UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarter ended ~~December~~June 3130, ~~2009~~2010

-OR-


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 033-~~377099~~37099-S

T-BAY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

NEVADA (State or other jurisdiction of incorporation or organization)		91-1465664 (I.R.S. Employer Identification No.)
NEVADA		91-1465664
Room 917, YongSheng Building ZhongShan Xi Road Xuhui District, Shanghai, China (Address of principal executive offices)		(Zip code)
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

Room 917, YongSheng Building
ZhongShan Xi Road
Xuhui District, Shanghai, China
(Address of principal executive offices)

Issuer’s telephone number, including area code: 86-021 51539900

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

Indicate by check mark whether the registrant: (1) 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 þ No o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See ~~definition~~the definitions of “large accelerated filer,” “accelerated filer” and ~~large~~“smaller ~~accelerated~~reporting ~~filer~~company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rue 12b-22of of the Exchange Act). Yes o No þ

The number of shares outstanding of each of the Registrant’s classes of common stock, as of ~~January 25~~August 6, 2010 was 30,088,174 shares, all of one class of $0.001 par value Common Stock.

T-BAY HOLDINGS, INC. FORM 10-Q Quarter Ended June 30, 2010 TABLE OF CONTENTS

FORM 10-Q


	Page

PART I— FINANCIAL INFORMATION

Item 1 Financial Statements

Consolidated Balance Sheets as of June 30, 2010 (Unaudited) and March 31, 2010		5

Unaudited Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended June 30, 2010 and 2009		6

Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the Three Months Ended June 30, 2010		7

Unaudited Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2010 and 2009		8

Notes to Unaudited Consolidated Financial Statements June 30, 2010		9–15

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operation		16

Item 3 Quantitative and Qualitative Disclosures About Market Risk		20

Item 4T Controls and Procedures		20

PART II—OTHER INFORMATION

Item 6 Exhibits		22

SIGNATURES		22

EX-31.1
EX-31.2
EX-32

~~Quarter~~Page ~~Ended~~2 ~~December 31,~~of ~~2009~~22

TABLE OF CONTENTS

	Page
PART I— FINANCIAL INFORMATION
Item 1 Financial Statements		4
Consolidated Balance Sheets as of December 31, 2009 (Unaudited) and March 31, 2009		6
Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2009 and 2008		7
Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the Nine Months Ended December 31, 2009		8
Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2009 and 2008		9
Notes to Unaudited Consolidated Financial Statements		10
Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operation		22
Item 3 Quantitative and Qualitative Disclosures About Market Risk		35
Item 4T Controls and Procedures		36
PART II—OTHER INFORMATION
Item 6 Exhibits		37
SIGNATURES		39
EX-31.1
EX-31.2
EX-32

~~This~~SPECIAL ~~Quarterly~~NOTE ~~Report~~ON onFORWARD ~~Form~~LOOKING ~~10-Q, including “Management’s Discussion and Analysis of~~STATEMENTS Financial Condition and Results of Operations” in Item 2 of Part I of this report includes forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors 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 forward-looking statements.

InThis ~~some~~Quarterly ~~cases,~~Report ~~you~~on ~~can~~Form ~~identify forward~~10-~~looking statements by terminology such as “may~~Q,~~” “should,”~~ ~~“expects,”~~including “~~plans,”~~Management’s ~~“anticipates,”~~Discussion ~~“believes,”~~and ~~“estimates,”~~Analysis ~~“predicts,”~~of ~~“potential,”~~Financial ~~“proposed,”~~Condition ~~“intended,”~~and orResults ~~“continue~~of Operation” orin ~~the~~Item 2 ~~negative~~ of ~~these~~Part I ~~terms~~of orthis ~~other comparable terminology. You should read statements that contain these words carefully~~report, ~~because~~includes ~~they discuss our expectations about our future operating results or our future financial condition or state other “~~forward-looking~~” information. There may be events in the future that we are not able to~~ ~~accurately predict or control~~statements. ~~Before~~These ~~you~~statements ~~invest~~involve inknown ~~our~~and ~~securities~~unknown risks, ~~you~~uncertainties ~~should~~and beother ~~aware~~factors that ~~the~~ ~~occurrence~~may ofcause ~~any of the events described in~~ our ~~Annual~~actual ~~Report on Form 10-K could substantially harm our business,~~ results ~~of operations and financial condition~~, ~~and~~levels ~~that upon the occurrence~~ of ~~any~~ ~~of these events~~activity, ~~the~~performance ~~trading price of our securities could decline and you could lose all~~ or ~~part~~ ofachievements ~~your~~to ~~investment.~~be ~~Although we believe that the expectations reflected in the forward-looking~~materially ~~statements~~different ~~are~~from ~~reasonable,~~any ~~we cannot guarantee~~ future results, ~~growth rates,~~ levels of activity, performance, or achievements. Weexpressed ~~are~~or implied ~~under~~by ~~no duty to update any of the~~ forward-looking statements ~~after the date of this Quarterly Report to conform these statements to actual results~~.

3In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.

Page 3 of 22

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS ~~NINE MONTHS ENDED DECEMBER 31, 2009~~


Unaudited Consolidated Balance Sheet			5

Unaudited Consolidated Statements of Operations and Comprehensive Income			6

Unaudited Consolidated Statement of Changes in Stockholders’ Equity			7

Unaudited Consolidated Statements of Cash Flows			8

Notes to Unaudited Consolidated Financial Statements			9–15

Page 4 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets as of December 31, 2009 (unaudited) and March 31, 2009			6
Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2009 and 2008			7
Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended December 31, 2009			8
Unaudited Consolidated Statements of Cash Flows for the Nine Months December 31, 2009 and 2008			9
Notes to Unaudited Consolidated Financial Statements			10

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

~~UNAUDITED~~ CONSOLIDATED BALANCE ~~SHEET~~SHEETS ~~DECEMBER 31, 2009 (In thousands of United States dollars)~~

			DECEMBER 31,		MARCH 31,
	Note(s)		2009		2009
			(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	906	$	20,493
Notes receivables				10,475		37
Accounts receivable, net				19,909		14,361
Prepayments, deposits and other receivables, net				1,507		13,694
Total current assets				32,797		48,585
PROPERTY, PLANT AND EQUIPMENT, NET		3		1,808		2,493
INTANGIBLE ASSETS, NET		4		47		65
ASSETS OF DISCONTINUED OPERATIONS		10		—		724
TOTAL ASSETS			$	34,652	$	51,867
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable			$	189	$	466
Accruals and other payables
Related parties		8		397		285
Third parties				1,319		1,412
Receipts in advance				146		990
Income tax payable				—		262
Total current liabilities				2,051		3,415
LONG-TERM LIABILITIES
Due to shareholders		8		4,255		4,255
Total liabilities				6,306		7,670
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, authorized 10,000,000 shares, par value $0.001, issued and outstanding Nil				—		—
Common stock, authorized 100,000,000 shares, par value $0.001, issued and outstanding 30,088,174				30		30
Additional paid-in capital				1,462		1,462
Public welfare fund				2,109		2,109
Statutory surplus fund				4,219		4,219
Retained earnings				12,707		28,303
Accumulated other comprehensive income				5,824		5,806
Total stockholders’ equity				26,351		41,929
NON-CONTROLLING INTEREST				1,995		2,268
TOTAL EQUITY				28,346		44,197
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	34,652	$	51,867

JUNE 30, 2010 AND MARCH 31, 2010

(In thousands of United States dollars)


			JUNE 30,		MARCH 31,
	Note(s)		2010		2010
			(Unaudited)

*ASSETS*
CURRENT ASSETS
Cash and cash equivalents			$	417	$	703
Notes receivable				—		10
Prepayments, deposits and other receivables, net		6		15		12,517


Total current assets				432		13,230

PROPERTY, PLANT AND EQUIPMENT, NET		3		1,387		1,591
ACCOUNTS RECEIVABLE, NET		6		29,745		28,493
INTANGIBLE ASSETS, NET		4		36		42


TOTAL ASSETS			$	31,600	$	43,356


LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable			$	1,595	$	155
Accruals and other payables
Related parties		8		499		437
Third parties				1,266		1,259
Receipts in advance				143		143


Total current liabilities				3,503		1,994

LONG-TERM LIABILITIES
Due to shareholders		8		4,255		4,255


Total liabilities				7,758		6,249


COMMITMENTS AND CONTINGENCIES		9

STOCKHOLDERS’ EQUITY
Preferred stock, authorized 10,000,000 shares, par value $0.001, issued and outstanding Nil				—		—
Common stock, authorized 100,000,000 shares, par value $0.001, issued and outstanding 30,088,174				30		30
Additional paid-in capital				1,462		1,462
Public welfare fund				2,109		2,109
Statutory surplus fund				4,219		4,219
Retained earnings				9,060		21,795
Accumulated other comprehensive income				5,844		5,830


Total stockholders’ equity				22,724		35,445


NON-CONTROLLING INTEREST				1,118		1,662


TOTAL EQUITY				23,842		37,107


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	31,600	$	43,356

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

6Page 5 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS ~~For~~ ~~the~~AND ~~three~~COMPREHENSIVE ~~and nine months ended December 31, 2009 and 2008 (In thousands of United States dollars, except per share data)~~INCOME

			THREE MONTHS ENDED						NINE MONTHS ENDED
			DECEMBER 31,						DECEMBER 31,
	Note(s)		2009			2008			2009			2008
NET REVENUE			$	8,129		$	8,122		$	28,912		$	30,569
COST OF REVENUE				7,624			6,115			27,054			18,690
GROSS PROFIT				505			2,007			1,858			11,879
OPERATING EXPENSES
Selling expenses				32			58			96			196
General and administrative expenses				6,724			4,943			17,668			6,268
TOTAL OPERATING EXPENSES				6,756			5,001			17,764			6,464
(LOSS) / INCOME FROM OPERATIONS				(6,251	)		(2,994	)		(15,906	)		5,415
OTHER INCOME				5			51			44			412
GAIN ON DISPOSAL OF A SUBSIDIARY		10		—			—			7			—
(LOSS) / INCOME BEFORE INCOME TAX				(6,246	)		(2,943	)		(15,855	)		5,827
INCOME TAX: CURRENT		5		—			(259	)		(7	)		(1,894	)
NET (LOSS) / INCOME FROM CONTINUING OPERATIONS				(6,246	)		(3,202	)		(15,862	)		3,933
LESS: NET LOSS/(INCOME) ATTRIBUTABLE TO NON-CONTROLLING INTEREST				57			112			266			(143	)
NET (LOSS) / INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS FROM CONTINUING OPERATIONS				(6,189	)		(3,090	)		(15,596	)		3,790
DISCOUNTINUED OPERATIONS
- Impairment of long-lived assets held for sale		10		—			(3,030	)		—			(3,030	)
NET (LOSS) / INCOME				(6,189	)		(6,120	)		(15,596	)		760
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment				33			(323	)		18			1,414
COMPREHENSIVE (LOSS) / INCOME			$	(6,156	)	$	(6,443	)	$	(15,578	)	$	2,174
WEIGHTED AVERAGE NUMBER OF SHARES (in thousands)				30,088			30,088			30,088			30,088
(LOSS) / EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (in dollars)
- CONTINUING OPERATIONS				(0.21	)		(0.10	)		(0.52	)		0.13
- DISCONTINUED OPERATIONS				—			(0.10	)		—			(0.10	)
				(0.21	)		(0.20	)		(0.52	)		(0.03	)

FOR THE THREE MONTHS ENDED JUNE 30, 2010 AND 2009

(In thousands of United States dollars, except per share data)


			THREE MONTHS ENDED
			JUNE 30,
	Note(s)		2010			2009

NET REVENUE			$	7,445		$	9,426

COST OF REVENUE				7,285			8,815


GROSS PROFIT				160			611


OPERATING EXPENSES
Selling expenses				29			33
General and administrative expenses				13,548			5,587


TOTAL OPERATING EXPENSES				13,577			5,620


LOSS FROM OPERATIONS				(13,417	)		(5,009	)

OTHER INCOME				142			21
GAIN ON DISPOSAL OF A SUBSIDIARY				—			7


LOSS BEFORE INCOME TAX				(13,275	)		(4,981	)

INCOME TAX: CURRENT		5		—			(7	)


NET LOSS				(13,275	)		(4,988	)

LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST				540			115


NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS				(12,735	)		(4,873	)

OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment				14			14


COMPREHENSIVE LOSS			$	(12,721	)	$	(4,859	)


WEIGHTED AVERAGE NUMBER OF SHARES (in thousands)				30,088			30,088


LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (in dollars)				(0.42	)		(0.16	)

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

7Page 6 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN ~~STOCKHOLDERS’~~ EQUITY ~~For the nine months ended December 31, 2009 (In thousands of United States dollars)~~

														Accumulated
					Additional		Public		Statutory					other		Total			Non-
					paid-in		welfare		surplus		Retained			comprehensive		stockholders’			controlling
	Common stock				capital		fund		fund		earnings			income		equity			interest			Total
	No. of
	shares
Balance, March 31, 2009		30,088,174	$	30	$	1,462	$	2,109	$	4,219	$	28,303		$	5,806	$	41,929		$	2,268		$	44,197
Net loss		—		—		—		—		—		(15,596	)		—		(15,596	)		(266	)		(15,862	)
Foreign currency translation adjustment		—		—		—		—		—		—			18		18			(7	)		11
Balance, December 31, 2009 (Unaudited)		30,088,174	$	30	$	1,462	$	2,109	$	4,219	$	12,707		$	5,824	$	26,351		$	1,995		$	28,346

FOR THE THREE MONTHS ENDED JUNE 30, 2010

(In thousands of United States dollars)


														Accumulated
	Common stock				Additional		Public		Statutory					other		Total			Non-
	No. of				paid-in		welfare		surplus		Retained			comprehensive		stockholders’			controlling
	shares				capital		fund		fund		earnings			income		equity			interest			Total

Balance, March 31, 2010		30,088,174	$	30	$	1,462	$	2,109	$	4,219	$	21,795		$	5,830	$	35,445		$	1,662		$	37,107
Net loss		—		—		—		—		—		(12,735	)		—		(12,735	)		(540	)		(13,275	)
Repayment to minority shareholder		—		—		—		—		—		—			—		—			(4	)		(4	)
Foreign currency translation adjustment		—		—		—		—		—		—			14		14			—			14

Balance, June 30, 2010		30,088,174	$	30	$	1,462	$	2,109	$	4,219	$	9,060		$	5,844	$	22,724		$	1,118		$	23,842

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

8Page 7 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS ~~For the nine months ended December 31, 2009 and 2008 (In thousands of United States dollars)~~

			FOR THE NINE MONTHS ENDED
			DECEMBER 31,
	Note(s)		2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) / income attributable to common stockholders			$	(15,596	)	$	760
Loss from discontinued operations:
Impairment of long-lived assets held for sale				—			3,030
Adjustments to reconcile net income to net cash generated from operating activities:
Depreciation				660			703
Amortization				18			27
Non-controlling interest				(266	)		143
Gain on disposal of subsidiary				(7	)		—
Loss on disposal of property, plant and equipment				12			—
Allowance for doubtful receivables				17,580			4,414
Changes in operating assets and liabilities:
Increase in notes receivable		11		(10,438	)		—
Increase in accounts receivables				(21,939	)		(6,324	)
Decrease in prepayments, deposits and other receivables		11		11,757			1,633
Decrease in inventories				—			32
(Decrease) / increase in accounts payable				(278	)		390
(Decrease) / increase in accruals and other payables				(94	)		67
Decrease in receipts in advance				(844	)		(1,510	)
Decrease in income tax payable				(262	)		(1,143	)
Net cash (used in) / provided by operating activities				(19,697	)		2,222
CASH FLOWS FROM INVESTING ACTIVITES
Acquisition of property, plant and equipment				—			(1	)
Proceeds from disposal of property, plant and equipment				14			—
Net cash provided by / (used in) investing activities				14			(1	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of cash advance from the minority shareholder				(6	)		—
Cash advance from shareholders				112			78
Net cash provided by financing activities				106			78
Effect of exchange rate changes on cash				(10	)		900
Net (decrease) / increase in cash and cash equivalents				(19,587	)		3,199
Cash and cash equivalents at beginning of period				20,493			23,330
Cash and cash equivalents at end of period			$	906		$	26,529
SUPPLEMENTAL INFORMATION
Income taxes paid			$	269		$	3,181
Interest paid				—			—

FOR THE THREE MONTHS ENDED JUNE 30, 2010 AND 2009

(In thousands of United States dollars)


	FOR THE THREE MONTHS
	ENDED JUNE 30,
	2010			2009

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(13,275	)	$	(4,988	)
Adjustments to reconcile net income to net cash generated from operating activities:-
Depreciation		213			225
Amortization		6			6
Gain on disposal of a subsidiary		—			(7	)
Loss on disposal of property, plant and equipment		—			3
Allowances for doubtful trade and other receivables		13,122			4,003

Changes in operating assets and liabilities:
Decrease in notes receivable		10			—
Increase in accounts receivable		(3,889	)		(4,663	)
Decrease in prepayments, deposits and other receivables		2,026			1,438
Increase /(decrease) in accounts payable		1,440			(98	)
Increase in accruals and other payables		1			33
Decrease in receipts in advance		—			(832	)
Decrease in income tax payable		—			(262	)


Net cash used in operating activities		(346	)		(5,142	)


CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds received from disposal of property, plant and equipment		—			12


Net cash provided by investing activities		—			12


CASH FLOWS FROM FINANCING ACTIVITIES
Increase in amounts due to shareholders		62			—
Repayment of cash advance to the minority shareholder		(4	)		—


Net cash provided by financing activities		58			—


Effect of exchange rate changes on cash		2			14


Net decrease in cash and cash equivalents		(286	)		(5,116	)

Cash and cash equivalents at beginning of period		703			20,493


Cash and cash equivalents at end of period	$	417		$	15,377


SUPPLEMENTAL INFORMATION
Income taxes paid	$	—		$	269

Interest paid	$	—		$	—

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

9Page 8 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~JUNE 3130, ~~2009~~2010

1. The Company and Subsidiaries

T-Bay Holdings, Inc. (the “Company” or “T-Bay”) was incorporated under the laws of the State of ~~Utah~~ Utah on August 8, 1984 as “Sharus Corporation” with authorized common stock of 50,000,000 shares with a par value of US$0.001. On June 13, 1989, the domicile of the Company was changed to the state of Nevada in connection with a name change to “Golden Quest, Inc.”. On January 7, 2002, the name was changed to “T-Bay Holdings, Inc.” as part of a reverse stock split of 400 shares of ~~outstanding~~ outstanding stock for one share and on November 23, 2004, the Company increased the authorized common stock to 100,000,000 shares with a par value of US$0.001 as part of a reverse stock split of 20 outstanding shares for one share.

On August 16, 2005, pursuant to an Agreement and Plan of Reorganization, T-Bay issued 18,550,000 shares of its common stock for all of Amber Link International Limited’s (“Amber Link”) and Wise Target International Limited’s (“Wise Target”) outstanding shares of common stock (the “Merger”). Amber Link and Wise Target were two of the owners of Shanghai Sunplus Communication Technology Co., Ltd. (“Sunplus”). Wise Target owned a 75% interest and Amber Link owned a 20% interest in Sunplus. After the Merger, T-Bay indirectly owned a 95% interest in Sunplus. In March 2009, Wise Target transferred all its holdings (75%) in Sunplus to Amber Link for US$2,885,000 (HK$22,500,000). As a result of this transaction, Amber Link directly owned 95% of Sunplus and this transaction had no impact on the Company’s effective holdings of Sunplus. Shanghai Fanna Industrial Design Co., Ltd. owned the remaining 5% interest in Sunplus. On November 25, 2009, the Company transferred all its holdings (100%) in Amber Link to Wise Target for US$2,600. As a result of the transaction, the Company indirectly holds Amber Link and this transaction had no impact on the Company’s effective holdings of Amber Link and Sunplus.

Wise Target was incorporated on April 24, 2002 under the International Business Companies Act in the British Virgin Islands.

Amber Link was incorporated on May 10, 2002 under the International Business Companies Act in the British Virgin Islands. During the year ended March 31, 2007, Amber Link commenced the sales of mobile phones and components.

Sunplus was established on October 17, 2002 under the laws of the People’s Republic of China (“PRC”) as a Sino-foreign joint venture specialized in the development, production and sales of electronic telecommunication devices. Sunplus commenced operations on May 1, 2003. At ~~December~~June 30, 312010, ~~2009,~~ Sunplus has approximately 8060 staff, mostly engineers and software programmers.

On February 12, 2007, Sunplus established a wholly-owned subsidiary, Zhangzhou JiaXun Communication Facility Co., Ltd. (“Zhangzhou JiaXun”) under the laws of the PRC. Zhangzhou JiaXun is an investment holding company. ~~On April 9, 2009, Sunplus disposed of Zhangzhou JiaXun to Qiaoxing~~ ~~Telecommunication Industry Company Limited (“QiaoXing Telecom”), a third party, at a consideration of US$731,000 (RMB5,000,000) (see Note 10).~~

On March 19, 2007, Sunplus and Zhangzhou JiaXun acquired 80% and 20%, respectively, of Fujian Qiaoxing Industry Co., Ltd. (“Fujian Qiaoxing”).

On March 20, 2009, Sunplus disposed of its 80% interest in Fujian Qiaoxing to Qiaoxing Telecommunication Industry Company Limited (“QiaoXing Telecom”), a third party, at a ~~consideration~~ consideration of US$12,~~314~~230,000 (RMB84,000,000) ~~(see Note 10)~~.

10On April 9, 2009, Sunplus disposed of Zhangzhou JiaXun to QiaoXing Telecom at a consideration of US$731,000 (RMB5,000,000).

Page 9 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) ~~DECEMBER~~JUNE 3130, ~~2009~~2010

1. The Company and Subsidiaries (continued)

As of ~~December~~June 3130, ~~2009~~2010, the Group structure is as follows:-

2. Summary of Significant Accounting Policies

(a) Basis of Preparation

The accompanying unaudited consolidated financial statements of T-Bay and its subsidiaries (collectively referred to as the “Group”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. In the opinion of management, these unaudited consolidated interim financial statements include all adjustments and disclosures ~~(consisting only of normal recurring items)~~ considered necessary ~~to make~~for the financial statements to be not misleading. ~~These~~All adjustments are of a normal recurring nature. These unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of T-Bay for the year ended March 31, ~~2009~~2010 and notes thereto contained in the Form 10-K as filed with the Securities and Exchange Commission. The results of operations for the ~~nine~~three months ended ~~December~~ June 3130, ~~2009~~2010 are not necessarily indicative of the results for the full fiscal year ending March 31, ~~2010~~2011.

11Page 10 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) ~~DECEMBER~~JUNE 3130, ~~2009~~2010

2. Summary of Significant Accounting Policies (continued)

(b) Basis of Consolidation

The unaudited consolidated balance sheet as of ~~December~~June 3130, ~~2009~~2010 ~~includes T-Bay, Wise Target, Amber Link~~ and ~~Sunplus.~~the ~~The~~unaudited ~~audited~~ consolidated statement ~~balance sheet as~~ of ~~March 31,~~operations ~~2009~~and ~~also~~comprehensive ~~included Zhangzhou~~income ~~JiaXun.~~for Asthe ~~mentioned~~three inmonths ~~Note~~ended 1June 30, ~~Zhangzhou~~2010 ~~JiaXun~~include ~~was~~T-Bay, ~~disposed~~Wise ~~of on April 9~~Target, ~~2009;~~Amber ~~therefore,~~Link ~~the~~and ~~financial~~Sunplus. ~~position~~All ofmaterial ~~Zhangzhou~~intercompany ~~JiaXun~~transactions ~~has~~have been ~~presented~~eliminated asupon ~~assets of discontinued operations as of March 31, 2009~~consolidation.

~~The unaudited consolidated statement of operations for the three months ended December~~(c) ~~31,~~Loss ~~2009 includes~~Per ~~T-Bay, Wise Target, Amber Link and Sunplus. The unaudited consolidated statement of~~Share operations for the nine months ended December 31, 2009 also includes Zhangzhou JiaXun. The unaudited consolidated statements of operations for the three and nine months ended December 31, 2008 included T-Bay, Wise Target, Amber Link, Sunplus, Zhangzhou JiaXun and Fujian Qiaoxing.

~~(c)~~Basic ~~(Loss)/~~loss ~~Earnings~~per ~~Per~~share ~~Share~~is computed by dividing the loss for the period by the weighted average number of common shares outstanding for the period. There are no common stock equivalents outstanding for any period presented.

Basic (loss)/earnings per share is computed by dividing the (loss)/earnings for the period by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities by including other potential common stock, including stock options and warrants, in the weighted average number of common shares outstanding for the period, if dilutive. There are no common stock equivalents outstanding for any period presented.

3. Property, Plant and Equipment, Net

	DECEMBER 31,		MARCH 31,
	JUNE 30,		MARCH 31,
	2009		2009
	2010		2010
	US$’000		US$’000
	(Unaudited)
Cost
Machinery	$	4,~~779~~798	$	4,~~859~~766
Office equipment		~~138~~104		~~138~~104
Motor vehicles		—		56
		4,902		4,870
		4,917		5,053
Accumulated depreciation
Machinery		3,~~001~~434		23,~~426~~200
Office equipment		~~108~~81		9579
Motor vehicles		—		39
		3,515		3,279
		3,109		2,560
Carrying value
Machinery		1,~~778~~364		21,~~433~~566
Office equipment		3023		4325
Motor vehicles		—		17
	$	1,387	$	1,591
	$	1,808	$	2,493

Depreciation expense for each of three -month periods ended ~~December~~June 3130, ~~2009~~2010 and ~~2008 was approximately US$216,000 and US$206,000, respectively, and for each of the nine month periods ended December 31,~~ 2009 ~~and 2008~~ was approximately US$~~660~~213,000 and US$~~703~~225,000, respectively.

12Page 11 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) ~~DECEMBER~~JUNE 3130, ~~2009~~2010

4. Intangible Assets, Net

Changes in the carrying amount of intangible assets for the ~~nine~~three months ended ~~December~~June 3130, ~~2009 were~~2010 were as follows:-

	Software			Patent			Total
	US$’000			US$’000			US$’000
Cost:
Balance, March 31, 2009 and December 31, 2009	$	183		$	4		$	187
Balance, March 31, 2010 and June 30, 2010	$	183		$	4		$	187
Less: Accumulated amortization
Balance, March 31, 2009		(119	)		(3	)		(122	)
Balance, March 31, 2010		(141	)		(4	)		(145	)
Amortization expenses		(176	)		(1—	)		(186	)
Balance, December 31, 2009		(136	)		(4	)		(140	)
Balance, June 30, 2010		(147	)		(4	)		(151	)
Net balance, December 31, 2009	$	47		$	—		$	47
Net balance, June 30, 2010	$	36		$	—		$	36

Amortization expense for each of the three ~~month~~months ~~periods~~ ended ~~December~~June 3130, ~~2009~~2010 and ~~2008 was approximately US$6,000 and US$8,000, and for the nine month periods ended December 31,~~ 2009 ~~and 2008~~ was approximately US$186,000 ~~and US$27,000, respectively~~. The estimated amortization expense for the ~~three~~nine months ending March 31, ~~2010~~2011 and the four years ending March 31, ~~2011,~~ 2012, 2013, ~~and~~ 2014 and 2015 amounts to approximately US$617,000, US$2218,000, US$172,000, US$~~2,000~~ nil and US$ nil, respectively.

5. Income Taxes

Amber Link and Wise Target are not subject to income taxes in any tax jurisdiction.

No provision for current income tax for T-Bay has been made as it incurred a loss for each of the ~~nine~~three months ended ~~December~~June 3130, ~~2009~~2010 and ~~2008~~2009, respectively.

Sunplus is subject to PRC Income Tax. Pursuant to the PRC Income Tax Laws, the prevailing statutory rate of enterprise income tax is 25%.

Zhangzhou JiaXun ~~and~~was ~~Fujian Qiaoxing were~~ inactive during the ~~period~~three months ended ~~December~~June 3130, ~~2008~~2009 up to date of disposal.

13A reconciliation between taxes computed at the PRC statutory rate of 25% and the Group’s effective tax rate is as follows:-


	THREE MONTHS ENDED JUNE 30,
	2010			2009
	US$’000			US$’000

Loss before income tax	$	(13,275	)	$	(4,981	)


Income benefit on pretax income at statutory rate		(3,319	)		(1,245	)
Effect of different tax rates of Group company operating in other jurisdictions		607			662
Tax effect of non-deductible expenses		2,659			—
Change in valuation allowance		53			583
Under-provision in prior year		—			7


Income tax expense	$	—		$	7

Page 12 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) ~~DECEMBER~~JUNE 3130, ~~2009~~2010

5. Income Taxes (continued)

AAs ~~reconciliation~~of ~~between~~June 30, ~~taxes~~2010, ~~computed~~T-Bay athad ~~the~~accumulated net operating loss carryforwards for United States federal ~~statutory~~tax ~~rate~~purposes of ~~34%~~approximately ~~and~~US$660,000, that are available to offset future taxable income. As of June 30, 2010, Sunplus had net operating loss carryforwards of approximately US$2,991,000 that are available to offset future taxable income up to 2015. Realization of the ~~Group’s~~net ~~effective~~operating ~~tax~~loss ~~rate~~carryforwards is dependent upon future profitable operations. In addition, the carryforwards may be limited upon a change of control in accordance with Internal Revenue Code Section 382, as ~~follows:~~amended. Accordingly, management has recorded a valuation allowance to reduce deferred tax assets associated with the net operating loss carryforwards to zero at June 30, 2010. T-Bay’s net operating loss carryforwards expire in years 2012 through 2030.

	FOR THE THREE MONTHS ENDED						FOR THE NINE MONTHS ENDED
	DECEMBER 31,			DECEMBER 31,			DECEMBER 31,			DECEMBER 31,
	2009			2008			2009			2008
	US$’000			US$’000			US$’000			US$’000
(Loss) / income before income tax	$	(6,246	)	$	(2,943	)	$	(15,855	)	$	5,827
Income tax/(benefit) on pretax income at statutory rate		(2,124	)		(1,000	)		(5,391	)		1,982
Effect of different tax rates of subsidiary operating in other jurisdictions		1,827			318			4,038			(1,005	)
Tax effect of non-deductible expenses		—			925			—			925
Tax effect of non-taxable income		—			—			—			(68	)
Valuation allowance		297			16			1,353			60
Under-provision in prior year		—			—			7			—
Income tax expense	$	—		$	259		$	7		$	1,894

As of June 30, 2010, deferred tax assets consist of:-

As of December 31, 2009, T-Bay had accumulated net operating loss carryforwards for United States federal tax purposes of approximately US$5,686,000, that are available to offset future taxable income. Realization of the net operating loss carryforwards is dependent upon future profitable operations. In addition, the carryforwards may be limited upon a change of control in accordance with Internal Revenue Code Section 382, as amended. Accordingly, management has recorded a valuation allowance to reduce deferred tax assets associated with the net operating loss carryforwards to zero at December 31, 2009. The net operating loss carryforwards expire in years 2012 through 2029.


	JUNE 30, 2010
	US$’000

Net operating loss carryforwards	$	3,651
Less: valuation allowance		(3,651	)

	$	—

As of December 31, 2009, deferred tax assets consist of:-

	DECEMBER 31,
	2009
	US$’000
Net operating loss carryforwards	$	5,780
Less: valuation allowance		(5,780	)
	$	—

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) DECEMBER 31, 2009

6. Concentrations and Credit Risk

The Group operates principally in the PRC (including Hong Kong) and grants credit to its customers in this geographic region. Although the PRC is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Group’s operations.

Financial instruments that potentially subject the Group to a concentration of credit risk consist of cash, accounts and ~~notes~~other ~~receivable~~receivables.

AsAt ~~of December 31, 2009 and~~ March 31, ~~2009~~2010, the Group had credit risk exposure of ~~uninsured~~sales ~~cash~~proceeds inreceivable from Qiaoxing ~~banks~~Telecom of approximately US$~~906~~10,~~000 and US$20~~475,~~493,~~000, ~~respectively. As of December 31~~(RMB71, ~~2009~~500, ~~the Group also had notes receivable of US$10,475,~~000,) ~~which~~(See ~~were~~Note ~~due from Qiaoxing Telecom as part of the proceeds of our sale of Zhangzhou JiaXun and Fujian Qiaoxing, with a scheduled maturity date of March 20, 2010~~1).

APursuant ~~substantial~~to ~~portion~~the agreement signed between Shanghai Sunplus Communication Technology Co., Ltd. (“Sunplus”) and Qiaoxing Telecommunication Industry Company Limited (“Qiaoxing Telecom”) in respect of ~~revenue~~the disposal of Fujian Qiaoxing Industry Co., Ltd. (“Fujian Qiaoxing”) to Qiaoxing Telecom in March 2009, Qiaoxing Telecom was ~~generated~~to settle this outstanding balance by June 2009. However, Qiaoxing Telecom was unable to obtain approval from ~~one~~the ~~group~~local ofgovernmental ~~customers~~bureau ~~for~~in Zhangzhou to develop the land held by Fujian Qiaoxing. This was due to the delay in development by Fujian Qiaoxing. When the Zhangzhou local government granted the land use right to Fujian Qiaoxing in 2006, Fujian Qiaoxing was required to develop the land within three years. However, the land had not been developed prior to the disposal to Qiaoxing Telecom and ~~nine~~the local authority has refused ~~months~~to ~~ended~~approve ~~December~~the development plans submitted by Qiaoxing Telecom. Since March 312010, ~~2009~~the ~~and~~management has ~~2008~~actively liaised with the Zhangzhou local governmental bureau to apply for an extension of the land development.

Despite various discussions and negotiations held with the Zhangzhou local authority, the effort was proved to fail, and the local authority may take back the land by forced resumption. The indebtedness ~~net~~relating to the afore-mentioned sales proceeds is now in dispute and Qiaoxing Telecom may not settle the balance due to ~~customers~~Sunplus. ~~representing~~In atview ~~least~~of this, full allowance has been made in respect of the sales proceeds receivable from Qiaoxing Telecom of US$10%,543,000 and charged to the statement of ~~net~~operations ~~total~~and ~~sales~~comprehensive ~~are~~income asfor ~~follows:-~~the three months ended June 30, 2010.

	FOR THE THREE MONTHS ENDED								FOR THE NINE MONTHS ENDED
	DECEMBER 31,								DECEMBER 31,
	2009				2008				2009				2008
	US$’000		%		US$’000		%		US$’000		%		US$’000		%
Customer A		1,922		24		477		6		5,840		20		2,262		7
Customer B		1,582		19		334		4		4,263		15		1,392		5
Customer C		1,019		13		2,188		27		3,193		11		6,276		21
Customer D*		335		4		298		4		3,758		13		1,856		6
Customer E*		416		5		84		1		4,015		14		84		—
Customer F		893		11		630		8		3,680		13		713		2
Customer G		—		—		2,020		25		—		—		6,812		22
Customer H		—		—		1,713		21		—		—		6,129		20
Customer I		1,091		13		245		3		1,584		5		1,857		6
Customer Group A*		751		9		382		5		7,773		27		1,940		6

A substantial portion of revenue was generated from one group of customers for the three months ended June 30, 2010 and 2009.

*Page At13 ~~December 31, 2009 and March 31, 2009, this group~~ of ~~customers accounted for~~ 22% and 15%, respectively, of accounts receivable. The accounts receivable have repayment terms of not more than twelve months. The Group does not require collateral to support financial instruments that are subject to credit risk.

The following customers had balances greater than 10% of the total accounts receivable as of December 31, 2009 and March 31, 2009:

	DECEMBER 31, 2009				MARCH 31, 2009
	US$’000		%		US$’000		%
Customer A		8,306		19		3,505		16
Customer B		6,635		15		3,219		14
Customer C		4,810		11		2,241		10
Customer D*		5,417		12		2,551		11
Customer E*		4,263		10		710		3
Customer G		2,450		6		2,808		13
Customer I		3,734		8		2,762		12
Customer group A*		9,680		22		3,261		14

* Customer Group A includes customers D and E.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) ~~DECEMBER~~JUNE 3130, ~~2009~~2010

6. Concentrations and Credit Risk (continued)

The net sales to customers representing at least 10% of net total sales are as follows:-


	THREE MONTHS ENDED JUNE 30,
	2010				2009
	US$’000		%		US$’000		%

Customer A		1,486		20		1,561		17
Customer B		1,272		17		920		10
Customer C		644		9		1,248		13
Customer D*		875		12		1,907		20
Customer E		1,304		18		795		8
Customer F*		847		11		1,806		19

Customer Group A*		1,722		23		3,713		39

The following customers had balances greater than 10% of the total accounts receivable as of June 30, 2010 and March 31, 2010:-


	JUNE 30, 2010				MARCH 31, 2010
	US$’000		%		US$’000		%

Customer A		8,787		19		8,248		19
Customer B		7,576		16		6,846		16
Customer F*		5,295		11		4,731		11
Customer G		4,607		10		4,497		11

Customer group A*		9,661		21		8,499		20


*		Customer Group A includes customers D and F.

*		At June 30, 2010 and March 31, 2010, this group of customers accounted for 21% and 20%, respectively, of accounts receivable.

The accounts receivable that have repayment terms of more than twelve months have been discounted.

The Group does not require collateral to support financial instruments that are subject to credit risk.

7. Retirement and Welfare Benefits

The full-time employees of the PRC subsidiaries are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The PRC subsidiaries are required to accrue the employer-portion for these benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits was US$4134,000 and US$~~124~~41,000 for the three ~~and nine~~ months ended ~~December~~June 3130, ~~2009~~2010 and ~~US$46~~2009,~~000~~ ~~and US$176,000 for the three and nine months ended December 31, 2008,~~ respectively. The PRC subsidiaries are required to make contributions to the plans out of the amounts accrued for all staff welfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits, unemployment insurance and pension benefits to be paid to these employees.

Page 14 of 22

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
JUNE 30, 2010

8. Related Party Transactions

The Group engages in business transactions with the following related parties: ~~a. Li Xiaofeng, a director and stockholder of T~~-~~Bay.~~

a. Li Xiaofeng, a director and stockholder of T-Bay.

b. Li Meilian, a stockholder of T-Bay.

The Group has the following transactions and balances with related parties:-

	DECEMBER 31,		MARCH 31,
	JUNE 30, 2010		MARCH 31, 2010
	2009		2009
	US$’000		US$’000
	(Unaudited)
Other payable — Li Meilian	$	499	$	437
Other payable — Li Meilian	$	397	$	285
Long-term liabilities
Other payable — Li Meilian	$	3,482	$	3,482
Other payable — Li Xiaofeng		773		773
	$	4,255	$	4,255

The balances have no stated terms for repayment, ~~and~~ are not interest bearing, and are the result of cash advances from related parties and the repayment thereof. ~~The~~Those payables to Li Meilian and Li Xiaofeng which are classified as long-term liabilities are not repayable within the next twelve months.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) DECEMBER 31, 2009

9. Commitments and Contingencies

a. As of ~~December~~June 3130, ~~2009~~2010, Sunplus leased office premises and staff quarters under several agreements expiring from 2010 to 2012.

Rental expenses for the three months ~~and nine months~~ ended ~~December 31~~June 30, ~~2009~~2010 ~~amounted to US$ 23,000~~ and US2009 ~~$69,000 respectively. Rental expenses for the three and nine months ended December 31, 2008~~ amounted to US$8021,000 and US$~~249~~ 22,000, respectively, and are included in general and administrative expenses in the consolidated statements of operations and comprehensive income.

The future minimum lease payments under the above-mentioned leases as of ~~December 31~~June 30, ~~2009~~2010 are as follows:-

Year Ending March 31,	US$’000
2010	$	10
2011	$	41
2011		38
2012		39
2012		35
Total	$	80
Total	$	83

b. As of ~~December~~June 3130, ~~2009~~2010, the Group had capital commitments in relation to acquisition of intangible assets of US$38,000.

10. ~~Disposal~~New ofAccounting ~~a subsidiary~~Pronouncements

OnIn ~~December~~January 312010, ~~2008,~~the ~~Sunplus~~FASB ~~entered~~issued ~~into~~Accounting anStandard ~~agreement~~Update ~~with~~No. ~~Huizhou~~2010-06 ~~Liyin~~(“ASU ~~Electronics Co.~~2010-06”), ~~Ltd. (~~“~~Huizhou~~Improving Disclosures ~~Liyin~~about Fair Value Measurements”), which amends ASC 820 to ~~dispose~~add ofnew ~~its~~requirements ~~100%~~for disclosures ~~interest~~related into ~~Zhangzhou~~amounts ~~JiaXun~~transferred ~~for~~into ~~RMB5,000,000~~and ~~(US$733,000)~~ out of Level 1 and ~~its~~2 ~~80%~~fair ~~interest~~value inmeasurements ~~Fuijian~~as well ~~QiaoXing~~as ~~for~~separate ~~RMB84~~disclosures of purchases,~~000,000~~ ~~(US$12~~sales,~~312,000).~~ ~~However~~issuances, onand ~~March 10, 2009,~~settlements ~~pursuant~~related to aamounts reported ~~supplemental~~as ~~agreement~~Level ~~between~~3 ~~Sunplus~~fair ~~and~~value ~~Huizhou~~measurements. ~~Liyin,~~ASU ~~Huizhou~~2010-06 ~~Liyin~~also ~~and Sunplus~~clarifies ~~rescinded~~existing ~~the~~fair ~~original~~value disclosure ~~agreement.~~requirements Onrelated to the ~~same~~level ~~date,~~of ~~Sunplus~~disaggregation ~~entered~~and ~~into~~the ~~another~~valuation ~~agreement~~techniques and ~~with~~inputs ~~Qiaoxing~~used ~~Telecom~~ to ~~dispose~~measure offair ~~its~~value ~~interest~~for inboth ~~Zhangzhou~~recurring ~~JiaXun~~and atnonrecurring afair ~~consideration~~value ofmeasurements. This ~~RMB5,000,000~~guidance ~~(US$731,000)~~has ~~and~~been ~~Fuijian~~effective ~~QiaoXing~~this quarter, except for ~~RMB84,000,000~~the ~~(US$12,312,000).~~separate Asdisclosures of ~~December 31~~purchases, ~~2008~~sales, issuances, ~~the~~and ~~net~~settlements ~~assets~~related ofto ~~discontinued~~amounts ~~operations~~reported ~~amounted~~as toLevel ~~US$16,075,000.~~3 Anfair ~~impairment~~value ~~loss~~measurements, which is ofeffective ~~US$3,030,000~~for ~~was~~fiscal ~~recognized~~years beginning after December 15, 2010.

OnThe ~~March 20,~~adoption ~~2009,~~of ~~legal~~this ~~and~~guidance ~~ownership~~did ofnot ~~Fuijian~~have ~~QiaoXing~~a ~~was~~material ~~transferred~~impact ~~(see~~on ~~Note~~our 1)financial position, results of operations or cash flows.

OnPage ~~April 9,~~15 ~~2009, Sunplus disposed~~ of ~~its 100% interest in Zhangzhou JiaXun to Qiaoxing Telecom at~~22 ~~a consideration of US$731,000 (RMB5,000,000) (see Note 1).~~

Disposal of subsidiary	April 9, 2009
	US$’000
Net assets disposed:-
Investment at cost	$	585
Other receivables		83
Due from minority shareholder		59
Cash and bank balances		1
Net assets disposed		728
Impairment		(4	)
Assets of discontinued operations		724
Consideration to be satisfied by cash		731
Gain on disposal of a subsidiary	$	7

~~T-BAY~~ITEM ~~HOLDINGS, INC~~2. MANAGEMENT’S DISCUSSION AND ~~SUBSIDIARIES~~ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

~~NOTES~~The TOfollowing ~~UNAUDITED~~review ~~CONSOLIDATED~~concerns ~~FINANCIAL~~the ~~STATEMENTS~~three ~~(continued)~~months ended June 30, 2010, which should be read in ~~DECEMBER~~conjunction with the financial statements and notes thereto presented in the Form 10-K for the year ended March 31, ~~2009~~2010.

10The structure of our revenue has undergone a transition. ~~Disposal~~Before, we generated our revenue both by selling mobile phone components and by charging design service fees. Now, we generate our revenue primarily by selling mobile phone components, and to a much lesser extent, by charging design service fees. As a result of the change in consumer preference, aggregate demand for the types of mobile phone handsets to which our mobile phone components are suited, in the Mainland China market as well as the overseas market, have been on a ~~subsidiary~~downward ~~(continued)~~trend. Our gross profit is significantly reduced not only as a direct result of this drop in demand, but also because the cost of sales is not reduced to the same extent as the reduction in revenue, as not all costs are variable with respect to revenue. We have been looking at ways to deal with this adverse change in the market. We may diversify into new businesses. However, it may take time to find new businesses to which we are suited and which offer a reasonable prospect of success. In the meantime, we plan to be prudent in the management of the Company, with a view to conserving cash. We will continue to assess our credit risk on a daily basis and may terminate business relationships with some clients, which may significantly reduce our existing business size. If we will not be able to enter into some new business area in the foreseeable future and such shrinkage of the existing business continues, our long-term financial performance and condition would be adversely affected.

AnTHREE ~~analysis~~MONTHS ofENDED ~~the~~JUNE ~~net~~30, ~~inflow~~2010 ofCOMPARED ~~cash~~TO ~~and~~THREE ~~cash~~MONTHS ~~equivalents~~ENDED inJUNE ~~respect~~30, ~~of the disposal of Zhangzhou~~2009 ~~Jiaxun is as follows:-~~

	US$’000
Cash and bank balances disposed	$	(1	)
Cash consideration received		731
Net cash inflow	$	730

The carrying values of the assets of the disposal group classified as held for sale as at March 31, 2009 were as follows:

	MARCH 31,
	2009
	US$’000
	(Audited)
Investment at cost	$	585
Deposits and other receivables		83
Due from minority shareholder		59
Cash and bank balances		1
		728
Impairment		(4	)
Assets of discontinued operations	$	724

11. Statements of Cash Flows — Supplemental schedule of non-cash transaction

During the nine months ended December 31, 2009, notes receivable of RMB71,500,000 (equivalent to US$10,457,000) were issued by Qiaoxing Telecom for settlement of other receivables in respect of sales proceeds for disposal of Fujian Qiaoxing.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) DECEMBER 31, 2009

12. New Accounting Pronouncements

In May 2009, the Financial Accounting Standard Board (“FASB”) issued FASB Accounting Standard Codification (“ASC”) No. 855-10 (Prior authoritative guidance: SFAS No. 165, “Subsequent Events”), or ASC No. 855-10, which sets forth general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC No.855-10 is effective after June 15, 2009. The adoption of ASC No. 855-10 had no material effect on the Company’s financial statements. We have evaluated subsequent events through February 10, 2010, the date the consolidated financial statements were issued. We have not identified any items requiring disclosure.

In April 2008, the FASB issued ASC No. 350-30-35-1 (Prior authoritative guidance: FSP FAS No. 142-3, “Determination of the Useful Life of Intangible Assets”). ASC No. 350-30-35-1 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC No. 350-30-35-1, Goodwill and Other Intangible Assets. ASC No. 350-30-35-1 is intended to improve the consistency between the useful life of an intangible asset and the period of expected cash flows used to measure the fair value of the asset under other applicable accounting literature. ASC No. 350-30-35-1 is effective for fiscal years beginning after December 15, 2008. Early adoption is prohibited. The adoption of ASC No. 350-30-35-1 had no material effect on the Company’s consolidated financial statements.

In April 2009, the FASB issued three related staff positions to clarify the application of ASC No. 820 (Prior authoritative guidance: FSP FAS No.115-2 and FAS No. 124-2, “Recognition of Other-Than-Temporary Impairments”) to fair value measurements in the current economic environment, modify the recognition of other-than-temporary impairments of debt securities, and require companies to disclose the fair value of financial instruments in interim periods. The final staff positions are effective for interim and annual periods ending after March 15, 2009. The adoption had no material effect on the Company’s consolidated financial statements.

In April 2009, the FASB issued ASC No.820 (Prior authoritative guidance: FSP No. 157-4 “Determining Whether a Market is Not Active and a Transaction Is Not Distressed”, or FSP No. 157-4). ASC No. 820 clarifies when markets are illiquid or that market pricing may not actually reflect the “real” value of an asset. If a market is determined to be inactive and market price is reflective of a distressed price then an alternative method of pricing can be used, such as a present value technique to estimate fair value. ASC No. 820 identifies factors to be considered when determining whether or not a market is inactive. ASC No. 820 is effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after June 15, 2009 and shall be applied prospectively. The adoption of ASC No. 820 had no material effect on the consolidated financial statements.

In December 2007, the FASB issued ASC No.815 (Prior authoritative guidance: FASB issued SFAS 141 (revised 2007), Business Combinations (ASC 815). ASC No.815 amends and clarifies the accounting guidance for the acquirer’s recognition and measurement of assets acquired, liabilities assumed and noncontrolling interests of an acquiree in a business combination. The adoption of ASC No.815 had no material effect on the Company’s consolidated financial statements.

In June 2009, the FASB issued ASC No.860 (Prior authoritative guidance: SFAS No. 166 “Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140”), which eliminates the concept of a qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting criteria, and changes the initial measurement of a transferor’s interest in transferred financial assets. ASC No. 860 will be effective for transfers of financial assets in fiscal years beginning after November 15, 2009, and in interim periods within those fiscal years with earlier adoption prohibited. The Company is currently evaluating the impact of the adoption of ASC No. 860 on its consolidated financial statements.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) DECEMBER 31, 2009

12. New Accounting Pronouncements (continued)

In June 2009, the FASB issued ASC No. 810 (Prior authoritative guidance: SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)”), which address the elimination of the concept of a qualifying special purpose entity. ASC No. 810 also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, ASC No. 810 provides more timely and useful information about an enterprise’s involvement with a variable interest entity. ASC No. 810 shall be effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. The Company is currently evaluating the impact of the adoption of ASC No. 810 on its consolidated financial statements.

In June 2009, the FASB issued ASC No. 105 (Prior authoritative guidance: SFAS No. 168 “The FASB Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162”), which establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied in the preparation of financial statements in conformity with generally accepted accounting principles. ASC No. 105 explicitly recognizes rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under federal securities laws as authoritative GAAP for SEC registrants. ASC No. 105 will become effective for financial statements issued for interim and annual periods ending after September 15, 2009. Adoption of ASC No. 105 did not have a material impact on the Company’s consolidated financial statements.

In August 2009, the FASB issued Accounting Standards Update No. 2009-02 (“ASU 2009-03”), “SEC update — Amendments to various topics containing SEC Staff Accounting Bulletins”, to update cross-references to Codification test. ASU 2009-03 did not have a material effect on the Company’s consolidated financial condition or results of operations.

In August 2009, the FASB issued Accounting Standards Update No.2009-05 (“ASU 2009-05”), ACS No. 820 “Measuring Liabilities at Fair Value”. ASU 2009-5 applies to all entities that measure liabilities at fair value within the scope of ASC No, 820. ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more valuation techniques.

The amendments in ASU 2009-05 also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. It also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The guidance provided in ASU 2009-05 is effective for the first reporting period beginning after issuance. The adoption of ASU 2009-5 is not expected to have a material effect on the Company’s consolidated financial condition or results of operations.

In September 2009, the FASB issued Accounting Standards Update No. 2009-07 (“ASU 2009-07”), “Accounting for Various Topics”. ASU 2009-07 represents technical corrections to various topics containing SEC guidance based on external comments received. The adoption of this guidance did not have a material effect on the Company’s consolidated financial condition or results of operations.

In September 2009, the FASB issued Accounting Standards Update No. 2009-12 (“ASU 2009-12”), “Fair Value Measurements and Disclosures (Topic 820), Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)”. ASU 2009-12 provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures — Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share. This ASU also requires disclosures by major category of investment about the attributes of investments within the scope of the amendments in this Update. The amendments in this Update are effective for interim and annual periods after December 15, 2009. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial condition or results of operations.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) DECEMBER 31, 2009

12. New Accounting Pronouncements (continued)

In October 2009, the FASB issued an Accounting Standards Update that provides amendments to the criteria of ASC Topic 605, “Revenue Recognition”, for separating consideration in multiple-deliverable arrangements. The amendments establish a selling price hierarchy for determining the selling price of a deliverable. This guidance is effective for the Company’s fiscal year beginning July 1, 2010, and either prospective or retrospective application is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial condition or results of operations.

In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance will become effective for the Company with the reporting period beginning April 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which will become effective for the Company with the reporting period beginning April 1, 2011. Other than requiring additional disclosures, adoption of this new guidance will not have a material impact on the Company’s consolidated financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

The following review concerns the nine months ended December 31, 2009, which should be read in conjunction with the financial statements and notes thereto presented in the Form 10-K for the year ended March 31, 2009.

In the wake of the global financial crisis, our customers have become slow in their payments. Also, they changed their orders from design services to mobile phone components, to provide some relief to the financial strain that they have. This behavior has the effect of transferring part of the financing of the production of mobile phone handsets from our customers to us. This, together with the reduction in aggregate mobile phone demand in the Mainland China market as well as the overseas market, resulted in a drastic reduction of customer orders for design services, for which the gross margin is relatively high. The global financial crisis has also caused an increase in credit risk on our receivables. We believe that we have made adequate provision for doubtful accounts in our financial statements. However, if the provision turned out to be inadequate, then our financial performance and our financial position would be adversely affected. The decline in purchases of design services and the slowness in collecting our accounts receivable pose potential risks to our financial performance. While there are limited steps that Management can take to mitigate these potential risks, we cannot assure that our customers’ financial position will improve. We anticipate, however, that the adverse business conditions described in this report will begin to improve around the middle of 2010. If conditions fail to improve, we would then change our business plan with a view to conserve cash to allow us to get through this extended period of temporary hardship. The anticipated receipt of $10,475,000 upon the maturity of notes receivable in March 2010, relating to the proceeds from the sale of our subsidiaries Fujian Qiaoxing and Zhangzhou Jiaxun, as well as the orderly collection of our accounts receivable from customers, are necessary to the maintenance of sufficient liquidity and capital resources for our operations during the next 12 months. While we do not anticipate any payment defaults on those obligations, we cannot assure investors that we will receive the proceeds of the notes and accounts receivable in full and on time. A failure to collect would adversely affect our liquidity and capital resources.

On November 25, 2009, T-Bay Holdings, Inc. transferred all its holdings (100%) in Amber Link International Limited to Wise Target International Limited for US$2,600. As a result of the transaction, the Company indirectly holds Amber Link and this transaction had no impact on the Company’s effective holdings of Amber Link and Sunplus.

THREE MONTHS ENDED DECEMBER 31, 2009 COMPARED TO THREE MONTHS ENDED DECEMBER 31, 2008

Overview

For the three months ended ~~December~~June 3130, ~~2009~~2010, our net revenue ~~increased~~decreased by US$71,981,000 from ~~US$8,122,000~~ ~~to US~~$89,~~129~~426,000~~, practically no change as compared with the same period last year. We~~ ~~incurred a net loss of US$6,189,000~~ for the three months ended ~~December~~June 3130, 2009 ~~compared~~to ~~with a net loss of US~~$67,~~120~~445,000, ~~for~~which ~~the~~represented ~~same~~a ~~period~~21.0% ~~last year~~decrease. ~~This~~Our ~~slight~~net loss ~~aggravation~~increased offrom ~~loss~~$4,873,000 ~~was~~to ~~mainly the~~$12,735,000, ~~result~~primarily ofas ~~the~~a ~~significant~~result ~~decrease~~ of ~~income from design services and~~ the ~~increase~~allowance indescribed ~~operating~~in ~~expenses,~~Note ~~offset~~6 byto ~~the~~our ~~decrease~~unaudited infinancial ~~the~~statements ~~impairment~~for ofthe ~~assets~~fiscal ~~held~~quarter ~~for~~ended ~~sale~~June 30, as2010, ~~discussed further~~included ~~below~~in this report. We ~~reported~~recorded a loss per share ~~loss~~ of US$ 0.2142 for the three months ended ~~December~~June 3130, ~~2009~~2010, compared ~~with~~to a loss per share ~~loss~~ of US$0.2016 for the ~~same~~three ~~period~~months ~~last~~ended ~~year~~June 30, 2009.

Net Revenue

	Three months ended December 31,
	Three months ended June 30,
				2009					2008
				2010					2009
~~(in thousand US dollars)~~	~~Growth%~~(in thousand US dollars)			~~Amount~~		%			~~Amount~~		%
Sales of mobile phone components		27.3			7,968		98.0			6,260		77.1
	% Decrease			Amount		%			Amount		%
Revenue from design services		-91.4			161		2.0			1,862		22.9
Sales of mobile phone components		-20.6	%		7,317		98.3	%		9,221		97.8	%
NET REVENUE					8,129		100			8,122		100
Revenue from design services		-37.6	%		128		1.7	%		205		2.2	%
NET REVENUE		-21.0	%		7,445					9,426

23Our net revenue was $7,445,000 for the three months ended June 30, 2010, a decrease of $1,981,000, or 21.0%, from $9,426,000 for the same period in the previous fiscal year. Revenue from sales of mobile phone components was $7,317,000 compared to $9,221,000 in the same period of the previous fiscal year, representing a 20.6% decrease. Revenue from design services decreased to $128,000 from $205,000 in the same period of the previous fiscal year, representing a 37.6% decrease.

~~Table~~Our revenue decrease mainly resulted from the change in consumer preference away from the types of mobile ~~Contents~~phone handsets to which our design service and our mobile phone components were suited. For the three months ended June 30, 2010, revenue from design services represented 1.7% of total revenue, while revenue from sales of mobile phone components was 98.3%, compared to 2.2% from design services and 97.8% from sales of mobile phone components in the three months ended June 30, 2009.

Our net revenue was $8,129,000 for the three months ended December 31, 2009, a slight increase of $7,000, or 0.1%, from $8,122,000 for the same period in the previous year. Revenue from sales of mobile phone components was $7,968,000 compared to $6,260,000 in the same period of the previous fiscal year, representing a 27.3% increase. Revenue from design services decreased to $161,000 from $1,862,000 in the same period of the previous fiscal year, representing a 91.4% decrease.

For the three months ended December 31, 2009, revenue from design services represented 2.0% of total revenue, while revenue from sales of mobile phone components was 98.0%, compared to 22.9% from design services and 77.1 % from sales of mobile phone components in the three months ended December 31, 2008.

Detailed information on sale of mobile phone components

~~Sales~~We ofdesign ~~mobile~~and ~~phone~~manufacture ~~components (~~PCB and provide PCBA, ~~the~~according ~~key~~to ~~components~~our incustomers’ specifications. Revenue from the ~~manufacture~~sale of mobile ~~handsets~~ phone components (comprising PCB and PCBA) ~~increased~~decreased from $69,~~260~~221,000 to $7,~~968~~317,000, representing a 2720.36% ~~increase~~decrease. The ~~increase~~decrease was ~~largely~~ ~~the~~attributable ~~result~~to ofreduced demand, as the ~~transfer~~types of mobile ~~orders~~phone ~~from~~handsets ~~design~~to ~~services~~which toour mobile phone components. ~~This reflected~~were asuited ~~change~~have inbecome ~~customer~~less ~~preferences,~~in ~~as our customers conserved cash by purchasing mobile phone components rather than design services~~fashion.

WePage ~~design~~16 ~~and~~of ~~manufacture PCB and provide PCBA according to our customers’ specifications. We~~22 ~~manufactured more PCB and PCBA for our customers for the three months ended December 31, 2009 when compared with the three months ended December 31, 2008.~~

Detailed information on revenue from design services

Revenue from design services decreased to $161,000 for the three months ended December 31, 2009 from $ 1,862,000 for the three months ended December 31, 2008 representing a 91.4% decrease. In the three months ended December 31, 2009, there was a drastic reduction of customer orders for design services compared with the same period of the previous fiscal year. We believe that as a result of the global financial crisis, aggregate mobile phone handset demand in the Mainland China market, as well as the overseas market, began to shrink since the second half of the fiscal year ended March 31, 2009. By purchasing components rather than design services, customers have been able to conserve cash. We expect sales of design services will start to pick up gradually around the middle of 2010.

Detailed information on revenue from design services

Revenue from design services decreased from $205,000 for the three months ended June 30, 2009 to $128,000, representing a 37.6% decrease. In the three months ended 30 June, 2010, there was a reduction of customer orders for design services compared with the same period in the last fiscal year. We believe that as a result of the change in consumer preference, aggregate demand for the types of mobile phone handsets to which our design services were suited, in the Mainland China market as well as the overseas market, have been on a downward trend.

Cost of Revenue

For the three months ended ~~December~~June 3130, ~~2009~~2010, cost of revenue ~~increased~~decreased to $7,~~624~~285,000 from $68,~~115~~815,000 for the three months ended ~~December~~June 3130, ~~2008~~2009, representing a 2417.74% ~~increase~~decrease. Cost of revenue primarily consisted of purchase cost of raw and processed materials, ~~and~~costs of salaries of engineers and designers, and research and development (“R&D”) expenses. The ~~increase~~decrease was largely the result of ~~transfer of orders from design~~ ~~services,~~the ~~for~~decrease ~~which~~in ~~cost~~the sale of ~~revenue was relatively low, compared with~~ mobile phone components~~, for which cost of revenue was relatively high~~. ~~We expect this trend of order transfer will start to~~ ~~reverse gradually around the middle of 2010.~~

Gross Profit

Our gross profit was $~~505~~160,000 for the three months ended ~~December~~June 3130, ~~2009~~2010 compared to $2611,~~007,~~000 for the three months ended ~~December~~June 3130, ~~2008~~2009, representing a 7473.8% decrease. ~~The~~Our ~~decrease~~gross profit was significantly reduced not only as a direct result of the drop in ~~gross~~demand of our products, but also because the ~~profit~~cost of sales was ~~mainly~~not ~~attributable~~reduced to the ~~significant~~same ~~decrease~~extent as the reduction in revenue, ~~from~~as ~~design~~not ~~services~~all ~~with~~costs were ~~high~~variable ~~profit~~with ~~margin~~respect to revenue.

Operating Expenses

Operating expenses consisted of selling expenses and general and administrative (G&A) expenses. For the three months ended ~~December~~June 3130, ~~2009~~2010, operating expenses were $613,~~756~~577,000, as compared to $5,~~001~~620,000 for the three months ended ~~December~~June 3130, ~~2008~~2009, representing ~~a 35~~141.16% increase.

Detailed information of operating expenses for the three months ended ~~December~~June 3130, ~~2009~~2010 is as follows:-

	Three months ended December 31,
	Three months ended June 30,
				2009		% of			2008		% of
				2010					2009
~~(in thousand US dollars)~~	~~Growth%~~(in thousand US dollars)			~~Amount~~		~~net revenue~~			~~Amount~~		~~net revenue~~
G&A expenses		36.0			6,724		82.7			4,943		60.9
						% of					% of
Selling expenses		-44.8			32		0.4			58		0.7
	% Change			Amount		Net revenue			Amount		net revenue
Operating expenses		35.1			6,756		83.1			5,001		61.6
G&A expenses		142.5	%		13,548		182.0	%		5,587		59.3	%
Selling expenses		-12.1	%		29		0.4	%		33		0.3	%
Operating expenses		141.6	%		13,577		182.4	%		5,620		59.6	%

Operating expenses during the three ~~month~~months ended ~~December~~June 3130, ~~2009~~2010 were $613,~~756~~577,000, or 83182.14% of revenue, compared to $5,~~001~~620,000, or 6159.6% of revenue, for the three months ended ~~December~~June 3130, ~~2008~~2009. The significant increase was mainly attributed to the increase in G&A expenses.

G&A expenses were $613,~~724~~548,000, or 82182.70% of revenue ~~for the three months ended December 31~~, ~~2009,~~ compared to $45,~~943~~587,000, or 6059.93% of revenue, for the three months ended ~~December~~June 3130, ~~2008~~2009. The significant increase in G&A expenses was mainly due to the increase in ~~allowance~~the ~~for~~charge ~~doubtful~~of ~~receivables. With a view to halting further increase in~~ allowance for doubtful receivables~~, in its decision to grant credit to its customers, the Company has been using more stringent criteria in the evaluation of their creditworthiness~~.

25We increased the charge of allowance for doubtful receivables to $13,122,000 for the three months ended June 30, 2010 as compared to $4,003,000 for the three months ended June 30, 2009 primarily as a result of the allowance described below and in Note 6 to our unaudited financial statements for the fiscal quarter ended June 30, 2010, included in this report. An allowance for doubtful receivables is maintained for all debtors based on a variety of factors, including the overall economy and industrial condition, length of time the receivables are past due, significant one-time events and historical experience.

Page 17 of 22

WePursuant ~~increased~~to ~~allowance~~the ~~for~~agreement ~~doubtful~~signed ~~receivables~~between bySunplus ~~$6,332,000~~and ~~for~~Qiaoxing ~~the~~Telecom ~~three~~in ~~months~~respect ~~ended~~of ~~December 31,~~the ~~2009~~disposal asof Fujian ~~compared~~Qiaoxing to ~~$4,276,000~~Qiaoxing ~~for~~Telecom ~~the~~in ~~three months ended December~~March 312009, ~~2008.~~Qiaoxing AnTelecom ~~allowance~~was ~~for doubtful~~to ~~receivables~~settle isthis ~~maintained~~outstanding balance ~~for~~by ~~all~~June 2009. ~~customers~~However, ~~based~~Qiaoxing onTelecom awas ~~variety~~unable ofto ~~factors,~~obtain ~~including~~approval from the local ~~overall~~governmental ~~economy~~bureau ~~and~~in ~~industrial~~Zhangzhou ~~condition,~~to ~~length~~develop ofthe ~~time~~land ~~the~~held ~~receivables~~by ~~are~~Fujian ~~past~~Qiaoxing. This was due, ~~significant~~to the ~~one-time~~delay ~~events~~in ~~and~~development ~~historical~~by ~~experience~~Fujian Qiaoxing. ~~For~~When the ~~three~~Zhangzhou ~~months~~local ~~ended~~government ~~December 31,~~granted ~~2009,~~the land use ~~particular~~right ~~consideration~~to ~~was~~Fujian ~~given~~Qiaoxing toin ~~the~~2006, ~~increased~~Fujian ~~credit~~Qiaoxing ~~risk~~was ~~due~~required to develop the ~~sluggish~~land ~~economic~~within three ~~climate~~years. However, ~~which~~the ~~was~~land ~~evident~~had ~~from~~not been developed prior to the ~~increase~~disposal into Qiaoxing Telecom and the local ~~length~~authority ofhave ~~time~~refused to approve the ~~receivables~~development ~~were~~plans ~~past~~submitted ~~due~~by Qiaoxing Telecom.

~~Selling~~Since ~~expenses~~March 2010, ~~decreased~~the ~~from~~Company $has ~~58,000~~been liaising with the Zhangzhou local governmental bureau to apply ~~$32,000~~for an extension of the land development. ~~The~~This ~~decrease~~effort ~~was~~has ~~mainly~~however ~~attributable~~failed, toand the local ~~less~~authority ~~marketing~~may take back the land by forced resumption. The indebtedness relating to the afore-~~related~~mentioned ~~expenses~~disposal of subsidiaries is now in ~~keeping~~dispute ~~with~~and Qiaoxing Telecom may not settle the balance ~~decline~~due to Sunplus. In view of this, full allowance has been made in ~~demand~~respect ~~for~~of ~~design~~the ~~services~~sales proceeds receivable from Qiaoxing Telecom of US$10,543,000.

Selling expenses decreased from $33,000 to $29,000. The decrease was in consistent with the decrease in revenue.

Loss from Operations

Loss from operation was $613,~~251~~417,000 for the three months ended ~~December~~June 3130, ~~2009~~2010, compared to a loss ~~from~~ ~~operations~~ of $25,~~994~~009,000 for the same period in the previous fiscal year. The ~~aggravation~~increase ofin the loss was mainly attributable to the ~~decrease~~increase ~~of revenue~~ in ~~design service and~~ the ~~increase~~charge of allowance for doubtful receivables.

Income Tax

Sunplus is subject to PRC Enterprise Income Tax. Pursuant to the PRC Income Tax Laws, the prevailing statutory rate of enterprise income tax in Shanghai was 25% ~~as of January 1, 2008~~.

For the three months ended ~~December~~June 3130, ~~2009~~2010, Sunplus recorded an income tax expense of $nil ~~compared~~, compared to $~~259~~7,000 ~~for~~in the three months ended ~~December~~June 3130, ~~2008~~2009. ~~Sunplus~~The ~~was~~income intax aexpenses ~~loss~~of ~~situation in~~US$7,000 ~~the~~for the three months ended ~~December~~June 3130, 2009 related to an under-provision in the prior year.

~~Fujian~~Non-controlling ~~QiaoXing and JiaXun were inactive and were not subject to any income tax in the three months~~Interest ~~ended December 31, 2008.~~

Non-controlling ~~Interests~~interest represented the portion of loss of Sunplus that we do not own. For the three months ended June 30, 2010, non-controlling interest was attributable to the 5% of the equity interest of Sunplus owned by Shanghai Fanna.

Non-controlling interests represented the portion of loss of Sunplus that we do not own. For the three months ended December 31, 2009, non-controlling interests were attributable to the 5% of the equity interest of Sunplus owned by Shanghai Fanna.

Impairment of Assets Held for Sale

Impairment of assets held for sale for the three months ended 31 December 2008 represented the impairment to sell one hundred percent (100%) of Sunplus’ interest in its wholly-owned subsidiary Zhangzhou JiaXun Communication Facility Co., Ltd. (“Zhangzhou Jiaxun”) and eighty percent (80%) of Shanghai Sunplus Communication Technology Co., Ltd. (“Sunplus”), a ninety-five percent (95%) Chinese subsidiary of T-Bay Holdings, Inc.’s interest in its subsidiary Fujian QiaoXing Industry Co., Ltd. (“Fujian QiaoXing”).

On December 31, 2008, Sunplus entered into an agreement with Huizhou Liyin Electronics Co., Ltd. (“Huizhou Liyin”) to sell one hundred percent (100%) of Sunplus’ interest in its wholly-owned subsidiary Zhangzhou JiaXun. The purchase price of Zhangzhou JiaXun was RMB5,000,000 (US$733,000). However, on March 10, 2009, pursuant to a supplemental agreement between Sunplus and Huizhou Liyin, Huizhou Liyin and Sunplus rescinded the original agreement. On the same date, Sunplus entered into another agreement with Qiaoxing Telecom to dispose of all its interest in Zhangzhou JiaXun at a consideration of RMB5,000,000 (US$733,000). The disposal criteria were met on December 31, 2008. On April 9, 2009 legal title and ownership of Zhangzhou Jiaxun were transferred.

On December 31, 2008, Sunplus entered into another agreement with Huizhou Liyin to sell eighty percent (80%) of Sunplus’ interest in its subsidiary Fujian QiaoXing. The purchase price of Fujian QiaoXing was RMB84,000,000 (US$12,312,000). The transaction was completed on March 20, 2009.

The total purchase price of these two companies was RMB89,000,000, equivalent to US$13,045,000, US$3,030,000 less than their book values as of December 31, 2008. As a result, we recorded an impairment loss of US$3,030,000.

There was no such impairment of assets held for sale for the three months ended December 31, 2009.

Net loss attributable to common stockholders

As a result of the above items, net loss attributable to common stockholders was $612,~~189~~735,000 for ~~the~~ the three months ended ~~December~~June 3130, ~~2009~~2010, as compared to net loss attributable to common stockholders of $64,~~120~~873,000 for the three months ended ~~December~~June 3130, ~~2008~~2009. This ~~slight~~increase ~~aggravation~~ of loss was mainly the result of the ~~significant decrease of income from design services and the~~ increase in ~~operating~~ ~~expenses, offset by~~ the ~~decrease~~charge ~~in the impairment~~ of ~~assets~~allowance ~~held~~ for ~~sale~~doubtful receivables.

Loss per share attributable to common stockholders

We reported loss per share attributable to common stockholders of $0.2142, based on a weighted average number of shares outstanding of 30,088,174 for the three months ended ~~December~~June 3130, ~~2009~~2010. ~~Our~~ Our outstanding common stock was 30,088,174 shares as of ~~December~~June 3130, ~~2009~~2010. We do not have any ~~preferred~~ preferred stock issued or outstanding warrants or options.

27Page 18 of 22

NINE MONTHS ENDED DECEMBER 31, 2009 COMPARED TO NINE MONTHS ENDED DECEMBER 31, 2008

Overview

Our net revenue decreased 5.4% from $30,569,000 for the nine months ended December 31, 2008 to $28,912,000 for the same period in the current fiscal year, which reflected zero of raw material sales and a transition from design services, accompanied by a substantial increase in our sales of mobile phone components. Our net results for the nine-month period changed from a profit of $760,000 to a loss of $15,596,000. This is primarily due to increase in cost of sales, which was driven by weaker margins on mobile phone components, and an increased provision for doubtful receivables. We recorded a loss per share of $0.52 for the nine months ended December 31, 2009, and earnings per share of $0.03 for the nine months ended December 31, 2008.

Net Revenue

	Nine months ended December 31,
			2009				2008
(in thousand US dollars)	Growth%		Amount		%		Amount		%
Sales of raw materials		-100		N/A		N/A		573		1.9
Sales of mobile phone components		44.1		28,364		98.1		19,679		64.4
Revenue from design services		-94.7		548		1.9		10,317		33.7
NET REVENUE				28,912		100		30,569		100

Our net revenue was $28,912,000 for the nine months ended December 31, 2009, which represented a decrease of $1,657,000, or 5.4%, from $30,569,000 for the nine months ended December 31, 2008. Revenue from sales of mobile phone components was $28,364,000 compared to $19,679,000 in the same period of the previous fiscal year, representing a 44.1% increase. Revenue from design services decreased to $548,000 from $10,317,000 in the same period of the previous fiscal year, representing a 94.7% decrease.

For the nine months ended December 31, 2009, revenue from design services represented 1.9% of total revenue, while revenue from sales of mobile phone components was 98.1%, compared to 33.7% from design services and 64.4% from sales of mobile phone components for the nine months ended December 31, 2008.

Detailed information on sale of mobile phone components

Sales of mobile phone components (PCB and PCBA, the key components in the manufacture of mobile handsets) increased from $19,679,000 to $28,364,000, representing a 44.1% increase. The increase was largely the result of the transfer of orders from design services to mobile phone components. For customers who would like to delay their cash outflow to relieve the strain on their finances, they preferred buying mobile phone components rather than design services.

We design and manufacture PCB and provide PCBA according to our customers’ specifications. We manufactured more PCB and PCBA for our customer for the nine months ended December 31, 2009 when compared with the nine months ended December 31, 2008.

Detailed information on revenue from design services

Revenue from design services decreased from $10,317,000 for the nine months ended December 31, 2008 to $548,000 for the nine months ended December 31, 2009, representing a 94.7% decrease. In the nine months ended December 31, 2009, there was a drastic reduction of customer orders for design services compared with the same period of the previous fiscal year. We believe that as a result of the global financial crisis, aggregate mobile phone handset demand in the Mainland China market, as well as the overseas market, began to shrink after the second half of the fiscal year ended March 31, 2009. By purchasing components rather than design services, customers have been able to conserve cash. We expect sales of design services will start to pick up gradually around the middle of 2010.

Cost of Revenue

For the nine months ended December 31, 2009, cost of revenue increased to $27,054,000 from $18,690,000 for the nine months ended December 31, 2008, representing a 44.8% increase. Cost of revenue primarily consisted of purchase cost of raw and processed materials and salaries of engineers and designers. The increase was largely the result of the transfer of orders from design services, for which cost of revenue is relatively low, as compared to mobile phone components, for which cost of revenue is relatively high.

Gross Profit

Our gross profit was $1,858,000 for the nine months ended December 31, 2009 compared to $11,879,000 for the nine months ended December 31, 2008, representing a 84.4% decrease. The decrease in gross profit was mainly attributable to the significant decrease in revenue from high profit margin design services.

Operating Expenses

Operating expenses consisted of selling expenses and general and administrative (G&A) expenses. For the nine months ended December 31, 2009, operating expenses were $17,764,000, as compared to $6,464,000 for the nine months ended December 31, 2008, representing a 174.8% increase.

Detailed information in respect of operating expenses for the nine months ended December 31, 2009 is as follows:

	Nine months ended December 31,
			2009		% of		2008		% of
(in thousand US dollars)	Growth%		Amount		Net revenue		Amount		net revenue
G&A expenses		181.9		17,668		61.1		6,268		20.5
Selling expenses		-51.0		96		0.3		196		0.6
Operating expenses		174.8		17,764		61.4		6,464		21.1

Operating expenses during the nine month ended December 31, 2009 were $17,764,000, or 61.4% of revenue, compared to $6,464,000, or 21.1 % of revenue for the nine months ended December 31, 2008. The significant increase was mainly attributed to the increase in G&A expenses.

G&A expenses were $17,668,000, or 61.1% of revenue for the nine months ended December 31, 2009, compared to $6,268,000, or 20.5% of revenue for the nine months ended December 31, 2008. The significant increase in G&A expenses was mainly due to increase in allowance for doubtful receivables. With a view to halting further increase in allowance for doubtful receivables, in its decision to grant credit to its customers, the Company has been using more stringent criteria in the evaluation of their creditworthiness.

We increased allowance for doubtful receivables by $17,580,000 for the nine months ended December 31, 2009 as compared to $4,414,000, for the nine months ended December 31, 2008. An allowance for doubtful receivables is maintained for all customers based on a variety of factors, including the overall economy and industrial condition, length of time the receivables are past due, significant one-time events and historical experience. For the nine months ended December 31, 2009, particular consideration was given to the increased credit risk due to the sluggish economic climate, which was evident from the increase in the length of time the receivables were past due.

Selling expenses decreased from $196,000 to $96,000. The decrease was mainly attributable to less marketing-related expenses in keeping with the decline in demand for design services.

(Loss) / Income from Operations

Loss from operation was $15,906,000 for the nine months ended December 31, 2009, compared to income from operation of $5,415,000 for the same period in the previous year. The change from a profit situation to a loss situation was mainly attributable to the decrease of revenue in design service and the increase of allowance for doubtful receivables.

Income Tax

Sunplus is subject to PRC Enterprise Income Tax. Pursuant to the PRC Income Tax Laws, the prevailing statutory rate of enterprise income tax in Shanghai was 25% as of January 1, 2008.

For the nine months ended December 31, 2009, Sunplus recorded an income tax expense $7,000, compared to $1,894,000 in the nine months ended December 31, 2008. The income tax expenses of $7,000 related to an under-provision in the prior year. No income tax expense relating to the current period was recorded for the nine months ended December 31, 2009 as Sunplus was in a loss situation for this period.

Fujian QiaoXing and JiaXun were inactive and were not subject to any income tax in the nine months ended December 31, 2008.

Non-controlling Interests

Non-controlling interests represented the portion of (loss) / income of Sunplus that we do not own. For the nine months ended December 31, 2009, non-controlling interests were attributable to the 5% of the equity interest of Sunplus owned by Shanghai Fanna.

Impairment of Assets Held for Sale

Impairment of assets held for sale for the nine months ended 31 December 2008 represented the impairment to sell one hundred percent (100%) of Sunplus’ interest in its wholly-owned subsidiary Zhangzhou JiaXun Communication Facility Co., Ltd. (“Zhangzhou Jiaxun”) and eighty percent (80%) of Shanghai Sunplus Communication Technology Co., Ltd. (“Sunplus”), a ninety-five percent (95%) Chinese subsidiary of T-Bay Holdings, Inc.’s interest in its subsidiary Fujian QiaoXing Industry Co., Ltd. (“Fujian QiaoXing”).

There was no such impairment of assets held for sale for the nine months ended December 31, 2009.

Net(loss)/Income attributable to common stockholders

As a result of the above items, net loss attributable to common stockholders was $15,596,000 for the nine months ended December 31, 2009, as compared to net income attributable to common stockholders of $760,000 for the nine months ended December 31, 2008. This adverse change was mainly the result of a significant decrease of income from design services and, on the other hand, a significant increase in operating expenses, offset by the decrease in the impairment of assets held for sale.

(Loss)/earnings per share attributable to common stockholders

We reported loss per share attributable to common stockholders of $0.52, based on a weighted average number of shares outstanding of 30,088,174 for the nine months ended December 31, 2009. Our outstanding common stock was 30,088,174 shares as of December 31, 2009. We do not have any preferred stock issued or outstanding warrants or options.

LIQUIDITY AND CAPITAL RESOURCES

Assets

As of ~~December~~June 3130, ~~2009~~2010, the total assets of the Company were $3431,~~652~~600,000, which consisted of $32432,~~797,~~000 in current assets, $1,~~808~~387,000 in property, plant and equipment (PPE) ~~and~~, $4729,745,000 in noncurrent accounts receivable and $36,000 in intangible assets.

Liabilities

Our total liabilities as of ~~December~~June 3130, ~~2009~~2010 were $67,~~306~~758,000, which consisted of $23,~~051~~503,000 in current liabilities and $4,255,000 in long-term liabilities. Long-term liabilities were all liabilities due to shareholders.

Capital Resources

For ~~nine~~three months ended ~~December~~June 3130, ~~2009~~2010, we were principally engaged in ~~sales~~provision of ~~mobile~~design ~~phone~~solutions ~~components~~of ~~and~~wireless ~~provision~~communication ofdevices ~~design~~and ~~solutions~~sales of ~~wireless~~mobile ~~communication~~phone ~~devices~~components. We did not declare or pay dividends in the ~~nine~~three months ended ~~December~~June 3130, ~~2009~~2010.

For the ~~nine~~three months ended ~~December~~June 3130, ~~2009~~2010, $19346,~~697,~~000 was used in operating activities, ~~and~~ $~~14,000~~nil was used in/provided by investing activities and $~~106~~58,000 was provided by financing activities. Cash and cash equivalents decreased by $19286,~~587,~~000 to $~~906~~417,000 as of ~~December~~June 3130, ~~2009~~2010 from $20703,~~493,~~000 as of March 31, ~~2009~~2010.

We used $19346,~~697,~~000 in operating activities for the ~~nine~~three months ended ~~December~~June 3130, ~~2009, as compared to $2,222,000 generated from operating activities for the same period in the last fiscal year~~2010. Net cash flow used in operating activities for the ~~nine~~three months ended ~~December~~June 3130, ~~2009~~2010 related to net loss adjusted for items not involving movement of cash for the period, ~~augmented~~principally ~~mainly by~~ the increase in ~~notes~~ accounts receivable of $103,~~438~~889,000, ~~and~~but offset mainly by the ~~increase~~decrease in ~~accounts~~prepayments, ~~receivable~~deposits and other receivables of $212,~~939~~026,000~~, offset~~ byand the ~~decrease~~increase in ~~prepayments,~~accounts ~~deposits~~payable ~~and other receivables~~ of $111,~~757~~440,000.

In arriving at the net loss, we ~~made~~charged an allowance of $1713,~~580~~122,000 for doubtful ~~receivables~~debts for the ~~nine~~three months ended ~~December~~June 3130, ~~2009~~2010, which did not involve any outflow of cash.

33There was no cash flow relating to investing activities for the three months ended June 30, 2010.

~~Table~~For the three months ended 30 June 2010, net cash provided by financing activities was approximately US$58,000, which related primarily to the increase in advances from a shareholder and the repayment of ~~Contents~~cash advance to the minority shareholder.

~~Net~~As ~~cash~~of ~~provided by investing activities amounted to $14~~June 30,~~000~~ ~~for the nine months ended December 31~~2010, ~~2009,~~we ~~compared~~had tocapital ~~net~~commitments ~~cash used~~ of $138,000 ~~for the same period~~ in ~~the~~relation ~~last~~to ~~fiscal~~acquisition ~~year. Cash provided by investing activities for the nine months ended December 31, 2009 was mainly proceeds from the sale~~ of ~~property, plant and equipment~~intangible assets.

~~For~~We ~~the~~believe ~~nine~~that ~~months~~proceeds ~~ended~~from ~~December 31,~~the ~~2009,~~collection ~~net~~of ~~cash~~our ~~provided~~long-outstanding byreceivables ~~financing~~are ~~activities~~necessary ~~was~~to ~~approximately~~support ~~$106~~our operations and capital commitments,~~000,~~ ~~compared~~as well as to ~~net~~meet ~~cash~~our ~~provided~~working ofcapital ~~$78,000~~needs for the ~~same~~next ~~period~~twelve inmonths. ~~the~~While ~~last fiscal~~we ~~year.~~believe ~~For~~that ~~the~~adequate ~~nine~~provisions ~~months~~on ~~ended~~our ~~December 31,~~receivables have been ~~2009~~made, we cannot assure investors that their carrying amount (net ~~cash~~of ~~flow~~provision) ~~provided~~will bybe ~~financing~~received ~~activities~~in full ~~related~~within ~~primarily~~the anticipated time frame. A failure to collect the ~~increase~~anticipated inamount ~~advances~~within the ~~from~~anticipated atime ~~shareholder~~frame ofwould ~~$106,000~~adversely affect our liquidity and capital resources.

As of December 31, 2009, we had capital commitments of $38,000 in relation to acquisition of intangible assets.

We believe that our cash holdings of $906,000 at December 31, 2009 together with the cash to be received when our accounts receivable are paid and when the notes receivable of $10,475,000 mature in March 2010 are sufficient to support our operations and capital commitments, as well as to meet our working capital needs for the next twelve months. The anticipated receipt of $10,475,000 upon the maturity of notes receivable in March 2010, relating to the proceeds from the sale of our subsidiaries Fujian Qiaoxing and Zhangzhou Jiaxun, as well as the orderly collection of our accounts receivable from customers, are necessary to the maintenance of sufficient liquidity and capital resources for our operations during the next 12 months. While we do not anticipate any payment defaults on those obligations, we cannot assure investors that we will receive the proceeds of the notes and accounts receivable in full and on time. A failure to collect would adversely affect our liquidity and capital resources.

Off-Balance Sheet arrangements

The Company has not engaged in any off-balance sheet transactions since its inception.

34Employees

~~Table~~As of ~~Contents~~June 30, 2010, we had approximately 60 full-time employees employed in Greater China. From time to time we employ independent contractors to support our production, engineering, marketing, and sales departments

Web Site Access to Our Periodic SEC Reports

You may read and copy any public reports we filed with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site http://www.sec.gov that contains reports and information statements, and other information that we filed electronically.

Page 19 of 22

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The majority of our revenues derived and expenses and liabilities incurred are denominated in Chinese Renminbi (“RMB”) with a relatively small amount in Hong Kong dollars (“HK$”) and United States dollars (“US$” or “$”). Thus, our revenues and operating results may be impacted by exchange rate fluctuations in the currencies of China and Hong Kong. We have not tried to reduce our exposure to exchange rate fluctuations by using hedging transactions. However, we may choose to do so in the future. The availability and effectiveness of any hedging transactions may be limited and we may not be able to successfully hedge our exchange rate risks. Accordingly, we may experience economic losses and negative impacts on earnings and equity as a result of foreign exchange rate fluctuations.

35ITEM 4T. CONTROLS AND PROCEDURES

ITEM 4T. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are controls and other procedures that are designed to provide reasonable assurance that the information that we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as appropriate to allow timely decisions regarding required disclosure.

In connection with the preparation of this Quarterly Report on Form 10-Q for the ~~third~~first quarter ended ~~December~~June 3130, ~~2009~~2010, an evaluation was performed by our management, with the participation of ~~the~~ the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report.

As previously disclosed under Item 9A (T) “Controls and Procedures” in our Annual Report on Form 10-K for fiscal year ended March 31, ~~2009~~2010, our management concluded that our disclosure controls and procedures were not effective at a reasonable assurance level because of certain material weaknesses in our internal control over financial reporting, including the lack of (i) effective communication of the importance of internal controls over financial reporting throughout the structure of the Company, (ii) an adequate tone set by management around control consciousness, (iii) sufficient in-house capacity to review and supervise the accounting operations, (iv) knowledge of U.S. GAAP and SEC reporting requirements, (v) anti-fraud program designed to detect and prevent fraud (vi) effective risk assessment and management mechanism, and (vii) personnel with an appropriate level of experience, training in our internal audit department. In addition, on September 2, 2009, the two independent directors who comprised the audit committee resigned from their positions as independent directors of the Company effective September 2, 2009. There is no audit committee since that date. Our management considers that the absence of an audit committee constitutes a material weakness in our internal controls over financial reporting.

InAs ~~addition,~~a onresult ~~September 2,~~of ~~2009,~~ the ~~two~~foregoing ~~independent~~material ~~directors~~weaknesses ~~who~~in ~~composed~~our ~~the~~internal ~~audit committee~~control ~~resigned~~over ~~from~~financial ~~their positions as independent directors of the Company effective September 2~~reporting, our ~~2009.~~management ~~There~~has isconcluded ~~no audit committee since~~ that ~~date.~~our ~~Our~~disclosure ~~management~~controls ~~considers~~and ~~that~~procedures ~~the~~were ~~absence of~~not aneffective ~~audit~~as ~~committee constitutes a material weakness in our internal controls over financial~~of ~~reporting~~June 30, 2010.

36Page 20 of 22

As a result of the foregoing material weaknesses in our internal control over financial reporting, our management has concluded that our disclosure controls and procedures were not effective as of December 31, 2009.

Each of the control deficiencies described here could result in a misstatement of the aforementioned accounts or disclosures that might result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. However, giving full consideration to these material weaknesses, we performed adequate analyses and procedures, including among other things, transaction reviews and account reconciliations in order to provide assurance that our unaudited consolidated financial statements included in this Quarterly Report were prepared in accordance with generally accepted accounting principles (“GAAP”) and present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP. As a result of these procedures, we concluded that the unaudited consolidated financial statements included in this Quarterly Report present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

Change in Internal Controls

There were no changes in the Company’s internal controls over financial reporting during the quarter ended ~~December~~June 3130, ~~2009~~2010 that have materially affected, or are reasonably likely to ~~materially~~ materially affect, the Company’s internal control over financial reporting.

Page 21 of 22

PART II — OTHER INFORMATION

ITEM 6. EXHIBITS

37INDEX TO EXHIBITS OF T-BAY HOLDINGS, INC.

INDEX TO EXHIBITS

T-BAY HOLDINGS, INC.


	31.1			Rule 13a-14 (a)/15d-14 (a) Certification of Chief Executive Officer

	31.2			Rule 13a-14 (a)/15d-14 (a) Certification of Chief Financial Officer

	32			Section 1350 Certification of Chief Executive Officer and Chief Financial Officer

SIGNATURES

Pursuant to the requirements of Section 13 of 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	T-BAY HOLDINGS, INC.(Registrant)
	T-BAY HOLDINGS, INC. (Registrant)
Date: February 11, 2010	By:	/s/ Xiaofeng Li
Date: August 20, 2010	By:	/s/ Li Xiaofeng
		Xiaofeng Li, Chief Executive Officer
		Li Xiaofeng, Chief Executive Officer
Date: August 20, 2010	By:	/s/ Qin Xiangning
		Qin Xiangning, Chief Financial Officer

Date: February 11, 2010	By:	/s/ Xiangning Qin
		Xiangning Qin, Chief Financial Officer

Page 22 of 22

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Filing Compare · T BAY HOLDINGS INC