U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB





Quarterly
      Report Under Section 13 or 15 (d) of


Securities
      Exchange Act of 1934





For
      the
      Period ended September 30, 2007





Commission
      File Number 333-139910





China
      Shoe Holdings, Inc.


(Name
      of
      small business issuer in its charter)





Nevada
            1712
            20-2234410(State
                or other jurisdiction
              of
                incorporation or organization)
            (Primary
                SIC Code)
            (IRS
                Employer Identification No.)




488
      Wai
      Qingsong Road,


Waigang,
      Jiading District, Shanghai


People's
      Republic of China 201800


011-86-21-59587756


(Address,
      including zip code, and telephone number,


including
      area code, of registrant's principal executive offices)





Gu
      Xianzhong, President and CEO


488
      Wai
      Qingsong Road


Waigang,
      Jiading District, Shanghai


People's
      Republic of China 201800


011-86-21-59587756


(Mailing
      Address of Agent for Service)





Check
      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





Check
      whether the registrant is a shell company (as defined in Rule 12b-2 of the
      Exchange Act). Yes o No x





There
      were 100,000,001 shares of Common Stock outstanding as of September 30,
      2007.










Table
        of
        Contents


PagePART
                  I.Item
                  1.
              FINANCIAL
                  STATEMENTS.
              3Item
                  2.
              MANAGEMENT'S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                  OPERATIONS.
              3Item
                  3.
              CONTROLS
                  AND PRODCECURES
              8PART
                  II:OTHER
                  INFORMATIONItem
                  1.
              Legal
                  Proceedings
              8Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              8Item
                  3.
              Defaults
                  Upon Senior Securities
              8Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              8Item
                  5.
              Other
                  Information
              8Item
                  6.
              Exhibits
                  and Reports on Form 8-K
              9SIGNATURES
              9EX-31.1
                  (Certifications required under Section 302 of the Sarbanes-Oxley
                  Act of
                  2002)EX-31.2
                  (Certifications required under Section 302 of the Sarbanes-Oxley
                  Act of
                  2002)EX-32
                  (Certifications required under Section 906 of the Sarbanes-Oxley
                  Act of
                  2002)





2





**PART
      I.**


**Item
      1. FINANCIAL STATEMENTS.**


**See
      Financial Statements beginning on Page F-1**




**ITEM
      2.**  **MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OFOPERATIONS.**




***Special
      Note Regarding Forward Looking Statements***




This
      Quarterly Report on Form 10-Q, including the following “Management's Discussion
      and Analysis of Financial Condition and Results of Operations,” contains
      forward-looking statements within the meaning of Section 27A of theSecurities
      Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
      1934,
      as amended (the “ExchangeAct”). Such statements include, among others, those
      concerning our expected financial performance and strategic andoperational
      plans, as well as all assumptions, expectations, predictions, intentions or
      beliefs about future events. You arecautioned that any such forward-looking
      statements are not guarantees of future performance and that a number of risks
      anduncertainties could cause actual results of the Company to differ materially
      from those anticipated, expressed or implied in theforward-looking statements.
      The words “believe,” “expect,” “anticipate,”“project,” “targets,” “optimistic,”
“intend,” “aim,”“will” or similar expressions are intended to identify
      forward-looking statements. All statements other thanstatements of historical
      fact are statements that could be deemed forward-looking statements. Risks
      and
      uncertainties that couldcause actual results to differ materially from those
      anticipated include risks related to new and existing products; any
      projectionsof sales, earnings, revenue, margins or other financial items; any
      statements of the plans, strategies and objectives of managementfor future
      operations; any statements regarding future economic conditions or performance;
      uncertainties related to conducting business in China; any statements of belief
      or intention; any of the factors mentioned in the “Risk Factors” sectionof our
“Report of Unscheduled Material Events or Corporate Changes” on Form 8-K for the
      years ended December31, 2006 and December 2005, and other risks mentioned in
      this Form 10-Q. The Company assumes no obligation and does notintend to update
      any forward-looking statements, except as required by law.




***Use
      of terms***





Except
      as
      otherwise indicated by the context, references in this Form 10-Q to “CHSH,”
“we,”“us,” “our,” “our Company,” or “the Company” are to China ShoeHoldings,
      Inc., a Nevada corporation and its consolidated subsidiaries. Unless the context
      otherwise requires, all references to (i)“WSTG” are to Wholly Success Technology
      Group Limited, a limited liability company incorporated in the British Virgin
      Islands; (ii)“SHKH” are to Shanghai Kanghong Yunheng Enterprise Development
      Company Limited., a limited liability company incorporated in the People's
      Republic of China; (iii) “BVI” are to British Virgin Islands; (vi) “PRC”and
“China” are to the People's Republic of China; (v) “U.S. dollar,” “$” and“US$”
are to United States dollars; (vi) “RMB” are to Renminbi Yuen of China;
      (vii)“Securities Act” are to the Securities Act of 1933, as amended; and (viii)
“Exchange Act” are to theSecurities Exchange Act of 1934, as
      amended.




3




***Overview***




The
      Company continued to implement its growth strategy for the nine months ended
      September 30, 2007 through slightly higher marketing efforts to be placed on
      the
      ladies footwear for the Japanese market.





The
      Company continued to strengthen its balance sheet in 2006 and for the nine
      months ended of September 30, 2007. Total assets and stockholders' equity have
      both increased.





***Our
      Business***




We
      are an
      independent, single facility-based, private label designer, manufacturer and
      marketer of a broad line of woman's shoes in which the footwear are generally
      sold under its customers' brand names. We also manufactures shoe component
      such
      as soles for other shoe manufacturers.





In
      2006,
      we sold shoes and shoe components to approximately forty customers in Japan
      and
      China. Our factory is located in Jiading Township, a suburb of Shanghai in
      the
      People's Republic of China.





***Recent
      Development***




On
      July
      3, 2007, a closing was held pursuant to an Agreement and Plan of Reorganisation,
      dated as of June 29, 2007, (the“Agreement”) by and among the Company, WSTG, a
      BVI Corporation, and WSTG's shareholders. Pursuant to the Agreement, each
      shareholder of WSTG exchanged all of his shares in WSTG for shares in The
      Company with an aggregate of 69,615,000 shares in the Company being issued
      in
      exchange for the shares in WSTG. In addition, the Agreement provided that China
      Venture Partners, Inc (“CVP”), a Delaware corporation, would be issued
      15,185,000 shares in the Company at their par value of $0.001 per share for
      service pursuant to a consulting agreement which the Company and CVP have agreed
      to value at $15,185. CVP has advised the Company that it is assigning a portion
      of the shares it received pursuant to the consulting agreement as set forth
      herein.




4




WSTG
      is
      the owner of all the outstanding shares of SHKH, a limited liability company
      organized under the laws of the People's Republic of China (“PRC”) and a
      manufacturer of woman's shoes, casual shoes and shoe components.





Under
      the
      terms of the Agreement, all of the officers of the Company resigned, WSTG was
      permitted to appoint two directors, representing 50% of the Company's Board
      of
      Directors and WSTG and the Company agreed not to file a registration statementon
      From SB-2 allowing for insiders' share sales for a period of one year or to
      file
      a registration statement on From S-8 for nine months. CVP provides general
      business consulting services, specializing in the needs of entities with
      interests in the PRC.





**Results
      of Operations**





The
      following table summarizes the results of our operations during the nine months
      ended September 30, 2007 and 2006, and provides information regarding the dollar
      and percentage increase or (decrease) from the nine months ended September
      30,
      2007 to the nine months ended September 30, 2007.





All
      amount, other than percentages, in millions of U.S dollars





****
              **3
                  Months Ended September 30,**
              ****
              ****
              ****
              ****
              ******Item**
              ****
              **2007**
              ****
              **2006**
              ****
              **Increase**
                **(Decrease)**
              ****
              **%
                  Increase**
                **(%
                  Decrease)**Operating
                  Revenues
              
              $
              2.30
              
              $
              1.20
              
              $
              1.10
              
              
              91.7
              %Gross
                  Profit
              
              
              0.58
              
              
              0.25
              
              
              0.33
              
              
              132.0
              %Operating
                  Expenses
              
              
              0.29
              
              
              0.20
              
              
              0.09
              
              
              45.0
              %Other
                  Income (Expenses)
              
              
              (0.02
              )
              
              (0.00
              )
              
              (0.02
              )
              
              N/AIncome
                  Tax Expenses
              
              
              -
              
              
              0.02
              
              
              (0.02
              )
              
              -100.0
              %Net
                  Income
              
              
              0.26
              
              
              0.03
              
              
              0.23
              
              
              766.7
              %




***Three
      Months Ended September 30, 2007 Compared to Three Months Ended September 30,
      2006***





***Revenue:*** Revenue
      was $2.30 million for the three months ended September 30, 2007 as compared
      to
      $1.20 million for the three months ended September 30, 2006, representing an
      increase by 91.7%. The increase in revenue was mainly contributed to the
      increase in the proportion of sales into the Japanese market.





***Cost
      of Revenue and Gross Profit:*** Cost
      of
      revenue and gross profit were respectively $1.72 million and $0.58 million
      for
      the three months ended September 30, 2007 as compared to $0.95 million and
      $0.25
      million for the three months ended September 30, 2006, representing an increase
      by 81.1% and 132.0% respectively. The substantial growth in gross profit was
      attributable to the increase in the proportion of sales into the Japanese market
      that are generally at higher margins than sales within the PRC.





***Operating
      Expenses:*** Operating
      expenses was $0.29 million for the three months ended September 30, 2007 as
      compared to $0.20 million for the three months ended September 30, 2006,
      representing an increase by 45.0%. The operating expenses consisted of hiring
      of
      additional staff and overtime compensation paid to the workers, increase in
      entertainment and more vehicle expenses for serving the Japanese customers
      and
      professional expenses related to the reverse take-over activities on the
      over-the counter market.





***Income
      Tax Expenses:*** ** No
      income
      tax was incurred during the three months ended September 30, 2007. Starting
      from
      the first quarterof 2007, Shanghai Kanghong Yunheng Enterprise Development
      Company Limited, a subsidiary of the Group, which operates in the People's
      Republic of China (“PRC”), is exempted from the PRC state and local enterprise
      income tax for thefirst two profitable financial years of operation and
      therefore a 50% relief from the PRC state corporate income tax for the following
      three years. Accordingly, it was not subject to tax in 2007.





On
      March
      16, 2007, the National People's Congress of the PRC determined to adopt a new
      corporate income tax law in its fifth plenary session. The new corporate income
      tax law unifies the application scope, tax rate, tax deduction and preferential
      policy for both domestic and foreign-invested enterprises. The new corporate
      income tax law will be effective on January 1, 2008. According to the new
      corporate income tax law, the applicable income tax law rate for our operating
      subsidiaries may be subjectto change. As the implementation detail has not
      yet
      been announced, we cannot be sure of the potential impact of such newcorporate
      income tax law on our financial position and operating results.





***Net
      income:*** Net
      income was $0.26 million for the three months ended September 30, 2007 as
      compared to $0.03 million for the three months ended September 30, 2006,
      representing an increase by 766.7%, the increase was mainly attributable to
      the
      increase in the greater proportion of sales from the Japanese
      market.





5





All
      amount, other than percentages, in millions of U.S dollars


**9
                  Months Ended September 30,****Item**
              
              **2007**
              
              **2006**
              
              **Increase**
                **(Decrease)**
              
              **%
                  Increase**
                **(%
                  Decrease)**Operating
                  Revenues
              
              $
              5.43
              
              $
              3.14
              
              $
              2.29
              
              
              72.9
              %Gross
                  Profit
              
              
              1.04
              
              
              0.64
              
              
              0.76
              
              
              118.8
              %Operating
                  Expenses
              
              
              0.71
              
              
              0.46
              
              
              0.25
              
              
              54.3
              %Other
                  Income (Expenses)
              
              
              (0.04
              )
              
              (0.01
              )
              
              (0.03
              )
              
              300.0
              %Income
                  Tax Expenses
              
              
              -
              
              
              0.06
              
              
              (0.06
              )
              
              100.0
              %Net
                  Income
              
              
              0.65
              
              
              0.11
              
              
              0.54
              
              
              490.9
              %
  ***Nine
      Months Ended September 30, 2007 Compared to Nine Months Ended September 30,
      2006***





***Revenue:*** ** During
      the nine months ended September 30, 2007, we experienced a substantial growth
      in
      sales, sales revenue was $5.43 million for the nine months ended September
      30,
      2007 as compared to $3.14 million for the nine months ended September 30, 2006,
      representing an increase by 72.9%. The increase in revenue was mainly
      attributable to the increase in the proportion of sales into the Japanese
      market.





***Cost
      of Revenue and Gross Profit:*** Cost
      of
      revenue and gross profit were respectively $4.03 million and $1.40 million
      for
      the nine months ended September 30, 2007 as compared to $2.50 million and $0.64
      million for the nine months ended September 30, 2006, representing an increase
      by 61.2% and 118.8% respectively. The substantial growth in gross profit was
      attributable to the increase in the proportion of sales into the Japanese market
      that are generally at higher margins than sales within the PRC.





***Operating
      Expenses:*** ** Operating
      expenses was $0.71 million for the nine months ended September 30, 2007 as
      compared to $0.46 million for the nine months ended September 30, 2006,
      representing an increase by 54.3%. Such increase was mainly attributable to
      the
      hiring of additional staff and overtime compensation paid to the workers,
      increase in entertainment and motor vehicle expenses for serving the Japanese
      customers and professional expenses related to the reverse take-over activities
      on the over-the counter market.





***Income
      Tax Expenses:*** No
      income
      tax was incurred during the period from January 2007 to September 2007, as
      starting from the first quarter of 2007, Shanghai Kanghong Yunheng Enterprise
      Development Company Limited, a subsidiary of the Group, which operates in the
      People's Republic of China (“PRC”), is exempted from the PRC state and local
      enterprise income tax for the first two profitable financial years of operation
      and therefore a 50% relief from the PRC state corporate income tax for the
      following three years. Accordingly, it was not subject to tax in
      2007.





On
      March
      16, 2007, the National People's Congress of the PRC determined to adopt a new
      corporate income tax law in its fifth plenary session. The new corporate income
      tax law unifies the application scope, tax rate, tax deduction and preferential
      policy for both domestic and foreign-invested enterprises. The new corporate
      income tax law will be effective on January 1, 2008. According to the new
      corporate income tax law, the applicable income tax law rate for our operating
      subsidiaries may be subject to change. As the implementation detail has not
      yet
      been announced, we cannot be sure of the potential impact of such new corporate
      income tax law on our financial position and operating results.





***Net
      income:*** ** Net
      income for the nine months from January 2007 to September 2007 was $0.65
      million, representing a 490.9% increase from the same period in 2006. The
      increase was mainly due to the increase in sales derived from the greater
      proportion of sales into the Japanese market.





6




**Liquidity
      and Capital Resources**




**Cash
      Flows**


All
      amounts in millions of U.S. dollars




Nine
                  months ended2007
              
              2006Net
                  cash provided by (used in) operating activities
              
              $
              0.24
              
              $
              (0.04
              )Net
                  cash provided by investing activities
              
              
              -
              
              
              -Net
                  cash provided by financing activities
              
              
              0.25
              
              
              -Net
                  change in cash and cash equivalents
              
              $
              0.49
              
              $
              (0.04
              )




***Operating
      Activities:***





Net
      cash
      provided by operating activities was $0.24 million for the nine months ended
      September 30, 2007, which is an increase of $0.28 million from ($0.04) million
      of the net cash used in operating activities for the same period in 2006. The
      increase was mainly due to the increase in net income, accounts payable, other
      payable and accrued liabilities and amounts due to directors.





***Investing
      Activities:***





There
      is
      no cash used in investing activities for both the nine months ended September
      30
      2007 and September 30 2006.





***Financing
      Activities:***





Net
      cash
      provided by financing activities in the nine months ended September 30, 2007
      totaled $0.25 million as compared to $0 in the same period of 2006. The increase
      of cash provided by financing activities was mainly attributable to the proceeds
      from short term bank borrowings.





***Short
      Term Bank Borrowings:***





The
      Company utilizes short term bank borrowings to provide for its liquidity needs
      as the Company is typically paid for its product adequate to allow the Company
      to operate at present levels and to sustain moderate growth.




Short-term
      bank borrowings were as follows:


September
                  30, 2007
              
              December
                  31, 2006(unaudited)
              
              (audited)Short-term
                  bank loans
              
              $
              193,436
              
              $
              185,600Trust
                  receipt loans
              
              
              584,398
              
              
              147,649$
              777,834
              
              $
              333,249


Management
      believes that the Company's reputation for quality production will result in
      more large orders that will be difficult to fill without significant plant
      expansion and to explore the feasibility of entering the retail shoe market
      in
      China. However, the Company does not have any commitments for additional
      financing and no assurance is given that any additional financing will
      beavailable or that, if available, it will be on terms that are favorable to
      our
      shareholders.





7





**ITEM
      3. CONTROLS AND PRODCECURES**




Members
      of our management, including our Chief Financial Officer and Principal
      Accounting and Financial Officer, have evaluated the effectiveness of our
      disclosure controls and procedures, as defined by paragraph (e) of Exchange
      Act
      Rules 13a-15or 15d-15, as of September 30, 2007, the end of the period covered
      by this report. Based upon that evaluation, Mr. Guo Xianzhong concluded that
      our
      disclosure controls and procedures are effective.




**INTERNAL
      CONTROL OVER FINANCIAL REPORTING**




There
      were no changes in our internal control over financial reporting or in other
      factors identified in connection with the evaluation required by paragraph
      (d)
      of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended
      September30, 2006 that have materially affected, or are reasonably likely to
      materially affect, our internal control over financial reporting.





**PART
      II: OTHER INFORMATION**





**Item
      1. Legal Proceedings**




**None.**





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




Reference
      is made to the Company’s report on Form 8-K dated July 3, 2007.





**Item
      3. Defaults Upon Senior Securities**




None.





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




None.





**Item
      5. Other Information**




None.




8





**Item
      6. Exhibits and Reports on Form 8-K**


a)
        EXHIBITS
 
 31.1
              Certification
                  of the Chief Executive Officer pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002
  31.2
              Certification
                  of the Chief Financial Officer pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002
  32
              Certifications
                  of the Chief Executive Officer and Chief Financial Officer pursuant
                  to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002


b)
      REPORTS ON FORM 8-K




The
      Company filed a Form 8-K, dated June 6, 2007. The Company filed additional
      reports on Form 8-K after the close of the period covered by this
      report.




**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      Registrant caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.


**China
                Shoe
                Holdings, Inc.**
              (Registrant)Date:
                November 14, 2007
            By:
            /s/
                Gu XianzhongGu
              XianzhongPresident
                and CEO




Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, this
      Report has been signed below by the following persons on behalf of the
      registrant and in the capacities and on the dates indicated.




NAME
            
            TITLE
            DATE/s/Gu
                Xianzhong
            
            President
                and CEO
            November
                14, 2007Gu
                Xianzhong/s/Angus
                Cheung Ming
            
            Chief
                Financial Officer
            November
                14, 2007Angus
                Cheung Ming
            
            (Principal
                Financial and Accounting Officer)




9




**CHINA
        SHOE HOLDINGS, INC**
 **(Formerly
        Indigo Technologies, Inc.** **,
        A Development Stage Company)**
 **INDEX
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **Pages**Condensed
                    Consolidated Balance Sheets as of September 30, 2007 and December
                    31,
                    2006
                
                F-2Condensed
                    Consolidated Statements of Operations And Comprehensive Income
                    for the
                    three and nine months ended September 30, 2007 and 2006
                
                F-3Condensed
                    Consolidated Statements of Cash Flows for the nine months ended
                    September
                    30, 2007 and 2006
                
                F-4Condensed
                    Consolidated Statements of Stockholders’ Equity for the nine months ended
                    September 30, 2007
                
                F-5Notes
                    to Condensed Consolidated Financial Statements
                
                F-6
                    - F-17
   F-1
  CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies, Inc. ,
          A
          Development Stage Company)
 CONDENSED
          CONSOLIDATED BALANCE SHEETS
 AS
          OF
          SEPTEMBER 30 2007 AND DECEMBER 31, 2006
 (Currency
          expressed in United States Dollars (‘US$”), except for number of
          shares)
 
 September
                  30, 2007
              
              December
                  31, 2006**ASSETS**
              
              (unaudited)
              
              (audited)Current
                  assets:Cash
                  and cash equivalents
              
              $
              850,402
              
              $
              335,474Restricted
                  cash
              
              
              241,342
              
              
              60,160Accounts
                  receivable, trade
              
              
              1,096,673
              
              
              582,372Advances
                  to employees
              
              
              39,558
              
              
              145,040Inventories
              
              
              1,086,932
              
              
              384,394Value
                  added tax receivable
              
              
              27,899
              
              
              66,948Other
                  receivables and prepayments
              
              
              433,808
              
              
              227,769Total
                  current assets
              
              
              3,776,614
              
              
              1,802,157Non-current
                  assets:Property,
                  plant and equipment, net
              
              
              1,353,454
              
              
              1,382,851**TOTAL
                  ASSETS**
              
              $
              5,130,068
              
              $
              3,185,008**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY**Current
                  liabilities:Short-term
                  bank borrowings
              
              $
              777,834
              
              $
              333,249Accounts
                  payable, trade
              
              
              538,947
              
              
              253,201Income
                  tax payable
              
              
              -
              
              
              20,119Amount
                  due to directors
              
              
              147,488
              
              
              -Other
                  payables and accrued liabilities
              
              
              341,511
              
              
              99,293Total
                  current liabilities
              
              
              1,805,780
              
              
              705,862Stockholders’
                  equity:Preferred
                  stock, $0.001 par value; 10,000,000 shares authorized; no share
                  issued and
                  outstanding
              
              
              -
              
              
              -Common
                  stock, $0.001 par value; 300,000,000 shares authorized; 100,000,001
                  shares
                  and 69,615,000 shares issued and outstanding as of September 30,
                  2007 and
                  December 31, 2006
              
              
              100,000
              
              
              69,615Additional
                  paid-in capital
              
              
              1,838,549
              
              
              1,853,749Accumulated
                  other comprehensive income (loss)
              
              
              146,918
              
              
              (33,829
              )Retained
                  earnings
              
              
              1,238,821
              
              
              589,6113,324,288
              
              
              2,479,146**TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY**
              
              $
              5,130,068
              
              $
              3,185,008
  
 See
        accompanying notes to condensed consolidated financial statements.
  F-2
 CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies, Inc. ,
          A
          Development Stage Company)
 CONDENSED
          CONSOLIDATED STATEMENTS OF
 OPERATIONS
          AND COMPREHENISVE INCOME
 FOR
          THE
          THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 (Currency
          expressed United States Dollars (‘US$”), except for number of
          shares)
 (Unaudited)
 
 Three
                  months ended September 30,
              
              Nine
                  months ended September 30,2007
              
              2006
              
              2007
              
              2006**OPERATING
                  REVENUES**
              
              $
              2,299,786
              
              $
              1,196,114
              
              $
              5,428,658
              
              $
              3,140,027**COST
                  OF REVENUES**
              
              
              1,724,617
              
              
              946,587
              
              
              4,025,563
              
              
              2,500,995**GROSS
                  PROFIT**
              
              
              575,169
              
              
              249,527
              
              
              1,403,095
              
              
              639,032**OPERATING
                  EXPENSES:**Depreciation
              
              
              2,408
              
              
              2,356
              
              
              14,919
              
              
              7,068Stock-based
                  compensation
              
              
              -
              
              
              -
              
              
              15,185
              
              
              -General
                  and administrative
              
              
              285,643
              
              
              196,287
              
              
              683,434
              
              
              457,825Total
                  operating expenses
              
              
              288,051
              
              
              198,643
              
              
              713,538
              
              
              464,893**INCOME
                  FROM OPERATIONS**
              
              
              287,118
              
              
              50,884
              
              
              689,557
              
              
              174,139**OTHER
                  INCOME (EXPENSE):**Other
                  income
              
              
              651
              
              
              88
              
              
              1,176
              
              
              171Interest
                  expense
              
              
              (24,011
              )
              
              (156
              )
              
              (41,523
              )
              
              (9,826
              )Total
                  other expense
              
              
              (23,360
              )
              
              (68
              )
              
              (40,347
              )
              
              (9,655
              )**INCOME
                  BEFORE INCOME TAXES**
              
              
              263,758
              
              
              50,816
              
              
              649,210
              
              
              164,484Income
                  tax expenses
              
              
              -
              
              
              (17,547
              )
              
              -
              
              
              (56,612
              )**NET
                  INCOME**
              
              $
              263,758
              
              $
              33,269
              
              $
              649,210
              
              $
              107,872Other
                  comprehensive income:-
                  Foreign currency translation gain
              
              
              178,575
              
              
              51,130
              
              
              180,747
              
              
              70,296**COMPREHENSIVE
                  INCOME**
              
              $
              442,333
              
              $
              84,399
              
              $
              829,957
              
              $
              178,168Net
                  income per share- Basic and diluted
              
              $
              0.00
              
              $
              0.00
              
              $
              0.01
              
              $
              0.00Weighted
                  average number of shares outstanding during the period -Basic
                  and diluted
              
              
              100,000,001
              
              
              69,615,000
              
              
              80,077,235
              
              
              69,615,000
 
 
 See
        accompanying notes to condensed consolidated financial statements.
 
 F-3
  CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies, Inc. ,
          A
          Development Stage Company)
 CONDENSED
          CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR
          THE
          NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 (Currency
          expressed United States Dollars (‘US$”))
 (Unaudited)
  Nine
                  months ended September 30,2007
              
              2006**Cash
                  flows from operating activities:**Net
                  income
              
              $
              649,210
              
              
              107,872Adjustments
                  to reconcile net income to net cash (used in) provided by operating
                  activities:Depreciation
              
              
              146,440
              
              
              42,205Shares
                  issued for service rendered, non-cash
              
              
              15,185
              
              
              -Change
                  in operating assets and liabilities:Accounts
                  receivable, trade
              
              
              (479,587
              )
              
              (685,962
              )Amount
                  due to directors
              
              
              144,438
              
              
              (744,169
              )Advances
                  to employees
              
              
              109,322
              
              
              582,606Inventories
              
              
              (672,118
              )
              
              348,626Other
                  receivables and prepayments
              
              
              (192,361
              )
              
              (1,285,609
              )Value-added
                  tax receivable
              
              
              41,011
              
              
              (23,221
              )Accounts
                  payable, trade
              
              
              269,368
              
              
              476,906Other
                  payables and accrued liabilities
              
              
              233,464
              
              
              1,129,276Income
                  tax payable
              
              
              (20,535
              )
              
              9,025Net
                  cash provided by (used in) operating activities
              
              
              243,837
              
              
              (42,445
              )**Cash
                  flows from financing activities:**Draw
                  down from short-term bank borrowings
              
              
              421,614
              
              
              -Increase
                  in restricted cash
              
              
              (174,949
              )
              
              -Net
                  cash provided by financing activities
              
              
              246,665
              
              
              -**Foreign
                  currency translation adjustment**
              
              
              24,426
              
              
              86,111**NET
                  CHANGE IN CASH AND CASH EQUIVALENTS**
              
              
              514,928
              
              
              43,666**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              335,474
              
              
              164,843**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              850,402
              
              
              208,509**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION:**Cash
                  paid for income taxes
              
              $
              -
              
              $
              -Cash
                  paid for interest expenses
              
              $
              41,523
              
              $
              9,826
  
 See
        accompanying notes to condensed consolidated financial statements
 
 F-4
 CHINA
          SHOE HOLDINGS, INC
 (Formerly
          Indigo Technologies, Inc. ,
          A
          Development Stage Company)
 CONDENSED
          CONSOLDIATED STATEMENTS OF STOCKHOLDERS’EQUITY
 FOR
          THE
          NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
          expressed in United States Dollars (“US$”), except for number of
          shares)
  Common
                    Stock
                
                Additional
                  paid-in
                
                Accumulated
                  other
                  comprehensive
                
                RetainedNo.
                    of shares
                
                Amount
                
                capital
                
                income
                    (loss)
                
                earnings
                
                Total
                    equityBalance
                    as of January 1, 2007
                
                
                69,615,000
                
                
                69,615
                
                
                1,853,749
                
                
                (33,829
                )
                
                589,611
                
                
                2,479,146Shares
                    issued to complete reverse acquisition
                
                
                15,200,001
                
                
                15,200
                
                
                (15,200
                )
                
                -
                
                
                -
                
                
                -Shares
                    issued for service
                
                
                15,185,000
                
                
                15,185
                
                
                -
                
                
                -
                
                
                -
                
                
                15,185Net
                    income for the period
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                649,210
                
                
                649,210Foreign
                    currency translation adjustment
                
                
                -
                
                
                -
                
                
                -
                
                
                180,747
                
                
                -
                
                
                180,747Balance
                    as of September 30, 2007
                
                
                100,000,001
                
                $
                100,000
                
                $
                1,838,549
                
                $
                146,918
                
                $
                1,238,821
                
                $
                3,324,288
  
 See
        accompanying notes to condensed consolidated financial statements
 
 F-5
 CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies,Inc. ,
          A
          Development Stage Company)
 NOTES
          TO
          CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
          THE
          NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
          expressed in United States Dollars (“US$”)
 (Unaudited)
  **NOTE
        -** **1**  **BASIS
        OF PRESENTATION**
 
 The
        accompanying unaudited condensed consolidated financial statements have been
        prepared in accordance with both generally accepted accounting principles
        for
        interim financial information, and the instructions to Form 10-QSB and Item
        310(b) of Regulation S-B. Accordingly, they do not include all of the
        information and footnotes required by generally accepted accounting principles
        for complete financial statements. The accompanying unaudited condensed
        consolidated financial statements reflect all adjustments (consisting of
        normal
        recurring accruals) that are, in the opinion of management, considered necessary
        for a fair presentation of the results for the interim periods presented.
        Interim results are not necessarily indicative of results for a full
        year.
 
 The
        condensed consolidated financial statements and related disclosures have
        been
        prepared with the presumption that users of the interim financial information
        have read or have access to our annual audited condensed consolidated financial
        statements for the preceding fiscal year. Accordingly, these condensed
        consolidated financial statements should be read in conjunction with the
        consolidated financial statements and the related notes thereto contained
        in the
        Annual Report on Form 10-KSB for the year ended December 31, 2006.
 
 
 **NOTE
        -** **2**  **ORGANIZATION
        AND BUSINESS BACKGROUND**
 
 China
        Shoe Holdings, Inc. (the “Company” or “CHSH”) was incorporated in the State of
        Nevada on January 24, 2005 as Indigo Technologies, Inc. On June 6, 2007,
        CHSH
        changed its name to China Shoe Holdings, Inc. The principal activity of CHSH,
        through its subsidiaries, is engaged
        in the manufacturing of ladies fashion footwear for shoe retailers in Japan
        and
        China. Meanwhile, the Company also produces various types of shoe soles for
        the
        domestic market in the PRC. In order to maintain a competitive advantage
        in the
        shoes manufacturing industry, the Company has developed the following
        proprietary technologies: (i) PU imitational grainy sole, (ii) TPR modified
        materials and (iii) Viscose water. The Company has registered and obtained
        “Utility Model” patent and “Invention” patent respectively for these innovations
        from the State Intellectual Property Office of the PRC in 2006.
 
 CHSH
        was
        considered a  development stage companyand
        its
        principal activity is seeking and consummating a merger or acquisition
        opportunity with a business entity organized as a private corporation,
        partnership, or sole proprietorship as defined by Statement of Financial
        Accounting Standards (SFAS) No. 7*“Accounting
        and Reporting by Development Stage Enterprises”*.
        CHSH
        did not generate revenues from any business operations from its
        inception.
 
 On
        June
        6, 2007, CHSH completed a 7.6 for 1 forward stock split on the common stock
        in
        the form of a dividend and the par value remains at $0.001 per share. In
        addition, Amended and Restated Articles of Incorporation was filed to the
        Secretary of State of the State of Nevada in connection with the increase
        in
        authorized capital stock from 75,000,000 shares of common stock at par value
        of
        $0.001 per share to 300,000,000 shares of common stock at par value $0.001
        per
        share and 10,000,000 shares of preferred stock at par value $0.001 per share.
  F-6
 CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies,Inc. ,
          A
          Development Stage Company)
 NOTES
          TO
          CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
          THE
          NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
          expressed in United States Dollars (“US$”)
 (Unaudited)
  On
        June
        29, 2007, the CHSH cancelled 31,350,000 restricted shares of common stock.
        All
        common stock and per share data for all periods presented in these condensed
        consolidated financial statements have been restated to give effect to the
        forward stock split and stock cancellation.
 
 As
        a
        result, the total number of issued and outstanding shares of the Company
        before
        the stock exchange transaction was increased from 6,125,000 to 15,200,000
        shares
        and par value of its common stock was unchanged at $0.001.
 
 On
        June
        29, 2007, CHSH completed a stock exchange transaction with Wholly Success
        Technology Group Limited (“WSTG”). WSTG was
        incorporated as a limited liability company in the British Virgin Islands
        (“BVI”) on December 16, 2004 with an authorized, issued and outstanding shares
        of 994,500 common stock at par value of $1 per share. Its principal activity
        is
        investment holding.
 
 The
        stock
        exchange transaction involved CHSH issued to each WSTG’s shareholder 70 shares
        of common stock of the Company for each share of common stock of WSTG. As
        a
        result, the total number of new issued and outstanding shares of common stock
        to
        WSTG’s shareholders was 69,615,000 shares.
 
 In
        addition to the stock exchange transaction, CHSH agreed to issue an additional
        15,185,000 restricted common stock of the Company to China Venture Partners
        for
        consulting services at the price of $0.001 per share.
 
 The
        stock
        exchange transaction has been accounted for as a reverse acquisition and
        recapitalization of the CHSH whereby WSTG is deemed to be the accounting
        acquirer (legal acquiree) and CHSH to be the accounting acquiree (legal
        acquirer). The accompanying consolidated financial statements are in substance
        those of WSTG, with the assets and liabilities, and revenues and expenses,
        of
        CHSH being included effective from the date of stock exchange transaction.
        CHSH
        is deemed to be a continuation of the business of WSTG. Accordingly, the
        accompanying consolidated financial statements include the
        following:
 
 (1)  the
        balance sheet consists of the net assets of the accounting acquirer at
        historical cost and the net assets of the accounting acquiree at historical
        cost;
 
 (2)  the
        financial position, results of operations, and cash flows of the accounting
        acquirer for all periods presented as if the recapitalization had occurred
        at
        the beginning of the earliest period presented and the operations of the
        accounting acquiree from the date of stock exchange transaction.
 
 On
        February 9, 2006, WSTG entered an equity transfer agreement with the equity
        owners of Shanghai Kanghong Yunheng Enterprise Development Company Limited
        (“Shanghai Kanghong”), whereby WSTG paid a cash consideration of $1,921,398
        (equivalent to Renminbi (“RMB”) 15,231,800) to purchase the total equity of
        Shanghai Kanghong. Shanghai Kanghong was organized as a limited liability
        company and located in Shanghai city, the People’s Republic of China (“PRC”)
        with a registered capital of RMB
        15,000,000. The transfer has been accounted for as a reorganization of entities
        under common control as the companies were beneficially owned by identical
        shareholders and share common management. The financial statements have been
        prepared as if the reorganization had occurred retroactively.
  F-7
 CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies,Inc. ,
          A
          Development Stage Company)
 NOTES
          TO
          CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
          THE
          NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
          expressed in United States Dollars (“US$”)
 (Unaudited)
 CHSH,
        WSTG and Shanghai Kanghong are collectively known as “the Company” in these
        condensed consolidated financial statements.
 
 
 **NOTE
        -** **3**  **SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES**
 
 l
              Basis
                  of presentation
 
 These
        accompanying condensed consolidated financial statements have been prepared
        in
        accordance with generally accepted accounting principles in the United States
        of
        America.
 
 l
              Use
                  of estimates
 
 In
        preparing these condensed consolidated financial statements, management makes
        estimates and assumptions that affect the reported amounts of assets and
        liabilities in the balance sheets and revenues and expenses during the period
        reported. Actual results may differ from these estimates.
 
 l
              Basis
                  of consolidation
 
 The
        condensed consolidated financial statements include the financial statements
        of
        CHSH and its subsidiaries, WSTG and Shanghai Kanghong.
 
 All
        significant inter-company balances and transactions within the Company have
        been
        eliminated upon consolidation.
 
 l
              Cash
                  and cash equivalents
 
 Cash
        and
        cash equivalents are carried at cost and represent cash on hand, demand deposits
        placed with banks or other financial institutions and all highly liquid
        investments with an original maturity of three months or less as of the purchase
        date of such investments.
 
 l
              Restricted
                  cash
 
 Restricted
        cash consists of cash pledged with a bank as collateral for all letters of
        credit.
 
 l
              Accounts
                  receivable, trade
 
 Accounts
        receivable are recorded at the invoiced amount and do not bear interest.
        The
        Company extends unsecured credit to its customers in the ordinary course
        of
        business but mitigates the associated risks by performing credit checks and
        actively pursuing past due accounts. An allowance for doubtful accounts is
        established and determined based on managements’ assessment of known
        requirements, aging of receivables, payment history, the customer’s current
        credit worthiness and the economic environment. As of September 30, 2007,
        the
        Company recorded no allowance for doubtful accounts.
 
 l
              Inventories
  F-8
 CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies,Inc. ,
          A
          Development Stage Company)
 NOTES
          TO
          CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
          THE
          NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
          expressed in United States Dollars (“US$”)
 (Unaudited)
  Inventories
        include direct materials, labor and factory overhead and are stated at lower
        of
        cost or market value, cost being determined on a FIFO. The Company periodically
        reviews historical sales activity to determine excess, slow moving items
        and
        potentially obsolete items and also evaluates the impact of any anticipated
        changes in future demand. The Company provides inventory allowances based
        on
        excess and obsolete inventories determined principally by customer demand.
        As of
        September 30, 2007, the Company did not record an allowance for obsolete
        inventories, nor have there been any write-offs.
  l
              Property,
                  plant and equipment, net
 
 Property,
        plant and equipment are stated at cost less accumulated depreciation and
        accumulated impairment losses, if any. Depreciation is calculated on the
        straight-line basis over the following expected useful lives from the date
        on
        which they become fully operational and after taking into account their
        estimated residual values:
 
 Depreciable
                  life
              
              Residual
                  valueBuildings
              
              
              20
                  years
              
              
              5
              %Plant
                  and machinery
              
              
              10
                  years
              
              
              5
              %Office
                  equipments
              
              
              10
                  years
              
              
              5
              %Motor
                  vehicles
              
              
              5
                  years
              
              
              5
              %
 
 Expenditure
        for maintenance and repairs is expensed as incurred.
 
 l
              Impairment
                  of long-lived assets
 
 In
        accordance with SFAS No. 144, *“Accounting
        for the Impairment or Disposal of Long-Lived Assets”* ,
        long-lived assets and certain identifiable intangible assets held and used
        by
        the Company are reviewed for impairment whenever events or changes in
        circumstances indicate that the carrying amount of an asset may not be
        recoverable. Recoverability
        of assets to be held and used is evaluated by a comparison of the carrying
        amount of assets to estimated discounted net cash flows expected to be generated
        by the assets. If such assets are considered to be impaired, the impairment
        to
        be recognized is measured by the amount by which the carrying amounts of
        the
        assets exceed the fair value of the assets. There has been no impairment
        as of
        September 30, 2007.
 
 l
              Revenue
                  recognition
 
 The
        Company derives revenues from the sale of self-manufactured products. The
        Company recognizes its revenues net of value added taxes (“VAT”). The Company is
        subject to VAT which is levied on the majority of the products of Shanghai
        at
        the rate of 17% on the invoiced value of sales. Output VAT is borne by customers
        in addition to the invoiced value of sales and input VAT is borne by the
        Company
        in addition to the invoiced value of purchases to the extent not refunded
        for
        export sales.
 
 In
        accordance with the SEC’s Staff Accounting Bulletin No. 104, *Revenue
        Recognition* ,
        the
        Company recognizes revenue when persuasive evidence of an arrangement exists,
        transfer of title has occurred or services have been rendered, the selling
        price
        is fixed or determinable and collectibility is reasonably assured.
 
 (a)
              Sale
                  of products
  F-9
 CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies,Inc. ,
          A
          Development Stage Company)
 NOTES
          TO
          CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
          THE
          NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
          expressed in United States Dollars (“US$”)
 (Unaudited)
  The
        Company recognizes revenue from the sale of products upon delivery to the
        customers and the transfer of title and risk of loss. The Company experienced
        no
        product returns and has recorded no reserve for sales returns for the nine
        months ended September 30, 2007.
 
 (b)
              Interest
                  income
 
 Interest
        income is recognized on a time apportionment basis, taking into account the
        principal amounts outstanding and the interest rates applicable.
 
 l
              Cost
                  of revenue
 
 Cost
        of
        revenues consists primarily of material costs, direct labor, depreciation
        and
        manufacturing overheads, which are directly attributable to the manufacture
        of
        products.
 
 l
              Income
                  taxes
 
 The
        Company accounts for income taxes in interim periods as required by Accounting
        Principles Board Opinion No. 28, *“Interim
        Financial Reporting”* and as
        interpreted by FASB Interpretation No. 18, *“Accounting
        for Income Taxes in Interim Periods.”* The
        Company has determined an estimated annual effective tax rate. The rate will
        be
        revised, if necessary, as of the end of each successive interim period during
        the Company’s fiscal year to the Company’s best current estimate. The estimated
        annual effective tax rate is applied to the year-to-date ordinary income
        at the
        end of the interim period.
 
 The
        Company also accounts for income tax using SFAS No. 109 *“Accounting
        for Income Taxes”* ,
        which
        requires the asset and liability approach for financial accounting and reporting
        for income taxes. Under this approach, deferred income taxes are provided
        for
        the estimated future tax effects attributable to temporary differences between
        financial statement carrying amounts of assets and liabilities and their
        respective tax bases, and for the expected future tax benefits from loss
        carry-forwards and provisions, if any. Deferred tax assets and liabilities
        are
        measured using the enacted tax rates expected in the years of recovery or
        reversal and the effect from a change in tax rates is recognized in the
        consolidated statement of operations and comprehensive income in the period
        of
        enactment. A valuation allowance is provided to reduce the amount of deferred
        tax assets if it is considered more likely than not that some portion of,
        or all
        of the deferred tax assets will not be realized.
 
 l
              Stock-based
                  compensation
 
 The
        Company adopts SFAS No. 123R, *“Accounting
        for Stock-Based Compensation”* using
        the fair value method. Under
        SFAS No. 123R, stock-based compensation expense is measured at the
        grant date based on the value of the option or restricted stock and is
        recognized as expense, less expected forfeitures, over the requisite service
        period.
 
 l
              Net
                  income per share
 
 The
        Company calculates net income per share in accordance with SFAS
        No. 128, *“Earnings
        per Share.”* Basic
        income per share is computed by dividing the net income by the weighted-average
        number of common shares outstanding during the period. Diluted income per
        share
        is computed similar to basic income per share except that the denominator
        is
        increased to include the number of additional common shares that would have
        been
        outstanding if the potential common stock equivalents had been issued and
        if the
        additional common shares were dilutive.
 
 F-10
  CHINA
          SHOE HOLDINGS,INC
 (Formerly
          Indigo Technologies,Inc. ,
          A
          Development Stage Company)
 NOTES
          TO
          CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
          THE
          NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
          expressed in United States Dollars (“US$”)
 (Unaudited)
 
 l
              Comprehensive
                  (loss) income
 
 SFAS
        No.
        130, *“Reporting
        Comprehensive Income”* ,
        establishes standards for reporting and display of comprehensive income,
        its
        components and accumulated balances. Comprehensive income as defined includes
        all changes in equity during a period from non-owner sources. Accumulated
        comprehensive income consists of changes in unrealized gains and losses on
        foreign currency translation. This comprehensive income is not included in
        the
        computation of income tax expense or benefit.
 
 l
              Foreign
                  currencies translation
 
 Transactions
        denominated in currencies other than the functional currency are translated
        into
        the functional currency at the exchange rates prevailing at the dates of
        the
        transaction. Monetary assets and liabilities denominated in currencies other
        than the functional currency are translated into the functional currency
        using
        the applicable exchange rates at the balance sheet dates. The resulting exchange
        differences are recorded in the consolidated statement of
        operations.
 
 The
        functional and reporting currency of the Company is the United States dollars
        (“U.S. dollars”). The accompanying condensed consolidated financial statements
        have been expressed in U.S. dollars. In addition, the
        Company’s operating subsidiary in the PRC, TCH maintains its books and records
        in its local currency, the Renminbi Yuan (“RMB”), which is functional currency
        as being the primary currency of the economic environment in which its
        operations are conducted.
 
 Assets
        and liabilities of its subsidiary whose functional currency is not the U.S.
        dollars are
        translated into US dollars, in accordance with Statement of Financial Accounting
        Standards (“SFAS”) No 52, *Foreign
        Currency Translation* ,
        using
        the exchange rate on the balance sheet date. Revenues and expenses are
        translated at average rates prevailing during the period. The gains and losses
        resulting from translation of financial statements of foreign subsidiary
        is
        recorded as a separate component of accumulated other comprehensive income
        within the statement of stockholders’ equity.
 
 l
              Related
                  parties
 
 Parties,
        which can be a corporation or individual, are considered to be related if
        the
        Company has the ability, directly or indirectly, to control the other party
        or
        exercise significant influence over the other party in making financial and
        operating decisions. Companies are also considered to be related if they
        are
        subject to common control or common significant influence.
 
 l
              Segment
                  reporting
 
 SFAS
        No.
        131 *“Disclosures
        about Segments of an Enterprise and Related Information”* establishes standards for reporting information about operating segments
        on a
        basis consistent with the Company’s internal organization structure as well as
        information about geographical areas, business segments and major customers
        in
        the financial statements. The Company operates in one principal reportable
        segment in Japan and the PRC.
  F-11
 CHINA
            SHOE HOLDINGS,INC
 (Formerly
            Indigo Technologies,Inc. ,
            A
            Development Stage Company)
 NOTES
            TO
            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
            THE
            NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
            expressed in United States Dollars (“US$”)
 (Unaudited)
 l
              Fair
                  value of financial instruments
 
 The
        Company values its financial instruments as required by Statement of Financial
        Accounting Standard (SFAS) No. 107, “ *Disclosures
        about Fair Value of Financial Instruments* ”.
        The
        estimated fair value amounts have been determined by the Company, using
        available market information and appropriate valuation methodologies. The
        estimates presented herein are not necessarily indicative of amounts that
        the
        Company could realize in a current market exchange.
 
 The
        Company’s financial instruments primarily consist of cash and cash equivalents,
        accounts receivable, receivable from a third party, prepayments and deposits,
        short-term bank loan, other payables and accrued liabilities and income tax
        payable.
 
 As
        of the
        balance sheet date, the estimated fair values of the financial instruments
        were
        not materially different from their carrying values as presented due to the
        short term maturities of these instruments and that the interest rates on
        the
        borrowings approximate those that would have been available for loans of
        similar
        remaining maturity and risk profile at respective year ends.
 
 l
              Recently
                  issued accounting standards
 
 The
        Company has reviewed all recently issued, but not yet effective, accounting
        pronouncements and do not believe the future adoption of any such pronouncements
        may be expected to cause a material impact on its financial condition or
        the
        results of its operations.
 
 In
        June
        2006, the FASB issued Interpretation No. 48, *Accounting
        for Uncertainty in Income Taxes* (“FIN
        48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
        in the Company’s financial statements in accordance with SFAS No. 109. FIN
        48 prescribes a recognition threshold and measurement attributes for the
        financial statement recognition and measurement of a tax position taken or
        expected to be taken in a tax return. The Company adopted FIN48 on
        January 1, 2007.
 
 The
        adoption of FIN 48 did not have an effect on the results of operations or
        financial condition. The Company did not have any unrecognized tax benefits
        as
        of September 30, 2007.
 
 On
        February 15, 2007, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards No.159, *“The
        Fair Value Option for Financial Assets and Financial Liabilities — Including an
        Amendment of FASB Statement No.115”* (“SFAS
        159”). This standard permits an entity to measure financial instruments and
        certain other items at estimated fair value. Most of the provisions of SFAS
        No.159 are elective; however, the amendment to FASB No.115, “Accounting for
        Certain Investments in Debt and Equity Securities,” applies to all entities that
        own trading and available-for-sale securities. The fair value option created
        by
        SFAS 159 permits an entity to measure eligible items at fair value as of
        specified election dates. The fair value option (a) may generally be applied
        instrument by instrument, (b) is irrevocable unless a new election date occurs,
        and (c) must be applied to the entire instrument and not to only a portion
        of
        the instrument. SFAS 159 is effective as of the beginning of the first fiscal
        year that begins after November 15, 2007. Early adoption is permitted as
        of the
        beginning of the previous fiscal year provided that the entity (i) makes
        that
        choice in the first 120 days of that year, (ii) has not yet issued financial
        statements for any interim period of such year, and (iii) elects to apply
        the
        provisions of FASB 157. Management is currently evaluating the impact of
        SFAS
        159, if any, on the Company’s financial statements.
 
 F-12
 CHINA
            SHOE HOLDINGS,INC
 (Formerly
            Indigo Technologies,Inc. ,
            A
            Development Stage Company)
 NOTES
            TO
            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
            THE
            NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
            expressed in United States Dollars (“US$”)
 (Unaudited)
 **NOTE
        -** **4**  **ACCOUNTS
        RECEIVABLE, TRADE**
 
 The
        majority of the Company’s sales are on open credit terms and in accordance with
        terms specified in the contracts governing the relevant transactions. The
        Company evaluates the need of an allowance for doubtful accounts based on
        specifically identified amounts that management believes to be uncollectible.
        If
        actual collections experience changes, revisions to the allowance may be
        required. Based upon the aforementioned criteria, management has determined
        that  no
        allowance for doubtful accounts is required for the nine months ended September
        30, 2007.
 
 
 **NOTE
        -** **5**  **INVENTORIES**
 Inventories
          consisted of following:
 September
                    30, 2007
                
                December
                    31, 2006(audited)Raw
                    materials
                
                $
                854,288
                
                $
                211,682Work
                    in process
                
                
                139,261
                
                
                56,948Finished
                    goods
                
                
                93,383
                
                
                115,764$
                1,086,932
                
                $
                384,394
 
 For
        the
        nine months ended September 30, 2007 and 2006, the Company did not record
        an
        allowance for obsolete inventories, nor have there been any write-offs.
 
 
 **NOTE
        -** **6**  **OTHER
        RECEIVABLES AND PREPAYMENTS**
 
 Other
        receivables and prepayments consisted of the following:
 
 September
                  30, 2007
              
              December
                  31, 2006(audited)Other
                  receivables
              
              $
              14,350
              
              $
              9,130Prepayments
              
              
              419,458
              
              
              218,639$
              433,808
              
              $
              227,769
 
 F-13
 CHINA
            SHOE HOLDINGS,INC
 (Formerly
            Indigo Technologies,Inc. ,
            A
            Development Stage Company)
 NOTES
            TO
            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
            THE
            NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
            expressed in United States Dollars (“US$”)
 (Unaudited)
 
 **NOTE
        -** **7**  **PROPERTY,
        PLANT AND EQUIPMENT, NET**
 
 Plant
        and
        equipment, net, consisted of the following:
 
 September
                  30, 2007
              
              December
                  31, 2006(audited)Buildings
              
              $
              403,046
              
              $
              403,046Plant
                  and machinery
              
              
              1,419,238
              
              
              1,419,238Office
                  equipments
              
              
              38,954
              
              
              38,954Motor
                  vehicles
              
              
              29,452
              
              
              29,452Foreign
                  exchange adjustment
              
              
              163,219
              
              
              -2,053,909
              
              
              1,890,690Less:
                  accumulated depreciation
              
              
              (654,279
              )
              
              (507,839
              )Less:
                  foreign exchange adjustment
              
              
              (46,176
              )
              
              -Property,
                  plant and equipment, net
              
              $
              1,353,454
              
              $
              1,382,851
 
 On
        December 8, 2006, Shanghai Kanghong, Mr. Gu Xianzhong and Mr. Gu Changhong
        entered an “Assets Transfer Agreement" to record the ownership of the building
        suites on Shanghai Kanghong's books and records. The net book value of the
        assets was $401,910 as of September 30, 2007. All parties have declared that
        the
        ownership of the assets should be Shanghai Kanghong's as of the balance sheet
        date and legally the transfer of ownership of the assets is under progress
        with
        the Real Property Registry of Jia Ding District, Shanghai.
 
 Depreciation
        expense for the nine months ended September 30, 2007 and 2006 were $146,440
        and
        $42,205, respectively.
 
 
 **NOTE
        -** **8**  **SHORT-TERM
        BANK BORROWINGS**
 
 Short-term
        bank borrowings were as follows:
 September
                  30, 2007
              
              December
                  31, 2006(audited)Short-term
                  bank loans
              
              $
              193,436
              
              $
              185,600Trust
                  receipt loans
              
              
              584,398
              
              
              147,649$
              777,834
              
              $
              333,249
  F-14
 CHINA
            SHOE HOLDINGS,INC
 (Formerly
            Indigo Technologies,Inc. ,
            A
            Development Stage Company)
 NOTES
            TO
            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
            THE
            NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
            expressed in United States Dollars (“US$”)
 (Unaudited)
  As
        of
        September 30, 2007, the short-term bank loans consist of four individual
        bank
        loans with aggregate amount of RMB 1,450,000 (2006: RMB 1,450,000) payable
        to a
        financial institution, guaranteed by an independent third party, with interest
        at 7.38% (2006: 7.38%) per annum payable quarterly, with principle due October
        30, 2007.
 
 
 As
        of
        September 30, 2007, trust receipts loans with an aggregate amount of RMB
        4,380,645 (2006: Nil ) payable to financial institutions, guaranteed by the
        shareholders of the Company, with interest at 6.975% (2006: Nil ) per annum,
        with principle due December 24, 2007.
 
 
 **NOTE
        -** **9**  **OTHER
        PAYABLES AND ACCRUED LIABILIITES**
 
 Other
        payables and accrued liabilities consisted of the followings:
 
 September
                  30, 2007
              
              December
                  31, 2006(audited)Salaries
                  payable
              
              $
              294,098
              
              $
              780Welfare
                  payable
              
              
              1,589
              
              
              4,098Advances
                  from customers
              
              
              -
              
              
              43,199Accrued
                  expenses
              
              
              44,258
              
              
              43,115Other
                  payables
              
              
              1,566
              
              
              8,101$
              341,511
              
              $
              99,293
 
 
 **NOTE
        -** **10
        INCOME TAXES**
 
 The
        Company is registered in the United States of America and has operations
        in two
        tax jurisdictions: the United States of America and the PRC. For the nine
        months
        ended September 30, 2007, the operation in the United States of America incurred
        net operating losses of $24,145 for income tax purposes. The
        Company has provided for a full valuation allowance of $8,450 for future
        tax
        benefits from the net operating loss carryforwards as the management believes
        it
        is more likely than not that these assets will not be realized in the
        future.
 
 In
        December 2006, the Shanghai city local government tax bureau in the PRC approved
        Shanghai Kanghong as a foreign investment enterprise. Hence, effective from
        January 1, 2007, Shanghai Kanghong is entitled to a two-year exemption from
        enterprise income tax and a reduced enterprise income tax rate of 15% for
        the
        following three years.
 
 The
        Company’s effective income tax rates for the three and nine months ended
        September 30, 2007 and 2006 were 0%, 0% and 33% and 33%,
        respectively.
 
 F-15
 CHINA
            SHOE HOLDINGS,INC
 (Formerly
            Indigo Technologies,Inc. ,
            A
            Development Stage Company)
 NOTES
            TO
            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
            THE
            NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
            expressed in United States Dollars (“US$”)
 (Unaudited)
 **NOTE
        -** **11
        AMOUNT DUE TO DIRECTORS**
 
 The
        balances due to directors, Mr. Gu Xianzhong and Mr. Gu Changhong, represented
        unsecured advances which are interest-free and repayable in next twelve
        months.
 
 
 **NOTE
        -** **12
        CAPITAL TRANSACTIONS**
 
 On
        June
        29, 2007, CHSH completed a stock exchange transaction with the stockholders
        of
        WSTG and CHSH issued to WSTG’s stockholders an aggregated amount equal to
        69,615,000 shares of common stock of CHSH, as more fully described in Note
        2.
 
 
 **NOTE
        -** **13
        STOCK-BASED COMPENSATION**
 
 On
        June
        29, 2007, the Company issued 15,815,000 restricted shares of common stock
        at the
        price of $0.001 per share for business advisory services to China Venture
        Partners (the “Consultant”).  The
        Company recognized the stock-based compensation cost of $15,815 to the condensed
        consolidated statements of operations for the nine months ended September
        30,
        2007.
 
 
 **NOTE
        -** **14**  **CONCENTRATION
        AND RISK**
 
 (a)
              Major
                  customers and vendors
 
 For
        the
        nine months ended September 30, 2007 and 2006, 100% of the Company’s assets were
        located in the PRC and 75% of the Company’s revenues were derived from customers
        located in Japan for nine months ended September 30, 2007.
 
 For
        the
        nine months ended September 30, 2007, customers who account for 10% or more
        of
        revenues are presented as follows:
 
 Customers
              
              
              Revenues
              
              Percentage
                of
                  revenues
              
              
              Accounts
                receivable,
                  tradeCustomer
                  A
              
              
              $
              1,019,093
              
              19%
              
              
              $
              168,478Customer
                  B
              
              
              
              988,377
              
              18%
              
              
              
              192,301Customer
                  C
              
              
              
              927,027
              
              17%
              
              
              
              195,885Customer
                  D
              
              
              
              734,696
              
              14%
              
              
              
              198,736Customer
                  E
              
              
              
              715,344
              
              13%
              
              
              
              205,341Total:
              
              $
              4,384,537
              
              81%
              Total:
              
              $
              960,741
 
 For
        the
        nine months ended September 30, 2007, there are no vendors who account for
        10%
        or more of purchases.
  F-16
 CHINA
            SHOE HOLDINGS,INC
 (Formerly
            Indigo Technologies,Inc. ,
            A
            Development Stage Company)
 NOTES
            TO
            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
            THE
            NINE MONTHS ENDED SEPTEMBER 30, 2007
 (Currency
            expressed in United States Dollars (“US$”)
 (Unaudited)
  (b)
                Credit
                    risk
 
 Financial
        instruments that potentially subject the Company to significant concentrations
        of credit risk consist principally of cash and trade accounts receivable.
        The
        Company performs ongoing credit evaluations of its customers’ financial
        condition, but does not require collateral to support such
        receivables.
 
 (c)
              Interest
                  rate risk
 
 As
        the
        Company has no significant interest-bearing assets, the Company’s income and
        operating cash flows are substantially independent of changes in market interest
        rates.
 
 The
        Company’s interest-rate risk arises from short-term borrowings. Borrowings
        issued at variable rates expose the Company to cash flow interest-rate risk.
        Borrowings issued at fixed rates expose the Company to fair value interest-rate
        risk. Company policy is to maintain approximately all of its borrowings in
        fixed
        rate instruments. As of September 30, 2007, all of borrowings were at fixed
        rates.
 
 
 **NOTE
        -** **15**  **OPERATING
        LEASE COMMITMENT**
 
 The
        Company rented offices and factories under non-cancelable operating lease
        agreements. Based on the current rental lease agreements, the future minimum
        rental payments required for the coming years are as follows:
 
 Year
                  ending September 30:2008
              
              $
              36,6232009
              
              
              38,4542010
              
              
              40,3762011
              
              
              42,395Thereafter
              
              
              80,529$
              238,377
 
 For
        the
        nine months ended September 30, 2007 and 2006, rental expenses were $38,991
        and
        $18,767 respectively.
 
 F-17