Our products are
  commonly used to power vacuum cleaners and other household electrical
  appliances; cordless power tools; medical devices; light electric vehicles,
  such as bicycles, electric vehicles and hybrid electric vehicles; light
  fittings, battery-operated toys, telecommunications, traffic control, and
  traffic lighting applications; and personal portable electronic devices, such
  as digital cameras, portable media players, portable gaming devices and PDAs.
  We are actively seeking opportunities to expand into the Lithium-Ion battery
  space through leveraging our lithium battery patent and those of our customers
  who purchase both nickel-metal hydride and Lithium-Ion batteries, and
  opportunities to design and distribute batteries for use in
  telecommunications, traffic control, and traffic lighting applications. We
  have developed and sent working prototypes of both nickel-metal hydride
  battery and Lithium-Ion battery to some of our customers for testing and
  expect to roll out new products before the end of 2010. More recently, we have
  developed a working prototype of a hybrid electric vehicle battery pack and
  are producing sample cells for testing for an electric vehicle battery pack.
  To expand our business into the hybrid electric vehicle and electric vehicle
  markets, we plan to establish an advanced power battery research and
  development center, set up a battery-production base for small scale testing
  and production and establish a cooperation application demonstration point
  with 1-3 vehicle producers to lay a solid foundation for the approval of the
  project and for the support of the government. To date, we have entered into
  letters of intent with two automobile companies in China for the sale of our
  hybrid electric vehicle battery packs. We conduct all of our operations in Shenzhen
  City, China, in close proximity to China's electronics manufacturing base and
  its rapidly growing market. Our access to China's supply of low-cost skilled
  labor, raw materials, machinery and facilities enables us to price our
  products competitively in an increasingly price-sensitive market. In addition,
  we have automated key stages of our manufacturing process to be able to
  produce high-quality battery cells that consistently meet the stringent
  requirements of our customers. Recent Developments On February 10, 2010, we entered into and
  closed a share exchange agreement with Leading Asia, a BVI company, and its
  sole shareholder, Unitech, a BVI company, pursuant to which we acquired 100%
  of the issued and outstanding capital stock of Leading Asia in exchange for
  25,250,000 shares of our common stock, par value $0.001, which constituted
  90.18% of our issued and outstanding capital stock on a fully-diluted basis as
  of and immediately after the consummation of the transactions contemplated by
  the share exchange agreement. The share exchange transaction with Leading Asia
  was treated as a reverse acquisition, with Leading Asia as the acquirer and
  China TMK Battery Systems Inc. as the acquired party. Unless the context
  suggests otherwise, when we refer in this report to business and financial
  information for periods prior to the consummation of the reverse acquisition,
  we are referring to the business and financial information of Leading Asia and
  its consolidated subsidiaries. Immediately following closing of the reverse
  acquisition of Leading Asia, Unitech transferred 10,524,600 of the 25,250,000
  shares issued to it under the share exchange to 22 individuals and entities,
  pursuant to a share allocation agreement that Unitech entered into with these
  people on February 10, 2010. On February 10, 2010, we also completed a
  private placement transaction with a group of accredited investors, pursuant
  to which we issued to the investors an aggregate of 5,486,000 shares of our
  common stock, for a purchase price $1.25 per share, and warrants to purchase
  up to 2,743,000 shares of our common stock. The warrants have a term of 5
  years, bear an exercise price of $1.60 per share, as adjusted from time to
  time pursuant to anti-dilution and other customary provisions, and are
  exercisable by investors at any time after the closing date. As a result of
  this private placement we raised $6,857,500 in gross proceeds, which left us
  with $5,392,151 in net proceeds after the deduction of offering expenses in
  the amount of $1,465,349. For details regarding the share exchange
  agreement and the private placement transaction see our Current Report on Form
  8-K filed on February 12, 2010. 18 
 On February 10, 2010, we changed our name to
  China TMK Battery Systems Inc. to more accurately reflect our new business
  operations. Our common stock will be quoted on the Over-the-Counter Bulletin
  Board maintained by the Financial Industry Regulatory Authority, or FINRA,
  under the symbol DFEL until FINRA assigns a new symbol to our common stock
  in connection with our name change.The chart below presents our
  corporate structure:  Our principal executive offices are located
  at Sanjun Industrial Park, No. 2 Huawang Rd., Dalang Street, Bao'an District,
  Shenzhen, 518109, People's Republic of China. The telephone number at our
  principal executive office is (+86) 755 28109908. Results of Operations The following table sets forth key
  components of our results of operations during the three month periods ended
  March 31, 2010 and 2009, respectively, both in dollars and as a percentage of
  our net sales. As the acquisition of Leading Asia, Good Wealth and TMK was
  entered into on February 10, 2010 and acquisition of Borou on July 14, 2009
  and during the periods indicated such entities were the only entities in our
  combined business that had operations, the results of operations below refer
  only to that of Leading Asia, Good Wealth, Borou and TMK. For Three Months EndedMarch 31,2010
      
      
      2009(as
      
      
      
      
      
      (as(in
      
      
      percent of
      
      
      (in
      
      
      percent ofthousands)
      
      
      revenue)
      
      
      thousands)
      
      
      revenue)(all amounts are in thousands except
      percentages,share and per
      share amounts)Revenue
      $
      13,264
      
      
      100.0%
      
      $
      9,901
      
      
      100.0%Cost of Goods
      Sold
      
      (10,105
      )
      
      -76.2%
      
      
      (7,489
      )
      
      -75.6%Gross Profit
      
      3,159
      
      
      23.8%
      
      
      2,412
      
      
      24.4%Selling Expenses
      
      235
      
      
      1.8%
      
      
      191
      
      
      1.9% 19 
 Depreciation
      
      18
      
      
      0.1%
      
      
      53
      
      
      0.5%General and
      administrative
      
      1,823
      
      
      13.7%
      
      
      269
      
      
      2.7%Research and
      development
      
      165
      
      
      1.2%
      
      
      112
      
      
      1.1%Total operating
      expenses
      
      2,241
      
      
      16.9%
      
      
      625
      
      
      6.3%Income (loss) from
      operations
      
      918
      
      
      6.9%
      
      
      1,787
      
      
      18.0%Other expensesInterest
      expense
      
      (242
      )
      
      -1.8%
      
      
      (219
      )
      
      -2.2%Other expenses,
      net
      
      (60
      )
      
      -0.5%
      
      
      (1
      )
      
      0.0%Change in fair
      value of embedded derivative
      
      (1,725
      )
      
      -13.0%
      
      
      0
      
      
      0.0%Total other
      expenses
      
      (2,027
      )
      
      -15.3%
      
      
      (220
      )
      
      -2.2%Income (loss) before
      income taxes
      
      (1,109
      )
      
      -8.4%
      
      
      1,567
      
      
      15.8%Income taxes
      
      (358
      )
      
      -2.7%
      
      
      (235
      )
      
      -2.4%Net Income (loss)
      $
      (1,467
      )
      
      -11.1%
      
      
      1,332
      
      
      13.5% Sales Revenue.
  Our sales revenue increased to $13.3 million in the three months ended March
  31, 2010 from $9.9 million in the same period in 2009, representing a 34.0%
  increase period-over-period. . The increase in revenue was attributed mainly
  to the increased demand for our products, which we believe is a result of our
  market expansion efforts. Cost of Sales.
  Our cost of sales increased $2.6million, or 34.9%, to $10.1 million in the
  three months ended March 31, 2010 from $7.5 million in the same period in
  2009. The increase was primarily a result of the increase in sales and was
  relatively consistent with the increase in our net revenue. Gross Profit and Gross Margin.
  Our gross profit increased $0.8 million, or 31.0%, to $3.2 million in the
  three months ended March 31, 2010 from $2.4million in the same period in 2009.
  The increase was primarily a result of the increase in sales and was
  relatively consistent with the increase in our net revenue. Our gross margin
  is 23.8% in first quarter of 2010 compared to 24.4% in the same period last
  year. The decrease in gross margin is mainly due to increase in the production
  cost. Operating Expense
  Operating expense was $2.2 million in the three
  months ended March 31, 2010 compare to $0.6 million in the same period last
  year. It is mainly due to one-time merger cost of $1.77 million in the first
  quarter of 2010. Change in Fair Value of Embedded DerivativeWe granted a total of 3,401,320
  warrants in connection with our private placement in February 2010. Due to the
  reset provision included in our warrant agreements, warrants are classified as
  derivative liability. The loss from change in fair value of derivative
  liability represents the difference of fair value between February 10, 2010
  (inception) and March 31, 2010. Income (Loss) Before Income Taxes.
  Our income before income taxes decreased by $2.68 million, or 170.8%, to -$1.1
  million in the three months ended March 31, 2010 from $1.6 million in the same
  period in 2009. The decrease in income before income tax is primarily due to
  increase in the one-time merger cost and loss of $1.73 million from change in
  fair value of derivative liability. Income Taxes. We incurred $.4 million income tax expenses in the three months ended
  March 31, 2010, as compared to $.2 million in the same period in 2009. The
  income taxes increased in the three months ended March 31, 2010 vs. same
  period in 2009 even though income before income taxes decreased in the three
  months ended March 31, 2010 vs. same period in 2009. The reason was that
  merger cost of $1.77 million and loss of $1.73 million from change in fair
  value of derivative liability were incurred on US shell company level which
  was not subject to any income taxes. Net Income (Loss).
  In the three months ended March 31, 2010, we incurred a net loss of $1.5
  million, a decrease of $2.8 million, or 210.2%, from $1.3 million in the same
  period in 2009. Liquidity and Capital Resources As of March 31, 2010, we had cash and cash
  equivalents of $.29 million, primarily consisting of cash on hand and demand
  deposits. The following table provides detailed information about our net cash
  flow for all financial statement periods presented in this report. To date, we
  have financed our operations primarily through cash flows from operations,
  augmented by short-term bank borrowings and equity contributions by our
  stockholders. 20 
 The following table sets forth a summary of
  our cash flows for the periods indicated: Cash Flow(all amounts in U.S. dollars) March 31, 2010
      
      
      March 31, 2009Net cash provided by
      (used in) operating activities
      $
      (1,147,250
      )
      $
      2,665,341Net cash  used in investing activities
      
      (5,874,237
      )
      
      (4,950,639
      )Net cash provided by
      (used in) financing activities
      
      6,970,904
      
      
      3,665,205Effects of exchange
      rate change in cash
      
      154,354
      
      
      (276,092
      )Net increase
      in cash and cash equivalents
      
      103,771
      
      
      1,103,815Cash and cash
      equivalent at beginning of the quarter
      
      185,590
      
      
      186,463Cash and cash
      equivalent at end of the quarter
      $
      289,361
      
      $
      1,290,278 Operating activities Net cash used in operating activities was
  $1.1 million for the three months ended March 31, 2010, as compared to $2.7
  million net cash provided by operating activities for the same period in 2009.
  The decrease in net cash provided in operating activities was primarily due to
  decrease in net income and increase in AR and prepaid expense. The decrease is
  partially offset by the increase in inventories and change in fair value of
  embedded derivative. Investing activities Net cash used in investing activities for
  the three months ended March 31, 2010 was $5.9 million, as compared to $5.0
  million net cash used in investing activities for the same period of 2009. The
  increase of net cash used in investing activities was mainly attributable to
  PPE purchase and deposit for Hualian acquisition. Financing activities Net cash provided by financing activities
  for the three months ended March 31, 2010 was $7.0 million, as compared to
  $3.7 million net cash provided by financing activities for the same period of
  2009. The increase of net cash provided by financing activities was mainly
  attributable to completion of the private placement in the first quarter of
  2010. We believe that our cash on hand and cash
  flow from operations will meet part of our present cash needs and we will
  require additional cash resources, including loans, to meet our expected
  capital expenditure and working capital for the next 12 months. We may,
  however, in the future, require additional cash resources due to changed
  business conditions, implementation of our strategy to ramp up our marketing
  efforts and increase brand awareness, or acquisitions we may decide to pursue.
  If our own financial resources are insufficient to satisfy our capital
  requirements, we may seek to sell additional equity or debt securities or
  obtain additional credit facilities. The sale of additional equity securities
  could result in dilution to our stockholders. The incurrence of indebtedness
  would result in increased debt service obligations and could require us to
  agree to operating and financial covenants that would restrict our operations.
  Financing may not be available in amounts or on terms acceptable to us, if at
  all. Any failure by us to raise additional funds on terms favorable to us, or
  at all, could limit our ability to expand our business operations and could
  harm our overall business prospects. Inflation Inflation and changing prices have not had a
  material effect on our business and we do not expect that inflation or
  changing prices will materially affect our business in the foreseeable future.
  However, our management will closely monitor the price change in travel
  industry and continually maintain effective cost control in operations. Off Balance Sheet Arrangements We do not have any 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 or capital expenditures or capital
  resources that is material to an investor in our securities. 21 
 Seasonality Our operating results and operating cash
  flows historically have not been subject to seasonal variations. This pattern
  may change, however, as a result of new market opportunities or new product
  introduction. Critical Accounting Policies The preparation of financial statements in
  conformity with accounting principles generally accepted in the United States
  requires our management to make assumptions, estimates and judgments that
  affect the amounts reported, including the notes thereto, and related
  disclosures of commitments and contingencies, if any. We have identified
  certain accounting policies that are significant to the preparation of our
  financial statements. These accounting policies are important for an
  understanding of our financial condition and results of operation. Critical
  accounting policies are those that are most important to the portrayal of our
  financial conditions and results of operations and require management's
  difficult, subjective, or complex judgment, often as a result of the need to
  make estimates about the effect of matters that are inherently uncertain and
  may change in subsequent periods. Certain accounting estimates are
  particularly sensitive because of their significance to financial statements
  and because of the possibility that future events affecting the estimate may
  differ significantly from management's current judgments. We believe the
  following critical accounting policies involve the most significant estimates
  and judgments used in the preparation of our financial statements: Revenue recognition The Company generates revenues from the
  sales of environment-friendly batteries including nickel metal hydride
  batteries. 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 VAT. No return allowance is made as
  products returns are insignificant based on historical experience. Use of estimates The preparation of financial statements in
  conformity with generally accepted accounting principles, or GAAP, in the
  United States of American. GAAP 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. Accounts receivable Accounts receivables are recognized and
  carried at original invoiced amount less an allowance for uncollectible
  accounts, as needed. The Company uses the aging method to estimate the
  valuation allowance for anticipated uncollectible receivable balances. Under
  the aging method, bad debts percentages determined by management based on
  historical experience as well as current economic climate are applied to
  customers' balances categorized by the number of months the underlying
  invoices have remained outstanding. The valuation allowance balance is
  adjusted to the amount computed as a result of the aging method. When facts
  subsequently become available to indicate that the amount provided as the
  allowance was incorrect, an adjustment which classified as a change in
  estimate is made. Impairment of long-lived assets The Company accounts for impairment of plant
  and equipment and amortizable intangible assets in accordance with ASC 360,
  Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be
  Disposed Of, which requires the Company to evaluate a long-lived asset for
  recoverability when there is event or circumstance that indicate the carrying
  value of the asset may not be recoverable. An impairment loss is recognized
  when the carrying amount of a long-lived asset or asset group is not
  recoverable (when carrying amount exceeds the gross, undiscounted cash flows
  from use and disposition) and is measured as the excess of the carrying amount
  over the asset's (or asset group's) fair value. 22 
 Comprehensive income The Company reports comprehensive income,
  its components, and accumulated balances in its financial statements.
  Accumulated other comprehensive income represents the accumulated balance of
  foreign currency translation adjustments. No other items of comprehensive
  income are present. Foreign currency The functional currency of the Company is
  RMB. The Company maintains its financial statements using the functional
  currency. Monetary assets and liabilities denominated in currencies other than
  the functional currency are translated into the functional currency at rates
  of exchange prevailing at the balance sheet dates. Transactions denominated in
  currencies other than the functional currency are translated into the
  functional currency at the exchange rates prevailing at the dates of the
  transaction. Exchange gains or losses arising from foreign currency
  transactions are included in the determination of net income (loss) for the
  respective periods. For financial reporting purposes, the
  financial statements of the Company, which are prepared in RMB, are translated
  into the Company's reporting currency, USD. Balance sheet accounts are
  translated using the closing exchange rate in effect at the balance sheet date
  and income and expense accounts are translated using the average exchange rate
  prevailing during the reporting period. Adjustments resulting from the
  translation, if any, are included in accumulated other comprehensive income
  (loss) in stockholder's equity. Government grants Grants from the PRC government are
  recognized at their fair value where there is a reasonable assurance that the
  grant will be received and the Company will comply with all attached
  conditions. Government grants are recognized as revenues or gains in the
  periods received and as assets, decreases of liabilities, or expenses
  depending on the form of the grants received. Recent Accounting Pronouncements In June 2009, the Financial Accounting
  Standards Board, or FASB, issued a standard that established the FASB
  Accounting Standards Codification, or ASC, amended the hierarchy of generally
  accepted accounting principles such that the ASC became the single source of
  authoritative nongovernmental U.S. GAAP. The ASC did not change current U.S.
  GAAP, but was intended to simplify user access to all authoritative U.S. GAAP
  by providing all the authoritative literature related to a particular topic in
  one place. All previously existing accounting standard documents were
  superseded and all other accounting literature not included in the ASC is
  considered non-authoritative. New accounting standards issued subsequent to
  June 30, 2009 are communicated by the FASB through Accounting Standards
  Updates, or ASUs. The Company adopted the ASC on July 1, 2009. This standard
  did not have an impact on the Company's consolidated results of operations or
  financial condition. However, throughout the notes to the consolidated
  financial statements references that were previously made to various former
  authoritative U.S. GAAP pronouncements have been changed to coincide with the
  appropriate section of the ASC. In September 2009, the FASB issued an
  accounting standard codified in ASC 820, Fair Value Measurements and
  Disclosures. This standard established a single definition of fair value
  and a framework for measuring fair value, set out a fair value hierarchy to be
  used to classify the source of information used in fair value measurements,
  and required disclosures of assets and liabilities measured at fair value
  based on their level in the hierarchy. This standard applies under other
  accounting standards that require or permit fair value measurements. One of
  the amendments deferred the effective date for one year relative to
  nonfinancial assets and liabilities that are measured at fair value, but are
  recognized or disclosed at fair value on a nonrecurring basis. This deferral
  applied to such items as nonfinancial assets and liabilities initially
  measured at fair value in a business combination (but not measured at fair
  value in subsequent periods) or nonfinancial long-lived asset groups measured
  at fair value for an impairment assessment. The adoption of the fair value
  measurement standard did not have a material impact on the Company's
  consolidated results of operations or financial condition. In December 2007, the FASB issued and, in
  April 2009, amended a new business combinations standard codified within ASC
  805, which changed the accounting for business acquisitions. Accounting for
  business combinations under this standard requires the acquiring entity in a
  business combination to recognize all (and only) the assets acquired and
  liabilities assumed in the transaction and establishes the acquisition-date
  fair value as the measurement objective for all assets acquired and
  liabilities assumed in a business combination. Certain provisions of this
  standard impact the determination of acquisition-date fair value of
  consideration paid in a business combination (including contingent
  consideration); exclude transaction costs from acquisition accounting; and
  change accounting practices for acquisition-related restructuring costs,
  in-process research and development, indemnification assets, and tax benefits.
  The Company adopted the standard for business combinations for its business
  combination during the period ended June 30, 2009. 23 
 In April 2009, the FASB issued an accounting
  standard which provides guidance on (1) estimating the fair value of an asset
  or liability when the volume and level of activity for the asset or liability
  have significantly declined and (2) identifying transactions that are not
  orderly. The standard also amended certain disclosure provisions for fair
  value measurements and disclosures in ASC 820 to require, among other things,
  disclosures in interim periods of the inputs and valuation techniques used to
  measure fair value as well as disclosure of the hierarchy of the source of
  underlying fair value information on a disaggregated basis by specific major
  category of investment. The standard was effective prospectively beginning
  April 1, 2009. The adoption of this standard did not have a material impact on
  the Company's consolidated results of operations or financial condition. In April 2009, the FASB issued an accounting
  standard regarding interim disclosures about fair value of financial
  instruments. The standard essentially expands the disclosure about fair value
  of financial instruments that were previously required only annually to also
  be required for interim period reporting. In addition, the standard requires
  certain additional disclosures regarding the methods and significant
  assumptions used to estimate the fair value of financial instruments. The
  adoption of this standard did not have a material impact on the Company's
  consolidated results of operations or financial condition. In May 2009, the FASB issued a new
  accounting standard regarding subsequent events. This standard incorporates
  into authoritative accounting literature certain guidance that already existed
  within generally accepted auditing standards, with the requirements concerning
  recognition and disclosure of subsequent events remaining essentially
  unchanged. This guidance addresses events which occur after the balance sheet
  date but before the issuance of financial statements. Under the new standard,
  as under previous practice, an entity must record the effects of subsequent
  events that provide evidence about conditions that existed at the balance
  sheet date and must disclose but not record the effects of subsequent events
  which provide evidence about conditions that did not exist at the balance
  sheet date. This standard added an additional required disclosure relative to
  the date through which subsequent events have been evaluated and whether that
  is the date on which the financial statements were issued. For the Company,this standard was effective beginning April 1, 2009. In June 2009, the FASB issued a new standard
  regarding the accounting for transfers of financial assets amending the
  existing guidance on transfers of financial assets to, among other things,
  eliminate the qualifying special-purpose entity concept, include a new unit of
  account definition that must be met for transfers of portions of financial
  assets to be eligible for sale accounting, clarify and change the
  derecognition criteria for a transfer to be accounted for as a sale, and
  require significant additional disclosure. The standard is effective for new
  transfers of financial assets beginning January 1, 2010. The adoption of this
  standard did not have a material impact on the Company's consolidated results
  of operations or financial condition. In June 2009, the FASB issued an accounting
  standard that revised the consolidation guidance for variable-interest
  entities. The modifications include the elimination of the exemption for
  qualifying special purpose entities, a new approach for determining who should
  consolidate a variable-interest entity, and changes to when it is necessary to
  reassess who should consolidate a variable-interest entity. The standard is
  effective January 1, 2010. The adoption of this standard did not have a
  material impact on the Company's consolidated results of operations or
  financial condition. In August 2009, the FASB issued ASU No.
  2009-05, Measuring Liabilities at Fair Value, which provides additional
  guidance on how companies should measure liabilities at fair value under ASC
  820. The ASU clarifies that the quoted price for an identical liability should
  be used. However, if such information is not available, a entity may use, the
  quoted price of an identical liability when traded as an asset, quoted prices
  for similar liabilities or similar liabilities traded as assets, or another
  valuation technique (such as the market or income approach). The ASU also
  indicates that the fair value of a liability is not adjusted to reflect the
  impact of contractual restrictions that prevent its transfer and indicates
  circumstances in which quoted prices for an identical liability or quoted
  price for an identical liability traded as an asset may be considered level 1
  fair value. This ASU is effective October 1, 2009. The adoption of this
  standard did not have a material impact on the Company's consolidated results
  of operations or financial condition. In October 2009, the FASB issued ASU No.
  2009-13, Multiple-Deliverable Revenue Arrangementsa consensus of the FASB
  Emerging Issues Task Force, that provides amendments to the criteria for
  separating consideration in multiple-deliverable arrangements. As a result of
  these amendments, multiple-deliverable revenue arrangements will be separated
  in more circumstances than under existing U.S. GAAP. The ASU does this by
  establishing a selling price hierarchy for determining the selling price of a
  deliverable. The selling price used for each deliverable will be based on
  vendor-specific objective evidence if available, third-party evidence if
  vendor-specific objective evidence is not available, or estimated selling
  price if neither vendor-specific objective evidence nor third-party evidence
  is available. A vendor will be required to determine its best estimate of
  selling price in a manner that is consistent with that used to determine the
  price to sell the deliverable on a standalone basis. This ASU also eliminates
  the residual method of allocation and will require that arrangement
  consideration be allocated at the inception of the arrangement to all
  deliverables using the relative selling price method, which allocates any
  discount in the overall arrangement proportionally to each deliverable based
  on its relative selling price. Expanded disclosures of qualitative and
  quantitative information regarding application of the multiple-deliverable
  revenue arrangement guidance are also required under the ASU. The ASU does not
  apply to arrangements for which industry specific allocation and measurement
  guidance exists, such as long-term construction contracts and software
  transactions. The ASU is effective beginning January 1, 2011. The Company is
  currently evaluating the impact of this standard on the Company's consolidated
  results of operations and financial condition. 24 
 In October 2009, the FASB issued ASU No.
  2009-14, Certain Revenue Arrangements That Include Software Elementsa
  consensus of the FASB Emerging Issues Task Force, that reduces the types
  of transactions that fall within the current scope of software revenue
  recognition guidance. Existing software revenue recognition guidance requires
  that its provisions be applied to an entire arrangement when the sale of any
  products or services containing or utilizing software when the software is
  considered more than incidental to the product or service. As a result of the
  amendments included in ASU No. 2009-14, many tangible products and services
  that rely on software will be accounted for under the multiple-element
  arrangements revenue recognition guidance rather than under the software
  revenue recognition guidance. Under the ASU, the following components would be
  excluded from the scope of software revenue recognition guidance: the tangible
  element of the product, software products bundled with tangible products where
  the software components and non-software components function together to
  deliver the product's essential functionality, and undelivered components that
  relate to software that is essential to the tangible product's functionality.
  The ASU also provides guidance on how to allocate transaction consideration
  when an arrangement contains both deliverables within the scope of software
  revenue guidance (software deliverables) and deliverables not within the scope
  of that guidance (non-software deliverables). The ASU is effective beginning
  January 1, 2011. The Company is currently evaluating the impact of this
  standard on the Company's consolidated results of operations and financial
  condition. In January 2010, the FASB issued ASU No.
  2010-6, Improving Disclosures About Fair Value Measurements, that amends
  existing disclosure requirements under ASC 820 by adding required disclosures
  about items transferring into and out of levels 1 and 2 in the fair value
  hierarchy; adding separate disclosures about purchase, sales, issuances, and
  settlements relative to level 3 measurements; and clarifying, among other
  things, the existing fair value disclosures about the level of disaggregation.
  This ASU is effective for the first quarter of 2010, except for the
  requirement to provide level 3 activity of purchases, sales, issuances, and
  settlements on a gross basis, which is effective beginning the first quarter
  of 2011. Since this standard impacts disclosure requirements only, its
  adoption will not have a material impact on the Companys consolidated results
  of operations or financial condition. ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not Applicable. ITEMS 4 AND 4A(T).CONTROLS AND PROCEDURES. Disclosure Controls and Procedures We maintain disclosure controls and
  procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure
  controls and procedures refer to controls and other procedures designed to
  ensure that information required to be disclosed in the reports we file or
  submit under the Securities Exchange Act is recorded, processed, summarized
  and reported within the time periods specified in the rules and forms of the
  SEC and that such information is accumulated and communicated to our
  management, including our Chief Executive Officer and Chief Financial Officer,
  as appropriate, to allow timely decisions regarding required disclosure. As required by Rule 13a-15(e), our
  management has carried out an evaluation, with the participation and under the
  supervision of our Chief Executive Officer, Ms. Xiangjun Liu and our Chief
  Financial Officer, Mr. Jin Hu, of the effectiveness of the design and
  operation of our disclosure controls and procedures, as of March 31, 2010.
  Based upon, and as of the date of this evaluation, Ms. Liu and Mr. Hu,
  determined that, our disclosure controls and procedures were not effective due
  to the deficiencies described below. These deficiencies consisted of inadequate staffing and
  supervision that could lead to the untimely identification and resolution of
  accounting and disclosure matters and failure to perform timely and effective
  reviews. In addition, there are deficiencies in the recording and
  classification of accounting transactions and a lack of personnel with
  expertise in US generally accepted accounting principles and US Securities and
  Exchange Commission rules and regulations.
  Deficiencies in our controls and procedures have led to
  restatements of our financial statements. In August 2010, we discovered that
  our financial statements for the three months ended March 31, 2010 should not
  be relied upon due to an error in accounting for warrants issued by the
  Company in connection with our private placement. On February 10, 2010, the
  Company issued warrants to both investors and private placement agent. The
  Warrants terms included rights to purchase shares of stock at various exercise
  prices per share and subject to adjustment for share issuances (dilutive
  reset). The Warrants contain reset features (subject to adjustment for
  dilutive share issuances) and based on the guidance of ASC 815-15 and ASC
  815-20, the warrants should be valued as a derivative liability. The Company
  failed to record Derivative Liability and related Additional Paid-in Capital
  at inception date. In addition, the Company failed to record the change in
  fair value of derivative liability between inception date and March 31, 2010
  in Form 10-Q filed on May 24, 2010.
  We are seeking to improve our controls and procedures in an
  effort to remediate these deficiencies through improving supervision,
  education, and training of our accounting staff. We will also seek third-party
  financial consultant to review and analyze our financial statements and assist
  us in improving our reporting of financial information. Management plans to
  enlist additional qualified in-house accounting personnel and third-party
  accounting personnel to ensure that management will have adequate resources in
  order to attain complete reporting of financial information disclosures in a
  timely matter. 25 
 Changes in Internal Controls over
  Financial Reporting We regularly review our system of internal
  control over financial reporting and make changes to our processes and systems
  to improve controls and increase efficiency, while ensuring that we maintain
  an effective internal control environment. Changes may include such activities
  as implementing new, more efficient systems, consolidating activities, and
  migrating processes. There were no changes in our internal
  controls over financial reporting during the first quarter of fiscal 2010 that
  have materially affected, or are reasonably likely to materially affect our
  internal control over financial reporting. PART II 
  OTHER INFORMATION ITEM 1.LEGAL PROCEEDINGS. From time to time, we may become involved in
  various lawsuits and legal proceedings, which arise, in the ordinary course of
  business. However, litigation is subject to inherent uncertainties, and an
  adverse result in these, or other matters, may arise from time to time that
  may harm our business. Other than the legal proceedings set forth below, we
  are currently not aware of any such legal proceedings or claims that we
  believe will have a material adverse affect on our business, financial
  condition or operating results. ITEM 1A.RISK FACTORS. Not applicable. ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. We have not sold any equity securities
  during the quarter ended March 31, 2010 which sale was not previously
  disclosed in a current report on Form 8-K filed during that period. ITEM 3.DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4.(REMOVED AND RESERVED). ITEM 5.OTHER INFORMATION. We have no information to include that was
  required to be but was not disclosed in a report on Form 8-K during the period
  covered by this Form 10-Q. There have been no material changes to the
  procedures by which security holders may recommend nominees to our board of
  directors. ITEM 6.EXHIBITS. The following exhibits are filed as part of
  this report or incorporated by reference: Exhibit Number
      
      Description31.1
      
      Certifications of Chief Executive Officer
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
      
      Certifications of Chief Financial Officer
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
      
      Certifications of Chief Executive Officer
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
      
      Certifications of Chief Financial Officer
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 26 
 SIGNATURES Pursuant to the
  requirements of the Securities Exchange Act of 1934, the registrant has duly
  caused this report to be signed on its behalf by the undersigned, thereunto
  duly authorized. CHINA TMK BATTERY
      SYSTEMS INC.Dated: October 20,
      2010
      /s/Henian WuHenian WuChairman(Principal
      Executive Officer)Dated: October 20,
      2010
      /s/ Jin HuJin HuChief Financial
      Officer(Principal
      Financial Officer and Principal Accounting Officer)  
 EXHIBIT INDEX Exhibit Number
      
      Description31.1
      
      Certifications of Chief Executive Officer
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
      
      Certifications of Chief Financial Officer
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
      
      Certifications of Chief Executive Officer
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
      
      Certifications of Chief Financial Officer
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002