**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-Q**




(Mark
      One)





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934





**For
      the quarterly period ended September 30, 2008**





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT





For
      the
      transition period from ________________ to _______________





**333-131168**


(Commission
      file number)





**DEER
      CONSUMER PRODUCTS, INC**


(Exact
      name of registrant as specified in its charter)


**Nevada**
              **20-5526104**(State
                  or other jurisdiction
              (IRS
                  Employerof
                  incorporation or organization)
              Identification
                  No.)




**Area
      2, 1/F, Building M-6,**


**Central
      High-Tech Industrial Park,**


**Nanshan,
      Shenzhen, China**


(Address
      of principal executive offices)





**011-86-755-8602-8285**


**** (Issuer’s
      telephone number)





**N/A**


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





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.


Yes
x No o





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. (Check one):


Large
                  accelerated filer o
              Accelerated
                  filer oNon-accelerated
                  filer o
              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
o  No
x




As
      of
      November 10, 2008 there were 22,600,000  shares
      of
      common stock were outstanding.










**DEER
      CONSUMER PRODCUTS, INC. AND SUBSIDIARIES**


**Index**




PageNumberPART
                  I.
              FINANCIAL
                  INFORMATIONItem
                  1.
              Financial
                  StatementsConsolidated
                  Balance Sheets as of September 30, 2008 (unaudited) and December
                  31,
                  2007
              2Consolidated
                  Statements of Income and Other Comprehensive Income for
                  the three and nine months ended September 30, 2008 and 2007
                  (unaudited)
              3Consolidated
                  Statements of Cash Flows for the nine
                  months ended September 30, 2008 and 2007 (unaudited)
              4Notes
                  to Consolidated Financial Statements (unaudited)
              5Item
                  2.
              Management’s
                  Discussion and Analysis or Plan of Operations
              16Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              23Item
                  4.
              Controls
                  and Procedures
              23PART
                  II.
              OTHER
                  INFORMATION
              23Item
                  1.
              Legal
                  Proceedings
              23Item
                  1A.
              Risk
                  Factors
              23Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              23Item
                  3.
              Defaults
                  Upon Senior Securities
              23Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              23Item
                  5.
              Other
                  Information
              24Item
                  6.
              Exhibits
              24SIGNATURES
              
              25







**DEER
      CONSUMER PRODCUTS, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEET**




**AS
        OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007**


**September
                  30,**
              
              **December
                  31,****2008**
              
              **2007**(unaudited)**ASSETS****CURRENT
                  ASSETS:**Cash
                  & cash equivalents
              
              $
              2,132,900
              
              $
              1,511,545Restricted
                  cash
              
              
              631,301
              
              
              450,385Accounts
                  receivable, net
              
              
              7,864,332
              
              
              3,491,235Advances
                  to suppliers
              
              
              3,239,827
              
              
              2,817,333Other
                  receivable
              
              
              378,978
              
              
              395,180Short
                  term investments
              
              
              29,260
              
              
              136,647Due
                  from shareholder
              
              
              —
              
              
              1,383,124Due
                  from related party
              
              
              3,876,907
              
              
              —Inventory
              
              
              10,793,826
              
              
              4,153,304Other
                  current assets
              
              
              46,912
              
              
              628,718Total
                  current assets
              
              
              28,994,243
              
              
              14,967,471PROPERTY
                  AND EQUIPMENT, net
              
              
              11,493,278
              
              
              8,576,102CONSTRUCTION
                  IN PROGRESS
              
              
              952,979
              
              
              302,160INTANGIBLE
                  ASSETS, net
              
              
              405,377
              
              
              387,541OTHER
                  ASSETS
              
              
              44,472
              
              
              42,008**TOTAL
                  ASSETS**
              
              $
              41,890,349
              
              $
              24,275,282**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****CURRENT
                  LIABILITIES:**Accounts
                  payable
              
              $
              7,776,380
              
              $
              2,479,056Other
                  payables
              
              
              474,465
              
              
              564,820Unearned
                  revenue
              
              
              1,485,577
              
              
              69,591Accrued
                  payroll
              
              
              259,071
              
              
              134,301Short
                  term loans
              
              
              6,067,172
              
              
              1,691,431Due
                  to shareholder
              
              
              —
              
              
              756,458Advances
                  from shareholder
              
              
              —
              
              
              509,139Advances
                  from related party
              
              
              117,039
              
              
              —Notes
                  payable
              
              
              6,402,882
              
              
              3,160,059Tax
                  and welfare payable
              
              
              1,357,509
              
              
              896,605Total
                  current liabilities
              
              
              23,940,095
              
              
              10,261,460**STOCKHOLDERS'
                  EQUITY:**Common
                  Stock, $0.001 per share; 75,000,000 shares authorized;22,600,000
                  and 18,050,000 shares issued and oustanding
              
              
              22,600
              
              
              18,050Additional
                  paid-in capital
              
              
              9,326,423
              
              
              9,330,973Development
                  funds
              
              
              517,985
              
              
              343,232Statutory
                  reserve
              
              
              1,035,970
              
              
              686,464Other
                  comprehensive income
              
              
              2,305,404
              
              
              1,303,732Retained
                  earnings
              
              
              4,741,872
              
              
              2,331,371Total
                  stockholders' equity
              
              
              17,950,254
              
              
              14,013,822**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              
              $
              41,890,349
              
              $
              24,275,282
  The
        accompanying notes are an integral part of these consolidated financial
        statements
  2





**DEER
      CONSUMER PRODCUTS, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME**


**FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND
        2007**


**Three
                  Months Ended September 30,**
              
              **Nine
                  Months Ended September 30,****2008**
              
              **2007**
              
              **2008**
              
              **2007**(unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)**Net
                  Revenue**
              
              $
              11,542,215
              
              $
              7,008,973
              
              $
              32,045,142
              
              $
              20,937,201**Cost
                  of Revenue**
              
              
              8,255,913
              
              
              5,410,111
              
              
              24,550,251
              
              
              16,508,880**Gross
                  profit**
              
              
              3,286,302
              
              
              1,598,862
              
              
              7,494,891
              
              
              4,428,321Operating
                  expensesSelling
                  expenses
              
              
              672,714
              
              
              377,262
              
              
              1,882,130
              
              
              1,062,204General
                  and administrative expenses
              
              
              943,467
              
              
              489,504
              
              
              2,182,969
              
              
              1,157,695Total
                  operating expenses
              
              
              1,616,181
              
              
              866,766
              
              
              4,065,099
              
              
              2,219,899**Income
                  from operations**
              
              
              1,670,121
              
              
              732,096
              
              
              3,429,792
              
              
              2,208,422Non-operating
                  income (expense):Financing
                  costs
              
              
              (1,926
              )
              
              (255
              )
              
              (48,361
              )
              
              (308
              )Interest
                  income
              
              
              1,693
              
              
              9,549
              
              
              8,548
              
              
              9,549Interest
                  expense
              
              
              (116,617
              )
              
              (38,503
              )
              
              (206,474
              )
              
              (72,941
              )Other
                  income (expense)
              
              
              32,690
              
              
              47,543
              
              
              74,523
              
              
              60,823Realized
                  loss on trading securities
              
              
              (34,684
              )
              
              -
              
              
              (34,684
              )
              
              -Foreign
                  exchange gain (loss)
              
              
              530,510
              
              
              15,893
              
              
              876,436
              
              
              7,664Total
                  non-operating income (expense)
              
              
              411,666
              
              
              34,227
              
              
              669,988
              
              
              4,787Income
                  before income tax
              
              
              2,081,787
              
              
              766,323
              
              
              4,099,780
              
              
              2,213,209Income
                  tax
              
              
              540,717
              
              
              359,893
              
              
              1,165,020
              
              
              605,422**Net
                  income**
              
              $
              1,541,070
              
              $
              406,430
              
              $
              2,934,760
              
              $
              1,607,787Other
                  comprehensive incomeForeign
                  currency translation gain
              
              
              1,367,814
              
              
              660,048
              
              
              2,305,404
              
              
              922,307**Comprehensive
                  Income**
              
              $
              2,908,884
              
              $
              1,066,478
              
              $
              5,240,164
              
              $
              2,530,094**Weighted
                  average shares outstanding:**Basic
              
              
              19,385,326
              
              
              18,050,000
              
              
              18,500,000
              
              
              18,050,000Diluted
              
              
              19,385,326
              
              
              18,050,000
              
              
              18,500,000
              
              
              18,050,000**Earnings
                  per share:**Basic
              
              $
              0.08
              
              $
              0.02
              
              $
              0.16
              
              $
              0.09Diluted
              
              $
              0.08
              
              $
              0.02
              
              $
              0.16
              
              $
              0.09
  The
        accompanying notes are an integral part of these consolidated financial
        statements
  3





**DEER
      CONSUMER PRODCUTS, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**




**FOR
        THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**Nine
                  Months Ended September 30,****2008**
              
              
              **2007**(unaudited)
              
              
              (unaudited)**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  income
              
              $
              2,934,760
              
              $
              1,607,787Adjustments
                  to reconcile net income to net cashused
                  in operating activities:Depreciation
              
              
              857,170
              
              
              658,852Amortization
              
              
              13,966
              
              
              13,847Loss
                  on disposal of fixed assets
              
              
              36,996
              
              
              -Realized
                  loss on short term investments
              
              
              34,684
              
              
              41,586(Increase)
                  / decrease in assets:Accounts
                  receivable
              
              
              (4,015,909
              )
              
              (2,973,964
              )Other
                  receivable
              
              
              147,815
              
              
              -Retention
              
              
              -
              
              
              817,315Inventory
              
              
              (6,234,027
              )
              
              (2,391,526
              )Due
                  from shareholder
              
              
              1,446,505
              
              
              -Due
                  from related party
              
              
              (3,799,263
              )
              
              -Advances
                  to suppliers
              
              
              (228,506
              )
              
              (2,715,015
              )Tax
                  rebate receivable
              
              
              347,731
              
              
              272,327Other
                  assets
              
              
              176,343
              
              
              (22,081
              )Increase
                  / (decrease) in current liabilities:Accounts
                  payable
              
              
              4,946,373
              
              
              1,871,416Unearned
                  revenue
              
              
              1,383,045
              
              
              137,358Other
                  payables
              
              
              (150,561
              )
              
              101,195Due
                  to related party
              
              
              (791,123
              )
              
              623,095Accrued
                  payroll
              
              
              113,427
              
              
              59,299Tax
                  and welfare payable
              
              
              392,629
              
              
              574,836Net
                  cash used in by operating activities
              
              
              (2,387,945
              )
              
              (1,323,673
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Acquisition
                  of property and equipment
              
              
              (3,188,166
              )
              
              (628,728
              )Acquisition
                  (disposal) of intangible assets
              
              
              8,041
              
              
              (167,063
              )Construction
                  in process
              
              
              (617,887
              )
              
              171,609Changes
                  in restricted cash
              
              
              (147,634
              )
              
              (348,401
              )Purchases
                  of short-term investments
              
              
              -
              
              
              (33,691
              )Sale
                  of short-term investments
              
              
              114,235
              
              
              -Net
                  cash used in investing activities
              
              
              (3,831,411
              )
              
              (1,006,274
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                  from issuance of notes payable
              
              
              2,969,781
              
              
              2,222,893Proceeds
                  from issuance of short term loans
              
              
              4,176,723
              
              
              1,247,513Change
                  in advance from shareholder, net
              
              
              (532,470
              )
              
              (64,208
              )Change
                  in advance from related party, net
              
              
              114,695
              
              
              -Net
                  cash provided by financing activities
              
              
              6,728,729
              
              
              3,406,198Effect
                  of exchange rate changes on cash and cash equivalents
              
              
              111,982
              
              
              47,486**NET
                  INCREASE (DECREASE) IN CASH & CASH
                  EQUIVALENTS**
              
              
              621,355
              
              
              1,123,737**CASH
                  & CASH EQUIVALENTS, BEGINNING BALANCE**
              
              
              1,511,545
              
              
              579,024**CASH
                  & CASH EQUIVALENTS, ENDING BALANCE**
              
              $
              2,132,900
              
              $
              1,702,761**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION:**Interest
                  paid
              
              $
              113,356
              
              $
              90,011Income
                  taxes paid
              
              $
              112,743
              
              $
              90,067
  The
        accompanying notes are an integral part of these consolidated financial
        statements
  4




**Deer
      Consumer Products, Inc. and Subsidiaries**


**Notes
      to Consolidated Financial Statements**


**For
      the Three and Nine Months Ended September 30, 2008 and 2007**


**(unaudited)**


**Note
      1 - Organization and Basis of Presentation**





The
      unaudited consolidated financial statements have been prepared by Deer Consumer
      Products, Inc. pursuant to the rules and regulations of the Securities Exchange
      Commission (“SEC”). The information furnished herein reflects all adjustments
      (consisting of normal recurring accruals and adjustments) which are, in the
      opinion of management, necessary to fairly present the operating results for
      the
      respective periods. Certain information and footnote disclosures normally
      present in annual consolidated financial statements prepared in accordance
      with
      accounting principles generally accepted in the United States of America have
      been omitted pursuant to such rules and regulations. These consolidated
      financial statements should be read in conjunction with the audited consolidated
      financial statements and footnotes included in the Company’s Annual Report on
      Form 10-K. The results for the nine months ended September 30, 2008 are not
      necessarily indicative of the results to be expected for the full year ending
      December 31, 2008.





Organization
      and Line of Business





Deer
      Consumer Products, Inc., formerly known as Tag Events Corp., (hereinafter
      referred to as the “Company” or “Deer”) was incorporated in the State of Nevada
      on July 18, 2006.





On
      September 3, 2008, the Company entered into a share exchange agreement and
      plan
      of reorganization with Deer International Group Limited (“Deer Intl”), a company
      incorporated under the laws of British Virgin Islands (“BVI”) on December 3,
      2007 and acquired 100% of the shares of Winder Electrical Company, Ltd.
      (“Winder”) on March 11, 2008. Winder has a 100% owned subsidiary, Delta
      International, Ltd., (“Delta”). W inder
      and
      Delta were formed and incorporated in the Guangdong Province of the PRC on
      July
      20, 2001 and February 23, 2006, respectively.





Pursuant
      to the share exchange agreement, the Company acquired from Deer Intl 50,000
      ordinary shares, consisting of all of its issued and outstanding capital stock,
      in exchange for the issuance of an aggregate of 18,050,000 shares of the
      Company’s common stock. Concurrently with the closing of the transactions
      contemplated by the share exchange agreement and as a condition thereof, the
      Company entered into an agreement with Crescent Liu, its former Director and
      Chief Executive Officer, pursuant to which he returned 5,950,000 shares of
      the
      Company’s common stock to the Company for cancellation. Mr. Liu was not
      compensated in any way for the cancellation of his shares of the Company’s
      common stock. Upon completion of the foregoing transactions, the Company had
      an
      aggregate of 22,600,000 shares of common stock issued and outstanding. In
      connection with the above transaction the Company changed its name to Deer
      Consumer Products, Inc. on September 3, 2008.





The
      exchange of shares with Deer Intl was accounted for as a reverse acquisition
      under the purchase method of accounting since Deer Intl obtained control of
      the
      Company. Accordingly, the merger of the Deer Intl into the Company was recorded
      as a recapitalization of Deer Intl, Deer Intl being treated as the continuing
      entity. The historical financial statements presented are the consolidated
      financial statements of Deer Intl. The share exchange agreement has been treated
      as a recapitalization and not as a business combination; therefore, no pro
      forma
      information is disclosed. At the date of this transaction, the net liabilities
      of the legal acquirer were $0.





As
      a
      result of the reverse merger transactions described above the historical
      financial statements presented are those of Deer Intl and its operating
      entities.





5
 
 **Deer
          Consumer Products, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **For
          the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**


The
      Company is engaged in manufacture, marketing, distribution and sale of household
      appliances (blenders, food processors, choppers, juicers, etc.). The Company
      manufactures its products out of YangJiang, China and operates corporate
      functions in Nanshan, Shenzhen, China.





Basis
      of Presentation





The
      accompanying consolidated financial statements include the accounts of the
      Company, its wholly-owned subsidiary, Deer Intl, and its 100% wholly-owned
      subsidiary Winder and Winder’s wholly-owned subsidiary Delta . All
      significant inter-company accounts and transactions have been eliminated in
      consolidation.





The
      accompanying consolidated financial statements have been prepared in conformity
      with accounting principles generally accepted in the United States of America.
      The Company’s functional currency is the Chinese Yuan Renminbi (RMB); however
      the accompanying consolidated financial statements have been translated and
      presented in United States Dollars ($).





Foreign
      Currency Translation





The
      accounts of the Company were maintained, and their consolidated financial
      statements were expressed in RMB. Such consolidated financial statements were
      translated into USD in accordance with Statement of Financial Accounting
      Standards ("SFAS") No. 52, "Foreign Currency Translation," with the RMB as
      the
      functional currency. According to the Statement, all assets and liabilities
      were
      translated at the exchange rate on the balance sheet date, stockholder's equity
      are translated at the historical rates and statement of operations items are
      translated at the weighted average exchange rate for the year. The resulting
      translation adjustments are reported under other comprehensive income in
      accordance with SFAS No. 130, "Reporting Comprehensive Income”.





**Note
      2 - Summary of Significant Accounting Policies**





Use
      of
      Estimates





The
      preparation of financial statements in conformity with United States generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates. Areas that
      require estimates and assumptions include valuation of accounts receivable
      and
      inventory, determination of useful lives of property and equipment, estimation
      of certain liabilities and sales returns.





Cash
      and Cash Equivalents





Cash
      and
      cash equivalents include cash in hand and cash in time deposits, certificates
      of
      deposit and all highly liquid debt instruments with original maturities of
      three
      months or less.





6


**Deer
        Consumer Products, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**





Accounts
      Receivable





The
      Company maintains reserves for potential credit losses on accounts receivable.
      Management reviews the composition of accounts receivable and analyzes
      historical bad debts, customer concentrations, customer credit worthiness,
      current economic trends and changes in customer payment patterns to evaluate
      the
      adequacy of these reserves.





Advances
      to Suppliers





The
      Company makes advances to certain vendors for purchase of its material. The
      advances to suppliers are interest free and unsecured.





Inventories





Inventories
      are valued at the lower of cost (determined on a weighted average basis) or
      market. The Company compares the cost of inventories with the market value
      and
      allowance is made for writing down the inventories to their market value, if
      lower.


Property
      & Equipment





Property
      and equipment are stated at cost. Expenditures for maintenance and repairs
      are
      charged to earnings as incurred; additions, renewals and betterments are
      capitalized. When property and equipment are retired or otherwise disposed
      of,
      the related cost and accumulated depreciation are removed from the respective
      accounts, and any gain or loss is included in operations. Depreciation of
      property and equipment is provided using the straight-line method for
      substantially all assets with estimated lives as follows:





Buildings
            
            
            5-20
                yearsEquipment
            
            
            5-10
                yearsVehicles
            
            
            5
                yearsOffice
                equipment
            
            
            5-10
                years





At
      September 30, 2008 and December 31, 2007, the following are the details of
      the
      property and equipment:




September
                30, 2008
            
            December
                31, 2007(unaudited)Building
            
            $
            1,884,763
            
            $
            1,552,881Equipment
            
            
            14,212,451
            
            
            10,597,224Vehicle
            
            
            34,311
            
            
            91,873Office
                Equipment
            
            
            404,118
            
            
            320,867Total
            
            
            16,535,643
            
            
            12,562,845Less
                accumulated depreciation
            
            
            (5,042,365
            )
            
            (3,986,743
            )$
            11,493,278
            
            $
            8,576,102




7


**Deer
        Consumer Products, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**


Depreciation
      expense for the three months ended September 30, 2008 and 2007 was $336,309
      and
      $269,228, respectively, and for the nine months ended September 30, 2008 and
      2007 was $857,170 and $658,852, respectively.





Long-Lived
      Assets





The
      Company applies the provisions of SFAS No. 144, “Accounting for the Impairment
      or Disposal of Long-Lived Assets” (“SFAS 144”), which addresses financial
      accounting and reporting for the impairment or disposal of long-lived assets
      and
      supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and
      for Long-Lived Assets to be Disposed Of,” and the accounting and reporting
      provisions of APB Opinion No. 30, “Reporting the Results of Operations for a
      Disposal of a Segment of a Business.” The Company periodically evaluates the
      carrying value of long-lived assets to be held and used in accordance with
      SFAS
      144. SFAS 144 requires impairment losses to be recorded on long-lived assets
      used in operations when indicators of impairment are present and the
      undiscounted cash flows estimated to be generated by those assets are less
      than
      the assets’ carrying amounts. In that event, a loss is recognized based on the
      amount by which the carrying amount exceeds the fair market value of the
      long-lived assets. Loss on long-lived assets to be disposed of is determined
      in
      a similar manner, except that fair market values are reduced for the cost of
      disposal. Based on its review, the Company believes that, as of September 30,
      2008 there were no significant impairments of its long-lived
      assets.


Intangible
      Assets





Intangible
      assets consist of rights to use land and computer software. The Company
      evaluates intangible assets for impairment, at least on an annual basis and
      whenever events or changes in circumstances indicate that the carrying value
      may
      not be recoverable from its estimated future cash flows. Recoverability of
      intangible assets is measured by comparing their net book value to the related
      projected undiscounted cash flows from these assets, considering a number of
      factors including past operating results, budgets, economic projections, market
      trends and product development cycles. If the net book value of the asset
      exceeds the related undiscounted cash flows, the asset is considered impaired,
      and a second test is performed to measure the amount of impairment loss.





Net
      intangible assets at September 30, 2008 and December 31, 2007 are as
      follows:





September
                30, 2008
            
            December
                31, 2007(unaudited)Right
                to use land
            
            $
            449,107
            
            $
            420,828Computer
                software
            
            
            76,696
            
            
            71,867Total
            
            
            525,803
            
            
            492,696Less
                Accumulated amortization
            
            
            (120,426
            )
            
            (105,155
            )Intangibles,
                net
            
            $
            405,377
            
            $
            387,541





Per
      the
      People's Republic of China's (“PRC”) governmental regulations, the Government
      owns all land. The Company has recognized the amounts paid for the acquisition
      of rights to use land as intangible asset. The Company is amortizing over the
      period the Company has use of the land which range from 45 to 50 years and
      computer software is amortized over 1-2 years.





8
 
 **Deer
          Consumer Products, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **For
          the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**


Amortization
      expense for the three of months ended September 30, 2008 and 2007 was $4,734
      and
      $5,294, respectively, and for the nine of months ended September 30, 2008 and
      2007 was $13,966 and $13,847, respectively.





Fair
      Value of Financial Instruments





Statement
      of financial accounting standard No. 107, Disclosures about fair value of
      financial instruments, requires that the Company disclose estimated fair values
      of financial instruments. The carrying amounts reported in the statements of
      financial position for current assets and current liabilities qualifying as
      financial instruments are a reasonable estimate of fair value.





On
      January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements.
      SFAS
      No. 157 defines fair value, establishes a three-level valuation hierarchy for
      disclosures of fair value measurement and enhances disclosures requirements
      for
      fair value measures. The carrying amounts reported in the balance sheets for
      receivables and current liabilities each qualify as financial instruments and
      are a reasonable estimate of fair value because of the short period of time
      between the origination of such instruments and their expected realization
      and
      their current market rate of interest. The three levels are defined as
      follow:





·
            Level
                1inputs
                to the valuation methodology are quoted prices (unadjusted) for identical
                assets or liabilities in active
                markets.





·
            Level
                2inputs
                to the valuation methodology include quoted prices for similar assets
                and
                liabilities in active markets, and inputs that are observable for
                the
                asset or liability, either directly or indirectly, for substantially
                the
                full term of the financial
                instrument.





·
            Level
                3inputs
                to the valuation methodology are unobservable and significant to
                the fair
                value measurement.





As
      of
      September 30, 2008, the Company did not identify any assets and liabilities
      that
      are required to be presented on the balance sheet at fair value.





Revenue
      Recognition




The
      Company’s revenue recognition policies are in compliance with Staff accounting
      bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to
      customers when a formal arrangement exists, the price is fixed or determinable,
      the delivery is completed, no other significant obligations of the Company
      exist
      and collectability is reasonably assured. Payments received before all of the
      relevant criteria for revenue recognition are satisfied are recorded as unearned
      revenue.




Advertising
      Costs





The
      Company expenses the cost of advertising as incurred or, as appropriate, the
      first time the advertising takes place. Advertising costs for the three months
      ended September 30, 2008 and 2007 was $24,229 and $387, respectively and for
      nine months ended September 30, 2008 and 2007 was $101,545 and $29,455,
      respectively.





9
 
 **Deer
          Consumer Products, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **For
          the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**


Income
      Taxes





The
      Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
      recognition of deferred tax assets and liabilities for the expected future
      tax
      consequences of events that have been included in the financial statements
      or
      tax returns. Under this method, deferred income taxes are recognized for the
      tax
      consequences in future years of differences between the tax bases of assets
      and
      liabilities and their financial reporting amounts at each period end based
      on
      enacted tax laws and statutory tax rates applicable to the periods in which
      the
      differences are expected to affect taxable income. Valuation allowances are
      established, when necessary, to reduce deferred tax assets to the amount
      expected to be realized.





The
      Company adopted the provisions of FASB Interpretation No. 48, Accounting for
      Uncertainty in Income Taxes, on January 1, 2007. As a result of the
      implementation of FIN 48, the Company made a comprehensive review of its
      portfolio of tax positions in accordance with recognition standards established
      by FIN 48. As a result of the implementation of Interpretation 48, the Company
      recognized no material adjustments to liabilities or stockholders’ equity. When
      tax returns are filed, it is highly certain that some positions taken would
      be
      sustained upon examination by the taxing authorities, while others are subject
      to uncertainty about the merits of the position taken or the amount of the
      position that would be ultimately sustained. The benefit of a tax position
      is
      recognized in the financial statements in the period during which, based on
      all
      available evidence, management believes it is more likely than not that the
      position will be sustained upon examination, including the resolution of appeals
      or litigation processes, if any. Tax positions taken are not offset or
      aggregated with other positions. Tax positions that meet the
      more-likely-than-not recognition threshold are measured as the largest amount
      of
      tax benefit that is more than 50 percent likely of being realized upon
      settlement with the applicable taxing authority. The portion of the benefits
      associated with tax positions taken that exceeds the amount measured as
      described above is reflected as a liability for unrecognized tax benefits in
      the
      accompanying balance sheets along with any associated interest and penalties
      that would be payable to the taxing authorities upon examination. Interest
      associated with unrecognized tax benefits are classified as interest expense
      and
      penalties are classified in selling, general and administrative expenses in
      the
      statements of income. The adoption of FIN 48 did not have a material impact
      on
      the Company’s financial statements.





Foreign
      Currency Transactions and Comprehensive Income





Accounting
      principles generally require that recognized revenue, expenses, gains and losses
      be included in net income. Certain statements, however, require entities to
      report specific changes in assets and liabilities, such as gain or loss on
      foreign currency translation, as a separate component of the equity section
      of
      the balance sheet. Such items, along with net income, are components of
      comprehensive income. The functional currency of the Company is Chinese
      Renminbi. The unit of Renminbi is in Yuan. Translation gains of $2,305,404
      and
      $1,303,732 at September 30, 2008 and December 31, 2007, respectively, are
      classified as an item of other comprehensive income in the stockholders’ equity
      section of the consolidated balance sheet. During the three and nine months
      ended September 30, 2008 and 2007, other comprehensive income in the
      consolidated statements of income and other comprehensive income included
      translation gains of $1,367,814 and $660,048, $2,305,404 and $922,307,
      respectively.


Currency
        Hedging
 
 The
        Company has entered into a forward exchange agreement with the Bank of China,
        whereby the Company has agreed to sell US dollars to the Bank of China at
        a
        certain contractual rates. Since the contractual rate at which the Company
        sells
        US dollars to the Bank of China was greater than the exchange rate on the
        date
        of each exchange transaction, the Company has recognized foreign exchange
        gains
        of $530,510, $15,893, $876,436 and $7,664 for the three and nine months ended
        September 30, 2008 and 2007, respectively. At September 30, 2008, the Company
        had commitments to sell $3,900,000 to the Bank of China.





10


**Deer
        Consumer Products, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**


Basic
      and Diluted Earnings Per Share





Earnings
      per share is calculated in accordance with SFAS No. 128, “Earnings Per Share”.
      SFAS No. 128 superseded Accounting Principles Board Opinion No.15 (APB 15).
      Net
      earnings per share for all periods presented has been restated to reflect the
      adoption of SFAS No. 128. Basic earnings per share is based upon the weighted
      average number of common shares outstanding. Diluted earnings per share is
      based
      on the assumption that all dilutive convertible shares and stock options were
      converted or exercised. Dilution is computed by applying the treasury stock
      method. Under this method, options and warrants are assumed to be exercised
      at
      the beginning of the period (or at the time of issuance, if later), and as
      if
      funds obtained thereby were used to purchase common stock at the average market
      price during the period. There were no options, warrants or dilutive securities
      outstanding as of September 30, 2008.




Statement
      of Cash Flows





In
      accordance with Statement of Financial Accounting Standards No. 95, “Statement
      of Cash Flows,” cash flows from the Company’s operations are calculated based
      upon the local currencies. As a result, amounts related to assets and
      liabilities reported on the statement of cash flows will not necessarily agree
      with changes in the corresponding balances on the balance sheet.





Recent
      Pronouncements





In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      159, “The Fair Value Option for Financial Assets and Financial Liabilities“.
      SFAS 159 permits entities to choose to measure many financial assets and
      financial liabilities at fair value. Unrealized gains and losses on items for
      which the fair value option has been elected are reported in earnings. SFAS
      159 is effective for fiscal years beginning after November 15, 2007. The
      Company is currently assessing the impact of SFAS 159 on its financial position
      and results of its operations.





In
      June
      2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for
      Nonrefundable Advance Payments for Goods or Services Received for use in Future
      Research and Development Activities” (“FSP EITF 07-3”), which addresses whether
      nonrefundable advance payments for goods or services that used or rendered
      for
      research and development activities should be expensed when the advance payment
      is made or when the research and development activity has been
      performed.  Management is currently evaluating the effect of this
      pronouncement on financial statements.





In
      December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
      Combinations.” SFAS No. 141R which changes how a reporting enterprise
      accounts for the acquisition of a business. SFAS No. 141R requires an
      acquiring entity to recognize all the assets acquired and liabilities assumed
      in
      a transaction at the acquisition-date fair value, with limited exceptions,
      and
      applies to a wider range of transactions or events. SFAS No. 141R is
      effective for fiscal years beginning on or after December 15, 2008 and
      early adoption and retrospective application is prohibited. This pronouncement
      will likely have a material impact on business acquisitions made after January
      1, 2009.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements”, which is an amendment of Accounting Research
      Bulletin (“ARB”) No. 51.  SFAS 160 clarifies that a noncontrolling
      interest in a subsidiary is an ownership interest in the consolidated entity
      that should be reported as equity in the consolidated financial
      statements.  SFAS 160 changes the way the consolidated income
      statement is presented, thus requiring consolidated net income to be reported
      at
      amounts that include the amounts attributable to both parent and the
      noncontrolling interest.  SFAS 160 is effective for the fiscal years,
      and interim periods within those fiscal years, beginning on or after December
      15, 2008.  Based on current conditions, the Company does not expect
      the adoption of SFAS 160 to have a significant impact on its results of
      operations or financial position.





11
 
 **Deer
          Consumer Products, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **For
          the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**


In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities an amendment of FASB
      Statement No. 133 .”
SFAS
      161 changes the disclosure requirements for derivative instruments and hedging
      activities. Entities are required to provide enhanced disclosures about (a)
      how
      and why an entity uses derivative instruments, (b) how derivative instruments
      and related hedged items are accounted for under SFAS 133 and its related
      interpretations, and (c) how derivative instruments and related hedged items
      affect an entity’s financial position, financial performance, and cash flows.
      The Company has not evaluated the impact that SFAS 161 may have on its results
      of operations or financial position.





In
      May
      2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
      Accounting Principles.” SFAS 162 identifies the sources of accounting principles
      and the framework for selecting the principles to be used in the preparation
      of
      financial statements of nongovernmental entities that are presented in
      conformity with generally accepted accounting principles (GAAP) in the United
      States (the GAAP hierarchy). SFAS 162 will not have an impact on the Company’s
      financial statements.





In
      May
      2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
      Insurance Contracts, an interpretation of FASB
      Statement No. 60 .”
The
      scope of SFAS 163 is limited to financial guarantee insurance (and reinsurance)
      contracts, as described in this Statement, issued by enterprises included within
      the scope of Statement 60. Accordingly, SFAS 163 does not apply to financial
      guarantee contracts issued by enterprises excluded from the scope of Statement
      60 or to some insurance contracts that seem similar to financial guarantee
      insurance contracts issued by insurance enterprises (such as mortgage guaranty
      insurance or credit insurance on trade receivables). SFAS 163 also does not
      apply to financial guarantee insurance contracts that are derivative instruments
      included within the scope of FASB
      Statement No. 133 ,
      “Accounting for Derivative Instruments and Hedging Activities.” SFAS 163 will
      not have an impact on the Company’s financial statements .





**Note
      3 - Inventory**





Inventory
      as of September 30, 2008 and December 31, 2007 consisted of the
      following:





September
                30, 2008
            
            December
                31, 2007(unaudited)Raw
                material
            
            $
            7,636,228
            
            $
            2,817,203Work
                in process
            
            
            1,154,577
            
            
            189,190Finished
                goods
            
            
            2,003,021
            
            
            1,146,911Total
            
            $
            10,793,826
            
            $
            4,153,304





12


**Deer
        Consumer Products, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**


**Note
      4 - Short Term Loans**





Short
      term loans at September 30, 2008 and December 31, 2007 are follows:





September
                30, 2008
            
            December
                31, 2007(unaudited)Short
                term bank loans with the Bank of China. As of September 30, 2008,
                the term
                of the loans are 3 to 6 months, with interest rates ranging from
                6.831% to
                7.777% (per annum). As of December 31, 2007 the term of the loan
                was 12
                months, with an interest rate of 7.884% (per annum). The loans are
                collateralized by buildings land use rights.
            
            $
            2,242,227
            
            
            98,231Short
                term loans with Industrial and Commercial Bank. As of September 30,
                2008,
                the term of the loans are 3 months, with interest rates ranging from
                9.796% to 9.804% (per annum). As of December 31, 2007 the term of
                the loan
                was 3 months, with an interest rate of 6.820% (per annum). The loans
                are
                collateralized by buildings land use rights and equipment.
            
            
            967,797
            
            
            685,440Short
                term loans with ABN-AMRO China, Shenzhen Branch. As of September
                30, 2008
                the term of the loan was 12 months, with a rate of 7.790% (per annum).
                As
                of December 31, 2007, the term of the loan was 2.5 months, with and
                an
                interest rate of 7.350% (per annum). The loans are collateralized
                by a
                cash deposit.
            
            
            77,448
            
            
            907,760Short
                term loans with Agricultural Bank of China. The term of the loans
                are 11.5
                months, with interest rates ranging from 7.470% and 8.217% (per annum).
                The loans are collateralized by time deposits.
            
            
            2,779,700$
            6,067,172
            
            $
            1,691,431





Interest
      expense on short term loans was $116,617 and $38,496 for the three months ended
      September 30, 2008 and 2007, respectively, and was $206,474 and $71,944 for
      the
      nine months ended September 30, 2008 and 2007, respectively.





13


**Deer
        Consumer Products, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**





**Note
      5 - Notes Payable**





Notes
      payable at September 30, 2008 and December 31, 2007 consist of multiple banker's
      acceptance notes from Bank of China payable to the Company’s vendors. The terms
      of the notes range from 0-3 months, with no interest rate on the notes. The
      Company deposits 10% of the notes’ par value with the bank, refundable when the
      notes paid. Notes payable at September 30, 2008 and December 31, 2007 amounted
      to $6,402,882 and $3,160,059, respectively.





**Note
      6 - Employee Welfare Plan**





The
      Company has established its own employee welfare plan in accordance with Chinese
      law and regulations. The Company makes annual contributions of 14% of all
      employees’ salaries to the employee welfare plan. The total expense for the
      above plan was $40,568 and $16,569 for the three months ended September 30,
      2008
      and 2007, respectively and was $52,982 and $16,569 for the nine months ended
      September 30, 2008 and 2007.




**Note
      7 - Statutory Reserve and Development Fund**





As
      stipulated by the Company Law of the PRC, net income after taxation can only
      be
      distributed as dividends after appropriation has been made for the
      following:





i.
            Making
                up cumulative prior years’ losses, if any;





ii.
            Allocations
                to the “Statutory surplus reserve” of at least 10% of income after tax, as
                determined under PRC accounting rules and regulations, until the
                fund
                amounts to 50% of the Company’s registered capital;





iii.
            Allocations
                of 5-10% of income after tax, as determined under PRC accounting
                rules and
                regulations, to the Company’s “Statutory common welfare fund” (“SCWF”),
                which is established for the purpose of providing employee facilities
                and
                other collective benefits to the Company’s employees; and





iv.
            Allocations
                to the discretionary surplus reserve, if approved in the stockholders’
                general meeting. The Company allocates 5% of income after tax as
                development fund. The fund is for enlarging its business and increasing
                capital.





Pursuant
      to the new Corporate Law effective on January 1, 2006, there is now only one
      "Statutory surplus reserve" requirement. The reserve is 10 percent of income
      after tax, not to exceed 50 percent of registered capital.





The
      Company has appropriated $349,506 and $174,753, and $181,627 and $90,813 as
      reserve for the statutory surplus reserve and development fund for the nine
      months ended September 30, 2008 and 2007, respectively.





14


**Deer
        Consumer Products, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Three and Nine Months Ended September 30, 2008 and 2007**
 **(unaudited)**





**Note
      8 - Related Party Transactions**





Due
      from
      shareholder amounted to $0 and $1,383,124 as of September 30, 2008 and December
      31, 2007, respectively. Due from related party amounted to $3,876,907 and $0
      as
      of September 30, 2008 and December 31, 2007, respectively. The Company collects
      a portion of its sales through a collection company controlled through a former
      shareholder and current related party. Due from shareholder and related party
      represents account receivables from that company.





Due
      to
      shareholder amounted to $0 and $756,458 as of September 30, 2008 and December
      31, 2007, respectively. Due to shareholder is non interest bearing and are
      payable or receivable on demand.





Advance
      from shareholder amounted to $0 and $509,139 as of September 30, 2008 and
      December 31, 2007, respectively. Advances from related party amounted to
      $117,039 and $0 s of September 30, 2008 and December 31, 2007, respectively.
      Advances from shareholder and related party are non interest bearing and are
      payable or receivable on demand.





**Note
      9 - Taxes**





Local
      PRC
      Income Tax





Pursuant
      to the tax laws of China, general enterprises are subject to income tax at
      an
      effective rate of 33%.





A
      reconciliation of tax at United States federal statutory rate to provision
      for
      income tax recorded in the financial statements is as follows:





**Nine
                Months Ended September 30,****2008**
            
            **2007**Tax
                provision at statutory rate
            
            
            34
            %
            
            34
            %Foreign
                tax rate difference
            
            
            (1
            %)
            
            (1
            %)Effect
                of tax holiday
            
            
            (5
            %)
            
            (6
            %)28
            %
            
            27
            %





The
      Company operates in a privileged economic zone which entitles them to certain
      tax benefits (tax holiday) as follows:





·
            Winder
                Electric - Exempt from provincial tax and 100% exemption from federal
                tax
                from January 1, 2002 to December 31, 2003 and 50% exemption from
                federal
                tax from January 1, 2004 to December 31, 2006.





·
            Delta
                International - Exempt from provincial tax and 100% exemption from
                federal
                tax from January 1, 2006 to December 31,
                2006.





If
      the
      Company had not been exempt from paying income taxes due to operating in a
      privileged economic zone, net income for the nine months ended September 30,
      2008 and 2007 would have been lower by approximately $188,000 and $125,000,
      respectively and earnings per share would have been $0.15 and $0.08,
      respectively.





15




**CAUTIONARY
      STATEMENT FOR FORWARD-LOOKING STATEMENTS**




*This
      Quarterly Report on Form 10-Q includes forward-looking statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934, as amended.  We have based
      these forward-looking statements on our current expectations and projections
      about future events.  These forward-looking statements are subject to
      known and unknown risks, uncertainties and assumptions about us that may cause
      our actual results, levels of activity, performance or achievements to be
      materially different from any future results, levels of activity, performance
      or
      achievements expressed or implied by such forward-looking
      statements.  In some cases, you can identify forward-looking
      statements by terminology such as “may,” “will,” “should,” “could,” “would,”
“expect,” “plan,” anticipate,” believe,” estimate,” continue,” or the negative
      of such terms or other similar expressions.  Factors that might cause
      or contribute to such a discrepancy include, but are not limited to, those
      listed under the heading “Risk Factors” and those listed  in our other
      Securities and Exchange Commission filings.  The following discussion
      should be read in conjunction with our Financial Statements and related Notes
      thereto included elsewhere in this report. Throughout this Quarterly Report
      we
      will refer to Deer Consumer Product, Inc. as "Deer," the "Company," "we," "us,"
      and "our."*





**Item
      2.  Management’s Discussion and Analysis or Plan of
      Operations**





**Overview**





On
      September 3, 2008, we entered into a share exchange agreement and plan of
      reorganization with Deer International Group Limited (“Deer Intl”), a company
      incorporated under the laws of British Virgin Islands (“BVI”) on December 3,
      2007 and holder of 100% of the shares of Winder Electrical Company, Ltd.
      (“Winder”) since March 11, 2008. Winder has a 100% owned subsidiary, Delta
      International, Ltd., (“Delta”). W inder
      and
      Delta were formed and incorporated in the Guangdong Province of the PRC on
      July
      20, 2001 and February 23, 2006, respectively.





Pursuant
      to the share exchange agreement, we acquired from Deer Intl 50,000 ordinary
      shares, consisting of all of its issued and outstanding capital stock, in
      exchange for the issuance of an aggregate of 18,050,000 shares of our common
      stock. Concurrently with the closing of the transactions contemplated by the
      share exchange agreement and as a condition thereof, we entered into an
      agreement with Crescent Liu, our former Director and Chief Executive Officer,
      pursuant to which he returned 5,950,000 shares of our common stock for
      cancellation. Mr. Liu was not compensated in any way for the cancellation of
      his
      shares of our common stock. Upon completion of the foregoing transactions,
      we
      had an aggregate of 22,600,000 shares of common stock issued and outstanding.
      In
      connection with the above transaction we changed our name to Deer Consumer
      Products, Inc. on September 3, 2008.





The
      exchange of shares with Deer Intl was accounted for as a reverse acquisition
      under the purchase method of accounting since Deer Intl obtained control of
      our
      company. Accordingly, the merger of the Deer Intl into us was recorded as a
      recapitalization of Deer Intl, Deer Intl being treated as the continuing entity.
      The historical financial statements presented are the consolidated financial
      statements of Deer Intl. The share exchange agreement has been treated as a
      recapitalization and not as a business combination; therefore, no pro forma
      information is disclosed. At the date of this transaction, the net liabilities
      of the legal acquirer were $0.





As
      a
      result of the reverse merger transactions described above the historical
      financial statements presented are those of Deer Intl, the operating
      entities.





16


We
      are
      engaged in the manufacture, marketing, distribution and sale of household
      appliances (blenders, food processors, choppers, juicers, etc.). The Company
      manufactures its products out of YangJiang, China and operates corporate
      functions in Nanshan, Shenzhen, China.





We
      operate through our two wholly-owned subsidiaries, Winder Electric Co. Ltd.
      (“Winder”), which is a wholly-owned foreign enterprise (“WOFE”) and responsible
      for research, production and delivery of goods, and Delta International Limited
      (“Delta”), which is a wholly owned subsidiary of Winder and primarily
      responsible for sales. We have traditionally acted as both an original equipment
      manufacturer (“OEM”) and original design manufacturer (“ODM”) for international
      markets with 96.7% and 86.0% of sales made overseas in 2006 and 2007, of which
      North America and Europe accounted for approximately 50% and 20% in 2007,
      respectively





**Critical
      Accounting Policies**





In
      presenting our financial statements in conformity with accounting principles
      generally accepted in the United States, we are required to make estimates
      and
      assumptions that affect the amounts reported therein. Several of the estimates
      and assumptions we are required to make relate to matters that are inherently
      uncertain as they pertain to future events. However, events that are outside
      of
      our control cannot be predicted and, as such, they cannot be contemplated in
      evaluating such estimates and assumptions. If there is a significant unfavorable
      change to current conditions, it will likely result in a material adverse impact
      to our results of operations, financial position and in liquidity. We believe
      that the estimates and assumptions we used when preparing our financial
      statements were the most appropriate at that time. Presented below are those
      accounting policies that we believe require subjective and complex judgments
      that could potentially affect reported results.





*Use
      of Estimates* .
      Our
      discussion and analysis of our financial condition and results of operations
      are
      based upon our financial statements, which have been prepared in accordance
      with
      accounting principles generally accepted in the United States of America. The
      preparation of these financial statements requires us to make estimates and
      judgments that affect the reported amounts of assets, liabilities, revenues
      and
      expenses, and related disclosures of contingent assets and liabilities. On
      an
      ongoing basis, we evaluate our estimates, including those related to impairment
      of long-lived assets, and allowance for doubtful accounts. We base our estimates
      on historical experience and on various other assumptions that we believe to
      be
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying value of assets and liabilities that are
      not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions; however, we believe that
      our estimates, including those for the above-described items, are
      reasonable.





Areas
      that require estimates and assumptions include valuation of accounts receivable
      and inventory, determination of useful lives of property and equipment,
      estimation of certain liabilities and sales returns.





*Accounts
      Receivable.* We
      maintain reserves for potential credit losses on accounts receivable. Management
      reviews the composition of accounts receivable and analyzes historical bad
      debts, customer concentrations, customer credit worthiness, current economic
      trends and changes in customer payment patterns to evaluate the adequacy of
      these reserves.





*Advances
      to Suppliers.* We make
      advances to certain vendors for purchase of its material. The advances to
      suppliers are interest free and unsecured.





17


*Inventory* .
      Inventory is valued at the lower of cost (determined on a weighted average
      basis) or market. We compare the cost of inventories with the market value
      and
      allowance is made for writing down the inventories to their market value, if
      lower.





*Long-Lived
      Assets.* We apply
      the provisions of Statement of Financial Accounting Standards No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”),
      which addresses financial accounting and reporting for the impairment or
      disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the
      Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,”
and the accounting and reporting provisions of APB Opinion No. 30, “Reporting
      the Results of Operations for a Disposal of a Segment of a Business.” We
      periodically evaluate the carrying value of long-lived assets to be held and
      used in accordance with SFAS 144. SFAS 144 requires impairment losses to be
      recorded on long-lived assets used in operations when indicators of impairment
      are present and the undiscounted cash flows estimated to be generated by those
      assets are less than the assets’ carrying amounts. In that event, a loss is
      recognized based on the amount by which the carrying amount exceeds the fair
      market value of the long-lived assets. Loss on long-lived assets to be disposed
      of is determined in a similar manner, except that fair market values are reduced
      for the cost of disposal. Based on our review, we believe that to date there
      were no significant impairments of its long-lived assets.





*Property
      and equipment:* Property
      and equipment are stated at cost. Expenditures for maintenance and repairs
      are
      charged to earnings as incurred; additions, renewals and betterments are
      capitalized. When property and equipment are retired or otherwise disposed
      of,
      the related cost and accumulated depreciation are removed from the respective
      accounts, and any gain or loss is included in operations. Depreciation of
      property and equipment is provided using the straight-line method. For
      substantially all assets with estimated lives as follows:





Buildings
            
            
            5-20
                yearsEquipment
            
            
            5-10
                yearsVehicles
            
            
            5
                yearsOffice
                equipment
            
            
            5-10
                years




*Revenue
      Recognition.* Our
      revenue recognition policies are in compliance with Staff accounting bulletin
      (SAB) 104. Sales revenue is recognized at the date of shipment to customers
      when
      a formal arrangement exists, the price is fixed or determinable, the delivery
      is
      completed, no other significant obligations exist and collectability is
      reasonably assured. Payments received before all of the relevant criteria for
      revenue recognition are satisfied are recorded as unearned revenue.





*Foreign
      Currency Transactions and Comprehensive Income.* Accounting principles generally require that recognized revenue, expenses,
      gains
      and losses be included in net income. Certain statements, however, require
      entities to report specific changes in assets and liabilities, such as gain
      or
      loss on foreign currency translation, as a separate component of the equity
      section of the balance sheet. Such items, along with net income, are components
      of comprehensive income. The functional currency of the Company is Chinese
      Renminbi. The unit of Renminbi is in Yuan. Translation gains are classified
      as
      an item of other comprehensive income in the stockholders’ equity section of the
      balance sheet. Other comprehensive income in the statements of income and other
      comprehensive income includes translation gains recognized each
      period.





18


**Results
      of Operations**





**Results
      of Operations for the Three Months Ended September 30, 2008 Compared to the
      Three Months Ended September 30, 2007:**




Three
                Months EndedSeptember
                30, 2008
            
            Three
                Months Ended September 30, 2007
            
            $
                Change
            
            %
                ChangeRevenues
            
            $
            11,542,215
            
            $
            7,008,973
            
            $
            4,533,242
            
            
            64.7
            %Cost
                of Revenue
            
            
            8,255,913
            
            
            5,410,111
            
            
            2,845,802
            
            
            52.6
            %Gross
                Profits
            
            
            3,286,302
            
            
            1,598,862
            
            
            1,687,440
            
            
            105.5
            %Selling,
                General and Administrative Expenses
            
            
            1,616,181
            
            
            866,766
            
            
            749,415
            
            
            86.5
            %Interest
                Expense and Financing Costs (net)
            
            
            (116,850
            )
            
            (29,209
            )
            
            (87,641
            )
            
            300.0
            %Other
                Income (Expense)
            
            
            528,516
            
            
            63,436
            
            
            465,080
            
            
            733.1
            %Income
                Tax Expense
            
            
            540,717
            
            
            359,893
            
            
            180,824
            
            
            50.2
            %Net
                Income
            
            
            1,541,070
            
            
            406,430
            
            
            1,134,640
            
            
            279.2
            %





*Revenues*





Our
      revenue for the three months ended September 30, 2008 was $11,542,215 an
      increase of $4,533,242 or 64.7% from $7,008,973 for the three months ended
      September 30, 2007.  The increase in revenues was due to an increase
      in sales of our core products: blenders and juice extractors.





*Cost
      of Revenue*





Our
      cost
      of revenue for the three months ended September 30, 2008 increased by $2,845,802
      or 52.6% from $5,410,111 for the three months ended September 30, 2007 to
      $8,255,913 for the three months ended September 30, 2008. The increased costs
      in
      2008 was due to the increases in sales.





*Gross
      Profit*





Our
      gross
      margin for the three months ended September 30, 2008 was 28.5% compared to
      22.8%
      for 2007.


The
      increase in gross margin can be attributed to success in controlling variable
      costs such as the design of new products and improving our sales order selection
      capability to fit market needs.





*Selling,
      General and Administrative Expenses*





Selling,
      general and administrative expenses for the three months ended September 30,
      2008 increased by $749,415 or 86.5%, from $866,766 for the three months ended
      September 30, 2007 to $1,616,181 for the three months ended September 30,
      2008. Selling
      expenses for the three months ended September 30, 2008 increased by 78.3% or
      $295,452 in comparison to the same period in 2007 due
      to
      the hiring of a new sales company for exporting services. General
      and administrative expenses for the three months ended September 30, 2008
      increased by 92.7% or $453,963 in comparison to the same period in
      2007. The
      increase in our operating expenses reflects the additional expenses incurred
      as
      a result of our increased sales. Operating expenses include overhead expenses
      such as rent, management and staff salaries, general insurance, marketing,
      accounting, legal and offices expenses.





*Interest
      and Financing Costs (net)*





Interest
      and financing costs for the three months ended September 30, 2008 was $116,850
      compared to $29,209 for the three months ended September 30, 2007 an increase
      of
      $87,641 or 300.0%. The change is principally due to an increase in the principal
      amount of short term loans and notes payable outstanding.





19


*Other
      Income (Expense)*





Other
      income for the three months ended September 30, 2008 was $528,516, an increase
      of $465,080 or 733.1%, from $63,436 for the three months ended September 30,
      2007. The increase is due to foreign exchange transactions the company
      experienced in 2008.





*Income
      Tax Expense*





Our
      effective tax rate for the three months ended September 30, 2008 was
      26.0%
      as opposed to 47.0% for the
      three months ended September 30, 2007.





**Results
      of Operations for the Nine Months Ended September 30, 2008 Compared to the
      Nine
      Months Ended September 30, 2007:**




Nine
                Months EndedSeptember
                30, 2008
            
            Nine
                Months Ended September 30, 2007
            
            $
                Change
            
            %
                ChangeRevenues
            
            $
            32,045,142
            
            $
            20,937,201
            
            $
            11,107,941
            
            
            53.1
            %Cost
                of Revenue
            
            
            24,550,251
            
            
            16,508,880
            
            
            8,041,371
            
            
            48.7
            %Gross
                Profits
            
            
            7,494,891
            
            
            4,428,321
            
            
            3,066,570
            
            
            69.2
            %Selling,
                General and Administrative Expenses
            
            
            4,065,099
            
            
            2,219,899
            
            
            1,845,200
            
            
            83.1
            %Interest
                Expense and Financing Costs (net)
            
            
            (246,287
            )
            
            (63,700
            )
            
            (182,587
            )
            
            286.6
            %Other
                Income (Expense)
            
            
            916,275
            
            
            68,487
            
            
            847,788
            
            
            1237.9
            %Income
                Tax Expense
            
            
            1,165,020
            
            
            605,422
            
            
            559,598
            
            
            92.4
            %Net
                Income
            
            
            2,934,760
            
            
            1,607,787
            
            
            1,326,973
            
            
            82.5
            %




*Revenues*





Our
      revenue for the nine months ended September 30, 2008 was $32,045,142 an increase
      of $11,107,941 or 53.1% from $20,937,201 for the nine months ended September
      30,
      2007.  The increase in revenues was due to an increase in sales of our
      core products: blenders and juice extractors.





*Cost
      of Revenue*





Our
      cost
      of revenue for the nine months ended September 30, 2008 increased by $8,041,371
      or 48.7% from $16,508,880 for the nine months ended September 30, 2007 to
      $24,550,251 for the nine months ended September 30, 2008. The increased costs
      in
      2008 were due to the increases in sales.





*Gross
      Profit*





Our
      gross
      margin for the nine months ended September 30, 2008 was 23.4% compared to 21.2%
      for 2007.


The
      increase in gross margin can be attributed to success in controlling variable
      costs such as the design of new products and improving our sales order selection
      capability to fit market needs.





*Selling,
      General and Administrative Expenses*





Selling,
      general and administrative expenses for the nine months ended September 30,
      2008
      increased by $1,845,200 or 83.1%, from $2,219,899 for the three months ended
      September 30, 2007 to $4,065,099 for the nine months ended September 30,
      2008. Selling
      expenses for the three months ended September 30, 2008 increased by 77.2% or
      $819,926 in comparison to the same period in 2007 due to due
      to
      the hiring of a new sales company for exporting services .
      General
      and administrative expenses for the nine months ended September 30, 2008
      increased by 88.6% or $1,025,274 in comparison to the same period in
      2007. The
      increase in our operating expenses reflects the additional expenses incurred
      as
      a result of our increased sales. Operating expenses include overhead expenses
      such as rent, management and staff salaries, general insurance, marketing,
      accounting, legal and offices expenses.





20


*Interest
      and Financing Costs (net)*





Interest
      and financing costs for the nine months ended September 30, 2008 was $246,287
      compared to $63,700 for the nine months ended September 30, 2007 an increase
      of
      $182,587 or 286.6%. The change is principally due to an increase in the
      principal amount of short term loans and notes payable outstanding.





*Other
      Income (Expense)*





Other
      income for the nine months ended September 30, 2008 was $916,275 an increase
      of
      $847,788 or 1237.9%, from $68,487 for the nine months ended September 30, 2007.
      The increase is due to foreign exchange transactions the company experienced
      in
      2008.




*Income
      Tax Expense*





Our
      effective tax rate for the nine months ended September 30, 2008 was 28.4% as
      opposed to 27.4% for the nine months ended September 30, 2007.





**Off-Balance
      Sheet Arrangements**





There
      were no off-balance sheet arrangements during the nine months ended September
      30, 2008 that have, or are reasonably likely to have, a current or future affect
      on our financial condition, revenues or expenses, results of operations,
      liquidity, capital expenditures or capital resources that is material to our
      interests.




**Liquidity
      and Capital Resources**





*Cash
      Flows*





On
      November 30, 2007, we decided to increase paid-in capital by $2,923,688 through
      a board meeting. The new capital was from retained earnings distributable to
      shareholders.




At
      September 30, 2008, we had $2,132,900 in cash and cash equivalents on hand. Our
      principal demands for liquidity are to increase capacity, inventory purchase,
      sales distribution, and general corporate purposes.  We anticipate
      that the amount of cash we have on hand as of the date of this report as well
      as
      the cash that we will generate from operations will satisfy these requirements.





Net
      cash
      flows used by operating activities for the nine months ended September 30,
      2008
      was $2,387,945 compared to $1,323,673 for the nine months ended September 30,
      2007. This change in cash flows from operating activities was due mainly to
      increases in accounts receivable, receivables due from related parties and
      inventory, offset by an increase in accounts payable and deferred revenue as
      well a decrease in receivables due from a shareholder and a non-related
      party.





21


We
      used
      $3,831,411 in investing activities during the nine months ended September 30,
      2008 for the acquisition of property and equipment, an increase in our
      construction in process, and restricted cash.





Cash
      provided from financing activities in the nine months ended September 30, 2008
      was $6,728,729 which included proceeds from a short term loan, note(s), and
      advances from a related party, offset by a payment(s) to a shareholder for
      the
      remaining balance.





*Assets*





As
      of
      September 30, 2008, our accounts receivable increased by $4,373,097 compared
      with the balance as of December 31, 2007. The increase in accounts receivable
      on
      nine months ended September 30, 2008 was due primarily to increased sales.
      We
      intend to continue our efforts to maintain accounts receivable at reasonable
      levels in relation to our sales. Inventory increased by $6,640,522 in the same
      period. Due from related party and advances to suppliers increased by $3,876,907
      and $422,494.





We
      experienced a decrease in due from shareholder, short-term investments, and
      other receivables of $1,383,124, $107,387 and $16,202, respectively during
      nine
      months ended September 30, 2008. In addition, due from related party and
      advances to suppliers increased by $3,876,907 and $422,494, respectively during
      the nine months ended September 30, 2008.





*Liabilities*





Our
      accounts payable increased by $5,297,324 during the nine months ended September
      30, 2008 and other payables decreased by $90,355 for the same period. Unearned
      revenues (payments received before all the relevant criteria for revenue
      recognition are satisfied) increased by $1,415,986 and tax and welfare payable
      increased by $460,904 over the same period. Short-term loans and Notes payable
      increased by $4,375,741 and $3,242,823, respectively, due to the receipt of
      proceeds from new loans entered into during the nine months ended September
      30,
      2008. Balances due to related parties and shareholders were reduced by
      $1,148,558.





We
      intend
      to meet our liquidity requirements, including capital expenditures related
      to
      the purchase of equipment, purchase of raw materials, and the expansion of
      our
      business, through cash flow provided by operations and funds raised through
      private placement offerings of our securities.





The
      majority of our revenues and expenses were denominated primarily in RMB, the
      currency of the PRC.





There
      is
      no assurance that exchange rates between the RMB and the USD will remain stable.
      We do engage in currency hedging. Inflation has not had a material impact on
      our
      business.





22


**Item
      3.**  **Quantitative
      and Qualitative Disclosures About Market Risk**





Not
      required.





**Item
      4. Controls and Procedures**





**Evaluation
      of Disclosure Controls and Procedures**




As
      of
      September 31, 2008, we carried out an evaluation of the effectiveness of the
      design and operation of our “disclosure controls and procedures” (as defined in
      the Exchange Act Rules 13a-15(e) and 15d-15(e)) under the supervision and with
      the participation of our management, including our Chief Executive Officer
      and
      our Chief Financial Officer. Based upon that evaluation, we concluded that
      our
      disclosure controls and procedures are effective.




Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in our reports filed or
      submitted under the Exchange Act are recorded, processed, summarized and
      reported, within the time periods specified in the SEC’s rules and forms.
      Disclosure controls and procedures include, without limitation, controls and
      procedures designed to ensure that information required to be disclosed in
      our
      reports filed under the Exchange Act is accumulated and communicated to
      management to allow timely decisions regarding required
      disclosure.




**Internal
      Control Over Financial Reporting**





There
      has
      been no change in our internal control over financial reporting that occurred
      during our last fiscal quarter that has materially affected, or is reasonably
      likely to materially affect, our internal control over financial reporting.





**Part
      II.**  **OTHER
      INFORMATION**





**Item
      1.**  **Legal
      Proceedings**





We
      know
      of no pending legal proceedings to which we are a party which are material
      or
      potentially material, either individually or in the aggregate.




**Item
      1A.**  **Risk
      Factors**





Not
      required.





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





None.





**Item
      3.**  **Defaults
      Upon Senior Securities**





None.





**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders**





None.





23


**Item
      5.**  **Other
      Information**





None.





**Item
      6.** **Exhibits** ****





**Exhibit**
              **Number**
            
            **Description
                of Exhibit**31.1
            
            Certification
                of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
                promulgated under the Securities and Exchange Act of 1934, as
                amended.31.2
            
            Certification
                of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d
                14(a),
                promulgated under the Securities and Exchange Act of 1934, as
                amended.32.1
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002 (Chief Executive
                Officer).32.2
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002 (Chief Financial
                Officer).





24





**SIGNATURES**





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




Deer
                Consumer Products, IncNovember
                10, 2008
            By:
            /s/ Ying
                HeYing
                HeChairman
                & Chief Executive Officer


November
                10, 2008
            By:
            /s/ Yuehua
                XiaYuehua
                XiaChief
                Financial Officer
              (Principal
                  Financial and Accounting
                  Officer)


25