UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~June~~September 30, 2011

o¨ Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______.

000-52341

(Commission file number)

ORB AUTOMOTIVE CORPORATION

(Exact name of registrant as specified in its charter)

CAYMAN ISLANDS	N/A
(State or other jurisdiction	(IRS Employer
of incorporation or organization)	Identification No.)

c/o Shenzhen ORB-Fortune New-Material Co., Ltd

Room O-R, Floor 23, Building A, Fortune Plaza

Shennan Road, Futian District

Shenzhen, Guangdong, People’s Republic of China 518040

(Address of principal executive offices)

+86(755) 8204-6828

(Issuer’s telephone number)

N/A

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~Yes x No o~~

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

Yes x No ¨

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o ¨ No x

On ~~August~~November 9, 2011, 22,~~070~~357,~~453~~494 shares of the registrant's ordinary stock, par value $0.000384 were outstanding.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2223
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	(Removed and Reserved)	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
SIGNATURES		34
EXHIBITS

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30 , 2011 AND DECEMBER 31, 2010

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

	September 30		December 31
	2011		2010
ASSETS	Unaudited		Audited
	(Unaudited)		(Audited)
ASSETS
CURRENT ASSETS
Cash & cash equivalents	$	43,~~016~~000,~~393~~159	$	887,696
Restricted cash		~~805~~243,~~366~~804		1,473,914
Accounts receivable, net		56,~~307~~418,~~327~~019		3,156,318
Bills receivable		32,~~904~~771,~~039~~091		423,903
Other receivables, net		~~229~~551,~~160~~022		574,393
Deposits		1516,~~704~~307		15,346
Prepayment - current		2,~~087~~971,~~065~~559		2,480,504
Inventory		68,~~492~~810,~~201~~526		2,305,753
Total current assets		2224,~~857~~782,~~255~~487		11,317,827
NONCURRENT ASSETS
Prepayment - noncurrent		1,~~561~~714,~~828~~636		1,312,131
Property and equipment, net		4,~~269~~474,~~879~~617		2,345,978
Prepayment for equipment purchases		658,811		-
Other (expenses) income		49,636		24,800
Construction in progress		48,741		24,800
Deferred tax assets		7,842		8,763
Deferred tax assets		8,153		8,763
Intangible assets, net		8,637		5,535
Intangible assets, net		4,879		5,535
Total noncurrent assets		6,255,368		3,697,207
Total noncurrent assets		6,552,291		3,697,207
TOTAL ASSETS	$	31,037,855	$	15,015,034
TOTAL ASSETS	$	29,409,546	$	15,015,034
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	35,~~892~~542,~~759~~983	$	625,993
Bills payable		~~805~~243,~~366~~804		1,473,914
Accrued liabilities and other payables		~~664~~580,~~321~~686		137,444
Taxes payable		3,~~610~~946,~~625~~843		1,941,263
Short term loans		54,~~222~~512,~~818~~823		3,170,912
Loan from related party		95,803		-
Warrant liability		226,798		-
Warrant Liability		401,506		-
Other payable - related party		9,790		-
Other payable to Shenzhen ORB original shareholders		413,020		403,597
Total current liabilities		15,~~116~~466,~~008~~957		7,753,123
LONG TERM PAYABLE - SUBSIDY RECEIVED IN ADVANCE		~~189~~192,~~289~~765		184,970
TOTAL LIABILITIES		15,~~305~~659,~~297~~722		7,938,093
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Convertible preferred stock, $0.000128 par value, 781,250 shares authorized, 0 shares issued and outstanding as of June 30, 2011 and December 31, 2010		-		-
Convertible preferred stock, $0.000128 par value, 781,250 shares authorized, 0 shares issued and outstanding as of September 30, 2011 and December 31, 2010		-		-
Common stock, $0.000384 par value, 100,000,000 shares authorized, 22,070,633 and 17,133,991shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively		8,475		6,579
Common stock, $0.000384 par value, 100,000,000 shares authorized, 22,357,494 and 17,133,991shares issued and outstanding as of September 30, 2011 and December 31, 2010, respectively		8,585		6,579
Additional paid in capital		67,~~404~~476,~~691~~904		2,672,319
Statutory reserve		~~828~~880,~~102~~847		339,560
Accumulated other comprehensive income		~~456~~726,~~813~~470		262,121
Retained earnings		6,~~406~~261,~~168~~723		3,796,362
Total stockholders' equity		14,104,249		7,076,941
Total ORB Automotive Corporation stockholders' equity		15,354,529		7,076,941
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	29,409,546	$	15,015,034
Noncontrolling interest		23,604		-
Total equity		15,378,133		7,076,941
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	31,037,855	$	15,015,034

See accompanying notes to the consolidated financial statements

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)

~~(unaudited)~~ FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

	FOR THE SIX MONTHS ENDED JUNE 30,					FOR THE THREE MONTHS ENDED JUNE 30,
	2011			2010		2011			2010
Net sales	$	11,913,987		$	2,362,028	$	7,839,678		$	1,438,959
Cost of goods sold		9,196,037			1,322,124		6,377,293			764,336
Gross profit		2,717,950			1,039,904		1,462,385			674,623
Operating expenses
Selling expenses		437,004			119,998		286,154			66,306
General and administrative expenses		727,010			121,006		424,268			60,556
Research and development expense		85,637			61,216		35,505			28,338
Total operating expenses		1,249,651			302,220		745,927			155,423
Income from operations		1,468,299			737,684		716,458			458,207
Non-operating income (expenses)
Interest income (expense)		(291,716	)		1,663		(219,123	)		1,422
Bargain purchase gain		1,844,730			-		1,844,730			-
Other income (expenses)		(1,579	)		-		(783	)		-
Total non-operating income (expenses), net		1,551,435			1,663		1,624,824			1,422
Income before income tax		3,019,734			739,347		2,341,282			520,845
Income tax expense		360,967			158,177		171,140			114,585
Net income	$	2,658,767		$	581,170	$	2,170,142		$	406,260
Other comprehensive item
Foreign currency translation		194,692			17,072		117,072			16,341
Comprehensive Income	$	2,853,459		$	598,242	$	2,287,214		$	442,601
Basic weighted average shares outstanding		18,388,827			3,376,575		19,629,873			3,376,575
Diluted weighted average shares outstanding		18,388,827			3,376,575		19,629,873			3,376,575
Basic earnings per share	$	0.14		$	0.17	$	0.11		$	0.12
Diluted earnings per share	$	0.14		$	0.17	$	0.11		$	0.12

(UNAUDITED)

See accompanying to the consolidated financial statements

	FOR THE NINE MONTHS ENDED SEPTEMBER 30,					FOR THE THREE MONTHS ENDED SEPTEMBER 30,
	2011			2010		2011			2010

Net sales	$	21,724,072		$	3,515,277	$	9,810,085		$	1,153,249

Cost of goods sold		16,828,946			1,901,734		7,632,909			579,610

Gross profit		4,895,126			1,613,543		2,177,176			573,639

Operating expenses
Selling expenses		766,794			162,549		329,790			42,551
General and administrative expenses		1,334,101			273,680		618,274			91,458
Research and development expense		187,210			-		101,573			-

Total operating expenses		2,288,105			436,229		1,049,637			134,009

Income from operations		2,607,021			1,177,314		1,127,539			439,630

Non-operating income (expenses)
Interest income (expense)		(705,610	)		1,872		(413,894	)		209
Bargain purchase gain		1,275,523			-		-			-
Other (expenses) income		(1,218	)		-		361			-

Total non-operating income (expenses), net		568,695			1,872		(413,533	)		209

Income before income tax		3,175,716			1,179,186		714,006			439,839

Income tax expense		608,648			259,552		247,681			101,375

Net income attributable to ORB Automotive Corporation	$	2,567,068		$	919,634	$	466,325		$	338,464

Other comprehensive item
Foreign currency translation gain attributable to ORB Automotive Corporation		464,349			63,321		269,657			46,249

Comprehensive Income attributable to ORB Automotive Corporation	$	3,031,417		$	982,955	$	735,982		$	384,713

Basic weighted average shares outstanding		19,662,078			3,492,529		22,167,173			3,720,655

Diluted weighted average shares outstanding		19,662,078			13,381,066		22,167,173			13,609,192

Basic earnings per share	$	0.13		$	0.26	$	0.02		$	0.09

Diluted earnings per share	$	0.13		$	0.07	$	0.02		$	0.02

See accompanying notes to the consolidated financial statements

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(unaudited)~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,658,767		$	581,170
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization		204,792			27,567
Bargain purchase gain of acquisition		(1,844,730	)		-
Changes in warrant liability		(2,098	)		-
Changes in deferred tax		896			-
Decrease (increase) in current asset, net of effects from acquisition:
Accounts receivable		2,909,071			(135,219	)
Bills receivable		(3,375,296	)		(213,959	)
Restricted cash		695,493			-
Prepayment		1,364,876			(633,659	)
Other receivables		354,834			(18,531	)
Inventory		(896,259	)		167,489
Deposit		-			(806	)
Deferred expense		408			-
Increase (decrease) in current liabilities, net of effects from acquisition:
Accounts payable		72,909			(7,608	)
Bills payable		(695,493	)		-
Accrued liabilities and other payables		132,145			10,481
Taxes payable		136,058			158,556
Net cash provided by (used in) operating activities		1,716,373			(64,519	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Prepayment for equipment purchases		(523,086	)		-
Cash acquired upon acquisition		1,482,006			-
Construction in progress		(23,113	)		-
Acquisition of property & equipment		(158,021	)		(953	)
Net cash provided by (used in) investing activities		777,786			(953	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from equity financing		1,446,660			-
Proceeds from short term loans		1,643,454			-
Repayment of short term loans		(2,593,795	)		-
Other payable - related party		9,686			-
Due from related party		-			(19,718	)
Loan from related party		94,786			-
Net cash provided by (used in) financing activities		600,791			(19,718	)
EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS		33,747			1,217
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS		3,128,695			(83,973	)
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD		887,696			299,719
CASH & CASH EQUIVALENTS, END OF PERIOD	$	4,016,393		$	215,746
Supplemental disclosures of cash flow information:
Cash paid for interest expenses	$	304,767		$	-
Cash paid for income tax	$	68,459		$	9,264

(UNAUDITED)

See accompanying to the consolidated financial statements

	2011			2010

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,567,068		$	919,634
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:
Inventory impairment		626,189			21,222
Depreciation and amortization		348,741			41,853
Bargain purchase gain of acquisition		(1,275,523	)		-
Changes in warrant liability		(9,562	)		-
Changes in deferred tax		1,353			-
Decrease (increase) in current assets, net of effects from acquisition:
Accounts receivable		1,926,712			(108,834	)
Bills receivable		(2,201,254	)		(186,393	)
Restricted cash		1,263,865			-
Prepayment		1,092,365			(953,901	)
Other receivables		46,533			4,011
Inventory		(3,679,392	)		134,293
Deposit		(308	)		(806	)
Deferred expense		410			-
Increase (decrease) in current liabilities, net of effects from acquisition:
Accounts payable		1,616,195			(39,349	)
Bills payable		(1,263,865	)		-
Accrued liabilities and other payables		40,113			7,800
Taxes payable		400,520			252,974

Net cash provided by operating activities		1,500,160			92,504

CASH FLOWS FROM INVESTING ACTIVITIES:
Prepayment for equipment purchases		(540,368	)		-
Acquisition of intangible assets		(3,978	)		-
Cash acquired upon acquisition		1,482,006			-
Construction in progress		(23,269	)		-
Acquisition of property & equipment		(424,623	)		(34,492	)

Net cash used in investing activities		489,768			(34,492	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from equity financing		1,782,533			-
Proceeds from short term loans		2,146,985			-
Repayment of short term loans		(3,889,975	)		-
Capital contribution from noncontrolling interest		23,466			-

Net cash provided by financing activities		63,009			-

EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS		59,526			6,597

NET INCREASE IN CASH & CASH EQUIVALENTS		2,112,463			64,609

CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD		887,696			299,719

CASH & CASH EQUIVALENTS, END OF PERIOD	$	3,000,159		$	364,328

Supplemental disclosures of cash flow information:
Cash paid for interest expenses	$	706,269		$	-
Cash paid for income tax	$	106,315		$	20,975

See accompanying notes to the consolidated financial statements

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

ORB Automotive Corporation (“ORB” or the “Company”), formerly known as Action Acquisition Corporation ("Action"), was formed in the Cayman Islands on September 27, 2006.

Effective September 10, 2010, the Company and its controlling shareholders entered into a share exchange agreement with Grand Power Capital, Inc., a British Virgin Islands business company (“GPC”), and the GPC shareholders. Pursuant to the agreement, Action issued an aggregate of 10,129,725 ordinary shares and 98,885.37 preference shares to GPC shareholders. With the exception of the shares of GPC held by Apollo Enterprises International, Inc., each share of GPC capital stock was exchanged for approximately 1,327 ordinary shares of the Company. The remaining shares of GPC held by Apollo Enterprises International, Inc. were exchanged for 98,885.37 preference shares of the Company. Each preference share was automatically convertible into 100 ordinary shares of the Company upon receipt of the approval by the Company shareholders of a proposed increase in the number of authorized ordinary shares from 39,062,500 shares to 100,000,000 shares. Upon effectiveness of the share exchange, the Company had 14,651,922 (pre-split) ordinary shares and 98,885.37 preference shares issued and outstanding. Upon consummation of the share consolidation and automatic conversion of the 98,885.37 preference shares issued to Apollo Enterprises International, Inc., there were 14,772,511 (post-split) ordinary shares and no preference shares of the Company's capital stock issued and outstanding, approximately 90% of which are held by the former GPC shareholders. The shareholders of the Company immediately prior to the completion of these transactions hold 10% of the issued and outstanding ordinary shares of the Company. As a result of the transaction, GPC became a wholly owned subsidiary of the Company.

GPC was incorporated in October 2009 and acquired 100% of the issued and outstanding capital stock of Shenzhen ORB-Fortune New Materials Co., Ltd. (“Shenzhen ORB”) in May 2010 for RMB 2,672,900 (US $404,000). The major shareholder of Shenzhen ORB became the major shareholder of GPC after the acquisition. The acquisition was accounted for as a reorganization of entities under common control, with assets and liabilities transferred at their carrying amounts, and the financial statements presented as if the reorganization had occurred retroactively. $241,648 of the $404,000 was recorded as a return of original share capital and the remaining was recorded as a dividend to the original shareholders of Shenzhen ORB.

Shenzhen ORB was incorporated in the Guangdong Province of the People’s Republic of China (“PRC”) in 2005 as a hi-tech enterprise primarily engaged in the development, manufacture and sale of high-performance adhesive seal materials in the PRC. In 2008 the Company deemed it more cost-effective to outsource the manufacture of some of its products to three original equipment manufacturing (OEM) factories, concentrating its in-house efforts on research and development of new products, as well as the marketing and distribution of its current and future products. These OEM factories utilize equipment, processes and raw materials established by the Company to manufacture products that bear the ORB label. The Company provides glass bonding solutions to a wide range of industries, including automobile, ships and boats, construction, and electronics, but currently focusing on the automobile windshields area. The Company is also in the process of developing other auto parts such as bumper, harness, lamp, and cooling liquid.

Action acquired GPC on September 10, 2010 through a share exchange as described above. Under generally accepted accounting principles in the United States of America (“US GAAP”), the share exchange is considered to be a capital transaction in substance, rather than a business combination. That is, the share exchange is equivalent to the issuance of stock by GPC for the net monetary assets of Action, accompanied by a recapitalization, and is accounted for as a change in capital structure. GPC’s shareholders will own the majority of the shares and will exercise significant influence over the operating and financial policies of the consolidated entity. Pro forma financial information is not applicable as this is not a business combination under Article 11-01 of Regulation S-X and Action is a public shell company with no operations. The post reorganization comparative historical financial statements of Action will be the historical financial statements of GPC and its wholly owned subsidiary, Shenzhen ORB, accompanied by a recapitalization.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

The preference shares were automatically converted into 9,888,537 ordinary shares following the consolidation. On September 10, 2010, 98,885.37 preference shares were converted into 9,888,537 ordinary shares. On November 3, 2010, the Company (i) changed its name from Action Acquisition Corporation to ORB Automotive Corporation and (ii) effected a 1 for 3 consolidation of the Company’s issued and outstanding ordinary shares and (iii) increased the amount of the Company’s authorized ordinary shares from 39,062,500 shares to 100,000,000 shares. As result of the consolidation and increase in share capital, the par value of the Company’s ordinary shares changed from $0.000128 per share to $0.000384 per share. As a result, immediately following the consolidation and giving effect to the conversion of the preference shares, the Company had 14,772,511 ordinary shares and no preference shares issued and outstanding. The reverse stock split of the ordinary shares was retroactively restated.

On November 3, 2010, ORB completed the acquisition of 100% of the equity interest in Hebei Xinhua Rubber Sealing Group Liuzhou Sealing Co., Ltd., a company registered in the PRC (“Liuzhou Rubber Sealing”), from Liuzhou Rubber Sealing’s shareholders. Pursuant to the terms of the stock purchase agreement among the parties, all of the issued and outstanding shares of Liuzhou Rubber Sealing were exchanged for 2.06 million ordinary shares of the Company, valued at $2.21 million. ~~As of June 30, 2011, 2,060,000 shares were issued.~~ Liuzhou Rubber Sealing’s results of operations from November 1, 2010 have been included in the consolidated statement of income; however, the Company is still in the process of legal title transfer with the local authority. As of ~~June~~September 30, 2011, ORB’s equity interest in Liuzhou Rubber Sealing is held in trust for the benefit of ORB until such time as the legal transfer of title is completed in China.

On May 20, 2011, ORB completed the acquisition of 100% of the equity interest in Hebei Hongtu Auto Parts Co., Ltd. (“Hongtu”), a company registered in the PRC, from Hongtu’s shareholders. Pursuant to the terms of the stock purchase agreement among the parties, all of the issued and outstanding shares of Hongtu were exchanged for 3.70 million ordinary shares of the Company, valued at $3.1370 million. As of ~~June~~September 30, 2011, 3,700,000 shares were issued. Hongtu’s results of operations from May 1, 2011 have been included in the consolidated statement of income; however, the Company is still in the process of legal title transfer with the local authority. As of ~~June~~September 30, 2011, ORB’s equity interest in Hongtu is held in trust for the benefit of ORB until such time as the legal transfer of title is completed in China.

~~The~~On ~~unaudited consolidated~~September ~~financial~~30, ~~statements~~2011, ~~included~~Shenzhen ~~herein~~ORB ~~have~~formed ~~been~~a ~~prepared~~new ~~by the Company~~subsidiary, ~~pursuant~~All-ready toAuto ~~the~~Antifreeze ~~rules~~Coolant ~~and regulations of the SEC~~Co. ~~The~~, ~~information~~Ltd ~~furnished herein reflects all adjustments~~ (~~consisting of normal recurring accruals and adjustments~~“All-ready”) ~~that are~~, ina ~~the~~company ~~opinion~~registered ofin ~~management~~Liuzhou, ~~necessary~~China. All-ready’s tototal ~~fairly~~registered ~~present~~capital ~~the~~is ~~operating~~RMB ~~results~~1 ~~for the respective periods~~million. ~~Certain~~Shenzhen ~~information~~ORB ~~and~~contributed ~~footnote~~RMB ~~disclosures~~850,000 ~~normally~~to ~~present~~All-ready in ~~annual~~exchange ~~financial~~for ~~statements~~85% ~~prepared~~of inthe ~~accordance~~equity ~~with~~ownership ~~accounting principles generally accepted~~ in the ~~United States of America (“US GAAP”) were omitted pursuant to such rules and regulations~~business. The ~~These financial~~remaining ~~statements~~15% ~~should~~equity beownership ~~read~~is inheld ~~conjunction~~by ~~with~~ the ~~audited financial~~Company’s ~~statements~~chief ~~and~~executive ~~footnotes~~officer ~~included~~and indirector, ~~the~~Junning ~~Company’s~~Ma ~~2010 audited~~(as ~~financial~~further ~~statements~~discussed ~~included~~ in ~~the~~Note ~~Company’s~~16). ~~Annual~~All-ready ~~Report~~intends onto ~~Form~~be ~~10-K. The~~engaged ~~results~~in ~~for~~ the ~~six~~production and ~~three~~sale ~~months~~of ~~ended~~auto ~~June~~antifreeze ~~30,~~coolant ~~2011~~when ~~are~~it ~~not~~commences ~~necessarily~~operations, ~~indicative~~which ofis ~~the~~currently ~~results~~anticipated to beoccur ~~expected~~in ~~for the full year ending~~ December ~~31,~~ 2011.

The unaudited consolidated financial statements included herein have been prepared by the Company, pursuant to the rules and regulations of the SEC. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) that are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with US GAAP were omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s 2010 audited financial statements included in the Company’s Annual Report on Form 10-K. The results for the nine and three months ended September 30, 2011 are not necessarily indicative of the results to be expected for the full year ending December 31, 2011.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with US GAAP. The Company’s functional currency is the Chinese Yuan Renminbi (“RMB”); however the accompanying consolidated financial statements have been translated and presented in United States Dollars (“$” or “USD”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of ORB, and its wholly owned subsidiary Liuzhou Rubber Sealing, Hongtu and GPC, together with its wholly owned subsidiary Shenzhen ORB. The "Company" refers collectively to ORB, Liuzhou Rubber Sealing, Hongtu, GPC and Shenzhen ORB. All significant inter-company accounts and transactions were eliminated in consolidation.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of ORB, and its wholly owned subsidiary Liuzhou Rubber Sealing, Hongtu and GPC, together with its wholly owned subsidiary Shenzhen ORB, and Shenzhen ORB’s subsidiary, All-ready. The "Company" refers collectively to ORB, Liuzhou Rubber Sealing, Hongtu, GPC and Shenzhen ORB. All significant inter-company accounts and transactions were eliminated in consolidation.

Use of Estimates

In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.

Reclassifications

Certain prior year amounts in the balance sheet as of December 31, 2010 were reclassified to be consistent with the presentation of the balance sheet as of ~~June~~September 30, 2011.

Cash and Cash Equivalents

For purposes of the consolidated statement of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

The Company’s policy is to maintain reserves for potential credit losses on account receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Based on management’s analysis noted above, the bad debts allowance was determined by calculating 0.5% of accounts receivable amount at the balance sheet date. Based on historical collection activity, the Company made allowance for bad debts of $35,~~396~~940 and $17,279 at ~~June~~September 30, 2011 and December 31, 2010, respectively.

Inventories

Inventories are valued at the lower of cost or net realizable value with cost determined on a weighted average basis. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to net realizable value, if lower. The Company recorded $0626,189 and $21,122 inventory write-down via allowance during the ~~six~~nine and three months ended ~~June~~September 30, 2011 and 2010.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets without salvage value and estimated lives of as follows:

Computer and office equipment		5 - 10 years
Motor vehicle		5 years
Electric equipment		3 - 5 years
Plant and machinery		5 - 20 years

Research and Development

Research and development costs are related primarily to the Company testing its new materials in the development stage. Research and development costs are expensed as incurred. For the six months ended June 30, 2011 and 2010, research and development expense was $85,637 and $61,216, respectively. For the three months ended June 30, 2011 and 2010, research and development expense was $35,505 and $28,338, respectively.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

Research and Development

Research and development costs are related primarily to the Company testing its new materials in the development stage. Research and development costs are expensed as incurred. For the nine months ended September 30, 2011 and 2010, research and development expense was $187,210 and $83,601, respectively. For the three months ended September 30, 2011 and 2010, research and development expense was $101,573 and $22,385, respectively.

Income Taxes

The Company utilizes the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified as selling, general and administrative expense in the statements of income. At ~~June~~September 30, 2011 and December 31, 2010, the Company had not taken any significant uncertain tax position on its tax return for 2010 and prior years or in computing its tax provision for 2011. The Company is subject to review by the respective tax authorities.

Revenue Recognition

The Company's revenue recognition policies are in compliance with SEC Staff Accounting Bulletin (SAB) 104, (codified in ASC Topic 605, “Revenue Recognition”). Sales revenue may be recognized when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, and no other significant obligations of the Company exist and collectability is reasonably assured. No revenue is recognized if there are significant uncertainties regarding the recovery of the consideration due, or the possible return of the goods. Generally, sales revenue is recognized when the delivery is completed and goods accepted by the customers. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue.

Sales revenue represents the invoiced value of goods, net of value-added taxes (VAT). All Company products are sold in the PRC and subject to the Chinese VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing the finished product. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government.

Cost of Goods Sold

Cost of goods sold consists primarily of material costs, labor costs, and related overhead which are directly attributable to the production of the products. Write-down of inventory to the lower of cost or net realizable value is also recorded in the cost of goods sold.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

Cost of Goods Sold

Environmental Costs and Liabilities

Liabilities related to environmental compliance and future remedial costs are recorded when the compliance or remedial efforts are probable and the costs can be reasonably estimated. The PRC adopted environmental laws and regulations that affect the operations of the auto industry. The outcome of environmental liabilities under proposed or future environmental legislation cannot be reasonably estimated at the present time, and could be material. Under existing legislation, however, Company’s management believes that there are no probable liabilities that will have a material adverse effect on the financial condition of the Company.

Shenzhen ORB, Liuzhou Rubber Sealing and Hongtu are regulated by local Environmental Protection Agency and have been certified as compliant with all environment standards and requirements for disposal of waste, toxic and hazardous substances. The direct cost associated with environmental handling waste water, exhaust gas, noise and scrap materials were immaterial in the ~~six~~nine and three months ended ~~June~~September 30, 2011 and 2010. The scrap materials are recycled by recycling companies.

Shipping and Handling Costs

Shipping and handling costs related to delivery of finished goods are included in selling expenses. During the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, shipping and handling costs were $~~252~~612,~~117~~773 and $76104,~~101~~666, respectively. During the three months ended ~~June~~September 30, 2011 and 2010, shipping and handling costs were $~~217~~360,~~176~~656 and $4628,~~835~~585, respectively.

Basic and Diluted Earnings per Share (EPS)

Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). During the ~~six~~nine and three months ended ~~June~~September 30, 2011 ~~and 2010~~, there was no dilution for the ~~370~~457,~~938~~050 warrants since the exercise price of the warrants exceeds the fair value of the common stock. ~~and~~During the ~~therefore~~nine ~~are~~and three ~~anti-dilutive~~months ended September 30, 2010, there was dilution due to potential common shares of 9,888,537 related to 98,885 of convertible stocks issued and outstanding as of September 30, 2010.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its clients' financial condition and customer payment practices to minimize collection risk on accounts receivable.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

Concentration of Credit Risk

The operations of the Company are in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy.

Statement of Cash Flows

In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company's operations is calculated based upon local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.

Fair Value of Financial Instruments

Some of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

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

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

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

The Company analyzes all financial instruments with features of both liabilities and equity under ASC Topic 480, “Distinguishing Liabilities from Equity,” and ASC Topic 815, “Derivatives and Hedging.”

As of September 30, 2011 and December 31, 2010, the Company did not identify any assets and liabilities required to be presented on the balance sheet at fair value, except for warrant liability of $226,798, which was based on Level 3 measurements. The warrant liability was initially valued at $194,688 and $41,672 upon issuance on May 4, 2011 and August 31, 2011, respectively. The Company recognized a gain of $9,562 and a loss of $3,718 during the nine and three months ended September 30, 2011, respectively, which represents the change in fair value based on Level 3 measurements.

Foreign Currency Translation and Comprehensive Income

The Company’s functional currency is the RMB. For financial reporting purposes, RMB were translated into USD as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated other comprehensive income". Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in exchange rate for the conversion of RMB to USD after the balance sheet date.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

The Company ~~analyzes~~uses ~~all~~ASC Topic 220 “Comprehensive Income”. Comprehensive income is a more inclusive financial ~~instruments~~reporting ~~with~~methodology ~~features~~that includes disclosures of ~~both~~certain ~~liabilities~~financial ~~and~~information ~~equity~~that ~~under~~historically ~~ASC~~has ~~Topic~~not ~~480,~~been ~~“Distinguishing~~recognized ~~Liabilities~~in ~~from~~the ~~Equity,”~~calculation of net income. Comprehensive income for the nine and ~~ASC~~three ~~Topic~~months ~~815~~ended September 30, ~~“Derivatives~~2011 and ~~Hedging~~2010 included net income and foreign currency translation adjustments.”

As of June 30, 2011 and December 31, 2010, the Company did not identify any assets and liabilities required to be presented on the balance sheet at fair value, except for warrant liability of $401,506, which was based on Level 3 measurements. The warrant liability was initially valued at $403,604 upon issuance on May 4, 2011. The Company recognized a gain of $2,098 during the six and three months ended June 30, 2011, which represents the change in fair value based on Level 3 measurements.

Foreign Currency Translation and Comprehensive Income

The Company uses ASC Topic 220 “Comprehensive Income”. Comprehensive income is a more inclusive financial reporting methodology that includes disclosures of certain financial information that historically has not been recognized in the calculation of net income. Comprehensive income for the six and three months ended June 30, 2011 and 2010 included net income and foreign currency translation adjustments.

Segment Reporting

ASC Topic 280, "Segment Reporting," requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

ASC Topic 280 has no effect on the Company's financial statements as substantially all of the Company's operations are conducted in one industry segment. The Company consists of one reportable business segment. All of the Company's assets are located in the PRC and all of the Company's revenue is generated in the PRC.

Recently Adopted Accounting Pronouncements

In December 2010, FASB issued ASU No. 2010-28, Intangibles – Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. The amendments in this update affect all entities that have recognized goodwill and have one or more reporting units whose carrying amount for purposes of performing Step 1 of the goodwill impairment test is zero or negative. The amendments in this update modify Step 1 so that for those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that impairment may exist. The qualitative factors are consistent with existing guidance, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. Upon adoption of the amendments, any resulting goodwill impairment should be recorded as a cumulative-effect adjustment to retained earnings beginning in the period of an adoption. Any goodwill impairments occurring after the initial adoption of the amendments should be included in earnings. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In December 2010, FASB issued ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in this update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company adopted the disclosure requirements for the business combinations in 2011.

In January 2010, FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This update provides amendments to ASC Topic 820 that will provide more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. This standard is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

Recently Issued Accounting Pronouncements Not Yet Adopted

In May 2011, FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in ~~U.S.~~US GAAP and International Financial Reporting Standards (ASC Topic 820), to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between US GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements. The provisions of this new guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The guidance is not expected to have a material impact on our consolidated financial statements.

In June 2011, FASB issued ASU 2011-05, Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income. Under the amendments in this update, an entity has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income and a total amount for comprehensive income. In a single continuous statement, the entity is required to present the components of net income and total net income, the components of other comprehensive income and a total for other comprehensive income, along with the total of comprehensive income in that statement. In the two-statement approach, an entity is required to present components of net income and total net income in the statement of net income. The statement of other comprehensive income should immediately follow the statement of net income and include the components of other comprehensive income and a total for other comprehensive income, along with a total for comprehensive income. In addition, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. The amendments in this update should be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company already complies with this presentation.

3. RESTRICTED CASH, BILLS PAYABLE – BANK ACCEPTANCES

Restricted cash at ~~June~~September 30, 2011 and December 31, 2010 represented $~~805~~243,~~366~~804 and $1,473,914 held in the bank as collateral for the bank to issue the same amount of bank acceptances. The Company endorses the bank acceptances to vendors as payment of their own obligations. Most of the bank acceptances have maturities of less than six months.

4. BILLS RECEIVABLE

Bills receivable represented an instrument which contains an unconditional order to pay a certain amount on an agreed date. It is used as an assurance for customers making the payment on time according to the agreed terms when the goods are sold on credit and payment is deferred to a future date. As of September 30, 2011 and December 31, 2010, bills receivable was $2,771,091 and $423,903, respectively. $0 and $179,685 of bills receivable as of September 30, 2011 and December 31, 2010 was used as collateral for bank loans, respectively (Note 15).

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

4. BILLS RECEIVABLE

Bills receivable represented an instrument which contains an unconditional order to pay a certain amount on an agreed date. It is used as an assurance for customers making the payment on time according to the agreed terms when the goods are sold on credit and payment is deferred to a future date. As of June 30, 2011 and December 31, 2010, bills receivable was $3,904,039 and $423,903, respectively. $0 and $179,685 of bills receivable as of June 30, 2011 and December 31, 2010 was used as collateral for bank loans (Note 15).

5. OTHER RECEIVABLES

Other receivables consisted of the following at ~~June~~September 30, 2011 and December 31, 2010 as following:

	2011		2010
Advance to employees	$	~~212~~376,~~423~~619	$	206,041
Short term advances to non-related parties		-		49,905
Guarantee deposit for loan payable		-		301,991
Deposits		16174,~~840~~508		16,456
Allowance		(~~103~~105)		-
	$	~~229~~551,~~160~~022	$	574,393

Cash advance to employees and short term advances to non-related parties are non-interest bearing and payable upon demand. Deposit was mainly for purchase of raw materials and warehouse rent.

6. PREPAYMENT

Prepayment consisted of the following at ~~June~~September 30, 2011 and December 31, 2010 as following:

	2011		2010
Payment to OEM factory and suppliers for the purchase of supplies - current	$	12,~~965~~889,~~826~~800	$	2,250,424
Consulting fee		-		144,956
Others		~~121~~81,~~239~~759		85,124
	$	2,~~087~~971,~~065~~559	$	2,480,504

Prepayment was mainly the payment to several original equipment manufacturer (OEM) factories and suppliers for future product deliveries. Others represented certain property, plant and equipment and operating expenses prepaid by the Company.

	2011		2010
Payment to OEM factory and suppliers for purchase of supplies - noncurrent	$	1,~~561~~029,~~828~~647	$	1,312,131
Prepayment for property, plant and equipment purchase		684,989
	$	1,714,636	$	1,312,131

7. INVENTORY

As of ~~June~~September 30, 2011 and December 31, 2010, inventory consisted of the following:

	2011		2010
Finished goods	$	47,~~031~~365,~~076~~715	$	1,538,716
Raw material		1,~~358~~271,~~365~~910		499,482
Work in process		1851,~~102,760~~247		304,824
Total		69,~~492~~488,~~201~~873		2,343,022
Impairment of inventory		-(678,346)		(37,269	)
	$	6,492,201	$	2,305,753
Inventory, net		8,810,526		2,305,753

8. OTHER PAYABLE TO SHENZHEN ORB ORIGINAL SHAREHOLDERS

The amount represents an unsecured and non interest-bearing loan payable to the original shareholders of Shenzhen ORB for the acquisition of Shenzhen ORB by GPC and is due on demand (See Note 1).

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

8. OTHER PAYABLE TO SHENZHEN ORB ORIGINAL SHAREHOLDERS

The amount represents an unsecured and non interest-bearing loan payable to the original shareholders of Shenzhen ORB for the acquisition of Shenzhen ORB by GPC and is due on demand (See Note 1).

9. PROPERTY AND EQUIPMENT, NET

As of ~~June~~September 30, 2011 and December 31, 2010, property and equipment consisted of the following:

	2011			2010
Office equipment	$	185,~~086~~478		$	155,431
Plant and machinery		5,~~183~~184,~~389~~322			2,796,396
Electric equipment		5962,~~307~~756			56,640
Motor vehicle		~~128~~161,~~850~~998			65,854
Total		5,~~556~~594,~~632~~554			3,074,321
Less: Accumulated depreciation		(1,~~286~~119,~~753~~937)	)		(728,343)	)
	$	4,~~269~~474,~~879~~617		$	2,345,978

Depreciation expense was $~~204~~348,~~016~~741 and $2741,~~567~~853 for the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, respectively. Depreciation expense was $~~121~~275,~~968~~414 and $1314,~~861~~286 for the three months ended ~~June~~September 30, 2011 and 2010, respectively.

10. CONSTRUCTION IN PROGRESS

The construction in progress represented the projects for office improvement and installation of new machinery. As of ~~June~~September 30, 2011 and December 31, 2010, the balance was $4849,~~741~~636 and $24,800, respectively.

11. INTANGIBLE ASSETS

The intangible assets represent financial software. The net balance as of ~~June~~September 30, 2011 and December 31, 2010 was $48,~~879~~637 and $5,535. For the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, the amortization expense was $~~776~~1,173 and $0, respectively. For the three months ended ~~June~~September 30, 2011 and 2010, the amortization expense was $~~390~~397 and $0, respectively.

12. MAJOR CUSTOMERS AND VENDORS

Three major customers accounted for 8577% (5636%, 1823% and 1118% for each) and 78two major customers accounted for 72% (5146% and 2726% for each) of sales for the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, respectively. Accounts receivable from these customers amounted to $3,~~805~~367,~~276~~821 as of ~~June~~September 30, 2011. If these customers were lost, it is unlikely that the Company would be able to replace the lost revenue, at least in the near term.

~~One~~Three major ~~customer accounted for 41% and two major~~ customers accounted for 7681% (4930%, ~~and 27~~26% ~~for~~and ~~each~~25%) of the sales for the three months ended ~~June~~September 30, 2011 ~~and 2010 respectively~~.

The Company ~~purchased~~did ~~its~~not ~~products~~have ~~from~~vendors ~~one~~that ~~major~~accounted ~~vendor~~for ~~during~~more ~~the~~than ~~six months ended June 30, 2011 with 13~~10% of ~~purchases.~~the ~~Accounts~~Company’s ~~payable~~total topurchase during the ~~vendor~~nine ~~was~~months ~~$47,911~~ended asSeptember ~~of June~~ 30, 2011. The Company purchased its products from three major vendors during the ~~six~~nine months ended ~~June~~September 30, 2010 with each accounting for 4144%, 3127% and 1412% of purchases, respectively. One major vendor accounted for ~~12% and three major vendors accounted for 82% (38%, 31% and~~ 13% ~~for each)~~ of the ~~sales~~purchase for the three months ended ~~June~~September 30, 2011 ~~and 2010 respectively~~.

13. ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables consisted of the following at September 30, 2011 and December 31, 2010 respectively:

	2011		2010
Other payables	$	186,870	$	41,193
Accrued salaries		270,673		96,251
Other accrued expense		123,143		-
Total	$	580,686	$	137,444

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

13. ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables consisted of the following at June 30, 2011 and December 31, 2010 respectively:

	2011		2010
Other payables	$	239,100	$	41,193
Accrued salaries		192,921		96,251
Other accrued expense		232,300		--
Total	$	664,321	$	137,444

Other accrued expenses include staff insurance, shipping cost, utility fee and interest expense.

14. TAXES PAYABLE

Taxes payable consisted of the following at ~~June~~September 30, 2011 and December 31, 2010:

	2011		2010
Value-added tax payable	$	~~197~~256,~~109~~563	$	202,811
Education surtax and other taxes payable		1522,~~609~~109		17,133
Income tax payable		3,~~397~~668,~~907~~171		1,721,319
Total	$	3,~~610~~946,~~625~~843	$	1,941,263

15. SHORT TERM LOANS

The Company was obligated for the following short term loans at September 30, 2011 and December 31, 2010:

	2011		2010
From a commercial bank in the PRC for RMB 5,000,000, entered into on December 23, 2010 with maturity on December 20, 2011; RMB 3,000,000 entered into on June 30, 2010 and has been paid off; RMB 2,000,000 entered into on July 22, 2010 with maturity on July 10, 2011, this loan was paid in full at maturity; the Company entered into another loan of RMB 2,000,000 on July 19, 2011 with maturity on July 10, 2012, the interest rate is 9.18% per annum; RMB 3,000,000 entered into on June 29, 2011 with maturity on June 15, 2012, which bear interest at 8.8% per annum. These loans are guaranteed by Liuzhou Credit Guarantee Co., Ltd, a company specifically providing the credit guarantees for Small and Medium-sized Enterprises. The loans were used to purchase raw materials.	$	1,573,589	$	1,509,958

On June 3, 2011, the Company obtained a loan from a commercial bank in PRC for RMB 5,000,000 with maturity on December 2, 2011. The interest rate is currently 6.435% per annum, which was 110% of the borrowing rate of The People’s Bank, and adjusted monthly. The loan was secured against accounts receivable of approximately RMB 6.3 million ($0.97 million). The loan was used for working capital and approximately RMB 1.3 million was repaid during the quarter ended September 30, 2011.		578,851		-

On June 24, 2010, the Company obtained a loan from an industrial and commercial bank in PRC for RMB 10,000,000 with maturity on June 24, 2011. The loan bears interest at 5.31% per annum. The loan is guaranteed by Guangxi Huibang Investment Guarantee Co., Ltd. The loan was used for working capital and paid in full upon maturity.		-		1,509,958

On December 16, 2010, the Company obtained a loan from a commercial bank in PRC for RMB 1,000,000 with maturity on June 14, 2011. The interest rate is currently 6.12% per annum, which was 120% of the borrowing rate of the People’s Bank, and adjusted quarterly. The loan is secured against a bill receivable of $179,685 (Note 4). The loan was used for working capital and paid in full upon maturity.		-		150,996

On July 30, 2011, the Company obtained a loan from commercial bank in PRC for RMB 5,000,000 with maturity on July 29, 2012, the interest rate is 120% of the borrowing rate of Peoples’ Bank per annum. The loan was used for working capital.		786,794		-

On April 14, 2011, the Company obtained a loan from commercial bank in PRC for RMB 10,000,000 with maturity on April 14, 2012. The loan bears interest at 9.15% per annum. The loan is collateralized by the property and land use rights of a third party which is a supplier of the Company. The loan was used to finance the working capital.		1,573,589		-
	$	4,512,823	$	3,170,912

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

15. SHORT TERM LOANS

The Company was obligated for the following short term loans at June 30, 2011 and December 31, 2010:

	2011		2010
From a commercial bank in the PRC for RMB 5,000,000, entered into on December 23, 2010 with maturity on December 20, 2011; RMB 3,000,000 entered into on June 30, 2010 and has been paid off; RMB 2,000,000 entered into on July 22, 2010 with maturity on July 10, 2011; another RMB 3,000,000 entered into on June 29, 2011 with maturity on June 15, 2012, which bear interest at 8.8% per annum. These loans are guaranteed by Liuzhou Credit Guarantee Co., Ltd, a company specifically providing the credit guarantees for Small and Medium-sized Enterprises. The loans were used to purchase raw materials.	$	1,545,213	$	1,509,958
On June 3, 2011, the Company obtained a loan from a commercial bank in PRC for RMB 5,000,000 with maturity on December 2, 2011. The interest rate is currently 6.435% per annum, which was 110% of the borrowing rate of The People’s Bank, and adjusted monthly. The loan was secured against accounts receivable of approximately RMB 6.3 million ($0.97 million). The loan was used for working capital.		772,606		-
On June 24, 2010, the Company obtained a loan from an industrial and commercial bank in PRC for RMB 10,000,000 with maturity on June 24, 2011. The loan bears interest at 5.31% per annum. The loan is guaranteed by Guangxi Huibang Investment Guarantee Co., Ltd. The loan was used for working capital and paid in full upon maturity.		-		1,509,958
On December 16, 2010, the Company obtained a loan from a commercial bank in PRC for RMB 1,000,000 with maturity on June 14, 2011. The interest rate is currently 6.12% per annum, which was 120% of the borrowing rate of the People’s Bank, and adjusted quarterly. The loan is secured against a bill receivable of $179,685 (Note 4). The loan was used for working capital and paid in full upon maturity.		-		150,996
During first half of 2011, the Company obtained two loans from two unrelated persons in PRC for RMB 1,800,000. The loan has maturity on demand and interest rate is currently 20% per annum and used for temporary working capital.		278,138		-
On October 8, 2010, the Company obtained a loan from commercial bank in PRC for RMB 7,000,000 with maturity on October 7, 2011. The loan bears interest at 6.372% per annum. The loan is collateralized by the property and land use rights of a third party which is a supplier of the Company. The loan was used to purchase raw materials.		1,081,649		-
On April 14, 2011, the Company obtained a loan from commercial bank in PRC for RMB 10,000,000 with maturity on April 14, 2012. The loan bears interest at 9.15% per annum. The loan is collateralized by the property and land use rights of a third party which is a supplier of the Company. The loan was used to finance the working capital.		1,545,212		-
	$	5,222,818	$	3,170,912

16. RELATED PARTY TRANSACTIONS

Loan from Related Party

The Company obtained a short-term loan from its manager and staff for $95,803 (RMB 620,000) during the first half of 2011. The loan has maturity on demand and interest rate is currently 20% per annum and used for temporary working capital. The loan was paid in full as of September 30, 2011.

~~Other~~Non-Controlling ~~Payable~~Equity –Interest of a Related Party in Subsidiary

~~Other~~In ~~payable~~connection ~~represented~~with ~~certain~~the ~~Company’s~~formation ~~expenses~~of ~~paid~~All-ready (see Note 1), as an accommodation to PRC law that requires that a limited liability company have at least two shareholders, Shenzhen ORB currently holds 85% of the equity ownership in All-ready and the remaining 15% equity ownership is held by the Company’s chief executive officer and director, ~~which~~Junning Ma. All-ready is currently negotiating with a non–affiliated third party to provide research and development and operational expertise to this new company and when such negotiations are completed a portion of the equity interest currently held by Mr. Ma will be ~~repaid~~conveyed to this third party and Mr. Ma will contribute his remaining interest to Shenzhen Orb. Mr. Ma’s equity interest in All-ready is reflected on the ~~director~~Company’s ~~upon~~Consolidated ~~demand~~Balance ~~and~~Sheet ~~without~~at September 30, 2011 as “Noncontrolling interest” in the amount of $23,604.

17. LONG TERM PAYABLE - SUBSIDY RECEIVED IN ADVANCE

The subsidy received in advance represents an interest free, long-term loan from the local government, in support of the Company’s technological innovation. As of ~~June~~September 30, 2011 and December 31, 2010, the long-term loan was $~~189~~192,~~289~~765 and $184,970 (RMB 1,225,000), respectively. The loan is not required to be repaid upon the passing of project inspection by government. The project is currently in the stage of technological innovation.

18. INCOME TAXES

There is no income tax for companies domiciled in the Cayman Islands and British Virgin Islands. Accordingly, the Company’s consolidated financial statements do not present any income tax provisions related to Cayman Islands and British Virgin Islands tax jurisdiction where the US parent company ORB and GPC are domiciled, respectively.

Shenzhen ORB is governed by the Income Tax Law of the PRC concerning private-run enterprises in special district. Prior to 2008, Shenzhen ORB was subject to tax at a statutory rate of 15% on income reported in the statutory financial statements after appropriated tax adjustments. According to the Income Tax Law that became effective January 1, 2008, for those enterprises to which the 15% tax rate was previously applicable, the applicable rates shall be gradually increased over a five-year period to reach the new statutory income tax rate of 25% as follows:

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

Year	Tax Rate
2007		15	%
2008		18	%
2009		20	%
2010		22	%
2011		24	%
2012		25	%

Liuzhou Rubber Sealing, Hongtu and ~~Hongtu~~All-ready are governed by the Income Tax Law of the PRC concerning private-run enterprises, and are subject to tax at a statutory rate of 25% for 2011 and 2010 on income reported in the statutory financial statements after appropriated tax adjustments.

The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the ~~six~~nine and three months ended ~~June~~September 30, 2011 and 2010:

	For the Six Months						For the Three Months
	For the Nine Months						For the Three Months
	2011			2010			2011			2010
U.S. statutory rates		34.0	%		34.0	%		34.0	%		34.0	%
Tax rate difference – current provision		(1.0.8	)%		(9.0	)%		1.64	%		(9.0	)%
Effective tax holiday		(0.34	)%		(3.0	)%		(10.14	)%		(3.0	)%
Bargain purchase gain		(2013.86	)%		-			~~(26.8~~-	)%		-
Other		-			(0.6	)%		(0.4	)%		-
Tax per financial statements		19.2	%		22.0	%		35.0	%		23.0	%
Tax per financial statements		11.9	%		21.4	%		7.3	%		22.0	%

Deferred tax assets at ~~June~~September 30, 2011 and December 31, 2010 consisted of the following:

Deferred tax assets arising from	2011		2010
Tax and book basis difference of fixed assets of Liuzhou Rubber Sealing due to the acquisition by ORB	$	87,~~153~~842	$	8,763
Less valuation allowance		-		-
Net deferred tax asset	$	87,~~153~~842	$	8,763

The provision for income tax for the ~~six~~nine and three months ended ~~June~~September 30, 2011 and 2010 consisted of the following:

	For the Six Months				For the Three Months
	For the Nine Months				For the Three Months
	2011		2010		2011		2010
Income tax expense - current	$	~~360~~610,~~071~~001	$	~~158~~259,~~177~~552	$	~~170~~248,~~679~~142	$	~~114~~101,~~585~~375
Income tax benefit - deferred		~~896~~1,353		-		461		-
Total income tax expenses	$	~~360~~608,~~967~~648	$	~~158~~259,~~177~~552	$	~~171~~247,~~140~~681	$	~~114~~101,~~585~~375

19. ACQUISITION OF LIUZHOU RUBBER SEALING AND HONGTU AND UNAUDITED PRO FORMA INFORMATION

On November 3, 2010, ORB completed the acquisition of 100% of the equity interest in Liuzhou Rubber Sealing. Pursuant to the terms of the stock purchase agreement among the parties, all of the issued and outstanding shares of Liuzhou Rubber Sealing were exchanged for 2.06 million ordinary shares of the Company. The fair value of the consideration transferred was valued at an amount of $1.072 per share, which was the Company’s 2010 earnings per share (excluding the net income of Liuzhou Rubber Sealing) multiplied by the average P/E ratio of 5 similar companies. For convenience of reporting the acquisition for accounting purposes, November 1, 2010 has been designated as the acquisition date. At the acquisition date, all contractual cash flows are expected to be collected.

The purchase price for Liuzhou Rubber Sealing was 2,060,000 shares of common stock equivalent to $2,207,453. The fair value of the assets acquired and liabilities assumed at acquisition date are used for the purpose of purchase price allocation. The excess of the fair value of the net assets acquired over the purchase price, or $172,518, was recorded as bargain purchase gain.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

On May 20, 2011, ORB completed the acquisition of 100% of the equity interest in Hongtu, a company registered in the People’s Republic of China, from Hongtu’s shareholders. The stock purchase agreement of this acquisition was entered on May 18, 2011. Pursuant to the terms of the stock purchase agreement, all of the issued and outstanding shares of Hongtu were exchanged for 3.7 million ordinary shares of the Company. The stock purchase agreement contained such representations, warranties, obligations and conditions as are customary for transactions of the type governed by such agreements.

The fair value of the stock price for the shares issued for Hongtu acquisition was determined based on the fair value of the stock issued in ORB’s equity financing completed on May 4, 2011; that is, the total financing amount less the fair value of the warrants issued to investors divided by total shares of ordinary stock issued during the equity financing, which was $01.8500 per share.

The purchase price for Hongtu was 3,700,000 shares of common stock equivalent to $3,~~130~~700,~~793~~000. The fair value of the assets acquired and liabilities assumed at the acquisition date are used for the purpose of purchase price allocation. The excess of the fair value of the net assets acquired over the purchase price, or $1,~~844~~275,~~730~~523, was recorded as bargain purchase gain.

The following unaudited pro forma consolidated results of operations for ORB, Liuzhou Rubber Sealing and Hongtu for the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010 presents the operations of ORB, Liuzhou Rubber Sealing and Hongtu as if the acquisitions occurred on January 1, 2010. The pro forma results are not necessarily indicative of the actual results that would have occurred had the acquisitions been completed as of the beginning of the period presented, nor are they necessarily indicative of future consolidated results.

	Six Months Ended
	Nine Months Ended
	2011		2010
Net revenue	$	2029,~~128~~938,~~362~~447	$	1023,~~223~~346,~~597~~783
Cost of revenue		1522,~~254~~887,~~828~~737		717,~~243~~163,~~857~~230
Gross profit		47,~~873~~050,~~534~~710		26,~~979~~183,~~740~~553
Total operating expenses		12,~~586~~617,~~300~~318		~~754~~1,~~684~~508,176
Income from operations		34,~~287~~433,~~234~~392		24,~~225~~675,~~056~~377
Total non-operating expense		1,341,838		(155,123	)
Total non-operating expense (income)		359,098		(473,020	)
Income before income tax		4,~~629~~792,~~072~~490		24,~~069~~202,~~933~~357
Income tax		~~763~~1,~~301~~010,982		~~417~~515,~~206~~177
Net income	$	3,~~865~~781,~~771~~508	$	13,~~652~~687,~~727~~180
Basic and diluted weighted average shares outstanding		21,~~230~~546,~~264~~059		9,~~136~~252,~~575~~529
Basic and diluted earnings per share	$	0.18	$	0.1840

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

20. SHAREHOLDER’S EQUITY

Common Stock with Warrants Issued for Cash

On May 4, 2011, the Company entered into one or more securities purchase agreements with a number of accredited investors in connection with a private placement transaction pursuant to which the Company issued 1,236,~~641~~461 shares of ordinary stock, par value $0.000384 per share, and warrants to purchase thirty percent (30%) of one (1) share of the ordinary stock. The aggregate purchase price for the shares and warrants was approximately $1.45 million ($1.17 per unit). The Company paid no underwriting discounts or commissions in connection with the transaction. The warrants are immediately exercisable, expire on the fifth year anniversary of their issuance and entitle their holders to purchase up to 370,938 ordinary shares at an initial exercise price of $1.47 per share.

~~The~~On August 31, 2011, the Company ~~agrees~~entered tointo ~~reserve~~one ~~from~~or ~~issuance~~more upsecurities topurchase ~~4,273,504~~agreements ~~Ordinary~~with ~~Shares~~a ~~(the~~number ~~“Make-Good~~of ~~Shares”)~~accredited investors in connection with a ~~fair~~private ~~value~~placement attransaction ~~June~~pursuant 30to which the Company issued 287,041 ~~2011~~shares of $3ordinary stock,~~632,477~~ par value $0. ~~The~~000384 ~~Make-Good~~per ~~Shares~~share, ~~shall~~and bewarrants ~~reserved~~to ~~for~~purchase ~~the~~thirty ~~benefit~~percent (30%) of one (1) share of the ~~Investors,~~ordinary ~~and~~stock. The ~~shall~~aggregate bepurchase ~~issued~~price tofor the ~~Investors~~shares inand ~~the~~warrants ~~event~~was ~~the~~approximately $335,873 ($1.17 per unit). The Company ~~fails~~paid tono ~~achieve~~underwriting ~~90%~~discounts ~~of either~~or ofcommissions in connection with the ~~following~~transaction. The ~~financial~~warrants ~~“Performance~~are ~~Thresholds”~~immediately ~~for~~exercisable, expire on the ~~12-month~~fifth ~~periods~~year ~~ending~~anniversary ~~December~~of ~~31,~~their ~~2011~~issuance and ~~December~~entitle 31their holders to purchase up to 86,112 ~~2012:~~ordinary shares at an initial exercise price of $1.47 per share.

The Company agrees to reserve from issuance up to 4,273,504 Ordinary Shares (the “Make-Good Shares”) with a fair value at September 30, 2011 of $4,273,504. The Make-Good Shares shall be reserved for the benefit of the Investors, and shall be issued to the Investors in the event the Company fails to achieve 90% of either of the following financial “Performance Thresholds” for the 12-month periods ending December 31, 2011 and December 31, 2012:

(1)

For 2011, audited net income under US GAAP, but increased by any cash or non-cash charges incurred as a result of the offering, including without limitation, as a result of the issuance, exercise or any anti-dilution adjustment, equals or exceeds Seven Million Dollars ($7,000,000 Performance Threshold);

(2)

For 2012, audited net income under US GAAP, but increased by any cash or non-cash charges incurred as a result of the offering, including without limitation, as a result of the issuance, exercise or any anti-dilution adjustment, equals or exceeds Ten Million Dollars ($10,000,000 Performance Threshold)

If the Company achieves less than 90% of the Performance Thresholds, then the number of the Make-Good Shares to be distributed to each investor shall be calculated as follows: number of shares purchased in the private placement multiplied by the lowest threshold, which is the percentage by which the Performance Threshold was not achieved.

As of ~~June~~September 30, 2011, the Company believes it is probable it will meet the Performance Threshold, and therefore no accrual is deemed necessary at this point.

The warrants issued to the investors for the private placement at May 4, 2011 are immediately exercisable and have a term of five years. The value of warrants was determined by using the Black-Scholes pricing model with the following assumptions: discount rate – 1.95%; dividend yield – 0%; expected volatility – ~~165~~73% based on the average volatility of three similar public companies and term of 5 years. The fair value of the Warrants was $~~403~~194,~~604~~688. The warrants issued to the investors for the private placement at August 31, 2011 are immediately exercisable and have a term of five years. The value of warrants was determined by using the Black-Scholes pricing model with the following assumptions: discount rate – 1.95%; dividend yield – 0%; expected volatility – 69% based on the average volatility of three similar public companies and term of 5 years. The fair value of the Warrants was $41,672.

Accordingly to FASB ASC 815-40-55, the warrants were classified as a liability on the balance sheet and adjusted to fair value at each reporting period as they have a ratchet provision for adjusting the strike price if equity is issued at a later date at a price below the strike price. The Company adjusted the derivative liability to $~~401~~226,~~506~~798 for warrants at ~~June~~September 30, 2011, and recognized a gain of $29,~~098~~562 and a loss of $3,718 on the change in fair value during the ~~six~~nine and three months ended ~~June~~September 30, 2011, respectively, which is reflected in general and administrative expense.

21. STATUTORY RESERVES

Pursuant to the corporate law of the PRC effective January 1, 2006, the Company’s operating subsidiary, Shenzhen ORB is now only required maintaining statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings.

Surplus reserve fund

The Company’s Chinese subsidiaries are required to transfer 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the registered capital. As of June 30, 2011 and December 31, 2010, the Company’s Chinese subsidiaries had statutory reserves of $828,102 and $339,560, respectively.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~THREE~~NINE AND ~~SIX~~THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(unaudited)

~~The~~Stock surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any. The fund may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their equity interest or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such capital issuance is not less than 25% of the registered capital.Options

On October 9, 2011, the Company granted an option to purchase 25,000 shares of the Company’s ordinary stock with exercise price of $1.00 per share to an independent contractor. The option vested and became exercisable at the same date of grant. The fair value of the option was calculated using the following assumptions: estimated life of five years, volatility of 72%, risk free interest rate of 1.95%, and dividend yield of 0%. The grant fair value of options was $15,526. The Company accrued $15,526 as compensation expense because the service was rendered and completed by the end of September 30, 2011.

21. STATUTORY RESERVES

Pursuant to the corporate law of the PRC effective January 1, 2006, the Company’s Chinese operating subsidiaries are now only required to maintain statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings.

Surplus reserve fund

The Company’s Chinese subsidiaries are now only required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital. The Company’s Chinese subsidiaries are not required to make appropriation to other reserve funds and do not have any intentions to make appropriations to any other reserve funds. There are no legal requirements in the PRC to fund these reserves by transfer of cash to restricted accounts, and the Company’s Chinese subsidiaries do not do so. As of September 30, 2011 and December 31, 2010, the Company’s Chinese subsidiaries had statutory reserves of $880,847 and $339,560, respectively.

The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Common welfare fund

Common welfare fund is a voluntary fund into which the Company’s Chinese subsidiaries can elect to transfer 5% to 10% of its net income. The Company’s Chinese subsidiaries did not make any contribution to this fund for the ~~six~~nine months ended ~~June~~September 3130, 2011 and 2010.

This fund can only be utilized on capital items for the collective benefit of the Company’s Chinese subsidiaries employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation.

22. COMMITMENTS

Rents

Shenzhen ORB, ~~and~~ Liuzhou Rubber Sealing and Hongtu entered into several cancellable and non-cancellable warehouse and office lease agreements with monthly payments that vary from $111 to $11,200 and the maturity date from January 31, 2011 to September 30, 2019. All non -cancellable operating leases expire within a one year period from the balance sheet date. Total rental expenses for the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010 were $~~186~~295,~~265~~462 and $2434,~~213~~878, respectively. Total rental expenses for the three months ended ~~June~~September 30, 2011 and 2010 were $93109,~~457~~197 and $1110,~~515~~665, respectively.

ORB AUTOMOTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(unaudited)

Consulting Service

On March 1, 2010, Shenzhen ORB entered into a consulting service agreement expiring on December 31, 2010 with a consulting company. In August 2010, this agreement was extended until December 31, 2011. During the quarter ended March 31, 2011, the agreement was cancelled and the prepayment of $146,421 (RMB 960,000) was refunded.

23. OPERATING RISKS

The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in the North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

The Company’s sales, purchase and expense transactions are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation in order to affect the remittance.

2124. SUBSEQUENT EVENTS

On July 12, 2011, following approval by the stockholders of the Company, the Company established the ORB Automotive Corporation 2011 Long-Term Incentive Plan (the “Plan”) to advance the interests of the Company and its members by providing incentives to certain eligible persons who contribute significantly to the strategic and long-term performance objectives and growth of the Company and any parent, subsidiary or affiliate of the Company. On October 9, 2011, under the terms of the Plan, the Company granted (i) an aggregate of 870,000 restricted ordinary shares to the directors of the Company with stock valued at $1.00 per share and (ii) an option to purchase 25,000 shares of ordinary stock with exercise price of $1.00 per share to an independent contractor (see Note 20).

The vesting term of the restricted shares granted is as follows: 33% of the total shares shall vest and become exercisable on February 1, 2012. An additional 33% of the total shares shall vest and become exercisable on February 1, 2013. The remaining 34% of the shares shall vest and become exercisable on February 1, 2014.

On November 9, 2011, the Company entered into one or more securities purchase agreements with a number of accredited investors in connection with a private placement transaction pursuant to which the Company issued 121,400 shares of ordinary stock, par value $0.000384 per share, and warrants to purchase thirty percent (30%) of one (1) share of the ordinary stock. The aggregate purchase price for the shares and warrants was approximately $142,038 ($1.17 per unit). The Company paid no underwriting discounts or commissions in connection with the transaction. The warrants are immediately exercisable, expire on the fifth year anniversary of their issuance and entitle their holders to purchase up to 36,420 ordinary shares at an initial exercise price of $1.47 per share. The fair value of the Warrants was $18,717.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the results of operations and financial condition of the Company should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with US GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, inventories, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including, but not limited to, those set forth under the sections entitled “Risk Factors” located in our Annual Report on Form 10-K, as filed with the SEC on April 15, 2011. We may use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

In this Quarterly Report on Form 10-Q, we will refer to ORB Automotive Corporation, a Cayman Islands exempted company, as "ORB," "Company," "we," "us," and "our."

COMPANY OVERVIEW

ORB, formerly known as Action Acquisition Corporation, was formed in the Cayman Islands on September 27, 2006. On September 10, 2010, ORB entered into and closed a share exchange agreement with Grand Power Capital, Inc., a privately held company formed under the laws of the British Virgin Islands (“GPC”). Pursuant to the share exchange agreement, ORB acquired all of the issued and outstanding capital stock of GPC in exchange for 10,129,725 ordinary shares and 98,885.37 preference shares of the Company. Prior to our acquisition of GPC, we were in the development stage and had not yet commenced business operations. We had no interest in any property.

GPC is a holding company, holding 100% of the issued and outstanding capital stock of Shenzhen ORB-Fortune New-Material Co., Ltd. (“Shenzhen ORB”). Shenzhen ORB provides bonding solutions for a wide range of industrial applications including, shipping, construction, and electronics, with a strong presence in the Chinese automotive sector. Shenzhen ORB is a market leader in the windshield adhesive business in Shenzhen, China.

The share exchange was accounted for as a "reverse acquisition," since the GPC shareholders own a majority of the outstanding shares of the Company's capital stock immediately following the transaction. GPC was deemed to be the acquiror in the reverse acquisition. As the Company, the legal acquiror, was a non-operating shell, the reverse acquisition was considered to be a capital transaction in substance rather than a business combination. Consequently, the assets and liabilities and the historical operations that are reflected in the financial statements prior to the share exchange are those of GPC and are recorded at the historical cost basis of GPC, and the consolidated financial statements after completion of the share exchange include the assets and liabilities of the Company and GPC, historical operations of GPC and operations of the Company from the closing date of the share exchange. Except as described in the previous paragraphs, no arrangements or understandings exist among present or former controlling shareholders with respect to the election of members of the Company's board of directors and, to our knowledge, no other arrangements exist that might result in a change of control of the Company. Further, as a result of the issuance of the shares of the Company capital stock pursuant to the share exchange, a change in control of the Company occurred on the date of the consummation of the transaction. The Company continues to be a "smaller reporting company" following the share exchange.

2223

On May 20, 2011, ORB completed the acquisition of 100% of the equity interest in Hebei Hongtu Auto Parts Co., Ltd,, a company registered in the PRC (“Hongtu”), from Hongtu’s shareholders. Pursuant to the terms of the stock purchase agreement among the parties, all of the issued and outstanding shares of Hongtu were exchanged for 3.7 million ordinary shares of the Company, valued at $3.13 million and Hongtu became a subsidiary of Shenzhen ORB. Hongtu’s results of operations from May 1, 2011 have been included in the consolidated statement of income; however, we are still in the process of legal title transfer with the local authority. Our equity interest in Hongtu is currently held in trust for the benefit of ORB until such time as the legal transfer of title is completed in China.

On September 30, 2011, Shenzhen ORB formed a new subsidiary, All-ready Auto Antifreeze Coolant Co., Ltd (“All-ready”), a company registered in Liuzhou, China. All-ready will be engaged in the production and sale of auto antifreeze coolant when it commences operations. The Company currently anticipates that All-ready will commence operations in December 2011. Shenzhen ORB currently holds 85% of the equity ownership in the business. The remaining 15% equity ownership is held by the Company’s chief executive officer and director, Junning Ma as an accommodation to PRC law that requires that a limited liability company have at least two shareholders. All-ready is currently negotiating with a non–affiliated third party to provide research and development and operational expertise to this new company and when such negotiations are completed a portion of the equity interest currently held by Mr. Ma will be conveyed to this third party and Mr. Ma will contribute his remaining interest to Shenzhen ORB.

CRITICAL ACCOUNTING POLICIES

In presenting our consolidated financial statements in conformity with US GAAP, we are required to make certain estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it will likely result in a material adverse impact to our consolidated results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time.

While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements, we believe the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

Basis of Presentation

The Company’s consolidated financial statements are prepared in accordance with US GAAP.

Use of Estimates

In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.

Accounts Receivable

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

Inventory

Inventory is valued at the lower of cost or net realizable value with cost determined on a weighted average basis. Management compares the cost of inventory with the net realizable value and an allowance is made for writing down its inventory to net realizable value, if lower.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred and additions, renewals and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets without salvage value and estimated lives ranging from 3 to 20 years as follows:

Computer and office equipment		5 to 10 years
Motor vehicle		5 years
Electric equipment		3 to 5 years
Plant and machinery		5 to 20 years

Revenue Recognition

The Company's revenue recognition policies are in compliance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. Sales revenue may be recognized when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, and no other significant obligations of the Company exist and collectability is reasonably assured. No revenue is recognized if there are significant uncertainties regarding the recovery of the consideration due, or the possible return of the goods. Generally, sales revenue is recognized when the delivery of goods is completed and accepted by customer. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue.

Sales revenue represents the invoiced value of goods, net of VAT. All Company products are sold in the PRC and subject to Chinese VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing the finished product. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the PRC government to collect this tax.

Cost of Goods Sold

Research and Development

Research and development costs are related primarily to the Company testing its new materials in the development stage. Research and development costs are expensed as incurred.

Foreign Currency Translation and Transactions and Comprehensive Income

The accompanying consolidated financial statements are presented in USD. GPC’s functional currency is USD; while Shenzhen ORB and Liuzhou Rubber Sealing’s functional currency is the RMB. The functional currencies of the Company’s foreign operations are translated into USD for balance sheet accounts using the current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using the average exchange rate during the fiscal year. The translation adjustments are recorded as a separate component of shareholders’ equity, captioned accumulated other comprehensive income. Gains and losses resulting from transactions denominated in foreign currencies are included in other income (expense) in the consolidated statements of operations. There have been no significant fluctuations in the exchange rate for the conversion of RMB to USD after the balance sheet date.

Segment Reporting

FASB ASC Topic 280, Segment Reporting, requires the use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

ASC Topic 820 has no effect on the Company’s financial statements as substantially all of the Company’s operations are conducted in one industry segment. The Company consists of one reportable business segment. All of the Company’s assets are located in the PRC and all of the Company’s revenue is generated in the PRC.

Recently Adopted Accounting Pronouncements

In December 2010, FASB issued ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this Update specify that if a public entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in this Update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company will adopt the disclosure requirements for any business combination in 2011.

In May 2011, FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (ASC Topic 820), to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements. The provisions of this new guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The guidance is not expected to have a material impact on our consolidated financial statements.

Three Months Ended ~~June~~September 30, 2011 Compared to the Three Months Ended ~~June~~September 30, 2010

The following table sets forth the results of our operations for the periods indicated as a percentage of net sales:

	2011						2010
	$			% of Sales			$		% of Sales
Net Revenue	$	79,~~839~~810,~~678~~085					$	1,~~438~~153,~~959~~249
Cost of Goods Sold		67,~~377~~632,~~293~~909			8178	%		~~764~~579,~~336~~610		5350	%
Gross Profit		12,~~462~~177,~~385~~176			1922	%		~~674~~573,~~623~~639		4750	%
Operating Expenses		~~745~~1,~~927~~049,637			1011	%		~~155~~134,~~200~~009		1112	%
Income from Operations		~~716~~1,~~458~~127,539			911	%		~~519~~439,~~423~~630		3638	%
Other Income (expenses), net		1(413,~~624,824~~533	)		21(4	)%		~~1,422~~209		0	%
Income tax expense		~~171~~247,~~140~~681			2	%		~~114~~101,~~585~~375		89	%
Net Income		2466,~~170,142~~325			285	%		~~406~~338,~~260~~464		2829	%

NET REVENUE

Net revenue for the three months ended June 30, 2011 was $7.84 million, as compared to net revenue of $1.44 million for the same period of 2010, an increase of $6.40 million, or approximately 445%. This growth in revenue was attributed primarily to the acquisition of Liuzhou Rubber Sealing in the fourth quarter of 2010 and the acquisition of Hongtu in the second quarter of 2011, which brought $6.63 million to total sales. Shenzhen ORB’s main product is sealant, for which sales decreased slightly by $0.22 million, or 16%, as compared to the same period of 2010. The decreased sales of Shenzhen ORB were mainly due to temporary decreased demand. However, sales of rubber sealing strips, the main product of our subsidiaries Liuzhou Rubber Sealing and Hongtu, resulted in an additional $2.87 million and $3.76 million in net revenue, respectively. Liuzhou Rubber Sealing is the exclusive supplier of rubber sealing strips for the primary car models that are built by our largest customer. Due to high overall inflation in China, Liuzhou Rubber Sealing has made a decision to raise the selling price of its rubber sealing strips by approximately 20%. This increase is to be retroactive with respect to our largest customer to the beginning of 2011. Liuzhou Rubber Sealing expects this increase to result in an increase of $0.64 million in revenue which will be recorded when the agreement is finalized, which is anticipated to be in the second half of 2011. The Company currently anticipates continued growth as a result of the recovery of the auto industry and other relevant industries.

NET REVENUE

Net revenue for the three months ended September 30, 2011 was $9.81 million, as compared to net revenue of $1.15 million for the same period of 2010, an increase of $8.66 million, or approximately 753%. This growth in revenue was attributed primarily to the acquisition of Liuzhou Rubber Sealing in the fourth quarter of 2010 and the acquisition of Hongtu in the second quarter of 2011, which brought $8.66 million to total sales. Shenzhen ORB’s main product is sealant, for which sales decreased slightly by $0.44 million, or 5.63%, as compared to the same period of 2010. The decreased sales of Shenzhen ORB were mainly due to temporary decreased demand. However, sales of rubber sealing strips, the main product of our subsidiaries Liuzhou Rubber Sealing and Hongtu, resulted in an additional $2.56 million and $6.10 million in net revenue, respectively. Liuzhou Rubber Sealing is the exclusive supplier of rubber sealing strips for the primary car models that are built by our largest customer. Due to high overall inflation in China, Liuzhou Rubber Sealing and Hongtu have made a decision to raise the selling price of their rubber sealing strips by approximately 20%. This increase is to be retroactive with respect to our largest customer to the beginning of 2011. Liuzhou Rubber Sealing recognized $0.63 million in revenue in the third quarter compensating for the first quarter sales from one customer and Hongtu recognized $0.78 million price adjustment from one major customer compensating for first quarter sales and $0.58 million price adjustments from another major customer compensating for the first seven months sales during the third quarter of 2011. Liuzhou Rubber Sealing and Hongtu are currently negotiating price adjustments for sales made in the second and third quarters of 2011 and expect to recognize $2.26 million in revenue in December of 2011 as a result of these negotiations. The Company anticipates continued growth as a result of increasing sales to its customers in the auto industry and other relevant industries.

COST OF GOODS SOLD

Cost of goods sold includes material costs, labor costs, and related overhead, which are directly attributable to the manufacture of our products. For the three months ended ~~June~~September 30, 2011, cost of goods sold amounted to $67.3863 million, an increase of $57.6105 million, or approximately ~~734~~1218%, as compared to the same period of 2010. The increase in the cost of goods sold was directly related to increase in production and sales volume in the three months ended ~~June~~September 30, 2011. Liuzhou Rubber Sealing and Hongtu brought an additional $21.8399 million and $25.9203 million of cost of goods sold, respectively, which ~~was~~were partially offset by a decreased cost of ~~good~~goods sold by Shenzhen ORB as a result of decreased sales volume. Cost of goods sold as a percentage of sales were approximately 81% for the three months ended June 30, 2011 and 53% for the same period of 2010. The increase in the cost of goods sold as a percentage of sales in the three months ended June 30, 2011 was mainly arising from the relatively higher costs from Liuzhou Rubber Sealing which was 99% and Hongtu which was 78% as a percentage of sales, respectively, while it was 52% for Shenzhen ORB. The significant increase in cost and cost as a percentage of sales were due to significant raw material price increases especially a 75% increase in our main raw material Ethylene-Propylene-Diene Monomer (“EPDM”). The Company’s percentage of cost of goods sold is expected to decrease due to the planned increase of selling price to the largest customer by Liuzhou Rubber Sealing. We continue to believe that our cost of goods sold will benefit from improved operating efficiencies.

Cost of goods sold as a percentage of sales was approximately 78% for the three months ended September 30, 2011 and 50% for the same period of 2010. The increase in the cost of goods sold as a percentage of sales in the three months ended September 30, 2011 was mainly attributable to the relatively higher costs from Liuzhou Rubber Sealing and Hongtu, which were 78% and 82%, respectively, compared to 54% for Shenzhen ORB. The significant increase in cost and cost as a percentage of sales were due to significant raw material price increases - especially a 75% increase in our main raw material Ethylene-Propylene-Diene Monomer (“EPDM”). The negative impact of this cost increase was largely offset by the additional revenues recognized during this quarter as a result of the price adjustments discussed above. The Company’s percentage of cost of goods sold is expected to decrease due to the planned increase of selling price to the largest customers of Liuzhou Rubber Sealing and Hongtu. We continue to believe that our cost of goods sold will benefit from improved operating efficiencies.

GROSS PROFIT

Gross profit for the three months ended ~~June~~September 30, 2011 was $12.4618 million, an increase of $01.7960 million, or approximately ~~117~~280%, as compared to the same period of 2010. Our gross profit margin was 1922% for the three months ended ~~June~~September 30, 2011 and 4750% for the 2010 period. The decrease in our gross profit margin was mainly due to the sales decrease of Shenzhen ORB which has a higher margin, and relatively higher production costs for Liuzhou Rubber Sealing and Hongtu.

OPERATING EXPENSES

Operating expenses ~~consisted~~consist of selling, general and administrative expenses, and research and development expenses, totaling $01.7505 million for the three months ended ~~June~~September 30, 2011, compared to $0.1613 million for the same period of 2010, an increase of $0.599 million, or ~~381~~692%. The increase in operating expenses was primarily due to increased selling expenses and general and administrative expenses ~~which~~resulting ~~resulted~~ from ~~acquisition~~the acquisitions of Liuzhou Rubber Sealing and Hongtu, which ~~brought~~contributed an additional $0.3151million ~~million~~in ~~additional~~ operating expenses ~~comparing~~period ~~with~~over ~~the same~~ period. Our acquisitions of ~~2010;~~Liuzhou Rubber Sealing and Hongtu resulted in an additional $0.24 million of auditing, accounting and legal expense, ~~from our acquisition of Liuzhou Rubber Sealing and Hongtu~~ as well as increased compliance costs as a U.S. public company for the three months ended September 30, ~~partially~~2011, ~~offset~~as bycompared with the ~~decreased~~corresponding ~~expense~~period ofin 2010, partially offset by Shenzhen ORB’s lower expenses due to decreased sales for the 2011 period.

NET INCOME

For the three months ended ~~June~~September 30, 2011, net income was $20.1746 million as compared to $0.4134 million for the same period of 2010, an increase of $10.7612 million, or approximately ~~434~~41%. This increase in net income was attributable to ~~the~~increased ~~$1.84~~income ~~million~~from ofour ~~bargain~~subsidiaries ~~purchase~~Liuzhou ~~gain~~Rubber ofSealing ~~acquisition~~and of Hongtu, ~~which was the excess~~ of $40.9715 million ofand ~~net assets over~~ $30.1339 million ~~of the purchase price on the acquisition date; the increased efficiency of our operations through economies of scale combined with increased revenue~~, ~~as well as the income from the newly acquired subsidiary Hongtu, which brought $0~~respectively.41 These ~~million~~results towere ~~net~~achieved ~~income,~~ despite ~~the~~ increased operating expenses in the ~~second~~third quarter of 2011 ~~and the net loss of Liuzhou Rubber Sealing, which has $0~~.~~14 million loss to net income.~~ Our management believes that net income will continue to increase as we continue to increase our sales, offer better quality products and control our manufacturing costs.

27Nine Months Ended September 30, 2011 Compared to the Nine Months Ended September 30, 2010

Six Months Ended June 30, 2011 Compared to the Six Months Ended June 30, 2010

The following table sets forth the results of our operations for the periods indicated as a percentage of net sales:

	2011					2010
	$		% of Sales			$		% of Sales
Net Revenue		1121,~~913~~724,~~987~~072					23,~~362~~515,~~028~~277
Cost of Goods Sold		916,~~196~~828,~~037~~946		77	%		1,~~322~~901,~~124~~734		5654	%
Gross Profit		24,~~717~~895,~~950~~126		23	%		1,~~039~~613,~~904~~543		4446	%
Operating Expenses		12,~~249~~288,~~651~~105		11	%		~~302~~436,~~220~~229		1312	%
Income from Operations		12,~~468~~607,~~299~~021		12	%		~~737~~1,~~684~~177,314		3134	%
Other Income (expenses), net		1568,~~551,435~~695		133	%		1,~~663~~872		0	%
Income tax expense		~~360~~608,~~967~~648		3	%		~~158~~259,~~177~~552		68	%
Net Income		2,~~658~~567,~~767~~068		2212	%		~~581~~919,~~170~~634		2526	%

NET REVENUE

Net revenue for the ~~six~~nine months ended ~~June~~September 30, 2011 was $1121.9172 million, as compared to net revenue of $23.3652 million for the same period of 2010, an increase of $918.5522 million, or approximately ~~405~~521%. This growth in revenue was attributed primarily to the acquisition of Liuzhou Rubber Sealing in the fourth quarter of 2010 and the acquisition of Hongtu in the second quarter of 2011. Shenzhen ORB’s main product is sealant, for which sales increased $0.2022 million, or 9%, as compared to the same period of 2010. In addition, sales of rubber sealing strips, the main product of Liuzhou Rubber Sealing and Hongtu, resulted in an additional $54.5990 million and $312.7672 million in net revenue, respectively. Liuzhou Rubber Sealing is the exclusive supplier of rubber sealing strips for the primary car models which are built by our largest customer. Due to high overall inflation in China, Liuzhou Rubber Sealing ~~has~~and Hongtu made the decision to raise the selling price of ~~its~~their rubber sealing strips by approximately 20%. This increase is to be retroactive with respect to our largest customer to the beginning of 2011. Liuzhou Rubber Sealing ~~expects~~recognized ~~this~~$0.63 ~~increase~~million toin ~~result~~revenue in anthe ~~increase~~third ofquarter compensating for the first quarter sales from one customer and Hongtu recognized $10.2778 million inprice ~~revenue~~adjustment ~~which~~from ~~will~~one bemajor ~~recorded~~customer ~~when~~compensating for first quarter sales and $0.58 million price adjustments from another major customer compensating for the ~~agreement~~first isseven ~~finalized,~~months ~~which~~sales isduring ~~anticipated~~the tothird bequarter of 2011. Liuzhou Rubber Sealing and Hongtu are currently negotiating price adjustments for sales made in the second ~~half~~and third quarters of 2011 and expect to recognize $2.26 million in revenue in December of 2011 as a result of these negotiations. The Company ~~currently~~ anticipates continued growth as a result of ~~the~~increasing ~~recovery~~sales ofto its customers in the auto industry and other relevant industries.

COST OF GOODS SOLD

Cost of goods sold includes material costs, labor costs, and related overhead, which are directly attributable to the manufacture of our products. For the ~~six~~nine months ended ~~June~~September 30, 2011, cost of goods sold amounted to $916.2083 million, an increase of $714.8893 million, or approximately ~~597~~786%, as compared to the same period of 2010. The increase in the cost of goods sold was directly related to increase in production and sales volume in the ~~six~~nine months ended ~~June~~September 30, 2011. Liuzhou Rubber Sealing and Hongtu ~~brought~~added ~~an additional~~ $46.9897 million and $27.9295 million ~~of cost of goods sold~~, respectively, ~~which was partially offset by $0.02 million which was due~~ to ~~the decrease in sales volume in~~ our ~~primer product line. Cost of goods sold as a percentage of sales were approximately 77% for the six months ended June 30, 2011 and 56% for the same period of 2010; The increase in the~~ cost of goods sold as a percentage of sales in the six months ended June 30, 2011 was mainly arising from the relatively higher cost from Liuzhou Rubber Sealing which was 89% and Hongtu which was 78% as a percentage of sales, while it was 49% for Shenzhen ORB. The percentage of cost of goods sold of the Company is expect to decrease due to the anticipated increase of selling price to the largest customer by Liuzhou Rubber Sealing. We believe that our cost of goods sold will continue to benefit from improved operating efficiencies.

Cost of goods sold as a percentage of sales was approximately 77% for the nine months ended September 30, 2011 and 54% for the same period of 2010. The increase in the cost of goods sold as a percentage of sales in the nine months ended September 30, 2011 was mainly due to the relatively higher cost from Liuzhou Rubber Sealing and Hongtu, which were 85% and 81%, respectively, while it was 52% for Shenzhen ORB. The significant increase in cost and cost as a percentage of sales were due to significant raw material price increases - especially a 75% increase in EP”). The negative impact of this cost increase was largely offset by the additional revenues recognized during this quarter as a result of the price adjustments discussed above. The Company’s percentage of cost of goods sold is expected to decrease due to the planned increase of selling price to the largest customers of Liuzhou Rubber Sealing and Hongtu. We continue to believe that our cost of goods sold will benefit from improved operating efficiencies.

GROSS PROFIT

Gross profit for the ~~six~~nine months ended ~~June~~September 30, 2011 was $24.7290 million, an increase of $13.6828 million, or approximately ~~161~~203%, as compared to the same period of 2010. Our gross profit margin was 23% for the ~~six~~nine months ended ~~June~~September 30, 2011 and 4446% for the 2010 period. The decrease in our gross profit margin was mainly due to the sales decrease ofby Shenzhen ORB which has a higher margin, and relatively higher production costs for Liuzhou Rubber Sealing and ~~newly acquired~~ Hongtu.

OPERATING EXPENSES

Operating expenses ~~consisted~~consist of selling, general and administrative expenses, and research and development expenses, totaling $12.2528 million for the ~~six~~nine months ended ~~June~~September 30, 2011, compared to $0.3044 million for the same period of 2010, an increase of $01.9584 million, or ~~313~~422%. The increase in operating expenses was primarily due to ~~increased~~an additional $1.05 million in selling expenses and general and administrative expenses ~~which~~resulting ~~resulted~~ from ~~acquisition~~the acquisitions of Liuzhou Rubber Sealing and Hongtu ~~which brought $0.54 million additional operating expenses comparing with the same period of 2010;~~ and $0.30 million of auditing, accounting and legal expense from our acquisition of Liuzhou Rubber Sealing and Hongtu as well as increased compliance costs as a U.S. public company.

NET INCOME

For the ~~six~~nine months ended ~~June~~September 30, 2011, net income was $2.6657 million as compared to $0.5892 million for the same period of 2010, an increase of $21.0865 million, or approximately ~~357~~179%. This increase in net income was attributable to ~~the~~(i) a $1.8428 million of bargain purchase gain ofrelated to the acquisition of Hongtu, which was the excess of $4.97 million of net assets over $3.1370 million of the purchase price on the acquisition date;, (ii) the increased efficiency of our operations through economies of scale combined with increased revenue, ~~as well as the newly acquired subsidiary Liuzhou Rubber Sealing~~ and ~~Hongtu,~~(iii) ~~which~~an ~~brought~~additional $0.0722 million and $0.4180 million toin net income contributed by Liuzhou Rubber Sealing and Hongtu, respectively,. These ~~but~~gains were partially offset by ~~the~~our increased operating expenses. Our management believes that net income will continue to increase as we continue to increase our sales, offer better quality products and control our manufacturing costs.

LIQUIDITY AND CAPITAL RESOURCES

As of ~~June~~September 30, 2011, the Company had cash and cash equivalents of $43.0200 million, other current assets of $1821.8478 million, and current liabilities of $15.1247 million. Working capital was $79.7432 million at ~~June~~September 30, 2011. The ratio of current assets to current liabilities was 1.5161-to-1 as of ~~June~~September 30, 2011.

The following is a summary of cash provided by or used in each of the indicated types of activities during the three months ended June 30, 2011 and 2010, respectively:

	2011		2010
Cash provided by (used in):
Operating Activities	$	1,716,373	$	(64,519	)
Investing Activities		777,786		(953	)
Financing Activities		600,791		(19,718	)

Net cash flow provided by operating activities was $1.72 million for the six months ended June 30, 2011, as compared to net cash flow used in operating activities of $0.06 million for the same period of 2010. The increase in net cash inflow during 2011 was mainly due to the decreased in prepayment, restrict cash as well as timely collection on accounts receivable, but partially offset by the increased bills receivable and inventory on hand which resulted from increased sales, and timely payment made for clearing our bills payable outstanding, despite we had an increase in net income.

Net cash flow provided by investing activities was $0.78 for the six months ended June 30, 2011, which contained $1.48 million cash acquired upon acquisition of Hongtu, $0.16 million for the purchase of fixed assets, $0.02 million for construction in progress and $0.52 million for prepayment for equipment purchase. While in the 2010 period, we had only $953 cash outflow for the purchase of fixed assets.

Net cash flow provided by financing activities was $0.60 million for the six months ended June 30, 2011, which contained proceeds of $1.45 million from equity financing, $1.64 million from short-term loans and $0.10 million of loan and advance from related parties. The cash inflow was partially offset by $2.59 million of the repayment to short term loan. While in the 2010 period, we had only $0.02 million due from related party.

The following is a summary of cash provided by or used in each of the indicated types of activities during the nine months ended September 30, 2011 and 2010, respectively:

	2011		2010
Cash provided by (used in):
Operating Activities	$	1,500,160	$	92,504
Investing Activities		489,768		(34,492	)
Financing Activities		63,009		0

Net cash flow provided by operating activities was $1.50 million for the nine months ended September 30, 2011, as compared to net cash flow provided by operating activities of $0.09 million for the same period of 2010. The increase in net cash inflow during 2011 was mainly due to (i) increased net income, (ii) decreases in prepayment, (iii) release of restrictions on our cash due to settlement of bills payable, and (iv) timely collection on accounts receivable, partially offset by increased bills receivable and inventory on hand which resulted from increased sales and timely payment made for clearing our bills payable outstanding.

Net cash flow used in investing activities was $0.49 for the nine months ended September 30, 2011, which contained $1.43 million for the purchase of fixed assets, $0.02 million for construction in progress and $0.54 million for prepayment for equipment purchase reduced by 1.48 million cash acquired upon acquisition of Hongtu. Our net cash flow for the purchase of fixed assets in the corresponding 2010 period was only $0.03 million.

Net cash flow provided by financing activities was $0.06 million for the nine months ended September 30, 2011, which contained proceeds of $1.78 million from equity financing, $2.14 million from short-term loans and $0.02 million of capital contribution from noncontrolling interest. The cash inflow was partially offset by $3.89 million related to the repayment of a short term loan. We had no net cash provided or used by financing activities during the corresponding 2010 period.

We believe that we have sufficient cash to continue our current business through 2011 due to expected increases in sale revenue and net income from operations through the acquisition of other adhesive sealant manufacturers. We expect to finance such expansion through bank loans, the issuance of debt or equity securities, or a combination thereof. Failure to obtain such financing could have a material adverse effect on our business expansion.

OFF-BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Our standard payment term for accounts receivable is 60 days. For the ~~six~~nine months ended ~~June~~September 30, 2011, we had accounts receivable turnover of 56.6303 on an annualized basis, with sales outstanding of 6460 days and inventory turnover of 4.1804 on an annualized basis. For the same period of 2010, we had accounts receivable turnover of 3.9189 on an annualized basis, with sales outstanding of 93 days and inventory turnover of 5.7036 on an annualized basis. The higher accounts receivable turnover and lower days outstanding in 2011 compared to 2010 is due to our rapid growth in sales in 2011 and quick collection on accounts receivable as a result of increased bills receivable collected from our clients in lieu of payment for accounts receivable, which resulted in lower accounts receivable but higher bills receivable outstanding at ~~June~~September 30, 2011. Bills receivable is the bank acceptance issued by the bank with payment guaranteed; we can either cash the bills receivable with the bank or transfer it to our vendors for payment of accounts payable. The inventory turnover rate was lower for the ~~six~~nine months ended ~~June~~September 30, 2011, compared to the turnover for the ~~six~~nine months ended ~~June~~September 30, 2010 as a result from the higher inventory level on hand in 2011.

CONTRACTUAL OBLIGATIONS

The Company was obligated for the following short-term loans at ~~June~~September 30, 2011 and December 31, 2010:

	2011		2010
From a commercial bank in the PRC for RMB 5,000,000, entered into on December 23, 2010 with maturity on December 20, 2011; RMB 3,000,000 entered into on June 30, 2010 and has been paid off; RMB 2,000,000 entered into on July 22, 2010 with maturity on July 10, 2011; another RMB 3,000,000 entered into on June 29, 2011 with maturity on June 15, 2012, which bear interest at 8.8% per annum. These loans are guaranteed by Liuzhou Credit Guarantee Co., Ltd, a company specifically providing the credit guarantees for Small and Medium-sized Enterprises. The loans were used to purchase raw materials.	$	1,545,213	$	1,509,958
From a commercial bank in the PRC for RMB 5,000,000, entered into on December 23, 2010 with maturity on December 20, 2011; RMB 3,000,000 entered into on June 30, 2010 and has been paid off; RMB 2,000,000 entered into on July 22, 2010 with maturity on July 10, 2011. This loan was paid in full at maturity; the Company entered into another loan of RMB 2,000,000 on July 19, 2011 with maturity on July 10, 2012, the interest rate is 9.18% per annum; another RMB 3,000,000 entered into on June 29, 2011 with maturity on June 15, 2012, which bear interest at 8.8% per annum. These loans are guaranteed by Liuzhou Credit Guarantee Co., Ltd, a company specifically providing the credit guarantees for Small and Medium-sized Enterprises. The loans were used to purchase raw materials.	$	1,573,589	$	1,509,958
On June 3, 2011, the Company obtained a loan from a commercial bank in PRC for RMB 5,000,000 with maturity on December 2, 2011. The interest rate is currently 6.435% per annum, which was 110% of the borrowing rate of The People’s Bank, and adjusted monthly. The loan was secured against accounts receivable of approximately RMB 6.3 million ($0.97 million). The loan was used for working capital.		772,606		-
On June 3, 2011, the Company obtained a loan from a commercial bank in PRC for RMB 5,000,000 with maturity on December 2, 2011. The interest rate is currently 6.435% per annum, which was 110% of the borrowing rate of The People’s Bank, and adjusted monthly. The loan was secured against accounts receivable of approximately RMB 6.3 million ($0.97 million). The loan was used for working capital and approximately RMB 1.3 million was repaid during the quarter ended September 30, 2011.		578,851		-
On June 24, 2010, the Company obtained a loan from an industrial and commercial bank in PRC for RMB 10,000,000 with maturity on June 24, 2011. The loan bears interest at 5.31% per annum. The loan is guaranteed by Guangxi Huibang Investment Guarantee Co., Ltd. The loan was used for working capital and paid in full upon maturity.		-		1,509,958
On December 16, 2010, the Company obtained a loan from a commercial bank in PRC for RMB 1,000,000 with maturity on June 14, 2011. The interest rate is currently 6.12% per annum, which was 120% of the borrowing rate of the People’s Bank, and adjusted quarterly. The loan is secured against a bill receivable of $179,685 (Note 4). The loan was used for working capital and paid in full upon maturity.		-		150,996
During first half of 2011, the Company obtained two loans from two unrelated persons in PRC for RMB 1,800,000. The loan has maturity on demand and interest rate is currently 20% per annum and used for temporary working capital.		278,138		-
On July 30, 2011, the Company obtained a loan from commercial bank in PRC for RMB 5,000,000 with maturity on July 29, 2012, the interest rate is currently standard rate plus 120% of the borrowing rate of the Peoples’ Bank per annum. The loan was used for working capital.		786,794		-
On October 8, 2010, the Company obtained a loan from commercial bank in PRC for RMB 7,000,000 with maturity on October 7, 2011. The loan bears interest at 6.372% per annum. The loan is collateralized by the property and land use rights of a third party who is a supplier of the Company. The loan was used to purchase raw materials.		1,081,649		-
On April 14, 2011, the Company obtained a loan from commercial bank in PRC for RMB 10,000,000 with maturity on April 14, 2012. The loan bears interest at 9.15% per annum. The loan is collateralized by the property and land use rights of a third party who is a supplier of the Company. The loan was used to finance the working capital.		1,573,589		-
On April 14, 2011, the Company obtained a loan from commercial bank in PRC for RMB 10,000,000 with maturity on April 14, 2012. The loan bears interest at 9.15% per annum. The loan is collateralized by the property and land use rights of a third party who is a supplier of the Company. The loan was used to finance the working capital.		1,545,212		-
	$	4,512,823	$	3,170,912
	$	5,222,818	$	3,170,912

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Not required.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of the design and operation of our 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")) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the Exchange Act. Disclosure controls and procedures are those controls and procedures designed to provide reasonable assurance that the information required to be disclosed in our Exchange Act filings is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and (2) accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our chief executive officer and chief financial officer concluded that as of ~~June~~September 30, 2011, our controls and procedures were not effective due to certain significant deficiencies (as defined in Public Company Accounting Oversight Board Standard No. 2) in our internal controls over financial reporting.

This is due to the fact that we lacks sufficient personnel with the appropriate level of knowledge, experience and training in the application of US ~~generally accepted accounting principals (“~~GAAP”) standards, especially related to complicated accounting issues. This could cause us to be unable to fully identify and resolve certain accounting and disclosure issues that could lead to a failure to maintain effective controls over preparation, review and approval of certain significant account reconciliation from Chinese GAAP to US GAAP and necessary journal entries. Our internal audit function is significantly deficient due to insufficient qualified resources and appropriate systems to perform such function. Therefore, the ability to prevent and control lapses and errors in our accounting function could not be rendered effectively.

Also, we are integrating the financial resources of several businesses in our new corporate structure. The relatively small number of professionals we employ in bookkeeping and accounting functions prevents us from appropriately segregating duties within our internal control systems. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews.

Based on the control deficiencies identified above, we intend to design and plan to implement, specific remediation initiatives which include:

Evaluating the roles of our existing accounting personnel in an effort to realign the reporting structure of our internal auditing staff in China that will test and monitor the implementation of our accounting and internal control procedures.

Engaging an outside, independent internal controls consultant to assist us in addressing the aforementioned deficiencies and generally provide guidance on proper US accounting practices.

Increasing our accounting and financing personnel resources, by retaining more US GAAP knowledgeable financial professionals.

These remedial measures may not be fully effectuated or may be insufficient to address the significant deficiencies we identified, and there can be no assurance that significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified or occur in the future. If additional significant deficiencies (or if material weaknesses) in our internal controls are discovered or occur in the future, among other similar or related effects: (i) we may fail to meet future reporting obligations on a timely basis, (ii) our consolidated financial statements may contain material misstatements, (iii) we may be required to restate prior period financial results, (iv) we may be subject to litigation and/or regulatory proceedings, and (v) our business and operating results may be harmed.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the second quarter of 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the third quarter of 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

~~Item1~~Item 1. Legal Proceedings

There have been no material changes from the disclosure provided in Part 1, Item 3 of our Annual Report on Form 10-K for the year ended December 31, 2010.

~~Item1A~~Item 1A. Risk Factors

Not required.

~~Item2~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

~~Item3~~Item 3. Defaults Upon Senior Securities

None.

~~Item4~~Item 4. (Removed and Reserved)

~~Item5~~Item 5. Other Information

None.

~~Item6~~Item 6. Exhibits

(a)

Exhibits

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

SIGNATURES

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

	ORB Automotive Corporation
August 22, 2011	By:	/s/ Junning Ma
November 17, 2011	By: /s/ Junning Ma
	Name: Junning Ma	~~Name: Junning Ma~~
	Title: President and Chief Executive Officer	~~Title: President and Chief Executive Officer~~

	ORB Automotive Corporation
August 22, 2011	By:	/s/ Guangning Xu
November 17, 2011	By: /s/ Guangning Xu
	Name: Guangning Xu	~~Name: Guangning Xu~~
	Title: Vice Chief Financial Officer	~~Title: Vice Chief Financial Officer~~

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