UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

~~[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15~~(dMark One) ~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2011 ~~2010~~

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________to _____________

~~For~~Commission ~~the~~File ~~transition~~No. ~~period~~000-53547 ~~from __________ to ____________~~

Commission File Number: 000-53547

CHINA GREEN ENERGY INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Nevada	26-1548693
(State or other jurisdiction of	(I.R.S. Employer Identification ~~Number~~No.)
incorporation or organization)

Jiangsu Wujin Lijia Industrial ~~ParkLijia~~Park Lijia Town ~~TownWujin~~Wujin District, Changzhou ~~CityJiangsu~~City Jiangsu Province ~~213176People~~213176 People’s Republic of China (Address of principal executive ~~office and~~ ~~zip code~~offices)

(86) 519-86230102
(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: ~~Common~~ Common Stock, par value $0.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [ X ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [ ] No [ X ]

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

Yes [ X ] No [ ]

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent~~has ~~filers~~submitted ~~pursuant~~electronically toand ~~Item~~posted ~~405~~on ofits ~~Regulation~~corporate ~~S-K~~Website, isif ~~not contained herein~~any, ~~and~~every ~~will~~Interactive Data ~~not~~File ~~be contained,~~required to ~~the~~be ~~best~~submitted ofand ~~registrant's~~posted ~~knowledge,~~pursuant into ~~definitive~~Rule ~~proxy~~405 orof Regulation ~~information~~S-T ~~statements~~during ~~incorporated~~the bypreceding ~~reference~~12 inmonths ~~Part~~(or ~~III~~for ofsuch ~~this~~shorter ~~Form~~period ~~10-K~~that the orregistrant ~~any~~was ~~amendment~~required to ~~this~~submit ~~Form~~and ~~10-K.~~post such files)

Yes [ X] No [ ]

Indicate by check mark ~~whether~~if ~~the~~disclosure ~~registrant~~of isdelinquent ~~a large~~filers ~~accelerated~~pursuant ~~filer,~~to anItem ~~accelerated~~405 ~~filer,~~of aRegulation ~~non~~S-~~accelerated~~K ~~filer~~is ornot acontained ~~smaller reporting~~herein, ~~company.~~and ~~See~~will not be contained, to the ~~definitions~~best of ~~“large~~registrant’s ~~accelerated filer”~~knowledge, ~~"accelerated~~ ~~filer”~~in ~~and~~definitive ~~“smaller~~proxy ~~reporting~~or information ~~company”~~statements incorporated by reference in ~~Rule~~Part ~~12b-2~~III of ~~the~~this Form 10-K ~~Exchange~~or ~~Act.~~any ~~(Check~~amendment ~~one):~~to this Form 10-K. [ ]

~~Large~~Indicate ~~accelerated~~by ~~filer~~check [mark ]whether ~~Accelerated~~the ~~filer~~registrant [is ]a ~~Non-~~large accelerated filer, [an ]accelerated ~~(Do~~filer, ~~not~~a ~~check~~non-accelerated iffiler, or a smaller reporting company). ~~Smaller~~See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” [in XRule ]12b-2 of the Exchange Act.

~~Indicate~~Large byAccelerated ~~check~~Filer ~~mark~~[ ~~whether~~] ~~the~~Accelerated ~~registrant~~Filer is[ a] ~~shell company~~Non-Accelerated Filer [ ] (asDo ~~defined~~not incheck ~~Rule~~if ~~12b-2~~a ofsmaller ~~the~~reporting ~~Act~~company). Smaller reporting company [X]

~~Yes~~Indicate ~~[ ] No~~by [check Xmark ]whether registrant is a shell company (as defined in Rule 12b-2 of the Act)

~~The~~Yes ~~issuer’s~~[ ] No ~~revenues~~[X] ~~for its most recent fiscal year ended December 31, 2010, were $28.6 million.~~

~~The~~As ~~aggregate~~of ~~market~~June ~~value~~30, 2011 (the last business day of the registrant’s ~~ordinary~~most ~~shares~~recently completed second fiscal quarter), ~~$0.001~~the ~~par~~aggregate market value ~~per~~of the ~~share~~shares ~~(“Shares”),~~ of the registrant’s common stock held by non-affiliates (based upon the closing bid price of such shares as reported on ~~June~~the ~~30,~~OTC ~~2010~~Bulletin Board) was approximately $0,4.3 asmillion. ~~there~~Shares ~~were~~of nothe ~~Shares~~registrant’s common stock held by each ~~non-affiliates~~executive onofficer ~~such~~and ~~date,~~director and each by each person who owns 10% or more of the outstanding common stock have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant’s. ~~Shares~~This determination ~~were~~of affiliate status is not ~~then~~necessarily ~~publicly~~a conclusive determination ~~traded~~for other purposes.

There were a total of 23,~~529~~625,~~411~~911 shares of the registrant’s common stock outstanding as of ~~March~~ 28April 16, ~~2011~~2012.

DOCUMENTS INCORPORATED BY REFERENCE:

None.

~~CHINA~~Annual ~~GREEN~~Report ~~ENERGY~~on ~~INDUSTRIES~~Form 10-K Year Ended December 31, ~~INC.~~2011

FORM 10-K

For the Fiscal Year Ended December 31, 2010

TABLE OF CONTENTS

Number		Page
PART I
Item 1.	Business.	52
Item 1A.	Risk Factors.	1317
Item 2.	Properties	25
Item 1B.	Unresolved Staff Comments.	29
Item 3.	Legal Proceedings	26
Item 2.	Properties.	29
Item 4.	(Removed and Reserved)	26
Item 3.	Legal Proceedings.	29
Item 4.	Mine Safety Disclosures.	29
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2630
Item 6.	Selected Financial Data	2631
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2631
Item 7A.	Quantitative and Qualitative Disclosures ~~about~~About Market Risk.	3339
Item 8.	Financial Statements and Supplementary Data.	3339
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	33
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	40
Item 9A	Controls and Procedures	34
Item 9A.	Controls and Procedures.	40
Item 9B	Other Information	35
Item 9B.	Other Information.	42
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	3542
Item 11.	Executive Compensation.	3746
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	3947
Item 13	Certain Relationships and Related Transactions, and Director Independence	40
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	48
Item 14.	Principal ~~Accountant~~Accounting Fees and Services	4149
PART IV
Item 15.	Exhibits, ~~and~~ Financial Statement Schedules.	4150

~~INTRODUCTORY~~Special ~~NOTE~~Note Regarding Forward Looking Statements

~~Forward~~In addition to historical information, this report contains forward-~~Looking~~looking ~~Statements~~statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” herein, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.

~~This~~Readers ~~report~~are ~~contains~~urged ~~information that~~to ~~may~~carefully ~~constitute~~review ~~"forward-looking~~and ~~statements."~~consider ~~Generally,~~ the ~~words~~various ~~"believe,"~~disclosures ~~"expect,"~~made ~~"intend,"~~by ~~"estimate,"~~us ~~"anticipate,"~~in ~~"project,"~~this ~~"will"~~report and ~~similar~~ ~~expressions~~our ~~identify~~other ~~forward-looking~~filings ~~statements,~~with ~~which~~the ~~generally~~SEC. ~~are not~~These ~~historical~~reports inattempt ~~nature.~~to ~~All~~advise ~~statements~~interested ~~that~~parties ~~address~~of ~~operating~~the ~~performance,~~risks ~~events or~~and ~~developments~~factors that ~~we expect or anticipate will occur in the future—including~~may ~~statements~~affect ~~relating~~our ~~to volume growth~~business, ~~share~~financial ofcondition ~~sales~~ and ~~earnings~~results ~~per~~of ~~share growth,~~operations and ~~statements expressing general views about future operating~~ ~~results—are forward-looking statements~~prospects. ~~Management~~The ~~believes that these~~ forward-looking statements ~~are reasonable as and when~~ made. ~~However,~~in ~~caution should~~this bereport ~~taken not to place undue reliance on any such forward-looking statements because such statements~~ speak only as of the date ~~when~~hereof ~~made.~~and ~~We undertake~~we nodisclaim ~~obligation to publicly update or revise~~ any ~~forward-looking statements~~obligation, ~~whether~~except as arequired ~~result~~by oflaw, ~~new~~to provide ~~information~~updates, ~~future~~revisions ~~events~~ or ~~otherwise, except~~amendments asto ~~required~~any ~~by law. In addition,~~ forward-looking statements ~~are subject~~ to ~~certain risks and uncertainties that could cause actual results to differ~~ ~~materially~~reflect ~~from~~changes ~~our~~in ~~historical experience and~~ our ~~present~~ expectations or ~~projections.~~ ~~These risks and uncertainties include, but are not limited to, those described in Part I, "Item 1A. Risk Factors" and elsewhere in this report and those described from time to time in our~~ future ~~reports filed with the Securities and Exchange Commission~~events.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:

“CGRE,” “the Company,” “we,” “us,” or “our,” ~~refer~~are to the combined business ~~business~~ of China Green Energy Industries, Inc., ~~and~~a Nevada corporation, its wholly-owned subsidiaries, Best Green BVI, and Best Green Changzhou, and ~~our~~its ~~controlled~~variable ~~VIEs~~interest entities, Best Cable and Best Appliances~~, but do not include the stockholders of China Green Energy Industries, Inc.~~;
“Best ~~Appliances~~Green BVI” ~~refer~~are to ~~Jiangsu~~ Best ~~Electrical~~Green ~~Appliances~~Energy ~~Co.,~~Industries ~~Ltd.~~Limited, a BVI ~~PRC~~ company;
“Best ~~Cable~~Green Changzhou” ~~refer~~are to ~~Changzhou City Wujin~~ Best ~~Electronic~~Green ~~Cables~~Energy (Changzhou) Co., Ltd., a PRC company;
“Best ~~Green BVI~~Cable” ~~refer~~are to ~~Best~~Changzhou ~~Green~~City ~~Energy~~Wujin ~~Industries~~Best ~~Limited,~~Electronic aCables ~~BVI~~Co., Ltd., a PRC company;
“Best ~~Green Changzhou~~Appliances” ~~refer~~are to Jiangsu Best ~~Green~~Electrical ~~Energy~~Appliances ~~(Changzhou)~~ Co., Ltd., a PRC company;
“~~Best Green Investments~~BVI” ~~refer~~are to ~~Best~~the ~~Green~~British ~~Investments~~Virgin ~~Limited, a BVI company~~Islands;
“~~BVI~~PRC” ~~refer~~and “China” are to the ~~British~~People’s ~~Virgin~~Republic ~~Islands~~of China, excluding Hong Kong, Macau and Taiwan;
“~~China,~~SEC” ~~“Chinese”~~are ~~and “PRC” refer~~ to the ~~People’s~~Securities ~~Republic~~and ofExchange ~~China~~Commission;
“~~Exchange~~Securities Act” ~~refer~~are to the Securities ~~Exchange~~ Act of ~~1934~~1933, as amended;
“~~RMB~~Exchange Act” ~~refer~~are to ~~Renminbi,~~ the ~~legal~~Securities ~~currency~~Exchange Act of ~~China~~1934, as amended;
“~~Securities~~Renminbi” ~~Act~~and “RMB” ~~refer~~are to the ~~Securities~~legal ~~Act~~currency of ~~1933, as amended~~China; and
“U.S. ~~dollar~~dollars,” “$dollars” and “US$” ~~refer~~are to the legal currency of the United States;. ~~and~~

~~“VIE”~~1 ~~refer to our variable interest entities, which are affiliated companies that we control through contractual arrangements and include Best Appliances and Best Cable.~~

PART I

~~Item~~ITEM 1 . ~~Business~~BUSINESS.

Overview of Our Business

We manufacture and distribute ~~various~~ clean technology-based consumer products., Weincluding ~~also~~light ~~manufacture~~electric ~~and~~vehicles, ~~distribute network~~or LEVs, and ~~HDMI cable~~cryogen-free refrigerators. We ~~offer~~also amanufacture ~~wide~~and ~~range~~distribute ofnetwork ~~products,~~and ~~including light~~High-Definition ~~electric~~Multimedia ~~vehicles~~Interface, or ~~LEVs~~HDMI, ~~and cryogen-free refrigerators~~cables. We sell some of our products under our own brand name of “BEST” and the balance of our products as an original equipment manufacturer, or OEM, for other companies, who are our customers. On January 25, 2011, we acquired the “NICONIA LEV” brand name and retail sales network, which we believe will compliment our line of LEVs.

~~As of December 31, 2010, we had 526 employees.~~ Our corporate headquarters and manufacturing base are located in in Changzhou, China, where we own an aggregate of approximately 46,800 square meters of manufacturing facilities and office space. We own the right to use a total of 49,900 square meters of land in ~~Changzhou, Jiangsu Province,~~ China. ~~We believe that our existing and planned facilities are adequate for our requirements for the foreseeable future.~~ Our annual manufacturing capacity for our LEVs, Cryogen-free refrigerators and sets of network and HDMI ~~cables~~ cables (combined) is 2035,000 units, 115,000 units and 25 million sets, respectively.

Our principal executive offices are located at Jiangsu Wujin Lijia Industrial Park, Lijia Town, Wujin District, Changzhou City, Jiangsu Province 213176, People’s Republic of China. Our telephone number at that address is (86)519-86230103. We maintain a website at www.chinagei.com that contains information about our company, but that information is not part of this report.

Our Organizational Structure

We are a Nevada holding company for certain direct and indirect subsidiaries in the BVI and China. We own all of the issued and outstanding capital stock of Best Green BVI, a BVI ~~corporation~~company. Best Green BVI is a holding company that owns ~~100%~~all of the outstanding capital stock of Best Green Changzhou, a PRC company.

Our principal manufacturing operations and sales and marketing activities in China are conducted through our variable interest entities, or VIEs, Best Cable and Best Appliances which we view and operate as our subsidiaries. We control the VIEs through a series of contractual arrangements. These contracts include an Exclusive Technical Services and Business Consulting Agreement, or the Consulting Agreement, a Business Operation Agreement, an Equity Interest Pledge, and a Proxy Agreement. These agreements are among our indirect, wholly-owned subsidiary, Best Green Changzhou, and each of our VIEs. These contractual arrangements are described below.

Consulting Agreement. Under the Consulting Agreement, Best Green Changzhou provides exclusive technical, business and management consulting services to the VIEs in exchange for service fees equal to 100% of the VIE’s total annual net profits.
Business Operation Agreement. The Business Operation Agreement imposes restrictions on the operations of the VIEs. Under the Business Operation Agreement, the VIEs are prohibited from engaging in any transaction which may materially affect ~~its~~their assets, obligations, rights or business operation without prior consent from us. The VIEs are also required to accept policies and suggestions provided by us from time to time with respect to employment or dismissal of employees, corporate management and financial management systems. The VIEs are also required to appoint the directors and members of senior management that we designate.
Equity Interest Pledge Agreement. The shareholders of the VIEs, Mr. Jianliang Shi and Ms. Xueqin Wang, ~~or the VIE Shareholders,~~ have pledged their entire equity interest in the VIEs to Best Green Changzhou pursuant to the Equity Interest Pledge Agreement. The equity interests are pledged as collateral security for the obligations of the VIEs under the Consulting Agreement and the Business Operation Agreement.
Proxy Agreement. The proxy agreement among Best Green Changzhou and ~~the~~Mr. ~~VIE~~Shi ~~Shareholders~~and ~~requires~~Ms. ~~the~~Wang ~~VIE~~requires ~~Shareholders~~that tothey vote all of the equity interests in the VIEs, at any shareholders meeting or other time when ~~when~~ shareholders of the VIEs vote, in accordance with our instructions.

As2 a result of these contractual agreements, Best Cable and Best Appliances became our variable interest entities. A variable interest represents a contractual or ownership interest in another entity that causes the holder to absorb the changes in fair value of the other entity’s net assets. Potential variable interests include: holding economic interests, voting rights, or obligations to an entity; issuing guarantees on behalf of an entity; transferring assets to an entity; managing the assets of an entity; leasing assets from an entity; and providing financing to an entity. In such cases consolidation of the VIE is required by the enterprise that controls the economic risks and rewards of the entity, regardless of ownership.

As a result of these contractual agreements, Best Cable and Best Appliances became our VIEs. A variable interest represents a contractual or ownership interest in another entity that causes the holder to absorb the changes in fair value of the other entity’s net assets. Potential variable interests include: holding economic interests, voting rights, or obligations to an entity; issuing guarantees on behalf of an entity; transferring assets to an entity; managing the assets of an entity; leasing assets from an entity; and providing financing to an entity. In such cases consolidation of the VIE is required by the enterprise that controls the economic risks and rewards of the entity, regardless of ownership.

The following chart reflects our organizational structure as of the date of this report.

*Contractual agreements consisting of an exclusive technical and consulting service agreement, an equity interest pledge agreement, business operation agreement and proxy agreement.

Our Corporate History

~~Background~~We ~~and~~were ~~History~~incorporated under the laws of the state of Nevada on December 7, 2007 under the name “TradeOn, Inc.” We were planning to develop and commercialize a mobile price comparison service for use by the general public. However, our business never materialized and we became inactive until we acquired Best Green BVI.

WeOn ~~were~~June a9, ~~development~~2010, ~~stage~~we ~~company~~completed ~~that~~a ~~was~~reverse ~~incorporated~~acquisition ~~under~~transaction ~~the~~with ~~laws~~Best ofGreen ~~the~~BVI, ~~state~~whereby ofwe ~~Nevada~~acquired onall ~~December~~of 7,the ~~2007.~~issued Weand ~~were~~outstanding ~~planning~~capital tostock ~~develop~~of ~~and~~Best ~~commercialize~~Green aBVI ~~mobile~~in ~~price~~exchange ~~comparison service~~ for ~~use~~20,734,531 byshares ~~the~~of ~~general~~our ~~public.~~common ~~Our~~stock, ~~service~~which, ~~would~~after giving ~~have~~effect ~~enabled consumers while out shopping in a store~~ to ~~compare~~the orcancellation ~~look~~of up4,000,000 ~~prices~~shares of aour ~~certain~~common ~~product~~stock by ~~sending~~Mr. aHaifeng ~~text~~Lu ~~message~~in ~~from~~connection ~~their~~with ~~cell~~the ~~phone~~reverse toacquisition, ~~our~~constituted ~~TradeOnSMS system~~88.1% ~~Our~~of ~~planned~~our ~~system~~issued ~~would~~and ~~have~~outstanding ~~accepted~~capital ~~text~~stock ~~messages~~on ~~from~~a ~~mobile~~fully-diluted ~~phones containing~~basis ~~the~~as ~~name~~of orand ~~part~~immediately ~~number~~after the consummation of athe ~~certain~~reverse ~~product~~acquisition. ~~Once~~Best ~~the~~Green ~~text~~BVI ~~message~~thereby ~~was~~became ~~received,~~our ~~TradeOnSMS~~wholly ~~would~~owned ~~search~~subsidiary ~~the~~and ~~Internet~~Best ~~for~~Green ~~the~~Investments ~~best~~Limited, ~~price~~the ~~and~~sole ~~retailer~~shareholder ~~and~~of ~~send~~Best ~~back~~Green aBVI, ~~text~~became ~~message~~our tocontrolling ~~the~~stockholder. ~~mobile~~For ~~phone~~accounting ~~with~~purposes, the ~~results. Our business never~~share ~~materialized~~exchange ~~and~~transaction wewas ~~became~~treated ~~inactive~~as ~~until~~a wereverse ~~acquired~~acquisition with Best Green BVI onas ~~June~~the 9,acquirer ~~2010~~and the Company as the acquired party.

~~Background~~At the time of the reverse acquisition, the sole owner of Best Green Investments Limited was Marsel Gilyazov. Prior to the reverse acquisition, on April 24, 2010, Marsel Gilyazov, entered into an option agreement with our Chairman and ~~History~~CEO, Mr. Jianliang Shi, and his wife, Ms. Xueqin Wang, pursuant to which they were granted options to purchase 51% and 49%, respectively, of the equity interests of Best Green ~~BVI~~Investments Limited. On October 20, 2010, Mr. Shi and ~~VIE~~Ms. Wang exercised their options, and as a result, they now own all of the equity interests of Best Green Investments Limited.

As a result of the reverse acquisition of Best Green BVI, our business became the business of Best Green BVI and its subsidiaries and VIEs. Best Green BVI was incorporated in the ~~British~~BVI ~~Virgin Islands~~ on March 31, 2010. Best Green BVI is a holding company that has no operations or assets other than its ownership of all of the capital stock of Best Green Changzhou. Best Green Changzhou was incorporated in the PRC on May 6, 2010. Best Cable was incorporated in the PRC on May 25, 1993 and Best Appliances was incorporated in the PRC on August 21, 2001. All of our manufacturing operations are conducted through Best Appliances and Best Cable through the contractual arrangements described above.

~~Acquisition~~3 ~~of Best Green BVI~~

On ~~June~~September 91, 2010, we ~~entered~~changed ~~into~~our aname ~~share~~from ~~exchange agreement~~“TradeOn, ~~or the Share Exchange Agreement, with Best Green BVI, and Best Green Investments, the sole shareholder of Best Green BVI~~Inc.” ~~Pursuant~~ to ~~the~~“China ~~Share Exchange Agreement, on June 9, 2010, Best~~ Green ~~Investments~~Energy ~~transferred all of the shares of the capital stock of Best Green BVI in exchange for 20~~Industries,~~734,531~~ ~~newly~~Inc.” ~~issued shares of our common stock, which, after giving effect~~ to ~~the~~reflect ~~Cancellation Agreement disclosed below, constituted 88.1% of~~ our ~~issued~~new ~~and~~business ~~outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement~~operations.

As a condition precedent to the consummation of the Share Exchange Agreement, on June 9, 2010 we entered into a cancellation agreement, or the Cancellation Agreement, with Mr. Haifeng Lu, whereby Mr. Lu agreed to the cancellation of 4,000,000 shares of our common stock owned by him of the then 6,794,384 shares outstanding.

On April 24, 2010, Marsel Gilyazov, the sole director and owner of Best Green Investments entered into an option agreement with our Chairman and CEO Mr. Jianliang Shi and his wife Xueqin Wang, pursuant to which they were granted options to purchase 51% and 49%, respectively, of the equity interest of Best Green Investments. The options were exercisable sixty (60) days after the date on which a disclosure statement on Form 8-K is filed in respect of the share exchange transaction (the “Share Exchange”), and ending on the fifth annual anniversary of that date. On October 20, 2010, Mr. Shi and Ms. Wang exercised their options to purchase the equity interest of Best Green Investments. As a result, Mr. Shi and Ms. Wang own an aggregate of 20,734,531 shares, or 88.1%, of the total outstanding shares of the Company’s capital stock and 88.1% total voting power of all of the Company’s outstanding voting securities.

Upon the closing of the reverse acquisition, Mr. Amit Sachs and Mr. Haifeng Lu, our directors and officers, submitted resignation letters pursuant to which they resigned from all offices that they held effective immediately and from their position as our directors that will become effective on the tenth day following the mailing by us of an information statement, or the Information Statement, to our stockholders that complies with the requirements of Section 14f-1 of the Exchange Act, which was mailed out on June 30, 2010. Jianliang Shi was appointed as our Chairman of the Board of Directors and Chief Executive Officer and Zhengxing Shangguan was appointed as our director effective upon the closing of the reverse acquisition. In addition, our executive officers were replaced by the Best Green BVI’s executive officers upon the closing of the reverse acquisition as indicated in more detail below.

For accounting purposes, the share exchange transaction was treated as a reverse acquisition with Best Green BVI as the acquirer and TradeOn, Inc. as the acquired party. When we refer in this report to business and financial information for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial information of Best Green BVI on a consolidated basis unless the context suggests otherwise.

On September 1, 2010, we amended our certificate of incorporation to change our name from “TradeOn, Inc.” to “China Green Energy Industries, Inc.” to reflect the current business of our company, which changed as a result of our acquisition of Best Green BVI.

Corporate Information

Our principal executive offices are located at Jiangsu Wujin Lijia Industrial Park, Lijia Town, Wujin District, Changzhou City, Jiangsu Province 213176, People’s Republic of China. And our telephone number at that address is (86)519-86230103. Our principal website is located at http://www.chinagei.com. The information on our website is not part of this report.

Our Industry

Light WeElectric ~~manufacture~~Vehicles and distribute clean technology-based consumer products. We also manufacture and distribute network and HDMI cable. Our products consist of light electric vehicles, or LEVs, and cryogen-free refrigerators. We manufacture several different varieties of LEVs and cryogen-free refrigerators. We sell some of our products under our own brand name of “BEST” and the balance of our products as an original equipment manufacturer, or OEM, for other companies, who are our customers.

~~Light~~Compared ~~Electric~~to ~~Vehicle~~motorbikes, LEVs enjoy the following advantages: less fossil fuel consumption, cheaper in price, more convenient to park inside cities, and less air and noise pollution. We believe many consumers are increasingly willing to consider purchasing LEVs due to environmental, economic, and convenience reasons. As a result, we believe the market for LEVs is poised for significant growth as consumers continue to shift their preferences strongly toward more energy efficient and lower emission vehicles. As Europe and the United States have started to provide government aid for LEV purchases, we believe that sales of LEVs in Europe, especially in the Netherlands and United Kingdom, and the United States will increase.

Compared to motorbikes, LEVs enjoy the following advantages: less fossil fuel consumption, cheaper in price, more convenient to park inside cities, and less air and noise pollution. We believe many consumers are increasingly willing to consider purchasing LEVs due to environmental, economic, and convenience reasons. As a result, we believe the market for LEVs is poised for significant growth as consumers continue to shift their preferences strongly toward more energy efficient and lower emission vehicles.

According to the China Electronic Components Association after the 2009 Cleantech Forum in Copenhagen, the global demand for LEVs is predicted to grow 7 to 10% annually. As Europe and the United States have started to provide government aid for LEV purchases, we believe that sales of LEVs in Europe, especially in the Netherlands and United Kingdom, and the United States will increase.

Electric Vehicle Incentives in the United States

A number of states and municipalities in the United States, as well as certain private enterprises, have adopted incentive programs such as tax exemptions, tax credits, and other special privileges to encourage the use of alternative fuel vehicles. For example, New Jersey and Washington exempt the purchase of electric vehicles from state sales tax. Other states, including Colorado, Oregon, Georgia and Oklahoma, provide for substantial state tax credits for the purchase of electric vehicles. In California, several utilities offer reduced electricity rates for the purpose of recharging electric vehicles. As of December 1, 2009, the Sacramento Municipal Utility District, for example, offered an off-peak discount of approximately 50% off of the regular residential electricity rate for electricity used to charge electric vehicles. Similar programs exist with Southern California Edison and other utility companies. Municipalities in California also offer parking incentives for electric vehicles which include free or reduced fee parking in major metropolitan areas.

Electric Vehicle Incentives in Europe

We believe Europe has a regulatory environment that is generally very conducive to the development, production and sale of small, alternative energy vehicles. Through emission legislation, tax incentives and direct subsidies, the European Union is taking a progressive stance in reducing carbon emissions and increasing demand for electric vehicles.

In addition to a favorable regulatory environment, European countries have announced attractive combinations of subsidies and tax incentives. For example, the United Kingdom has announced a plan for up to £5,000 in support of electric vehicles and France has proposed €5,000 in direct subsidies for electric vehicle purchases through 2012. Additionally, a number of European countries are shifting their registration tax regime to a carbon dioxide-based system which typically reduces or eliminates annual registration taxes for electric vehicles due to their zero emissions profile. Certain European countries such as Norway have also adopted significant tax incentives for individuals to purchase electric vehicles.

China’s LEV Market

The Chinese market for LEVs is very large and has been growing rapidly. According to the China Electronic Components Association, 2129.57 million LEVs were sold in China in ~~2008,~~2011 ~~representing~~with ~~growth~~2004 ofto ~~26.5%~~2011 ~~over~~CAGR ~~2007.~~of ~~And in 2009, 24~~23%.5 ~~million LEVs were sold in China.~~ The following chart shows the historical and expected growth of LEV sales in China:

Source: China Electronic Components Association

Small Home ~~Appliance~~Appliances

We currently produce and sell cryogen-free refrigerators, which are classified as small home appliances. ~~Current international and domestic market highlights for small home appliances are described below:~~

1.	Global sales of small home appliances grew from $77.94 billion in 2007 to $85.91 billion in 2008, of which China accounted for approximately 17%, or $13.3 billion, in 2007 and 18%, or $15.7 billion, in 2008. (Source: CCID Consulting, 2007, 2008 and 2008. 2009 Annual Report of China’s Small Electrical Appliance Industry)
2.	China is the leading manufacturer of small home appliances producing 1.44 billion units in 2007 and 1.63 billion units in 2008, of which exports accounted for 74.3%; (Source: CCID Consulting, 2008, 2009 Annual Report of China’s Small Electrical Appliance Industry)

According to CCID Consulting, the CAGR of small home appliance sales in China was 15% during the period from 2003 to 2011. The following chart shows the growth of small home appliance sales in China:

In the US, the top five firms control over 90% of the market while in Europe the top five firms have approximately 60% market share. Top European market participants include Electrolux, Bosch, Black & Decker, Phillips, and Miele; (Source: ~~Assembly~~ ~~Magazine,~~CCID ~~“Appliance Assembly: Environmental Restrictions Dictate European Designs” by Austin Weber~~Consulting, ~~May~~company 1,estimates ~~2005)~~

~~According~~Cables toand ~~CCID~~Wires Consulting, the compound aggregate growth rate, or CAGR of small home appliance sales in China was 15% during the period from 2003 to 2008. The following chart shows the growth of small home appliance sales in China:

Source: CCID Consulting, 2008-2009 Annual Report of Chinese Small Home Appliance Industry

Cable and Wire

General Cable and Wire Market

China’s cable and wire industry has surpassed the United States to become the largest cable and wire producer in the world. ~~According to the Shanghai Cable & Wire Research Institute, the sale of cable and wire in China was $59 billion in 2006. (Source: Zhongli Sci-Tech Group IPO Prospectus, August 13, 2009.)~~ In China, the cable & wire industry is expected to grow at a level comparable to that of the national economy, which is ~~projected~~estimated to be 7% to 8%. ~~(Source: http://www.chinawirecable.com)~~

~~U.S. demand for insulated wire and cable is expected to grow 4.3% annually to $21.~~5 billion in 2010 (Source: US industry forecasts to 2010 & 2015 Insulated Wire & Cable), a rebound from the declines early in the decade, according to Zuosi Research. An improved capital investment climate, as well as rising motor vehicle production levels and strong growth in nonresidential construction expenditures, will provide opportunities for wire and cable suppliers. Product innovations will also help to boost demand, although pricing competition in the industry will remain intense.

HDMI Cable Market

~~According~~We toexpect awith ~~newly~~the ~~released~~growth ~~market~~of ~~research~~HDTV ~~report~~and ~~from~~related ~~Information~~video ~~Gatekeepers~~equipment ~~Inc. (IGI)~~market, onthe ~~Active~~growth ~~Optical~~of ~~Cables (AOC), the~~ HDMI~~-based~~ ~~Active~~cable ~~Optical Cable~~ market will ~~grow~~continue ~~from $140 million~~ in ~~2009 to over $1~~2012.7 ~~billion~~The bylarger ~~2011, representing~~HDTV aninstalled ~~astounding~~base ~~CAGR~~and ofproduction ~~250%. During this period, early OEM providers will enjoy excellent average selling prices (ASPs) compared with the cost~~ of ~~building~~HDMI ~~these cables~~V1. ~~The~~4 ~~AOC~~devices ~~Market Report 2009 forecasts that the materials costs for HDMI-based active cables~~ will ~~also~~continue ~~decline, allowing cable providers~~ to ~~realize~~drive ~~excellent~~demand ~~product~~for ~~margins~~lower-speed ~~even~~10 Gigabit/s asHDMI ~~they grow their sales volumes~~models.

~~IGI~~Our ~~expects~~Competitive to see an early entrance of 20 Gigabit/s HDMI 2.0 in 2010, with higher average selling prices driving their revenue picture. Pressure from competing bus interfaces such as Display Port and Light Speed are anticipated to accelerate this high-speed transition late in 2010. The larger HDTV installed base and production of HDMI V1.4 devices will continue to drive demand for lower-speed 10 Gigabit/s HDMI models for quite some time. In 2014, even the relatively modest 32% share for 10 Gigabit/s HDMI AOC is expected to produce around $370 million in revenue. Strength

~~Quality~~We ~~Assurance~~believe that the following competitive strengths will sustain our rapid growth and ~~Quality~~enable ~~Control~~ us to continue to compete effectively:

We ~~closely~~provide ~~monitor~~high ~~and~~quality ~~test~~products ~~the~~with ~~quality~~international ofsafety ~~our products~~certifications. We have ~~established~~obtained ~~inspection~~ISO9001 ~~points~~and atISO14001 ~~key~~certifications ~~production~~for ~~stages~~our toproduction ~~identify~~processes, ~~product~~and ~~defects~~we ~~during~~also ~~the~~have ~~production~~obtained ~~process,~~various ~~and~~other ~~our~~safety ~~finished~~certifications, ~~products~~such ~~are~~as ~~inspected~~UL, TÜV and ~~tested~~ETL ~~according~~for ~~to standardized~~our ~~procedures~~products. WeSee ~~provide~~“Quality ~~regular~~Assurance ~~training~~ and ~~specific~~Quality ~~guidelines~~Control” tobelow ~~our~~for ~~operators~~a tomore ~~ensure~~detailed ~~that~~explanation of our ~~internal~~quality ~~production~~control ~~processes~~measures. ~~meet~~These ~~quality~~certifications ~~standards.~~enable Weus ~~have~~to ~~passed~~sell ~~quality~~to ~~standards~~our ofinternational ~~ISO9001~~clients. ~~and~~As ~~ISO14001~~a ~~certifications~~result, ~~since~~our ~~2007.~~customers Weare ~~have~~more ~~also~~willing ~~obtained~~to ~~the~~pay ~~following~~a ~~certifications,~~relatively ~~which~~higher ~~enable~~price usfor toour ~~export overseas:~~ products.
We have customers that are multinational companies. Many of our customers are large multinational corporations. We are the OEM LEV manufacturer for QWIC of Netherlands and the OEM cryogen-free refrigerator manufacturer for Ford, Pepsi, Coca-Cola, Carlsberg and Disney. We also provide network cables and HDMI cables to Wal-Mart, Home Depot and Carrefour. These large multinational corporations provide us with stable orders while also providing customer confidence in our products to help grow our potential client base.

Our Growth Strategies

By leveraging our sales network and manufacturing capacity, we are taking the initiative to grow into a business group of new energy and environmentally friendly consumer goods businesses through the following strategies:

We explore the expanding global LEV market. We expect the rapidly growing LEV market to increase our revenue steadily in the coming years. Currently, we manufacture LEVs in China to leverage the low manufacturing cost and sell LEVs in the European market. European countries provide several incentives to help stimulate the use of LEVs. We expect these regulations to help the European LEV market grow rapidly, and we hope that our market position will help us take advantage of this opportunity. We expect growth in LEV sales as additional LEV incentives are implemented by European governments.
We plan to increase sales of environmentally friendly consumer goods. As people become more aware of the increasing need for environmental protection, we believe that many consumers will choose to purchase cryogen-free refrigerators instead of traditional refrigerators with cryogen. We provide environmentally friendly non-cryogenic refrigerators. They contain zero cryogen and do not cause any pollution during the manufacturing process or during use. We will continue to work to increase sales of cryogen-free refrigerators and other related environmentally friendly home appliances, including our thermostatic wine cabinets and thermostatic cosmetics cases.
We plan to strengthen our relationships and alliances with large multinational companies. Currently, we are the OEM LEV manufacturer for QWIC of Netherlands. We are also the non-cryogen refrigerator OEM manufacturer for Ford, Pepsi, Coca-Cola, Carlsberg and Disney. We intend to continue strengthening our relationships and alliances with existing and potential multinational corporate customers and leverage their financial resources and brand awareness with our relative low production cost to achieve faster and more sustained growth in the future.

Our Products

We manufacture and distribute clean technology-based consumer products, including LEVs and cryogen-free refrigerators. We also manufacture and distribute network and HDMI cables. For the year ended December 31, 2011, approximately 29%, 17% and 54% of our revenues were generated from sales of our LEVs, refrigerators and cable products, respectively.

Light Electric Vehicles

LEVs can be classified into the following categories:

Electric Scooters (10 - 15 mph)
Electric Bicycles (12 - 20 mph)
Electric Motorcycles (20 - 45 mph)

Our major LEV products are electric bicycles and electric motorcycles. These LEVs use a lithium battery or lead-acid battery for propulsion and their mileage per charge ranges from 40 miles to 60 miles. Our LEVs can be charged using any home AC electric supply, which enables users to re-charge LEVs almost anywhere with convenience. From an environmental perspective, use of LEVs eliminates emissions of carbon-dioxide (CO2) that would otherwise occur if a gas propelled motor vehicle were used.

We manufacture LEVs in China and sell them to the European market. We are also the OEM LEV manufacturer for QWIC of Netherlands. Below are depictions of two of our LEV products that we manufacture for QWIC.

Our LEVs sold in China are under NICONIA brand, which we acquired on January 25, 2011.

Cryogen-free Refrigerators

Most refrigerators use cryogen. The most common type of cryogen used in refrigerators is Chlorofluorocarbon, or CFC, also commonly known by the DuPont trade name Freon. Use of CFCs has become heavily regulated because of the destructive effects on the ozone layer. Given the increasing environmental awareness and increase in environmental regulations, the market for cryogen-free refrigerators is growing.

Our cryogen-free refrigerator cooling system is based on thermoelectric effect. The thermoelectric effect, also known as the Peltier effect, is the direct conversion of temperature differences to electric voltage and vice versa. A thermoelectric device creates a voltage when there is a different temperature on each side. Conversely when a voltage is applied to it, it creates a temperature difference. The following chart shows how thermoelectric effect works:

Our refrigerator works without cryogen and is based on thermoelectric effect. Compared with traditional refrigerators, it possesses the following advantages: zero cryogen pollution to the environment, less electricity consumption, compact in size, lower cost and price, and lower operating noise. Currently, we are the OEM manufacturer for Ford, Pepsi, Coca-Cola, Carlsberg and Disney branded mini size refrigerators. The following pictures depict our cryogen-free refrigerators:

By diversifying our cryogen-free refrigeration technology, we have extended our refrigerator product line to portable refrigerators, thermostatic wine cabinets, thermostatic cosmetics cases. We believe many consumers are increasingly willing to consider buying these products for environmental reasons and also because they are convenient to use.

Network cable and HDMI cables

Our major wire and cable products are network cables and HDMI cables.

Network Cables

Our network cables mainly include Category 5, or Cat-5, and Category 6, or Cat-6, cables. Cat-5 cable is a twisted pair high signal integrity cable type. Cat-5 has been superseded by the Cat-5e specification structured cabling for computer networks, such as Ethernet, and is also used to carry many other signals such as basic voice services, token ring, and ATM (at up to 155 Mbit/s, over short distances). Cat-6 cable is a cable standard for Gigabit Ethernet and other network protocols that are backward compatible with the Category 5/5e and Category 3 cable standards. Compared with Cat-5 and Cat-5e, Cat-6 features more stringent specifications for crosstalk and system noise.

HDMI Cables

HDMI is a compact audio/video interface for transmitting uncompressed digital data. It represents a digital alternative to consumer analog standards, such as radio frequency coaxial cable, composite video, S-Video, SCART, component video, D-Terminal, or VGA. HDMI connects digital audio/video sources, such as set-top boxes, DVD players, HD DVD players, Blue-ray Disc players, PCs, video game consoles such as the PlayStation 3 and Xbox 360, and AV receivers to compatible digital audio devices, computer monitors, and digital televisions. HDMI supports, on a single cable, any TV or PC video format, including standard, enhanced, and high-definition video; up to 8 channels of digital audio; and a Consumer Electronics Control, or CEC, connection. The CEC allows HDMI devices to control each other when necessary and allows the user to operate multiple devices with one remote control handset. Because HDMI is electrically compatible with the signals used by Digital Visual Interface, or DVI, no signal conversion is necessary, nor is there a loss of video quality when a DVI-to-HDMI adapter is used. As an uncompressed connection, HDMI is independent of the various digital television standards used by individual devices, such as ATSC and DVB, as these are encapsulations of compressed MPEG video streams.

HDMI products started shipping in 2003. Over 850 consumer electronics and PC companies have adopted the HDMI specification. In Europe, either DVI-HDCP or HDMI is included in the HD ready in-store labeling specification for TV sets for HDTV, formulated by EICTA with SES Astra in 2005. HDMI began to appear on consumer HDTV camcorders and digital still cameras in 2006.

We are certified by HDMI Licensing, LLC as member of HDMI and produce HDMI cables under a 1.3a and 1.3b standard. HDMI 1.3 was released in 2006 and increased the single-link bandwidth to 340 MHz (10.2 Gigabit/s). It optionally supports Deep Color, with 30-bit, 36-bit, and 48-bit xvYCC, sRGB, or YCbCr, compared to 24-bit sRGB or YCbCr in previous HDMI versions. It also optionally supports output of Dolby True-HD and DTS-HD Master Audio streams for external decoding by AV receivers.

Manufacturing

Manufacturing Facilities

Our corporate headquarters and all of our manufacturing facilities are located in Changzhou, China. We have a total of 49,900 square meters of land use rights. On such land we have an aggregate of approximately 46,800 square meters of manufacturing buildings and office space. We believe that our existing and planned facilities are adequate for our requirements for the foreseeable future.

Manufacturing Processes

Light Electric Vehicles

LEV parts, including electromotors, batteries, wheels, and ties are purchased from third party suppliers. We weld the bike frame together and assemble other parts to finalize the LEVs. The diagram below illustrates our LEV manufacturing process:

Cryogen-free Refrigerator

We purchase the semiconductor refrigeration component for our refrigerators from third party suppliers. We manufacture the body and case of the refrigerators through plastic injection molding. The diagram below illustrates our refrigerator manufacturing process.

Network Cable and HDMI Cable

We produce network cables and HDMI cables in our manufacturing base in Changzhou, China. The diagram below illustrates our manufacturing process of a network cable and HDMI cable:

Raw Materials

Most of our raw materials are purchased from suppliers in China. Before we utilize raw materials in our manufacturing process, the raw materials must undergo an inspection process. The nature of the process depends on the type of raw materials. The type of raw materials and component parts that we require vary depending upon the product. The prices of the raw materials that we utilize to produce our products are determined based upon prevailing market conditions, supply and demand.

The major raw materials for LEV are steel, electromotors, batteries, wheels and tires. We purchase them from local suppliers in China.

The major raw materials that we utilize for the production of our cryogen-free refrigerators are polyvinyl chloride, or PVC, semiconductor refrigeration components, and air cooling fins. We purchase PVC from two suppliers in Zhejiang Province and Jiangsu Province. Air cooling fins are supplied by two suppliers in Jiangsu Province.

Raw materials for network cable and HDMI cable are copper and PVC. We purchase copper from one supplier in Jiangsu Province and PVC from two suppliers in Zhejiang Province and Jiangsu Province.

The following table sets forth the suppliers representing 10% or more of the Company’s purchases during the year 2011 are as follows:

Supplier	Raw Materials	Amount (in thousands)
Wuxi Lingfeng Copper	Copper wire	5,277

Quality Assurance and Quality Control

We closely monitor and test the quality of our products. We have established inspection points at key production stages to identify product defects during the production process, and our finished products are inspected and tested according to standardized procedures. We provide regular training and specific guidelines to our operators to ensure that our internal production processes meet quality standards. We have passed quality standards of ISO9001 and ISO14001 certifications since 2007. We have also obtained the following certifications, which enable us to export overseas:*

	UL Safety Certification for all A/V cables since 2006 UL Safety Certification for net cables Cat5e, Cat6 since 2008
	HDMI member for 28#1.3a, 1.3b
	ISO9001 since 2007 ISO14001 standard since 2007
	ETL Safety Certification for net cables Cat5e, Cat6 since 2009
	TÜV Safety Certification and GS Mark for cryogen-free refrigerators since 2006
	Wal-Mart certified provider since 2009
	Carrefour certified provider since 2009
	Home Depot certified provider since 2009

*All marks are trademarks or registered trademarks of their respective owners. The display of trademarks herein does not imply that a license of any kind has been granted.

Sales and Marketing

We use different distribution channels and deploy different sales and marketing strategies for our different products.

Light Electric Vehicle (LEV)

We sell LEVs to customers in European countries through our overseas agents and through OEM arrangements. We intend to continue to form strategic alliances with those agents and OEM customers in Europe. In addition, our sales team is developing new customers in Australia, the United States of America and the rest of Asia. We believe we can grow our LEV sales in those geographic areas with the establishment of an agent network. We are in the process of building this agent network in such areas.

Cryogen-free Refrigerator

We sell cryogen-free refrigerators through our overseas agents. We are also an OEM cryogen-free refrigerator manufacturer for Ford, Pepsi, Coca-cola, Carlsberg and Disney. We intend to continue to form strategic alliances with additional multinational companies and leverage our production capacity and relatively high brand awareness.

Network cable and HDMI cable

Our network cable and HDMI cable products are sold to many multinational retailers including Wal-Mart, Carrefour and Home Depot. We are certified providers to those retailers. We intend to continue selling network cable and HDMI cable to those multinational retailers.

The following table sets forth the customers representing 10% or more of the Company’s sales during year 2011 are as follows:

Customer	Main Products	Amount (in thousands)	% of Revenues
Company A	Cable	4,952	20%

Competition

Light Electric ~~Vehicle~~Vehicles ~~(LEV)~~

Competition in the LEV industry is heavy and still evolving. We believe the impact of new regulatory requirements for occupant safety, technological advances, and shifting customer needs are causing the industry to evolve in favor of LEVs. We believe the primary competitive factors in LEV markets are: technological innovation; product quality and safety; service options; product performance; design and styling; product price; and manufacturing efficiency.

technological innovation;

product quality and safety;

service options;

product performance;

design and styling;

product price; and

manufacturing efficiency.

We believe that our LEVs compete in both the traditional market segment with motorbikes as well as the market segment of LEVs. Hence, our major competitors in LEV sales are traditional motorbikes manufacturers as well as innovational LEV manufacturers, including Loncin Holdings, Lifan Motorcycles, Jianshe Group, Luyuan E-vehicle, and Xinri Group.

Many of our current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. Our competitors may be in a stronger position to respond quickly to new technologies and may be able to design, develop, market and sell their products more effectively. We believe our overseas customer relationships, as well as overseas OEM strategic alliances, are the basis on which we can compete in the overseas LEV market in spite of the challenges posed by our competitors.

Cryogen-free ~~Refrigerator~~ Refrigerators

As a cryogen-free refrigerator is a unique product, we believe it is a less competitive niche market at the current stage. Our major competitors are Mobicool and Laurina Electronics.

The manufacturing base of Mobicool is in Shenzhen, China. It manufactures and sells non-cryogen portable refrigerators and components in China and export to Europe market. Its products are purchased as original equipment by luxury car manufactures, including BMW, Volvo and Mercedes. Laurina Electronics is based in Shenzhen, China. It manufactures and sells refrigerators and other small home appliances in China and also exports them to the rest of the Asian market. ~~We believe the primary competitive factors in this niche market are:~~

~~product~~12 ~~quality and performance; and~~

We believe the primary competitive factors in this niche market are: product quality and performance; and relationships with OEM clients. With our OEM relationships with Ford, Pepsi, Coca-cola, Carlsberg and Disney, we intend to continue to leverage our advantage of product quality, performance, and OEM experience in specific territory markets.

With our OEM relationships with Ford, Pepsi, Coca-cola, Carlsberg and Disney, we intend to continue to leverage our advantage of product quality, performance, and OEM experience in specific territory markets.

Network cable and HDMI cable

The wire and cable industry is highly competitive. Our competitors include a large number of independent suppliers. Certain competitors have substantially greater manufacturing, sales, research and financial resources than us. We believe the primary competitive factors in wire and cable markets are: product quality and performance; reliability of supply; customer service; and product price.

product quality and performance;

reliability of supply;

customer service; and

product price.

Certified by global retailers like Wal-Mart, Carrefour and Home Depot, we believe our products still possess a competitive advantage over other competitors. Our major competitors are those companies originally from Taiwan and Hong Kong, who established manufacturing bases in mainland China, as well as other Chinese local competitors, such as Jesmay Electronics and Ningbo Yizhou Electronics.

Intellectual Property

We ~~rely~~own onthe atrademark ~~combination~~ of ~~trademark~~“BEST” , ~~copyright~~which ~~and~~is ~~trade~~actively ~~secret~~used ~~protection~~for ~~laws~~our products. inThe ~~China~~trademark ~~and~~has ~~other~~been ~~jurisdictions,~~registered aswith ~~well~~the asState ~~confidentiality~~Trademark ~~procedures~~Bureau of PRC and ~~contractual~~has ~~provisions~~a tovalid ~~protect~~term ~~our~~of ~~intellectual~~10 ~~property~~years ~~and~~expiring ~~our~~on ~~brand~~June 2016. We ~~have applied~~ ~~for~~acquired ~~two patents for solar power water heaters as we intend to penetrate~~ the trademark ~~solar~~of ~~heat~~“Niconia ”, ~~power~~which ~~industry~~is asused afor ~~part of~~ our ~~green~~LEVs. ~~energy~~The ~~business~~trademark ~~strategy~~has ~~and~~been registered ~~supplementing~~with ~~our~~the ~~current~~State ~~LEV~~Trademark ~~business.~~Bureau Weof ~~also~~PRC ~~have confidentiality~~ and ~~non-competition policies~~has ina ~~place~~valid asterm ~~part~~ of ~~our~~10 years ~~company~~expiring ~~employment~~on ~~guidelines~~June ~~which~~27, is2014. ~~given~~When toit ~~employees~~matures, ~~and~~ we ~~enter~~will ~~into~~make ~~nondisclosure~~another ~~agreements~~10 ~~with third parties~~year extension. ~~However,~~We wealso ~~cannot~~own ~~assure~~two ~~you~~other ~~that~~trademarks, wewhich ~~will~~are benot ~~able~~used toor ~~protect~~not frequently orused ~~enforce~~for our ~~intellectual property~~products ~~rights~~at this time.

We have applied for two patents for solar power water heaters as 11we intend to penetrate the solar heat power industry as a part of our green energy business strategy and supplementing our current LEV business.

We own the trademark of “BEST” , which is actively used for our products. We also own two other trademarks, which are not used anymore or not frequently used for our products at the current time.

Patent Title	Type	Application No.	Certificate No.	Authorization Date
Suspension-type solar water heater with automatic tracking	Invention patent	200910225069	CN101706164A	2010.5.12
Suspended automatic tracking focusing solar water heater	Utility model patent	200920269084	CN201593879U	2010.9.29

We rely on a combination of trademark, copyright and trade ~~Environmental~~secret ~~Matters~~protection laws in China and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our intellectual property and our brand. We also have confidentiality and non-competition policies in place as part of our company employment guidelines which is given to employees, and we enter into nondisclosure agreements with third parties. However, we cannot assure you that we will be able to protect or enforce our intellectual property rights.

Our manufacturing facilities are subject to various pollution control regulations with respect to noise and air pollution and the disposal of waste and hazardous materials. We also are subject to periodic inspections by local environmental protection authorities. Our controlled VIEs have received certifications from the relevant PRC government agencies indicating that their business operations are in material compliance with the relevant PRC environmental laws and regulations. We are not currently subject to any pending actions alleging any violations of applicable PRC environmental laws.

Regulation

Because our ~~controlled~~primary ~~VIEs~~operating subsidiaries are located in ~~the PRC~~ China, we are ~~regulated~~subject byto ~~the~~China’s national and local laws, including those outlined below. We believe that we are in material compliance with all registrations and requirements for the issuance and maintenance of all licenses required by the ~~PRC~~governing bodies, and that all license fees and filings are current.

We13 ~~are subject to the environmental regulations described in the preceding section entitled “Our Business – Environmental Matters.”~~

~~There~~Environmental isMatters no private ownership of land in China. Upon payment of a land grant fee, land use rights can be obtained from the government for a period unto 50 years in the case of industrial land and are typically renewable. We have received the necessary land use rights certificate for our land lots.

WeOur ~~are~~manufacturing ~~also~~facilities are subject to ~~China’s~~various ~~foreign~~pollution ~~currency~~control regulations. ~~The~~with ~~PRC~~respect ~~government~~to ~~has~~noise ~~controlled~~and ~~Renminbi~~air ~~reserves~~pollution ~~primarily~~and ~~through direct regulation of~~ the ~~conversion~~disposal of ~~Renminbi~~waste ~~into~~and ~~other~~hazardous ~~foreign currencies~~materials. ~~Although~~We ~~foreign~~also ~~currencies, which~~ are ~~required~~subject ~~for~~to ~~“current~~periodic ~~account”~~inspections ~~transactions,~~by ~~can~~local beenvironmental protection ~~bought~~authorities. ~~freely~~Our atcontrolled ~~authorized~~VIEs ~~PRC~~have ~~banks,~~received ~~the~~certifications ~~proper~~from ~~procedural~~the ~~requirements~~relevant ~~prescribed by~~ PRC ~~law~~government ~~must~~agencies beindicating ~~met.~~that Atour ~~the~~business ~~same~~operations ~~time, PRC companies~~ are ~~also~~in ~~required~~material tocompliance ~~sell~~with ~~their~~the ~~foreign exchange~~relevant ~~earnings to authorized~~ PRC ~~banks,~~environmental laws and ~~the~~regulations. ~~purchase~~We ofare not ~~foreign~~currently ~~currencies~~subject ~~for~~to ~~capital~~any ~~account~~pending ~~transactions~~actions ~~still~~alleging ~~requires~~any ~~prior~~violations ~~approval~~ of ~~the~~applicable PRC ~~government~~environmental laws.

~~Under~~Occupational ~~current~~Health ~~PRC laws~~ and regulations, Foreign Invested Entities, or FIEs, may pay dividends only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, FIEs in China are required to set aside at least 10.0% of their after-tax profit based on PRC accounting standards each year to their general reserves until the cumulative amount of such reserves reaches 50.0% of their registered capital. These reserves are not distributable as cash dividends. The board of directors of an FIE has the discretion to allocate a portion of the FIEs’ after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Safety

WeThe doStanding ~~not~~Committee ~~face~~of ~~any~~the ~~significant~~National ~~government~~People’s ~~regulation~~Congress inpromulgated ~~connection~~the ~~with~~PRC Safe Production Law on June 29, 2002, which sets out the legal framework to achieve and ensure safety in the production and operation activities of ~~our~~enterprises. ~~products~~Under the Safe Production Law, enterprises are required to establish internal safety systems and regulations, set up internal organization or appoint responsible personnel for safety affairs, to provide necessary safe working conditions and to strictly follow the State or industrial standards in relation to safe production. WeEnterprises which do not ~~require~~satisfy ~~any~~the ~~special~~facilities ~~government~~and ~~permits~~conditions required under the laws and the State or industrial standards are not allowed to ~~produce~~start ~~our~~or ~~products~~continue ~~other~~their production ~~than~~or ~~those~~operation ~~permits~~activities. ~~that~~Enterprises are also required ofto ~~all~~set ~~corporations~~up inobvious ~~China.~~safety caution signals on those production or operation sites, facilities or equipment where there is a material potential risk for safety and shall further provide protective uniforms and personal care products to the field employees for their personal protection.

~~Our~~The ~~Employees~~PRC Law on the Prevention and Treatment of Occupational Diseases, which was promulgated on October 27, 2001 and became effective on May 1, 2002, requires that work environment and conditions established or provided by employers meet the occupational health standards and requirements of the State, and that employers shall further adopt and implement measures to assure employees’ access to occupational health protection. The employers are also required to participate in social insurance for work-related injury in accordance with the law and declare to and be supervised by the relevant health authorities if the employers are engaged in those harmful projects listed in the Occupational Diseases Catalogue.

We ~~had~~have ~~526~~not ~~employees~~experienced asany incident of ~~December~~injury ~~31,~~or ~~2010.~~death ~~The~~due ~~following~~to ~~table~~violation ~~sets~~of ~~forth~~health ~~the~~and ~~number~~safety ofregulations. ~~our~~We ~~employees~~have inadopted ~~each~~a set of ~~our~~safety ~~areas~~and ofoccupational ~~operations~~health protection procedures and asstandards, abased ~~percentage~~on ofthe ~~our~~specifications ~~total~~and ~~workforce~~guidelines asset out ofunder ~~December~~the ~~31,~~PRC ~~2010:~~ laws and regulations.

	As of December 31, 2010
	Employees	Percentage
Manufacturing, Procurement and Logistics	476	90%
Quality Control	9	2%
Research and Development	5	1%
Sales and Marketing	16	3%
Administration and Management	12	2%
Finance	8	2%
Total	526	100%

Land Use Rights

AsAll ~~required~~urban land in China is owned by ~~applicable~~the ~~PRC~~State. ~~law,~~Pursuant weto ~~have~~Interim ~~entered~~Regulations ~~into~~of ~~employment~~the ~~contracts~~People’s ~~with~~Republic ~~most~~of China Concerning the Assignment and Transfer of ~~our~~the ~~officers~~Right to the Use of the State-owned Land in the Urban Areas, ~~managers~~which ~~and~~became effective ~~employees.~~on WeMay 19, 1990, individuals and companies are ~~working~~permitted ~~towards~~to ~~entering~~acquire ~~employment~~rights ~~contracts~~to ~~with~~use ~~those~~urban ~~employees~~land ~~who~~or doland ~~not~~use ~~currently~~rights ~~have~~for ~~employment~~specific ~~contracts with~~purposes, usincluding residential, industrial and commercial purposes. We ~~believe~~The ~~that~~land weuse ~~maintain~~rights are granted for a ~~satisfactory~~period of ~~working~~70 ~~relationship~~years ~~with~~for ~~our~~residential ~~employees~~purposes, 50 years for industrial purposes and we40 ~~have~~years ~~not~~for ~~experienced~~commercial ~~any~~purposes. ~~significant~~These ~~disputes~~periods ormay be renewed at the expiration of the initial and any ~~difficulty~~subsequent terms. Upon approval by both the land administrative authorities and city planning authorities, industrial parcel uses may be converted to other uses, and the duration and other clauses in ~~recruiting~~the ~~staff~~land use right granting agreement will be revised to match the new use. Granted land use rights are transferable and may be used as security for ~~our~~borrowings ~~operations~~and other obligations. We have received the necessary land use right certificates for the properties described under Item 2 “Properties.”

~~Our~~Foreign ~~employees~~Currency inExchange China participate in a state pension plan organized by PRC municipal and provincial governments. We are currently required to contribute to the plan at the rate of 21% of the average employee’s monthly salary.

12The majority of our sales revenue and expenses are denominated in RMB. Under the PRC foreign currency exchange regulations applicable to us, RMB is convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions. Currently, our PRC operating subsidiary and VIEs may purchase foreign currencies for settlement of current account transactions, including payments of dividends to us, employee salaries (even if employees are based outside of China), and payment for equipment purchases outside of China, without the approval of the State Administration of Foreign Exchange of the People’s Republic of China, or SAFE, by complying with certain procedural requirements. Conversion of RMB for capital account items, such as direct investment, loan, security investment and repatriation of investment, however, is still subject to the approval of SAFE. In particular, if our PRC operating subsidiary or VIEs borrow foreign currency through loans from us or other foreign lenders, these loans must be registered with SAFE, and if we finance the subsidiaries by means of additional capital contributions, these capital contributions must be approved by certain government authorities, including the Ministry of Commerce, or MOFCOM, or their respective local branches. These limitations could affect the ability of our PRC operating subsidiary and VIEs to obtain foreign exchange through debt or equity financing. In the event of a liquidation of our PRC subsidiary or VIEs, SAFE approval is required before the remaining proceeds can be expatriated from China.

Taxation

On March 16, 2007, the National People's Congress of China passed a new Enterprise Income Tax Law, or EIT Law, and on November 28, 2007, the State Council of China passed its implementing rules, which took effect on January 1, 2008. Before the implementation of the EIT Law, foreign invested enterprises, or FIEs, established in the PRC, unless granted preferential tax treatments by the PRC government, were generally subject to an earned income tax, or EIT, rate of 33.0%, which included a 30.0% state income tax and a 3.0% local income tax. The EIT Law and its implementing rules impose a unified EIT of 25.0% on all domestic-invested enterprises and FIEs, unless they qualify under certain limited exceptions. Despite these changes, the EIT Law gives FIEs established before March 16, 2007, or Old FIEs, a five-year grandfather period during which they can continue to enjoy their existing preferential tax treatments. During this five-year grandfather period, the Old FIEs which enjoyed tax rates lower than 25% under the original EIT law will be subject to gradually increased EIT rates over a 5-year period until their tax rate reaches 25%. In addition, the Old FIEs that are eligible for other preferential tax treatments by the PRC government under the original EIT law are allowed to continue enjoying their preference until these preferential treatment periods expire. During the year 2011, the Company is following the taxation laws issued in 2007.

In addition to the changes to the current tax structure, under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” If the PRC tax authorities subsequently determine that we should be classified as a resident enterprise, then our organization’s global income will be subject to PRC income tax of 25%. For detailed discussion of PRC tax issues related to resident enterprise status, see Item 1A “Risk Factors—Risks Related to Doing Business in China—Under the Enterprise Income Tax Law, we may be classified as a ‘resident enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.”

In addition, the EIT Law and its implementing rules generally provide that an income tax rate of 10% will normally be applicable to dividends payable to investors that are “non-resident enterprises,” or non-resident investors, which (i) do not have an establishment or place of business in the PRC or (ii) have an establishment or place of business in the PRC, but the relevant income is not effectively connected with the establishment or place of business to the extent such dividends are derived from sources within the PRC. The State Council of the PRC or a tax treaty between China and the jurisdictions in which the non-PRC investors reside may reduce such income tax.

Pursuant to the Provisional Regulation of China on Value Added Tax and its implementing rules, all entities and individuals that are engaged in the sale of goods, the provision of repairs and replacement services and the importation of goods in China are generally required to pay value added tax, or VAT, at a rate of 17.0% of the gross sales proceeds received, less any deductible VAT already paid or borne by the taxpayer. Further, when exporting goods, the exporter is entitled to some or all of the refund of VAT that it has already paid or borne.

Dividend Distributions

All of our sales are earned by our PRC subsidiary. However, PRC regulations restrict the ability of our PRC subsidiary to make dividends and other payments to its offshore parent company. PRC legal restrictions permit payments of dividends by our PRC subsidiary only out of its accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiary is also required under PRC laws and regulations to allocate at least 10% of its annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of our registered capital. Allocations to these statutory reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances, or cash dividends.

Circular 75

On November 1, 2005, SAFE issued the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Overseas Financing and Round Trip Investment via Overseas Special Purpose Vehicles, or Circular 75, which regulates the foreign exchange matters in relation to the use of a special purpose vehicle, or SPV, by PRC residents to seek offshore equity financing and conduct “round trip investment” in China. Under Circular 75, a SPV refers to an offshore entity established or controlled, directly or indirectly, by PRC residents or PRC entities for the purpose of seeking offshore equity financing using assets or interests owned by such PRC residents or PRC entities in onshore companies, while “round trip investment” refers to the direct investment in China by the PRC residents through the SPVs, including, without limitation, establishing FIEs and using such foreign-invested enterprises to purchase or control onshore assets through contractual arrangements. Circular 75 requires that, before establishing or controlling a SPV, PRC residents and PRC entities are required to complete foreign exchange registration with the local offices of SAFE for their overseas investments.

Circular 75 applies retroactively. PRC residents who have established or acquired control of the SPVs which have completed “round-trip investment” before the implementation of Circular 75 shall register their ownership interests or control in such SPVs with the local offices of SAFE before March 31, 2006. An amendment to the registration is required if there is a material change in the SPV, such as increase or reduction of share capital and transfer of shares. Failure to comply with the registration procedures set forth in Circular 75 may result in restrictions on the foreign exchange activities of the relevant FIEs, including the payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate and the capital inflow from the offshore parent, and may also subject relevant PRC residents to penalties under PRC foreign exchange administration regulations.

As we stated under Item 1A “Risk factors—Risks Related to Doing Business in China”—Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident stockholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiary and VIEs, limit our PRC subsidiary’s ability to distribute profits to us or otherwise materially adversely affect us,” we have asked our stockholders, who are PRC residents as defined in Circular 75, to register with the relevant branch of SAFE, as currently required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiary. However, many of the terms and provisions in Circular 75 remain unclear and implementation by central SAFE and local SAFE branches of Circular 75 have been inconsistent since their adoption. Therefore, we cannot predict how Circular 75 will affect our business operations or future strategies. For example, our present and prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC resident beneficial holders.

Employees

As of December 31, 2011, we had 575 employees. The following table sets forth the number of our employees in each of our areas of operation:

Function	Number of Employees
Manufacturing, Procurement and Logistics	489
Quality Control	15
Research and Development	18
Sales and Marketing	37
Administration and Management	6
Finance	10
TOTAL	575

As required by applicable PRC law, we have entered into employment contracts with most of our officers, managers and employees other than our CEO, for which we currently have no agreement with. We are working towards entering employment contracts with those employees who do not currently have employment contracts with us. We believe that we maintain a satisfactory working relationship with our employees, and we have not experienced any significant disputes or any difficulty in recruiting staff for our operations.

Our employees in China participate in a state pension plan organized by PRC municipal and provincial governments. We are currently required to contribute to the plan at a Federal rate of 21% of the average employee’s monthly salary however, at the State level, we are granted certain rate reductions, capped salary levels and exclusions of certain employee levels, which reduced our contribution rate.

In addition, we are required by PRC law to cover employees in China with various types of social insurance, and we believe that we are in compliance with the relevant PRC laws.

~~Financial~~16 ~~Experience of Management and Preparation of Financial Statements~~

WeITEM ~~maintain our books and records in accordance with Chinese GAAP on the accrual basis~~1A. ~~Chinese~~RISK ~~GAAP is similar to International Financial Reporting Standards~~FACTORS. The basic accounting principles and practice of Chinese GAAP are similar to U.S. GAAP. We hire knowledgeable and reputable third-party consultants to convert our books and records from Chinese GAAP to U.S. GAAP. We provide our books and records to the consultants who make the appropriate adjustments in the working papers prepared for our auditor. All adjustments are approved by management and reviewed and/or audited by our auditor. Our CFO reviews all the adjustments and conversions made by our consultants. Our CFO has over ten years of accounting experience with Chinese GAAP obtained from her prior work experience in the accounting department of various companies in the manufacturing industry in China, at which she served in various positions, including accountant, accounting supervisor and accounting manager. She also obtained experience with internal controls over financial reporting from her experience at these companies. Our CFO reviewed the conversion of our books and records to U.S. GAAP performed by our consultants as described below with the assistance of other persons familiar with such conversion procedures. We also employ five intermediate and junior accountants in our accounting department to assist in the preparation of our financial statements and our day-to-day accounting needs.

~~Our~~An ~~third-party~~investment ~~consultants,~~in ~~who~~our ~~are~~common ~~professional~~stock ~~accountants,~~involves ~~work~~a ~~closely~~high ~~with~~degree ~~the~~of risk. ~~Company’s~~You ~~accounting~~should ~~department~~carefully toconsider ~~prepare~~ the ~~financial~~risks ~~statements.~~described ~~Each~~below, together with all of the ~~consultants~~other ~~hold~~information ~~bachelor’s~~included ~~degrees~~ in ~~accounting~~this report, ~~and~~before ~~some~~making ofan ~~them hold~~investment ~~master’s degrees in accounting~~decision. ~~They~~If ~~take~~any ~~continuing~~of ~~professional~~the ~~development~~following ~~courses~~risks ~~each~~actually ~~year~~occurs, toour ~~update their accounting knowledge as is required by the governing accounting bodies~~business, ~~including the Chinese Institute of Certified Public~~financial ~~Accountants~~condition ~~(CICPA)~~or ~~and~~results ~~the Association~~ of ~~Chartered~~operations ~~Certified~~could ~~Accountants (ACCA)~~suffer. ~~They~~In ~~also~~that ~~subscribe~~case, ~~to online courses where they receive~~ the ~~latest~~trading ~~updates~~price of inour ~~U.S.~~common ~~GAAP~~stock ~~and~~could ~~SEC~~decline, ~~rules~~ and ~~regulations.~~you ~~Most~~may oflose ~~the~~all ~~consultants~~or ~~are~~part ~~CICPAs. The manager~~ of ~~the consulting team has over 10 years of experience working in an international firm and in auditing U~~your investment.S. ~~companies.~~You ~~She~~should ~~formerly~~read ~~worked~~the atsection ~~Arthur~~entitled ~~Andersen~~“Special ~~and~~Note ~~PricewaterhouseCoopers~~Regarding ~~where she accumulated valuable public company auditing~~Forward ~~experience~~Looking ~~auditing~~Statements” ~~and~~above ~~reporting~~for ona ~~Chinese~~discussion ~~subsidiaries~~ of ~~U.S.~~what ~~companies.~~types Weof ~~believe~~statements ~~that our consultants~~ are forward-looking ~~qualified to prepare our financial~~ statements, ~~based~~as onwell ~~their~~as ~~professional~~the ~~experience.~~significance ~~They~~of ~~spend~~such ~~approximately~~statements ~~four to five weeks~~ in ~~2010~~the ~~and~~context ~~2011~~of ~~assisting~~this ~~us in preparing our financial statements~~report.

~~ITEM~~RISKS ~~1A.~~RELATED ~~RISK~~TO ~~FACTORS.~~OUR BUSINESS

~~Investing~~We inare ~~our~~vulnerable ~~common stock involves a high degree of risk. You should carefully consider the following factors and other information in this report before deciding~~ to ~~invest~~shortages in ~~our~~raw ~~common~~materials ~~stock. You should pay particular attention to the fact~~or ~~that~~fluctuations ~~we conduct all of our operations~~ in ~~China~~raw ~~and~~material ~~are governed by a legal and regulatory environment that in some respects differs significantly from the environment that may prevail in the U~~prices.S. and other countries. If any of the following risks actually occurs, our business, financial condition or operating results may suffer, the trading price of our common stock could decline, and you may lose all or part of your investment.

The major raw materials for the LEVs that we produce are steel, ~~RISKS~~electromotor, ~~RELATED~~batteries, TOwheels ~~OUR~~and ~~BUSINESS~~tires. The major raw materials for cryogen-free refrigerators that we produce are polyvinyl chloride, or PVC, semiconductor refrigeration components, and air cooling fins. Raw materials for our network cable and HDMI cable business consist of cooper and PVC. In order to ensure timely delivery of quality products to our customers at competitive prices, we must obtain sufficient quantities of good quality raw materials at acceptable prices in a timely manner. There is no assurance that we will be able to obtain sufficient quantities of raw materials from our suppliers which are of an acceptable quality and acceptable price in a timely manner.

WeFurthermore, as steel and copper are commodities, we are vulnerable to ~~shortages~~the risk of rising steel and copper prices, which is determined by demand and supply conditions in ~~raw~~the ~~materials~~global orand ~~fluctuations~~the PRC market. Should there be any significant increases in ~~raw~~the ~~material~~price of steel and copper, and if we are unable to pass on such increases in costs to our customers or find alternative suppliers who are able to supply us steel and copper at reasonable prices, our business and profitability would be adversely affected.

~~The~~Our ~~major~~rapid ~~raw~~expansion ~~materials~~could ~~for~~significantly ~~the~~strain ~~LEVs that we produce are steel~~our resources, ~~electromotor,~~management ~~batteries, wheels~~ and ~~tires.~~operational ~~The~~infrastructure ~~major~~which ~~raw~~could ~~materials~~impair ~~for cryogen-free refrigerators that we produce are polyvinyl chloride (PVC), semiconductor refrigeration components,~~our ~~and~~ability ~~air~~to ~~cooling~~meet ~~fins.~~increased ~~Raw~~demand ~~materials~~ for our ~~network~~products ~~cable~~ and ~~HDMI~~hurt ~~cable business consist of cooper and PVC. In order to ensure timely delivery of quality products to~~ our ~~customers at competitive prices, we must obtain sufficient quantities of good~~business ~~quality raw materials at acceptable prices in a timely manner~~results. ~~There is no assurance that we will be able to obtain sufficient quantities of raw materials from our suppliers which are of an acceptable quality and acceptable price in a timely manner.~~

~~Furthermore,~~To asaccommodate ~~steel~~our ~~and~~anticipated ~~copper are commodities~~growth, we ~~are~~will ~~vulnerable~~need to ~~the~~expend capital ~~risk~~resources ofand ~~rising~~dedicate ~~steel~~personnel to implement and ~~copper~~upgrade ~~prices~~our accounting, ~~which~~operational isand ~~determined~~internal bycontrol ~~demand~~systems and ~~supply~~enhance ~~conditions~~our inrecord keeping ~~the global~~ and ~~the~~contract ~~PRC~~tracking ~~market~~system. ~~Should~~Such ~~there~~measures bewill ~~any~~require ~~significant~~us ~~increases~~to ~~in the~~dedicate ~~price~~additional offinancial ~~steel~~resources and ~~copper,~~personnel ~~and~~to ifoptimize weour ~~are~~operational infrastructure ~~unable~~and to ~~pass~~recruit onmore ~~such~~personnel ~~increases~~to intrain ~~costs~~and tomanage our ~~customers~~growing employee orbase. ~~find~~If ~~alternative~~we ~~suppliers~~cannot ~~who~~successfully ~~are~~implement ~~able~~these tomeasures ~~supply~~efficiently and uscost-effectively, ~~steel~~we ~~and~~will ~~copper~~be atunable ~~reasonable~~to ~~prices~~satisfy the demand for our products, which will impair our ~~business~~revenue growth and ~~profitability~~hurt ~~would~~our beoverall ~~adversely affected.~~financial performance.

Our ~~rapid~~business ~~expansion~~is ~~could~~capital ~~significantly~~intensive ~~strain~~and our ~~resources,~~growth ~~management~~strategy may ~~and~~require ~~operational~~additional ~~infrastructure~~capital which ~~could~~may ~~impair~~not ~~our~~be ~~ability~~available toon ~~meet~~favorable ~~increased~~terms ~~demand~~or at ~~for our products and hurt our business results~~all.

ToWe ~~accommodate~~believe that our ~~anticipated~~current ~~growth~~cash, wecash flow from operations will ~~need~~be sufficient to ~~expend~~meet ~~capital~~our ~~resources~~present and ~~dedicate~~reasonably ~~personnel~~anticipated tocash ~~implement~~needs. ~~and~~We may, ~~upgrade~~however, ~~our~~require ~~accounting,~~additional ~~operational~~cash ~~and~~resources ~~internal~~due ~~management~~to ~~systems~~changed ~~and~~business conditions, ~~enhance~~implementation of our ~~record~~strategy ~~keeping~~to ~~and~~expand ~~contract~~our ~~tracking~~manufacturing ~~system.~~capacity ~~Such~~or ~~measures~~other ~~will~~investments ~~require~~or usacquisitions we may decide to ~~dedicate~~pursue. ~~additional~~If our own financial resources ~~and~~are ~~personnel~~insufficient to ~~optimize~~satisfy our ~~operational~~capital ~~infrastructure~~requirements, ~~and~~we may seek to ~~recruit~~sell ~~more~~additional ~~personnel~~equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our ~~train~~stockholders. The incurrence of indebtedness would result in increased debt service obligations and ~~manage~~could ~~our~~require ~~growing~~us ~~employee~~to ~~base~~agree to operating and financial covenants that would restrict our operations. IfFinancing wemay ~~cannot~~not ~~successfully~~be ~~implement~~available ~~these~~in ~~measures~~amounts ~~efficiently~~or ~~and~~on ~~cost-effectively~~terms acceptable to us, weif ~~will~~at beall. ~~unable~~Any failure by us to ~~satisfy~~raise additional ~~the~~funds ~~demand~~on ~~for~~terms ~~our~~favorable ~~products~~to us, ~~which~~or ~~will~~at ~~impair~~all, could limit our ~~revenue~~ability ~~growth~~to expand our business operations and ~~hurt~~could harm our overall ~~financial~~business ~~performance~~prospects.

~~Our~~17 ~~business is capital intensive and our growth strategy may require additional capital which may not be available on favorable terms or at all.~~

We ~~believe that our current cash, cash flow from operations will be sufficient to meet our present and reasonably anticipated cash needs. We~~ may, however, require additional cash resources due to changed business conditions, implementation of our strategy to expand our manufacturing capacity or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be ~~available~~unable ~~in amounts or on terms acceptable~~ to ~~us,~~effectively ifmanage ~~at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit~~ our ~~ability to expand our business operations and could harm our overall business prospects~~expansion.

13We have identified several growth plans. These expansion plans may strain our financial resources. They may also overstretch our management personnel and require us to restructure our management structure. If we are unable to successfully manage our expansion, we may encounter operational and financial difficulties which would in turn adversely affect our business and financial results.

Any interruption in our production processes could impair our financial performance and negatively affect our brand.

We manufacture or assemble our products at our facilities in Changzhou, China. Our manufacturing operations are complicated and integrated, involving the coordination of raw material and component sourcing from third parties, internal production processes and external distribution processes. While these operations are modified on a regular basis in an effort to improve manufacturing and distribution efficiency and flexibility, we may experience difficulties in coordinating the various aspects of our manufacturing processes, thereby causing downtime and delays. We have also been steadily increasing our production capacity and have limited experience operating at these higher production volume levels. In addition, we may encounter interruption in our manufacturing processes due to a catastrophic loss or events beyond our control, such as fires, explosions, labor disturbances or violent weather conditions. Any interruptions in our production or capabilities at our facilities could result in our inability to produce our products, which would reduce our sales revenue and earnings for the affected period. If there is a stoppage in production at any of our facilities, even if only temporary, or delays in delivery times to our customers, our business and reputation could be severely affected. Any significant delays in deliveries to our customers could lead to increased returns or cancellations and cause us to lose future sales. We currently do not have business interruption insurance to offset these potential losses, delays and risks so a material interruption of our business operations could severely damage our business.

WeIf ~~may~~our becustomers ~~exposed~~that touse ~~infringement~~our orproducts ~~misappropriation~~successfully ~~claims~~assert byproduct ~~third~~liability ~~parties,~~claims ~~which,~~against ifus ~~determined~~due ~~adversely~~to ~~against~~defects ~~us,~~in ~~could~~our ~~disrupt~~products, our ~~business~~operating ~~and~~results ~~subject~~may ussuffer toand ~~significant~~our ~~liability~~reputation tomay ~~third~~be ~~parties~~harmed.

Our ~~success~~products ~~largely~~are ~~depends~~primarily onfor ~~our~~commercial ~~ability~~and toresidential use. ~~and~~Significant ~~develop~~property ~~our~~damage ~~technology,~~or ~~know-how~~personal ~~and~~injuries ~~product~~can ~~designs~~result ~~without~~from ~~infringing~~such ~~upon~~uses. ~~the~~If ~~intellectual~~our ~~property~~products ~~rights~~are ofnot ~~third~~properly ~~parties.~~designed, Webuilt ~~may~~or beinstalled ~~subject~~or toif ~~litigation~~people ~~involving~~are ~~claims~~injured because of ~~patent~~our ~~infringement~~products, orwe ~~violation~~could ofbe ~~other~~subject ~~intellectual~~to ~~property~~claims ~~rights~~for ofdamages ~~third~~based ~~parties.~~on ~~The~~theories ~~holders~~ of ~~patents~~product liability and other ~~intellectual~~legal ~~property~~theories. ~~rights~~The ~~potentially~~costs ~~relevant~~and resources to ~~our~~defend ~~product~~such ~~offerings~~claims ~~may~~could be ~~unknown~~substantial toand, usif orsuch ~~may~~claims ~~otherwise~~are ~~make~~successful, itwe ~~difficult~~could be responsible for uspaying tosome ~~acquire~~or aall ~~license~~of onthe ~~commercially~~damages. ~~acceptable~~Negative ~~terms~~publicity from such claims may also damage our reputation, regardless of whether such claims are successful. Any of these consequences resulting from defects in our products would hurt our operating results and stockholder value.

~~Best~~Problems ~~Cable~~with ~~has~~product ~~registered~~quality ~~the trademark for “BEST” . There may also be technologies licensed to and relied on by us that are subject to infringement~~ or ~~other~~product ~~corresponding~~performance ~~allegations or claims by others which~~ could ~~damage~~result ~~our~~in ~~ability~~a ~~to rely~~decrease onin ~~such~~customers ~~technologies.~~and ~~In addition~~revenue, ~~although~~unexpected weexpenses ~~endeavor~~and toloss ~~ensure that companies that work with us possess appropriate intellectual property rights or licenses, we cannot fully avoid the risks~~ of ~~intellectual~~market ~~property rights infringement created by suppliers of components used in our products or by companies with which we work in cooperative research and development activities~~share.

Our ~~current~~operating orresults ~~potential~~depend, ~~competitors~~in part, ~~many~~on ofour ~~which~~ability ~~have~~to ~~substantial~~deliver ~~resources~~quality products on a timely and ~~have~~cost-effective ~~made~~basis. ~~substantial~~As ~~investments~~our inproducts ~~competing~~become ~~technologies~~more advanced, it may ~~have~~become ~~obtained~~more difficult to maintain our quality standards. If we experience deterioration in the performance or ~~may~~quality ~~obtain~~of ~~patents~~any ~~that~~of ~~will~~our ~~prevent~~products, ~~limit~~it could result in delays in shipments, cancellations of orders or ~~interfere~~customer ~~with~~returns and complaints, loss of goodwill and harm to our ~~ability~~brand and reputation. Furthermore, our products are used together with components and in motor vehicles that have been developed and maintained by third parties, and when a problem occurs, it may be difficult to ~~make~~identify the source of the problem. In addition, some automobile parts and components ~~use~~may ornot ~~sell~~be fully compatible with our products inand ~~China~~may not meet our or our customers’ quality, safety, security or other ~~countries~~standards. The ~~defense~~use by customers of ~~intellectual~~our ~~property~~products ~~claims,~~with ~~including~~incompatible ~~patent~~or ~~infringement~~otherwise ~~suits,~~substandard components is largely outside of our control and ~~related~~could ~~legal~~result in malfunctions or defects in our products and ~~administrative~~result ~~proceedings~~in ~~can~~harm beto ~~both~~our ~~costly~~brand. These problems may lead to a decrease in customers and ~~time~~revenue, ~~consuming~~harm to our brand, ~~and~~unexpected ~~may~~expenses, ~~significantly divert~~loss of market share, the ~~efforts~~incurrence of significant warranty and ~~resources~~repair costs, and diversion of ~~our~~the ~~technical~~attention ~~and~~of ~~management~~our engineering personnel. ~~Furthermore,~~from anour ~~adverse~~product ~~determination~~development inefforts, ~~any~~customer ~~such~~relation ~~litigation~~problems or ~~proceeding~~loss toof ~~which~~customers, weany ~~may~~one ~~become~~of awhich ~~party~~ could ~~cause~~materially usadversely ~~to:~~affect our business.

~~pay~~We ~~damage~~are ~~awards; seek~~dependent ~~licenses~~on ~~from third parties; pay additional ongoing royalties, which could decrease~~ our ~~profit~~major ~~margins; redesign our products; or be restricted by injunctions~~customers.

~~These~~Sales ~~factors~~to ~~could~~our ~~effectively~~largest ~~prevent~~customer, usaccounted ~~from~~in ~~pursuing~~aggregate ~~some or all~~ of ~~our~~approximately ~~business~~20% and ~~result~~44% ~~in our customers or potential customers deferring, canceling or limiting their purchase or use~~ of our ~~products,~~revenues ~~which~~for ~~could~~2011 ~~have a material adverse effect on our financial condition~~ and ~~results~~2010, ~~of operations~~respectively.

1418

IfOur ability to retain the major customer is therefore important to our ~~customers~~continued success. There is however no assurance that ~~use~~the customer will continue to purchase our products ~~successfully~~at ~~assert~~the ~~product~~current ~~liability~~levels ~~claims~~in ~~against~~the usfuture. ~~due~~There is also no assurance that we will be able to ~~defects~~decrease inour dependence on these major customers over time. If the major customer ceases or reduces significantly their purchase of our products and we are unable to obtain substitute orders of comparable size from other existing or new customers, ~~our~~there ~~operating~~will ~~results~~be ~~may~~a ~~suffer~~material ~~and~~adverse impact on our ~~reputation~~financial ~~may~~performance beand ~~harmed~~position.

~~Our~~We ~~products~~have ~~are~~limited ~~primarily~~insurance ~~for~~coverage ~~commercial~~ and ~~residential~~do ~~use. Significant property damage or personal injuries can result from such uses. If our products are~~ not ~~properly~~carry ~~designed,~~any ~~built~~business orinterruption ~~installed or if people are injured because of our products~~insurance, wethird-party ~~could~~liability beinsurance ~~subject to claims~~ for ~~damages~~our ~~based~~manufacturing onfacilities ~~theories of product liability and other legal theories. The costs and resources to defend such claims could be substantial and, if such claims are successful, we could be responsible for paying some~~ or ~~all~~insurance ofthat covers the ~~damages.~~risk ~~Negative publicity from such claims may also damage our reputation, regardless~~ of ~~whether~~loss ~~such claims are successful. Any~~ of ~~these consequences resulting from defects in~~ our products ~~would~~in ~~hurt our operating results and stockholder value~~shipment.

~~Certain~~Operation of our ~~existing~~facilities ~~stockholders~~involves ~~have~~many ~~substantial~~risks, ~~influence~~including ~~over~~equipment ~~our~~failures, ~~company~~natural disasters, industrial accidents, power outages, labor disturbances and ~~their~~other ~~interests~~business interruptions. Furthermore, if any of our products are faulty, then we may become subject to product liability claims or we may have to engage in a product recall. We do not carry any business interruption insurance, product recall or third-party liability insurance for our manufacturing facilities or with respect to our products to cover claims pertaining to personal injury or property or environmental damage arising from defaults with our products, product recalls, accidents on our property or damage relating to our operations. Our existing insurance coverage may not be ~~aligned~~sufficient to cover all risks associated with ~~the~~our ~~interests~~business. As a result, we may be required to pay for financial and other losses, damages and liabilities, including those caused by natural disasters and other events beyond our control, out of our ~~other~~own ~~stockholders.~~funds, which could have a material adverse effect on our business, financial condition and results of operations.

~~Mr.~~Inability Jianliang Shi, our Chairman, Chief Executive Officer and President is the beneficial owner of approximately 88.1% of our common stock after he exercised his rights under the Option Agreement. As a result, he has significant influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. This concentration of ownership may also have the effect of discouraging, delaying or preventing a future change of control, which could deprive our stockholders of an opportunity to ~~receive~~maintain ~~a premium for their shares as part of a sale of~~ our ~~company~~competitiveness ~~and~~would ~~might~~adversely ~~reduce~~affect ~~the price of~~ our ~~shares.~~financial performance.

~~Problems~~We ~~with~~operate ~~product~~in ~~quality~~a orcompetitive ~~product~~environment ~~performance~~and ~~could~~face ~~result~~competition infrom aexisting ~~decrease~~competitors inand ~~customers~~new market entrants. Some of these existing competitors are able to manufacture products which are similar to ours and ~~revenue,~~we ~~unexpected~~compete ~~expenses~~with each other on key attributes which include scale and ~~loss~~capacity of ~~market~~our ~~share.~~production facilities, pricing, brand name, timely delivery and customer service.

~~Our~~Competition ~~operating results depend,~~ in ~~part,~~the ~~on our ability to deliver quality~~ products ~~on a timely and cost-effective basis. As our products become more advanced, it may become more difficult to maintain our quality standards. If~~ we ~~experience deterioration~~manufacture ~~in the performance or quality of any of our products, it~~ could ~~result in delays in shipments~~increase, ~~cancellations of orders~~ or ~~customer returns and complaints, loss of goodwill and harm to~~ our ~~brand~~competitors ~~and reputation. Furthermore, our products are used together with components and in motor vehicles that have been developed and maintained by third parties, and when a problem occurs, it~~ may be ~~difficult~~able to ~~identify~~price ~~the~~their ~~source of the problem. In addition, some automobile parts and components may not be fully compatible with our~~ products ~~and~~more ~~may not meet our or our customers’ quality~~attractively, ~~safety, security~~ or ~~other~~may ~~standards.~~develop ~~The use by customers of our products with incompatible~~ or ~~otherwise~~acquire ~~substandard~~technology ~~components~~that is ~~largely~~comparable ~~outside of our control and could result in malfunctions or defects in our products and result in harm~~ to our ~~brand.~~intellectual These problems may lead to a decrease in customers and revenue, harm to our brand, unexpected expenses, loss of market share, the incurrence of significant warranty and repair costs, diversion of the attention of our engineering personnel from our product development efforts, customer relation problems or loss of customers, any one of which could materially adversely affect our businessproperty.

WeThere ~~have~~is ~~limited~~no ~~insurance~~assurance ~~coverage~~that ~~and~~we dowill ~~not~~be ~~carry~~able ~~any~~to ~~business~~compete ~~interruption~~successfully ~~insurance,~~in ~~third-party~~the ~~liability~~future. ~~insurance~~Any ~~for~~failure ~~our~~by ~~manufacturing~~us ~~facilities~~to orremain ~~insurance~~competitive ~~that~~would ~~covers~~adversely ~~the~~affect ~~risk of loss of~~ our ~~products~~financial ~~in shipment~~performance.

~~Operation~~We of our facilities involves many risks, including equipment failures, natural disasters, industrial accidents, power outages, labor disturbances and other business interruptions. Furthermore, if any of our products are faulty, then we may ~~become~~ ~~subject~~be toexposed ~~product liability claims or we may have~~ to ~~engage~~infringement ~~in a product recall. We do not carry any business interruption insurance, product recall~~ or ~~third-party~~misappropriation ~~liability insurance for our manufacturing facilities or with respect to our products to cover~~ claims ~~pertaining~~by tothird ~~personal injury or property or environmental damage arising from defaults with our products~~parties, ~~product recalls~~which, ~~accidents~~if ondetermined ~~our~~adversely ~~property~~against orus, ~~damage~~could ~~relating~~disrupt to our ~~operations.~~business ~~Our~~and ~~existing~~subject ~~insurance~~us ~~coverage may not be sufficient~~ to ~~cover~~significant ~~all~~liability ~~risks associated with our business. As a result, we may be required~~ to ~~pay~~third for financial and other losses, damages and liabilities, including those caused by natural disasters and other events beyond our control, out of our own funds, which could have a material adverse effect on our business, financial condition and results of operationsparties.

15Our success largely depends on our ability to use and develop our technology, know-how and product designs without infringing upon the intellectual property rights of third parties. We may be subject to litigation involving claims of patent infringement or violation of other intellectual property rights of third parties. The holders of patents and other intellectual property rights potentially relevant to our product offerings may be unknown to us or may otherwise make it difficult for us to acquire a license on commercially acceptable terms.

We ~~are~~own ~~dependent~~the intellectual property identified in Item 1 “Business—Intellectual Property.” There may also be technologies licensed to and relied on by us that are subject to infringement or other corresponding allegations or claims by others which could damage our ~~major~~ability ~~customers~~to rely on such technologies. In addition, although we endeavor to ensure that companies that work with us possess appropriate intellectual property rights or licenses, we cannot fully avoid the risks of intellectual property rights infringement created by suppliers of components used in our products or by companies with which we work in cooperative research and development activities.

~~Sales~~Our tocurrent ~~our~~or ~~two~~potential ~~largest customers~~competitors, ~~Belkin~~many ~~Electrical~~of ~~(Changzhou)~~which ~~Company~~have ~~Limited~~substantial resources and ~~Changzhou~~have ~~Xiu~~made ~~Yun~~substantial ~~Refrigeration~~investments ~~Equipment~~in ~~Company~~competing ~~Limited~~technologies, ~~accounted~~may have obtained or may obtain patents that will prevent, limit or interfere with our ability to make, use or sell our products in ~~aggregate~~China or other countries. The defense of ~~approximately~~intellectual 45property %claims, including patent infringement suits, and ~~37%~~related oflegal ~~our~~and ~~revenue~~administrative ~~for~~proceedings ~~2010~~can be both costly and ~~2009~~time consuming, ~~respectively~~and may significantly divert the efforts and resources of our technical and management personnel. Furthermore, an adverse determination in any such litigation or proceeding to which we may become a party could cause us to:

~~Our~~19 ability to retain these major customers is therefore important to our continued success. There is however no assurance that these customers will continue to purchase our products at the current levels in the future. There is also no assurance that we will be able to decrease our dependence on these major customers over time. If these major customers cease or reduce significantly their purchase of our products and we are unable to obtain substitute orders of comparable size from other existing or new customers, there will be a material adverse impact on our financial performance and position.

Wepay ~~depend~~damage ~~heavily on key personnel, and the loss of key employees and senior management could harm our business.~~ awards;
~~Our~~seek ~~future~~licenses ~~business~~from ~~and~~third results of operations depend in significant part upon the continued contributions of our key technical and senior management personnel, including our Chairman and Chief Executive Officer, Jianliang Shi and Chief Financial Officer, Jianfeng Xu. They also depend in significant part upon our ability to attract and retain additional qualified management, technical, marketing and sales and support personnel for our operations. If we lose a key employee, if a key employee fails to perform in his or her current position or if we are not able to attract and retain skilled employees as needed, our business could suffer. Turnover in our senior management could significantly deplete institutional knowledge held by our existing senior management team and impair our operations. parties;
Inpay ~~addition,~~additional ifongoing ~~any of these key personnel joins a competitor or forms a competing company~~royalties, we may lose some of our customers. We have not entered into confidentiality and non-competition agreements with all of these key personnel. Even with respect to those key personnel with whom we have entered into confidentiality or non-competition agreements, it is not clear, in light of uncertainties associated with the PRC legal system, what the court decisions will be and the extent to which ~~these court decisions~~ could bedecrease ~~enforced~~our inprofit ~~China, where all of these key personnel reside and hold some of their assets.~~ margins;
~~Inability~~redesign ~~to maintain~~ our ~~competitiveness~~products; ~~would adversely affect our financial performance.~~ or
Webe ~~operate~~restricted inby ~~a competitive environment and face competition from existing competitors and new market entrants~~injunctions. Some of these existing competitors are able to manufacture products which are similar to ours and we compete with each other on key attributes which include scale and capacity of our production facilities, pricing, brand name, timely delivery and customer service.

~~Competition~~These infactors ~~the~~could ~~products~~effectively weprevent ~~manufacture~~us ~~could~~from ~~increase,~~pursuing some or all of our ~~competitors~~business ~~may~~and beresult ~~able~~in toour ~~price~~customers ~~their~~or ~~products~~potential ~~more~~customers ~~attractively~~deferring, canceling or ~~may~~limiting ~~develop~~their purchase or ~~acquire~~use ~~technology~~of ~~that~~our isproducts, ~~comparable~~which tocould have a material adverse effect on our ~~intellectual~~financial ~~property.~~condition and results of operations.

~~There~~We isdepend noheavily ~~assurance~~on ~~that~~key wepersonnel, ~~will~~and ~~be able to compete successfully in~~ the ~~future.~~loss ~~Any~~of ~~failure~~key byemployees usand tosenior ~~remain~~management ~~competitive~~could ~~would~~harm ~~adversely affect~~ our ~~financial performance~~business.

WeOur ~~may~~future bebusiness ~~unable~~and results of operations depend in significant part upon the continued contributions of our key technical and senior management personnel, including our Chairman and Chief Executive Officer, Jianliang Shi and Chief Financial Officer, Jianfeng Xu. They also depend in significant part upon our ability to ~~effectively~~attract ~~manage~~and retain additional qualified management, technical, marketing and sales and support personnel for our ~~expansion~~operations. If we lose a key employee, if a key employee fails to perform in his or her current position or if we are not able to attract and retain skilled employees as needed, our business could suffer. Turnover in our senior management could significantly deplete institutional knowledge held by our existing senior management team and impair our operations.

WeIn ~~have~~addition, ~~identified~~if ~~several~~any ~~growth~~of ~~plans.~~these ~~These~~key ~~expansion~~personnel ~~plans~~joins ~~may~~a ~~strain~~competitor ~~our~~or ~~financial~~forms ~~resources.~~a ~~They~~competing company, we may ~~also~~lose ~~overstretch~~some of our ~~management~~customers. We have not entered into confidentiality and non-competition agreements with all of these key personnel. Even with respect to those key personnel with whom we have entered into confidentiality or non-competition agreements, it is not clear, in light of uncertainties associated with the PRC legal system, what the court decisions will be and ~~require~~the usextent to ~~restructure~~which ~~our~~these court ~~management~~decisions ~~structure.~~could be enforced in China, where all of these key personnel reside and hold some of their assets.

IfCertain weof ~~are~~our ~~unable~~existing tostockholders ~~successfully~~have ~~manage~~substantial influence over our ~~expansion~~company, weand ~~may~~their ~~encounter~~interests ~~operational~~may ~~and~~not ~~financial~~be ~~difficulties~~aligned ~~which~~with ~~would~~the ininterests ~~turn~~of ~~adversely affect~~ our ~~business~~other ~~and financial results~~stockholders.

WeMr. ~~may~~Jianliang ~~require~~Shi, ~~additional~~our ~~funding~~Chairman, ~~for~~Chief Executive Officer and President is the beneficial owner of approximately 88% of our ~~growth~~common ~~plans~~stock. As a result, he has significant influence over our business, including decisions regarding mergers, consolidations and ~~such~~the ~~funding~~sale of all or substantially all of our assets, election of directors and other significant corporate actions. This concentration of ownership may ~~result~~also inhave the effect of discouraging, delaying or preventing a ~~dilution~~future change of control, ~~your~~which ~~investment.~~could deprive our stockholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our shares.

16RISKS RELATING TO OUR ORGANIZATIONAL STRUCTURE

We ~~attempted~~operate toour ~~estimate~~businesses through companies with which we have contractual relationships, but in which we do not have controlling ownership. If the PRC government determines that our ~~funding~~agreements ~~requirements~~with these companies are not in ~~order~~compliance towith applicable ~~implement~~regulations, our ~~growth~~business ~~plans.~~in the PRC could be materially adversely affected.

IfWe ~~the~~operate ~~costs~~our business through a series of ~~implementing~~contractual ~~such~~arrangements ~~plans~~with ~~should~~Best ~~exceed~~Cable ~~these~~and ~~estimates~~Best ~~significantly~~Appliances orand iftheir weshareholders, ~~come~~Mr. ~~across~~Jianliang ~~opportunities~~Shi toand ~~grow~~Ms. ~~through~~Xueqin ~~expansion~~Wang. ~~plans~~See ~~which~~Item ~~cannot~~1 be“Business—Our ~~predicted~~Organizational atStructure” ~~this~~for ~~time,~~a description ~~and~~of ~~our~~these ~~funds~~arrangements. ~~generated~~We ~~from~~are ~~our~~able ~~operations~~to ~~prove insufficient~~control ~~for~~these ~~such~~entities ~~purposes,~~and weoperate ~~may~~their ~~need~~businesses tothrough ~~raise~~these ~~additional~~contractual ~~funds~~arrangements, tobut ~~meet~~we ~~these~~have ~~funding~~no ~~requirements.~~equity control over these companies.

~~These~~In ~~additional~~the ~~funds~~opinion ~~may~~of beour ~~raised~~PRC bylegal ~~issuing~~counsel, ~~equity~~Grandall orLegal ~~debt~~Group, ~~securities~~our orcorporate bystructure ~~borrowing~~and ~~from~~our ~~banks~~contractual orarrangements ~~other~~comply ~~resources.~~with Weall ~~cannot~~applicable ~~ensure~~PRC ~~that~~laws, werules ~~will~~and beregulations, ~~able~~and todo ~~obtain~~not violate any ~~additional~~applicable ~~financing~~PRC onlaws, ~~terms~~rules or regulations. We have been advised by our PRC legal counsel, however, that there are ~~acceptable~~substantial touncertainties ~~us,~~regarding orthe atinterpretation ~~all~~and application of current and future PRC laws and regulations. IfAccordingly, ~~we fail~~the toPRC ~~obtain~~regulatory ~~additional~~authorities ~~financing~~may onin ~~terms~~the future take a view that ~~are~~is ~~acceptable~~contrary to ~~us,~~the weopinion ~~will~~of ~~not~~our bePRC ~~able~~legal tocounsel. ~~implement~~We ~~such~~have ~~plans~~been ~~fully.~~further ~~Such~~advised ~~financing~~by ~~even~~our PRC legal counsel that if ~~obtained,~~the ~~may~~PRC begovernment ~~accompanied~~finds bythat ~~conditions~~the agreements that ~~limit~~establish ~~our~~the ~~ability~~structure tofor ~~pay~~operating ~~dividends~~our business orin ~~require~~the usPRC ~~to seek~~do ~~lenders’~~not ~~consent~~comply ~~for~~with ~~payment~~PRC ofgovernment ~~dividends~~restrictions, orthe ~~restrict~~relevant ~~our~~PRC ~~freedom~~regulatory toauthorities ~~operate~~would ~~our~~have ~~business~~broad bydiscretion ~~requiring~~in ~~lender’s~~dealing ~~consent~~with ~~for~~such ~~certain~~violations, ~~corporate~~including: ~~actions.~~

~~Further,~~20 if we raise additional funds by way of a rights offering or through the issuance of new shares, any shareholders who are unable or unwilling to participate in such an additional round of fund raising may suffer dilution in their investment.

Welevy ~~may~~fines beon ~~exposed to potential risks relating to our internal controls over financial reporting and our ability to have those controls attested to by our independent auditors.~~us;
revoke ~~Companies~~our ~~that~~business ~~file reports with the SEC, including us, are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404. SOX 404 requires management to establish~~ and ~~maintain~~operating a system of internal control over financial reporting and annual reports on Form 10-K filed under the Exchange Act to contain a report from management assessing the effectiveness of a company’s internal control over financial reporting. Separately, under SOX 404, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, public companies that are large accelerated or accelerated filers must include in their annual reports on Form 10-K an attestation report of their regular auditors attesting to and reporting on management’s assessment of internal control over financial reporting. Non-accelerated filers and smaller reporting companies are not required to include an attestation report of their auditors in annual reports.licenses;
require Weus ~~are a smaller reporting company and, consequently, are not required~~ to ~~include~~discontinue anor ~~attestation~~restrict ~~report of~~ our auditor in this annual report. However, we may become an accelerated filer and, accordingly, may required to include an attestation report of our auditors in our annual report on Form 10-K for the fiscal year ending December 31, 2011. We have taken several measures to improve our internal control over financial reporting after the reverse acquisition, such as hiring additional staff with knowledge of U.S. GAAP and reporting experience with the SEC. However, if and when we become subject to the auditor attestation requirements under SOX 404, we can provide no assurance that we will receive a positive attestation from our independent auditors.operations;
~~Our~~restrict ~~holding~~our ~~company~~right ~~structure~~to ~~may~~collect ~~limit the payment of dividends.~~ revenues;
Werequire ~~have~~us ~~no direct business operations, other than our contractual control over our VIEs. While we have no current intention of paying dividends, should we decide in the future~~ to dorestructure ~~so, as a holding company,~~ our ~~ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our controlled VIEs and other holdings and investments. In addition~~business, ~~our~~corporate ~~controlled~~structure VIEs, from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or ~~other~~operations; ~~hard currency~~ and other regulatory restrictions as discussed below. If future dividends are paid in RMB, fluctuations in the exchange rate for the conversion of RMB into U.S. dollars may reduce the amount received by U.S. stockholders upon conversion of the dividend payment into U.S. dollars.
~~Chinese~~impose ~~regulations~~additional ~~currently~~conditions ~~permit~~or ~~the~~requirements ~~payment of dividends only out of accumulated profits as determined in accordance~~ with ~~Chinese~~which ~~accounting~~we ~~standards~~may and regulations. Our controlled VIEs in China are also required to set aside a portion of their after tax profits according to Chinese accounting standards and regulations to fund certain reserve funds. Currently, our controlled VIEs in China are the only sources of revenues or investment holdings for the payment of dividends. If they do not ~~accumulate sufficient profits under Chinese accounting standards and regulations to first fund certain reserve funds as required by Chinese accounting standards, we will~~ be ~~unable~~able to ~~pay any dividends.~~ comply

17The imposition of any of these penalties could result in a material and adverse effect on our ability to conduct our business and our financial condition.

~~RISKS~~We ~~RELATING~~believe TOthat ~~OUR~~the ~~COMMERCIAL~~VIE ~~RELATIONSHIP~~arrangements ~~WITH~~are ~~BEST~~in ~~CABLE~~compliance ~~AND~~with ~~BEST~~PRC ~~APPLIANCES~~law and are legally enforceable. The major shareholders of the VIEs are also the major shareholders of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders of the VIEs were to reduce their interest in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so.

~~Our~~If the contractual ~~arrangements~~relationships ~~with~~between Best Cable and Best Appliances and ~~their~~Best Green Changzhou were terminated, our non-affiliated shareholders ~~may~~would ~~not~~have belittle asor ~~effective~~no inrecourse ~~providing~~against ~~control~~the ~~over~~assets ~~them~~of asBest ~~direct~~Cable ~~ownership.~~and Best Appliances.

WeOur ~~rely~~Company’s oncontrolling ~~contractual arrangements with several affiliated PRC entities and their~~ shareholders, towho ~~operate~~collectively ~~our~~hold ~~businesses~~87.8% ~~For a description~~ of ~~these~~our ~~contractual~~common ~~arrangements~~shares, ~~see~~also ~~“Corporate~~hold ~~structure”.~~100% Inof the ~~opinion~~equity of ~~our~~Best ~~PRC~~Cable ~~legal counsel, Grandall Legal Group, these contractual arrangements are valid, binding~~ and ~~enforceable,~~Best ~~and~~Appliances ~~will~~(the ~~not result in any violation of PRC laws or regulations currently in effect~~VIEs). These ~~contractual~~shareholders ~~arrangements~~are ~~may~~in ~~not~~a beposition asto ~~effective~~exert ~~in providing~~substantial ~~us with~~ control over ~~these entities as direct ownership~~the Company. IfBecause ~~we had direct ownership~~ of ~~these~~this ~~entities~~relationship, wethese ~~would~~shareholders could be ~~able~~in ~~to exercise our rights as~~ a ~~shareholder~~position to ~~effect~~voluntarily ~~changes~~terminate in the ~~boards~~contractual ofrelationship ~~directors~~between ofBest ~~these~~Green ~~entities,~~Changzhou ~~which~~and inthe ~~turn could~~VIEs ~~effect~~pursuant ~~changes, subject~~ to ~~any~~which ~~applicable~~we ~~fiduciary~~control ~~obligations, at~~ the ~~management~~VIEs ~~level.~~by ~~However,~~virtue ~~if any~~ of ~~these~~our ~~entities~~ownership ~~or any~~ of ~~their subsidiaries or their shareholders fails to perform its or his respective obligations under these~~all ~~contractual~~of ~~arrangements, we may not be able to enforce~~ the ~~relevant~~equity ~~agreements if the agreements are ruled in violation~~ of ~~the~~Best ~~PRC~~Green ~~laws as mentioned above, even if the contracts are otherwise legal and valid~~Changzhou. WeIf ~~may~~this ~~have~~were to ~~incur substantial costs and resources to enforce them~~occur, ~~and~~most ~~seek~~non-affiliated ~~legal~~shareholders ~~remedies~~would ~~under~~have ~~PRC~~little ~~law,~~to ~~including~~no ~~specific~~recourse ~~performance~~against orthe ~~injunctive~~assets ~~relief,~~of ~~and~~the ~~claiming damages~~VIEs, which ~~may~~are ~~not~~located bein ~~effective~~China. ~~Accordingly, it may be difficult for us to change our corporate structure or to bring claims against any of these entities if they do not perform their obligations under their contracts with us.~~

~~All~~Our ~~of our revenues are generated through our VIE, and we rely on payments made by our VIE to Best Green Changzhou, our subsidiary, pursuant to~~ contractual arrangements towith ~~transfer~~Best ~~any~~Cable ~~such~~and ~~revenues to~~ Best ~~Green~~Appliances ~~Changzhou. Any restriction on such payments~~ and ~~any~~their ~~increase~~shareholders ~~in the amount of PRC taxes applicable to such payments~~ may ~~materially~~not ~~and~~be ~~adversely~~as ~~affect~~effective ~~our~~in ~~business~~providing ~~and~~control ~~our~~over ~~ability~~them toas ~~pay~~direct ~~dividends to our shareholders~~ownership.

WeOur ~~conduct~~operations ~~substantially~~are ~~all~~dependent ofon ~~our operations through~~ Best Cable and Best Appliances, ~~our~~in ~~VIE,~~ which ~~generates~~we ~~all~~have ofno ~~our~~equity ~~revenues.~~ownership Asinterest ~~Best Cable~~ and ~~Best~~must ~~Appliances~~rely ~~are~~on ~~not~~contractual ~~owned~~arrangements byto ~~our~~control ~~subsidiary,~~and itoperate isthe ~~not~~businesses ~~able~~of tothese ~~make~~entities. ~~dividend~~These ~~payments~~contractual toarrangements ~~our~~may not ~~subsidiary.~~be ~~Instead,~~as ~~Best~~effective ~~Green~~in ~~Changzhou,~~providing ~~our~~control ~~subsidiary~~over inthese ~~China,~~entities ~~entered~~as ~~into~~direct aownership. ~~number~~For ofexample, ~~contracts with~~ Best Cable and ~~Bes~~Best Appliances, ~~including~~may ~~Business~~be ~~Operation~~unwilling ~~Agreement,~~or ~~Equity~~unable ~~Interest~~to ~~Pledge~~perform ~~Agreement,~~their ~~Exclusive~~obligations ~~Technical~~under ~~and~~our ~~Consulting Service~~commercial ~~Agreement~~agreements ~~and~~with ~~Proxy Agreement~~them, ~~pursuant~~in to which ~~Best~~case ~~Cable~~we ~~and~~will ~~Best~~not ~~Appliances~~be able ~~pay~~to ~~Best~~conduct ~~Green~~our ~~Changzhou~~operations ~~for~~in ~~certain~~the ~~services~~manner ~~that~~currently ~~Best~~planned. ~~Green~~In ~~Changzhou~~addition, ~~provides~~they tomay ~~Best~~seek ~~Cable~~to ~~and~~renew ~~Best~~their ~~Appliances.~~agreements ~~However, depending~~ on ~~the~~terms ~~nature~~that ~~of services provided, certain of these payments~~ are ~~subject~~disadvantageous to ~~PRC~~us. ~~taxes~~Although atwe ~~different~~have ~~rates,~~entered ~~including~~into ~~business~~a ~~taxes~~series ~~and~~of ~~VATs,~~agreements ~~which effectively reduce the amount~~ that ~~Best~~provide ~~Green~~us ~~Changzhou~~with ~~receives~~substantial ability ~~from~~to control Best Cable and Best Appliances., Wewe ~~cannot~~may ~~assure~~not ~~you~~succeed ~~that the~~in ~~PRC~~enforcing ~~government~~our ~~will~~rights ~~not~~under ~~impose~~them ~~restrictions~~by relying on ~~such~~legal ~~payments~~remedies orunder ~~change~~Chinese ~~the~~law, ~~tax~~which ~~rates~~may ~~applicable~~not tobe ~~such payments~~adequate. ~~Any~~In ~~such~~addition, ~~restrictions~~if onwe ~~such~~are ~~payment~~unable orto ~~increases~~renew inthese ~~the~~agreements ~~applicable~~on ~~tax~~favorable terms ~~rates~~when ~~may~~these ~~materially~~agreements ~~and~~expire, ~~adversely~~or ~~affect our ability~~ to ~~receive~~ ~~payments~~enter ~~from~~into ~~Best~~similar ~~Cable~~agreements ~~and~~with ~~Best~~other ~~Appliances or the amount of such payments~~parties, ~~and~~our business may innot ~~turn~~be ~~materially~~able ~~and~~to ~~adversely~~operate ~~affect~~or ~~our business~~expand, ~~our net income~~ and our ~~ability~~operating toexpenses ~~pay~~may ~~dividends~~significantly ~~to our shareholders~~increase.

~~Jianliang~~Uncertainties ~~Shi’s~~in ~~association~~the ~~with~~PRC ~~Best~~legal ~~Cable~~system ~~and~~may ~~Best~~impede ~~Appliances~~our ~~could~~ability ~~pose~~to aenforce ~~conflict~~the ofcommercial ~~interest~~agreements ~~which~~that ~~may~~we ~~result~~have inentered into with Best Cable and Best Appliances ~~decisions~~or ~~that~~any ~~are~~arbitral ~~adverse~~award thereunder and any inability to enforce these agreements could materially and adversely affect our business. and operation.

~~Jianliang~~While ~~Shi~~disputes ~~and~~under ~~Xueqin~~the ~~Wang,~~contractual ~~who~~arrangements ~~hold~~with aBest ~~controlling~~Cable ~~interest~~and in Best ~~Green~~Appliances ~~Investment~~ are ~~also~~subject ~~controlling~~to ~~shareholders~~binding ofarbitration ~~our~~before ~~VIEs.~~the ~~Conflicts~~China ofInternational ~~interests~~Economic ~~between~~and ~~their~~Trade ~~dual~~Arbitration ~~roles~~Commission, asor ~~owners~~CIETAC, ofin ~~both~~accordance ~~Best~~with ~~Cable~~CIETAC’s arbitration ~~and~~rules, ~~Best~~the ~~Appliances~~agreements are governed by PRC law and ~~our~~an ~~company may~~arbitration ~~arise.~~award Wemay ~~cannot~~be ~~assure~~challenged ~~you~~in ~~that~~accordance ~~when~~with ~~conflicts~~PRC oflaw. ~~interest~~For ~~arise~~example, ~~any~~a orclaim ~~all~~that ofthe ~~these~~enforcement ~~individuals~~of ~~will~~an ~~act~~award in ~~the~~our ~~best~~favor ~~interests~~will ofbe ~~our~~detrimental ~~company~~to the public interest, or that an ~~any~~issue ~~conflict~~does not fall within the scope of ~~interest~~the ~~will~~arbitration bewould ~~resolved~~require us to engage in ~~our~~administrative ~~favor.~~and Injudicial ~~addition,~~proceedings ~~these~~to ~~individuals~~defend ~~may breach~~an oraward. ~~cause~~China’s ~~Best~~legal ~~Cable~~system ~~and~~is ~~Best~~a ~~Appliances~~civil tolaw ~~breach~~system orbased ~~refuse~~on ~~to renew~~written ~~the~~statutes ~~existing~~and ~~contractual~~unlike ~~arrangements~~common law systems, it is a system in which ~~will~~decided legal cases have alittle ~~material~~value ~~adverse~~as ~~effect~~precedent. onAs ~~our~~a ~~ability~~result, toChina’s ~~effectively~~administrative ~~control~~and ~~Best~~judicial ~~Cable~~authorities ~~and~~have ~~Best~~significant ~~Appliances~~discretion in interpreting and ~~receive~~implementing ~~economic~~statutory ~~benefits~~and ~~from~~contractual terms, and it. may Ifbe wemore ~~cannot~~difficult ~~resolve~~to ~~any~~evaluate ~~conflicts~~the outcome of ~~interest~~administrative ~~or disputes~~and ~~between~~judicial usproceedings and the ~~beneficial~~level ~~owners~~of legal protection available than in more developed legal systems. These uncertainties may impede our ability to enforce the terms of the contracts that we have entered into with Best Cable and Best Appliances,. weAny ~~would~~inability ~~have~~ to ~~rely~~enforce onthe ~~legal~~contractual ~~proceedings,~~arrangements ~~the~~with ~~outcome~~Best ofCable ~~which~~and isBest ~~uncertain~~Appliances ~~and~~or ~~which~~an award thereunder could bematerially ~~disruptive~~and toadversely affect our business and operation.

1821

IfThe shareholders of Best Cable and Best Appliances ormay ~~the~~have ~~Shareholders~~potential ~~violate~~conflicts ~~our~~of ~~contractual~~interests ~~arrangements~~ with itus, ~~our~~which ~~business could be disrupted and we~~ may ~~have~~adversely toaffect ~~resort to litigation to enforce~~ our ~~rights which may be time consuming and expensive~~business.

~~Our~~Mr. ~~operations~~Jianliang ~~are~~Shi ~~currently~~and ~~dependent~~Ms. ~~upon~~Xueqin ~~our~~Wang, ~~commercial~~who ~~relationship~~own ~~with~~and control Best Green Investment Limited, are also controlling shareholders of Best Cable and Best Appliances. IfConflicts of interests between their dual roles as owners of both Best Cable and Best Appliances orand ~~their~~our ~~shareholders~~Company ~~are~~may ~~unwilling~~arise. orWe ~~unable~~cannot toassure ~~perform~~you ~~their~~that ~~obligations~~when ~~under~~conflicts ~~our~~of ~~commercial arrangements~~interest ~~with them~~arise, ~~including~~any ~~payment~~or all of ~~revenues~~these ~~under~~individuals ~~the~~will ~~Exclusive~~act ~~Technical~~in ~~and~~the ~~Consulting~~best ~~Service~~interests ~~Agreement,~~of weour ~~will~~company ~~not~~or bethat ~~able~~any toconflict ~~conduct~~of ~~our~~interest ~~operations~~will inbe ~~the~~resolved ~~manner~~in ~~currently~~our ~~planned~~favor. In addition, these individuals may breach or cause Best Cable and Best Appliances ~~may seek~~ to ~~renew~~breach ~~these~~or ~~agreements~~refuse onto ~~terms~~renew ~~that~~the ~~are~~existing ~~disadvantageous~~contractual toarrangements, ~~us.~~which ~~Although~~will we have ~~entered into~~ a ~~series~~material ofadverse ~~agreements~~effect ~~that~~on ~~provide~~our ~~us with substantial~~ ability to effectively control Best Cable and Best Appliances, weand ~~may~~receive ~~not~~economic ~~succeed~~benefits infrom ~~enforcing our rights under them~~it. If we ~~are~~cannot ~~unable~~resolve toany ~~renew~~conflicts ~~these~~of ~~agreements~~interest onor ~~favorable~~disputes ~~terms,~~between orus toand ~~enter~~the ~~into~~beneficial ~~similar~~owners ~~agreements~~of ~~with~~Best ~~other~~Cable ~~parties,~~and ~~our~~Best ~~business~~Appliances, ~~may~~we ~~not~~would behave ~~able~~ to ~~operate~~rely oron ~~expand~~legal proceedings, the outcome of which is uncertain and ~~our~~which ~~operating~~could ~~expenses~~be ~~may~~disruptive ~~significantly~~to ~~increase.~~our business.

IfOur ~~the~~arrangements ~~PRC~~with ~~government~~Best ~~determines~~Cable ~~that~~and ~~the~~Best ~~agreements~~Appliances ~~establishing~~and ~~the~~their ~~structure~~shareholders ~~for~~may ~~operating~~be ~~our~~subject ~~China~~to ~~business~~a dotransfer ~~not~~pricing ~~comply~~adjustment ~~with~~by ~~applicable~~the PRC ~~laws,~~tax ~~rules~~authorities ~~and~~which ~~regulations, we~~ could behave ~~subject~~an toadverse ~~severe~~effect ~~penalties~~on ~~including being prohibited from continuing~~ our ~~operations~~income inand ~~the PRC~~expenses.

OnWe ~~August~~could 9,face ~~2006,~~material ~~six~~and ~~PRC~~adverse ~~regulatory~~tax ~~agencies,~~consequences ~~including~~if the ~~CSRC,~~PRC ~~promulgated~~tax ~~the~~authorities ~~Regulation~~determine onthat ~~Mergers~~our ~~and~~contracts ~~Acquisitions~~with ofBest ~~Domestic~~Cable ~~Companies~~and byBest ~~Foreign~~Appliances ~~Investors,~~and ~~which~~their ~~became~~shareholders ~~effective~~were onnot ~~September~~entered 8,into ~~2006~~based ~~(the~~on ~~“2006~~arm’s ~~M&A Rules”)~~length negotiations. ~~This~~If ~~new regulation, among other things, governs~~ the ~~approval~~PRC ~~process~~tax authorities bydetermine ~~which~~that athese ~~PRC~~contracts ~~company~~were ~~may~~not ~~participate~~entered ininto on an ~~acquisition~~arm’s oflength ~~assets~~basis, orthey ~~equity~~may ~~interests.~~adjust Weour ~~believe~~income ~~that~~and ~~this~~expenses ~~approval~~for ~~process~~PRC ~~was~~tax ~~not~~purposes ~~required~~ in ~~our case because we have not acquired either~~ the ~~equity~~form ~~or assets~~ of a ~~company~~transfer ~~located~~pricing inadjustment. ~~the~~Such ~~PRC, and that the VIE agreements do not constitute such~~ an ~~acquisition.~~adjustment Ifmay ~~the~~require ~~PRC~~that ~~government were to take a contrary view,~~ we ~~might be subject to fines or other~~pay ~~enforcement~~additional ~~action,~~PRC ~~and~~taxes ~~might~~plus beapplicable ~~forced~~penalties ~~to amend or terminate our contractual arrangements with Best Cable~~ and ~~Best Appliances~~interest, ~~which~~if ~~could have an adverse effect on our business~~any.

~~The~~RISKS ~~2006~~RELATED ~~M&A~~TO ~~Rules~~DOING ~~also~~BUSINESS ~~contain~~IN ~~provisions~~CHINA requiring offshore special purpose vehicles, or SPVs, formed for the purpose of acquiring PRC domestic companies and controlled by PRC individuals, to obtain the approval of the CSRC prior to listing their securities on an overseas stock exchange. We believe that CSRC’s approval was not required for our offering of securities since we are not an SPV as defined in the Rules, nor have we acquired a PRC domestic company. However, there remains some uncertainty as to how this regulation will be interpreted or implemented. If the CSRC or another PRC regulatory agency subsequently determines that its approval was required, we may face sanctions by the CSRC or another PRC regulatory agency or other actions which could have an adverse effect on our business.

~~Uncertainties~~If inwe ~~the~~become ~~PRC~~directly ~~legal~~subject ~~system~~to ~~may~~the ~~impede~~recent ~~our~~scrutiny, ~~ability~~criticism toand ~~enforce~~negative ~~the~~publicity ~~commercial~~involving ~~agreements~~U.S.-listed ~~that~~Chinese companies, we may have ~~entered~~to ~~into~~expend ~~with~~significant ~~Best~~resources ~~Cable~~to investigate and ~~Best~~resolve ~~Appliances~~the ormatter ~~any~~which ~~arbitral~~could ~~award~~harm ~~thereunder~~our ~~and~~business operations, ~~any~~stock ~~inability~~price toand ~~enforce~~reputation ~~these~~and ~~agreements~~ could ~~materially~~result ~~and~~in ~~adversely~~a ~~affect~~loss of your investment in our ~~business~~stock, especially if such matter cannot be addressed and ~~operation.~~resolved favorably.

~~While~~Recently, ~~disputes~~U.S. ~~under~~public ~~the~~companies ~~Exclusive~~that ~~Technical~~have ~~and~~substantially ~~Consulting~~all ~~Service~~of ~~Agreement~~their ~~with~~operations ~~Best~~in ~~Cable~~China, ~~and~~particularly ~~Best~~companies ~~Appliances~~like ~~are~~us ~~subject~~which tohave ~~binding~~completed ~~arbitration~~so-called ~~before~~reverse ~~the~~merger ~~China~~transactions, ~~International~~have ~~Economic~~been ~~and~~the ~~Trade~~subject ~~Arbitration~~of ~~Commission~~intense scrutiny, orcriticism ~~CIETAC~~and negative publicity by investors, infinancial ~~accordance with~~commentators ~~CIETAC~~and ~~Arbitration~~regulatory ~~Rules~~agencies, such as the ~~agreements~~SEC. ~~are~~Much ~~governed~~of bythe ~~PRC~~scrutiny, ~~law~~criticism and annegative ~~arbitration~~publicity ~~award~~has ~~may~~centered bearound ~~challenged~~financial inand ~~accordance~~accounting ~~with~~irregularities ~~PRC~~and ~~law. For example~~mistakes, a ~~claim~~lack ~~that the enforcement~~ of aneffective ~~award~~internal controls inover ~~our~~financial ~~favor~~accounting, ~~will~~inadequate becorporate ~~detrimental~~governance topolicies ~~the public interest,~~ or ~~that~~a anlack ~~issue~~of ~~does~~adherence ~~not~~thereto ~~fall~~and, ~~within~~in ~~the~~many ~~scope~~cases, allegations of ~~the~~fraud. ~~arbitration~~As ~~would~~a ~~require~~result usof tothe ~~engage~~scrutiny, incriticism ~~administrative~~ and ~~judicial~~negative ~~proceedings~~publicity, tothe ~~defend~~publicly antraded ~~award.~~stock ~~China’s~~of ~~legal~~many U.S. ~~system~~listed isChinese acompanies ~~civil~~has ~~law~~sharply ~~system~~decreased ~~based~~in onvalue ~~written statutes~~ and ~~unlike~~, ~~common~~in ~~law~~some ~~systems~~cases, ithas isbecome avirtually ~~system~~worthless. inMany ~~which~~of ~~decided~~these ~~legal~~companies ~~cases~~are ~~have~~now ~~little~~subject ~~value~~to asshareholder ~~precedent.~~lawsuits, AsSEC aenforcement ~~result,~~actions ~~China’s~~and ~~administrative~~are ~~and~~conducting ~~judicial~~internal ~~authorities~~and ~~have~~external ~~significant~~investigations ~~discretion~~into inthe ~~interpreting~~allegations. ~~and~~It ~~implementing~~is ~~statutory~~not ~~and~~clear ~~contractual~~what ~~terms~~effect this sector-wide scrutiny, criticism and itnegative ~~may~~publicity bewill ~~more~~have ~~difficult~~on toour ~~evaluate~~Company, ~~the~~our ~~outcome~~business ofand ~~administrative~~our ~~and~~stock ~~judicial~~price. ~~proceedings~~If ~~and~~we become the ~~level~~subject of ~~legal~~any ~~protection~~unfavorable ~~available~~allegations, ~~than~~whether such inallegations ~~more developed~~are ~~legal~~proven ~~systems.~~to ~~These~~be ~~uncertainties~~true ~~may~~or ~~impede~~untrue, ~~our~~we ~~ability~~will have to ~~enforce~~expend ~~the~~significant ~~terms~~resources ofto ~~the~~investigate ~~Exclusive~~such ~~Technical~~allegations and/or ~~Consulting~~defend ~~Service~~our ~~Agreement~~company. ~~and~~This ~~the~~situation ~~other~~will ~~contracts~~be ~~that~~costly weand ~~may~~time ~~enter~~consuming ~~into~~and ~~with~~distract ~~Best~~our ~~Cable~~management ~~and~~from ~~Best~~growing ~~Appliances~~our company. ~~Any~~If ~~inability~~such ~~to enforce~~allegations ~~the~~are ~~Exclusive~~not ~~Technical~~proven ~~and~~to ~~Consulting~~be ~~Service~~groundless, ~~Agreement~~our orcompany anand ~~award~~business ~~thereunder~~operations ~~could~~will ~~materially~~be severely impacted and ~~adversely~~your ~~affect~~investment in our ~~business~~stock ~~and~~could ~~operation.~~be rendered worthless.

1922

~~Our~~Adverse ~~arrangements~~changes ~~with~~in ~~Best~~political, ~~Cable~~economic and ~~Best~~other ~~Appliances~~policies ~~and~~of the ~~Shareholders~~Chinese ~~may~~government becould ~~subject~~have to a ~~transfer~~material ~~pricing~~adverse ~~adjustment~~effect byon the ~~PRC~~overall ~~tax~~economic ~~authorities~~growth of China, which could ~~have~~materially anand ~~adverse~~adversely ~~effect~~affect onthe growth of our ~~income~~business and ~~expenses.~~our competitive position.

WeMost ~~could~~of ~~face material and adverse tax consequences if the PRC tax authorities determine that~~ our ~~contracts~~business ~~with~~operations ~~Best~~are ~~Cable~~conducted ~~and~~in ~~Best Appliances and the Shareholders were not entered into based on arm’s length negotiations~~China. ~~Although~~Accordingly, our ~~contractual~~ ~~arrangements~~business, ~~are~~financial ~~similar~~condition, toresults ~~other~~of ~~companies conducting similar~~ operations inand ~~China,~~prospects ifare ~~the~~affected ~~PRC~~significantly ~~tax~~by ~~authorities determine that these contracts were not entered into on an arm’s length basis~~economic, ~~they~~political ~~may adjust our income~~ and ~~expenses for~~legal ~~PRC~~developments ~~tax purposes~~ in ~~the form of a transfer pricing adjustment~~China. ~~Such~~The anChinese ~~adjustment~~economy differs ~~may~~from ~~require~~the ~~that~~economies weof ~~pay~~most ~~additional~~developed ~~PRC~~countries ~~taxes~~in ~~plus~~many ~~applicable penalties and interest~~respects, ~~if any.~~ including:

~~RISKS~~the ~~RELATED~~degree TOof ~~DOING~~government ~~BUSINESS IN CHINA~~ involvement;
~~We may be exposed to liabilities under~~ the ~~Foreign~~level ~~Corrupt~~of ~~Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could hurt our business.~~ development;
~~We are subject to~~ the ~~Foreign~~growth Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We have operations, agreements with third parties and make sales in China, which may experience corruption. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants, sales agents or distributors of our Company, even though these parties are not always subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire. rate;
~~Changes~~the incontrol ~~China’s~~of ~~political~~foreign ~~or economic situation could harm us and our operating results.~~ exchange;
~~Economic reforms adopted by~~ the ~~Chinese~~allocation ~~government have had a positive effect on the economic development~~ of the country, but the government could change these economic reforms or any of the legal systems at any time. This could either benefit or damage our operations and profitability. Some of the things that could have this effect are: resources;
~~Level~~an ofevolving ~~government~~regulatory ~~involvement in the economy~~system; ~~Control~~ ~~of foreign exchange; Methods of allocating resources; Balance of payments position; International trade restrictions;~~ and ~~International conflict.~~
The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, or OECD, in many ways. For example, state-owned enterprises still constitute a ~~large portion of the Chinese economy and weak corporate governance and a~~ lack of ~~flexible~~sufficient ~~currency~~transparency ~~exchange policy still prevail~~ in ~~China. As a result of these differences, we may not develop in~~ the ~~same~~regulatory ~~way or at the same rate as might be expected if the Chinese economy was similar to those of the OECD member countries~~process.

20While the Chinese economy has experienced significant growth in the past 30 years, growth has been uneven, both geographically and among various sectors of the economy. The Chinese economy has also experienced certain adverse effects due to the recent global financial crisis. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall Chinese economy, but may also have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us.

~~Our~~The ~~business~~Chinese iseconomy ~~largely~~has ~~subject~~been transitioning from a planned economy to a more market-oriented economy. Although in recent years the ~~uncertain~~Chinese ~~legal~~government ~~environment~~has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of sound corporate governance in business enterprises, a substantial portion of the productive assets in China is still owned by the Chinese government. The continued control of these assets and ~~your~~other ~~legal~~aspects ~~protection~~of the national economy by the Chinese government could bematerially ~~limited~~and adversely affect our business. The Chinese government also exercises significant control over Chinese economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.

~~The~~Any ~~Chinese~~adverse ~~legal~~change ~~system is a civil law system based on written statutes. Unlike common law systems, it is a system~~ in ~~which precedents set in earlier legal cases are not generally used. The overall effect of legislation enacted over~~ the ~~past~~economic ~~20 years~~conditions ~~has~~or ~~been~~government topolicies ~~enhance the legal protections afforded to foreign invested enterprises~~ in China. ~~However,~~could ~~these~~have ~~laws,~~a ~~regulations~~material ~~and~~adverse ~~legal~~effect ~~requirements~~on ~~are~~overall ~~relatively~~economic ~~recent and are evolving rapidly~~growth, ~~and~~which ~~their~~in ~~interpretation~~turn ~~and enforcement involve uncertainties. These uncertainties~~ could ~~limit~~lead ~~the legal protections available~~ to ~~foreign~~a ~~investors,~~reduction ~~such~~in asdemand ~~the~~for ~~right of foreign invested enterprises to hold licenses and permits such as requisite business licenses. In addition, all of~~ our ~~executive~~ ~~officers~~products and ~~our~~consequently ~~directors~~have ~~are residents of China and not of the U.S., and substantially all the assets of these persons are located outside the U.S. As~~ a ~~result,~~material adverse ~~it could be difficult for investors to~~ effect ~~service~~on ~~of process in the U.S., or to enforce a judgment obtained in the U.S. against~~ our ~~Chinese operations and our controlled VIEs~~businesses.

~~The~~Future ~~Chinese~~ government ~~exerts~~regulations ~~substantial~~or ~~influence~~other ~~over~~standards ~~the~~could ~~manner~~have inan ~~which~~adverse weeffect ~~must~~on ~~conduct~~ our ~~business activities~~operations.

~~China~~Our ~~only~~operations ~~recently~~are ~~has~~subject ~~permitted~~to ~~provincial~~a ~~and~~variety ~~local~~of ~~economic~~laws, ~~autonomy~~regulations and ~~private~~licensing ~~economic~~requirements ~~activities.~~of ~~The~~national ~~Chinese government has exercised~~ and ~~continues~~local toauthorities ~~exercise~~in ~~substantial~~the ~~control~~PRC. ~~over~~We ~~virtually~~are ~~every~~required ~~sector~~to ofobtain ~~the~~licenses ~~Chinese~~or ~~economy~~permits ~~through regulation~~ and ~~state~~to ~~ownership.~~meet ~~Our~~certain ~~ability~~standards ~~to operate~~ in ~~China~~the ~~may~~conduct beof ~~harmed~~our bybusiness. ~~changes~~The loss inof ~~its~~such ~~laws~~licenses, ~~and~~or ~~regulations,~~the ~~including~~imposition ~~those~~of ~~relating~~conditions to ~~taxation,~~the ~~import~~granting ~~and~~or ~~export~~retention ~~tariffs,~~of ~~environmental~~such ~~regulations~~licenses, ~~land~~could ~~use~~have ~~rights,~~an ~~property~~adverse ~~and~~effect ~~other matters~~on us. WeIn ~~believe~~the event that ~~our~~these ~~operations~~laws, inregulations ~~China~~and/or ~~are~~licensing inrequirements ~~material~~change, ~~compliance~~we ~~with~~may ~~all~~be ~~applicable~~required ~~legal~~to ~~and~~modify our ~~regulatory~~operations ~~requirements.~~or ~~However,~~to ~~the~~utilize ~~central~~resources orto ~~local~~maintain ~~governments~~compliance ofwith ~~the~~such ~~jurisdictions~~rules inand ~~which~~regulations. weIn ~~operate~~addition, ~~may impose~~ new, ~~stricter~~ regulations ormay ~~interpretations~~be ofenacted ~~existing regulations~~ that ~~would~~could ~~require~~have ~~additional~~an ~~expenditures~~adverse ~~and~~effect ~~efforts~~ on ~~our part to ensure our compliance with such regulations or interpretations~~us.

~~Accordingly,~~Uncertainties ~~government~~with ~~actions~~respect ~~in the future, including any decision not~~ to ~~continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in~~ the ~~implementation~~PRC oflegal ~~economic~~system ~~policies,~~ could ~~have~~limit athe ~~significant~~legal ~~effect~~protections onavailable ~~economic~~to ~~conditions~~you ~~in China or particular regions thereof,~~ and ~~could require~~ us ~~to divest ourselves of any interest we then hold in Chinese properties or joint ventures~~.

~~Future~~We ~~inflation~~conduct substantially all of our business through our subsidiary and VIEs in the PRC. Our subsidiary and VIEs are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to Foreign Invested Enterprises, or FIEs. The PRC legal system is based on written statutes, and prior court decisions may ~~inhibit~~be ~~our~~cited ~~ability~~for reference but have limited precedential value. Since 1979, a series of new PRC laws and regulations have significantly enhanced the protections afforded to ~~conduct~~various ~~business~~forms of foreign investments in China. However, since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations, and rules are not always uniform, and enforcement of these laws, regulations, and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. In addition, most of our executive officers and directors are residents of China and not of the United States, and substantially all the assets of these persons are located outside the United States. As a result, it could be difficult for investors to affect service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations and subsidiaries.

In23 recent years, the Chinese economy has experienced periods of rapid expansion and highly fluctuating rates of inflation. During the past ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2% . These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products and our company.

~~Restrictions~~You ~~on currency exchange~~ may ~~limit~~have ~~our~~difficulty ~~ability~~enforcing tojudgments ~~receive~~against ~~and use our revenues effectively~~us.

~~The~~Most ~~majority~~ of our ~~revenues~~assets ~~will~~are belocated ~~settled~~outside inof ~~Renminbi~~the United States and Uall of our current operations are conducted in the PRC.S. ~~dollars~~In addition, most of our directors and ~~any~~officers ~~future~~are ~~restrictions~~nationals onand ~~currency~~residents ~~exchanges~~of ~~may~~countries ~~limit~~other ~~our~~than ~~ability~~the toUnited ~~use~~States. ~~revenue~~A substantial ~~generated~~portion inof ~~Renminbi~~the toassets ~~fund~~of ~~any~~these ~~future~~persons ~~business~~is ~~activities~~located outside ~~China~~the orUnited States. As a result, it may be difficult for you to ~~make dividend~~effect orservice ~~other~~of ~~payments~~process within the United States upon these persons. It may also be difficult for you to enforce in U.S. ~~dollars.~~courts ~~Although~~judgments on the ~~Chinese~~civil ~~government~~liability ~~introduced~~provisions ~~regulations~~of inthe ~~1996~~U.S. tofederal ~~allow~~securities ~~greater~~laws ~~convertibility~~against us and our officers and directors, most of whom are not residents in the ~~Renminbi~~United ~~for~~States ~~current~~and ~~account~~the ~~transactions,~~substantial ~~significant~~majority ~~restrictions~~of ~~still~~whose ~~remain,~~assets ~~including~~are ~~primarily~~located outside of the ~~restriction~~United ~~that~~States. ~~foreign-invested~~In ~~enterprises~~addition, ~~may~~there ~~only~~is ~~buy,~~uncertainty ~~sell~~as to whether the courts of the PRC would recognize or ~~remit~~enforce judgments of U.S. courts. Our counsel as to PRC law has advised us that the recognition and enforcement of foreign judgments ~~currencies~~are ~~after~~provided ~~providing~~for ~~valid~~under ~~commercial~~the ~~documents,~~PRC atCivil ~~those~~Procedures ~~banks~~Law. Courts in China ~~authorized~~may torecognize ~~conduct~~and enforce foreign ~~exchange~~judgments ~~business.~~in Inaccordance ~~addition,~~with ~~conversion~~the requirements of ~~Renminbi for~~the ~~capital~~PRC ~~account~~Civil ~~items,~~Procedures ~~including~~Law ~~direct~~based ~~investment~~on treaties between China and ~~loans,~~the country where the judgment is ~~subject~~made toor ~~governmental~~on ~~approval~~reciprocity inbetween jurisdictions. China, ~~and~~does ~~companies~~not ~~are~~have ~~required~~any totreaties ~~open~~or other arrangements that provide for the reciprocal recognition and ~~maintain~~enforcement ~~separate~~of foreign ~~exchange~~judgments ~~accounts~~with ~~for~~the ~~capital~~United ~~account items~~States. WeIn ~~cannot~~addition, beaccording ~~certain~~to ~~that~~ the PRC ~~Chinese~~Civil ~~regulatory~~Procedures ~~authorities~~Law, courts in the PRC will not ~~impose~~enforce ~~more~~a ~~stringent~~foreign ~~restrictions~~judgment onagainst us or our directors and officers if they decide that the ~~convertibility~~judgment violates basic principles of PRC law or national sovereignty, security, or the ~~Renminbi~~public interest. So it is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States.

21The PRC government exerts substantial influence over the manner in which we must conduct our business activities.

~~Failure~~The toPRC ~~comply~~government ~~with~~has ~~PRC~~exercised ~~regulations~~and ~~relating~~continues to ~~the~~exercise ~~establishment~~substantial control over virtually every sector of ~~offshore~~the ~~special~~Chinese ~~purpose~~economy ~~companies~~through byregulation ~~PRC~~and ~~residents~~state ownership. Our ability to operate in China may ~~subject~~be ~~our~~harmed ~~PRC~~by ~~resident~~changes ~~stockholders~~in its laws and regulations, including those relating to ~~personal~~taxation, ~~liability~~import and export tariffs, ~~limit~~environmental regulations, land use rights, property, and other matters. We believe that our ~~ability~~operations toin ~~acquire~~China ~~PRC~~are ~~companies~~in ormaterial tocompliance with all applicable legal and ~~inject~~regulatory ~~capital~~requirements. ~~into~~However, ~~our~~the ~~PRC~~central ~~controlled~~or ~~VIEs~~local governments of the jurisdictions in which we operate may impose new, ~~limit~~stricter ~~our~~regulations ~~PRC~~or ~~controlled~~interpretations ~~VIEs’~~of ~~ability~~existing toregulations ~~distribute~~that ~~profits~~would require additional expenditures and efforts on our part to usensure orour ~~otherwise~~compliance ~~materially~~with ~~adversely~~such ~~affect~~regulations usor interpretations.

~~In October 2005~~Accordingly, ~~the~~government ~~PRC~~actions ~~State Administration of Foreign Exchange, or SAFE, issued the Notice on Relevant Issues~~ in the ~~Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China~~future, ~~generally~~ ~~referred~~including toany asdecision ~~Circular~~not ~~75, which required PRC residents~~ to ~~register~~continue with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing outside of China on the strength of domestic PRC assets originally held by those residents. Internal implementing guidelines issued by SAFE, which became public in June 2007 (known as Notice 106), expanded the reach of Circular 75 by (i) purporting to ~~cover~~support ~~the~~recent ~~establishment~~economic orreforms ~~acquisition~~and ~~of control by PRC residents of offshore entities which merely acquire “control” over domestic companies or assets, even in the absence of legal ownership; (ii) adding requirements relating~~ to ~~the~~return ~~source of the PRC resident’s funds used~~ to ~~establish or acquire the offshore entity; (iii) covering the use of existing offshore entities for offshore financings; (iv) purporting to cover situations in which an offshore SPV establishes~~ a ~~new~~more ~~subsidiary~~centrally inplanned ~~China~~economy or ~~acquires~~regional ~~an unrelated company~~ or ~~unrelated~~local ~~assets~~variations in ~~China; and (v) making~~ the ~~domestic~~implementation ~~affiliate~~ of ~~the~~economic ~~SPV responsible for the accuracy of certain documents which must be filed in connection with any such registration~~policies, notably, the business plan which describes the overseas financing and the use of proceeds. Amendments to registrations made under Circular 75 are required in connection with any increase or decrease of capital, transfer of shares, ~~mergers~~could ~~and~~have ~~acquisitions,~~a ~~equity~~significant ~~investment~~effect oron ~~creation~~economic ofconditions ~~any security interest~~ in ~~any assets located in~~ China to guarantee offshore obligations, and Notice 106 makes the offshore SPV jointly responsible for these filings. In the case of an SPV which was established, and which acquired a related domestic company or ~~assets,~~particular ~~before~~regions ~~the~~thereof implementation date of Circular 75, a retroactive SAFE registration was required to have been completed before March 31, 2006; this date was subsequently extended indefinitely by Notice 106, which also required that the Registrant establish that all foreign exchange transactions undertaken by the SPV and ~~its~~could ~~affiliates~~require ~~were~~us ~~in compliance with applicable laws and regulations. Failure~~ to ~~comply~~divest ~~with the~~ourselves ~~requirements~~ of Circular 75, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties under PRC laws for evasion of applicable foreign exchange restrictions. Any such failure could also result in the SPV’s affiliates being impeded or prevented from distributing their profits and the proceeds from any ~~reduction~~interest inwe ~~capital,~~then ~~share~~hold ~~transfer or liquidation to the SPV, or from engaging~~ in ~~other~~Chinese ~~transfers~~properties ~~of funds into~~ or ~~out~~joint ~~of China~~ventures.

WeFuture ~~have~~inflation ~~asked our stockholders, who are PRC residents as defined~~ in ~~Circular~~China ~~75,~~may toinhibit ~~register with the relevant branch of SAFE, as currently required, in connection with their equity interests in us and~~ our acquisitions of equity interests in our PRC subsidiaries. However, we cannot provide any assurances that they can obtain the above SAFE registrations required by Circular 75 and Notice 106. Moreover, because of uncertainty over how Circular 75 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict how it will affect our business operations or future strategies. For example, our present and prospective PRC subsidiaries' ability to conduct ~~foreign~~business ~~exchange~~in ~~activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 and Notice 106 by our PRC resident beneficial holders~~China.

In ~~addition~~recent years, ~~such~~the ~~PRC~~Chinese ~~residents~~economy ~~may~~has ~~not~~experienced ~~always~~periods beof ~~able~~rapid toexpansion ~~complete~~and ~~the~~highly ~~necessary~~fluctuating ~~registration~~rates ~~procedures~~of ~~required~~inflation. byDuring ~~Circular~~the 75past ~~and~~ten ~~Notice~~years, ~~106.~~the Werate ~~also~~of ~~have~~inflation ~~little~~in ~~control~~China ~~over~~has ~~either~~been ~~our~~as ~~present~~high oras ~~prospective~~5.9% ~~direct~~and oras ~~indirect~~low ~~stockholders~~as ~~or the~~-0.8% ~~outcome~~. ofThese ~~such~~factors ~~registration~~have led ~~procedures.~~to Athe ~~failure~~adoption by ~~our~~the ~~PRC~~Chinese ~~resident~~government, ~~beneficial~~from ~~holders~~time orto ~~future~~time, ~~PRC~~of ~~resident~~various ~~stockholders~~corrective measures designed to ~~comply~~restrict ~~with~~the ~~Circular~~availability 75of ~~and~~credit ~~Notice~~or ~~106,~~regulate ifgrowth ~~SAFE~~and ~~requires~~contain ~~it,~~inflation. ~~could~~High ~~subject~~inflation ~~these~~may ~~PRC~~in ~~resident~~the ~~beneficial~~future ~~holders~~cause ~~to fines~~the orChinese ~~legal~~government to ~~sanctions,~~impose ~~restrict~~controls ~~our~~on ~~overseas~~credit and/or ~~cross-border investment activities~~prices, ~~limit~~or ~~our subsidiaries' ability~~ to ~~make~~take ~~distributions~~other oraction, ~~pay~~which ~~dividends~~could orinhibit ~~affect~~economic ~~our~~activity ~~ownership~~in ~~structure~~China, ~~which~~and ~~could~~thereby ~~adversely~~harm ~~affect~~the market for our ~~business~~products and ~~prospects~~our company.

WeRestrictions ~~may~~on becurrency ~~unable~~exchange tomay ~~complete~~limit aour ~~business~~ability ~~combination transaction efficiently or on favorable terms due~~ to ~~complicated~~receive ~~merger~~ and ~~acquisition~~use ~~regulations~~our ~~which~~sales ~~became effective on September 8, 2006~~effectively.

OnThe ~~August~~majority 9,of ~~2006,~~our ~~six~~sales ~~PRC~~will ~~regulatory~~be ~~agencies,~~settled ~~including~~in ~~the CSRC~~RMB, ~~promulgated the Regulation on Mergers~~ and ~~Acquisitions~~any offuture ~~Domestic~~restrictions ~~Companies by Foreign Investors, which became effective~~ on ~~September~~currency 8,exchanges ~~2006.~~may ~~This~~limit ~~new~~our ~~regulation,~~ability ~~among~~to ~~other things,~~use ~~governs~~revenue ~~the~~generated ~~approval~~in ~~process~~RMB byto ~~which~~fund aany ~~PRC~~future ~~company~~business ~~may participate~~activities inoutside anChina ~~acquisition of assets~~ or ~~equity~~to ~~interests.~~make ~~Depending~~dividend onor ~~the~~other ~~structure~~payments ofin U.S. ~~the~~dollars. ~~transaction,~~Although the ~~new~~Chinese ~~regulation~~government ~~will~~introduced ~~require~~regulations ~~the~~in ~~PRC~~1996 ~~parties~~ to ~~make~~allow agreater ~~series~~convertibility of ~~applications~~the ~~and~~RMB ~~supplemental~~for ~~applications~~current toaccount ~~the~~transactions, ~~government~~significant ~~agencies.~~restrictions ~~In some~~still ~~instances~~remain, ~~the~~including ~~application~~primarily ~~process may require~~ the ~~presentation~~restriction ofthat ~~economic~~FIEs ~~data~~may ~~concerning a transaction~~only buy, ~~including~~sell ~~appraisals~~or ofremit ~~the~~foreign ~~target~~currencies ~~business~~after ~~and~~providing ~~evaluations~~valid ofcommercial ~~the acquirer~~documents, ~~which~~at ~~are~~those ~~designed~~banks toin ~~allow~~China ~~the~~authorized ~~government~~ to ~~assess~~conduct ~~the transaction.~~foreign ~~Government~~exchange ~~approvals~~business. ~~will~~In ~~have~~addition, ~~expiration~~conversion ~~dates~~of byRMB ~~which~~for acapital ~~transaction~~account ~~must~~items, beincluding ~~completed~~direct investment and loans, ~~reported to the government agencies. Compliance with the new regulations~~ is ~~likely~~subject to begovernmental ~~more~~approval ~~time~~in ~~consuming~~China, and ~~expensive~~companies ~~than~~are inrequired ~~the~~to ~~past~~open and ~~the~~ ~~government~~maintain ~~can~~separate ~~now~~foreign ~~exert~~exchange ~~more~~accounts ~~control~~for ~~over~~capital ~~the~~account ~~combination of two businesses~~items. ~~Accordingly,~~The ~~due~~Chinese toregulatory ~~the~~authorities ~~new~~may ~~regulation,~~impose ~~our ability to engage in business combination transactions has become significantly~~ more ~~complicated,~~stringent ~~time~~restrictions ~~consuming~~on ~~and~~the ~~expensive,~~convertibility ~~and~~of wethe ~~may not be able to negotiate a transaction that is acceptable to our stockholders or sufficiently protect their interests in a transaction~~RMB.

22In addition, the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the Relevant Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, issued by SAFE and effective as of August 29, 2008, or Circular 142, regulates the conversion by FIEs of foreign currency into RMB by restricting how the converted RMB may be used. Circular 142 requires that RMB converted from the foreign currency-dominated capital of a FIE may only be used for purposes within the business scope approved by the relevant government authority and may not be used to make equity investments in PRC, unless specifically provided otherwise. SAFE further strengthened its oversight over the flow and use of RMB funds converted from the foreign currency-dominated capital of a FIE. The use of such RMB may not be changed without approval from SAFE, and may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Any violation of Circular 142 may result in severe penalties, including substantial fines.

~~The~~24 new regulation allows PRC government agencies to assess the economic terms of a business combination transaction. Parties to a business combination transaction may have to submit to the Ministry of Commerce and other relevant government agencies an appraisal report, an evaluation report and the acquisition agreement, all of which form part of the application for approval, depending on the structure of the transaction. The regulations also prohibit a transaction at an acquisition price obviously lower than the appraised value of the PRC business or assets and in certain transaction structures, require that consideration must be paid within defined periods, generally not in excess of a year. The regulation also limits our ability to negotiate various terms of the acquisition, including aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions relating to the assumption and allocation of assets and liabilities. Transaction structures involving trusts, nominees and similar entities are prohibited. Therefore, such regulation may impede our ability to negotiate and complete a business combination transaction on financial terms that satisfy our investors and protect our stockholders’ economic interests.

~~Under~~Fluctuations ~~the~~in ~~New~~exchange ~~EIT~~rates ~~Law,~~could weadversely ~~may~~affect beour ~~classified~~business asand athe ~~“resident~~value ~~enterprise”~~ of ~~China. Such classification will likely result in unfavorable tax consequences to us and~~ our ~~non-PRC shareholders~~securities.

~~China~~The ~~passed~~value aof ~~new~~our ~~Enterprise~~common ~~Income~~stock ~~Tax~~will ~~Law,~~be orindirectly ~~the~~affected ~~New~~by ~~EIT~~the ~~Law,~~foreign ~~and~~exchange ~~its~~rate ~~implementing~~between ~~rules,~~the ~~both~~U.S. ofdollar ~~which~~and ~~became~~RMB ~~effective~~and onbetween ~~January~~those 1,currencies ~~2008.~~and ~~Under~~other ~~the~~currencies ~~New~~in ~~EIT~~which ~~Law,~~our ansales ~~enterprise~~may ~~established~~be ~~outside~~denominated. ofAppreciation ~~China~~or ~~with~~depreciation ~~“de~~in ~~facto~~the ~~management~~value ~~bodies”~~of ~~within~~the ~~China~~RMB isrelative ~~considered~~to athe ~~“resident~~U.S. ~~enterprise,”~~dollar ~~meaning~~would ~~that~~affect itour ~~can~~financial beresults ~~treated~~reported in aU.S. ~~manner~~dollar ~~similar~~terms towithout agiving ~~Chinese~~effect ~~enterprise~~to ~~for~~any ~~enterprise~~underlying ~~income~~change ~~tax~~in ~~purposes.~~our ~~The~~business ~~implementing~~or ~~rules~~results of operations. Fluctuations in the ~~New~~exchange ~~EIT~~rate ~~Law~~will ~~define~~also deaffect ~~facto~~the ~~management~~relative asvalue ~~“substantial~~of ~~and~~any ~~overall~~dividend ~~management~~we ~~and~~issue ~~control~~that ~~over~~will ~~the~~be ~~production~~exchanged ~~and~~into ~~operations,~~U.S. ~~personnel~~dollars, ~~accounting~~as well as earnings from, and ~~properties”~~the value of, any U.S. dollar-denominated investments we make in the ~~enterprise~~future.

OnSince ~~April~~July 222005, ~~2009,~~ the ~~State~~RMB ~~Administration~~has ofno ~~Taxation~~longer ~~issued~~been ~~the~~pegged ~~Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant~~ to ~~Criteria of de facto Management Bodies, or~~ the ~~Notice,~~U.S. ~~further interpreting the application of the New EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities~~dollar. ~~Pursuant~~Although to the ~~Notice,~~People’s anBank enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of ~~daily~~China ~~operation~~regularly ~~reside~~intervenes ~~or perform their duties mainly~~ in ~~China;~~ ~~(ii)~~the ~~its~~foreign ~~financial~~exchange ormarket ~~personnel~~to ~~decisions~~prevent ~~are~~significant ~~made~~short-term orfluctuations ~~approved by bodies or persons~~ in ~~China;~~the ~~(iii)~~exchange ~~its substantial properties~~rate, ~~accounting~~the ~~books,~~RMB ~~corporate chops, board and shareholder minutes are kept in China; and (iv) ½ directors~~may ~~with~~appreciate ~~voting rights~~ or ~~senior~~depreciate ~~management~~significantly ~~often resident~~ in ~~China.~~value ~~Such~~against ~~resident~~the ~~enterprise~~U.S. ~~would~~dollar bein ~~subject~~the tomedium ~~an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends~~ to ~~its non-PRC~~long ~~shareholders~~term. ~~However~~Moreover, it ~~remains~~is ~~unclear~~possible asthat toin ~~whether~~ the ~~Notice~~future isPRC ~~applicable~~authorities tomay anlift ~~offshore~~restrictions ~~enterprise incorporated by a Chinese natural person. Nor are detailed measures~~ on ~~imposition~~fluctuations ofin ~~tax~~the ~~from~~RMB ~~non-domestically~~exchange ~~incorporated~~rate ~~resident enterprises~~and ~~are~~lessen ~~available.~~intervention ~~Therefore, it is unclear how tax authorities will determine tax residency based on~~ in the ~~facts~~foreign ofexchange ~~each case~~market.

~~However,~~Very aslimited ~~our~~hedging ~~case~~transactions ~~substantially~~are ~~meets~~available ~~the~~in ~~foregoing~~China ~~criteria,~~to ~~there~~reduce isour aexposure ~~likelihood that we are deemed~~ to beexchange arate ~~resident enterprise by Chinese tax authorities~~fluctuations. IfTo ~~the~~date, ~~PRC tax authorities determine that~~ we ~~are~~have anot ~~“resident~~entered ~~enterprise” for~~into ~~PRC~~any ~~enterprise~~hedging ~~income tax purposes, a number of unfavorable PRC tax consequences could follow~~transactions. ~~First,~~While we may beenter ~~subject~~into tohedging ~~the~~transactions ~~enterprise~~in ~~income~~the ~~tax~~future, atthe aavailability and ~~rate~~effectiveness of ~~25%~~these ontransactions ~~our~~may ~~worldwide~~be ~~taxable income as well as PRC enterprise income tax reporting obligations. In our case~~limited, ~~this would mean that income such as interest on financing proceeds~~ and ~~non-China~~we ~~source~~may ~~income~~not ~~would~~ be ~~subject~~able to ~~PRC~~successfully ~~enterprise~~hedge ~~income~~our ~~tax~~exposure at ~~a rate of 25%~~all. ~~Second~~In addition, ~~although under the New EIT Law and its implementing rules dividends paid to us from~~ our ~~PRC~~foreign ~~subsidiaries~~currency ~~would~~exchange ~~qualify~~losses ~~as “tax-exempt~~may ~~income,” we cannot guarantee that such dividends will not~~ be ~~subject~~magnified toby ~~a 10% withholding tax, as the~~ PRC ~~foreign~~ exchange control ~~authorities,~~regulations ~~which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities~~ that ~~are~~restrict treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our ~~non-PRC shareholders and with respect to gains derived by our non-PRC shareholders from transferring our shares. We are actively~~ ~~monitoring~~ability ~~the possibility of “resident enterprise” treatment for the 2008 tax year and are evaluating appropriate organizational changes~~ to ~~avoid~~convert ~~this~~RMB ~~treatment,~~into toforeign ~~the extent possible~~currencies.

23Restrictions under PRC law on our PRC subsidiary’s ability to make dividends and other distributions could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct our business.

IfSubstantially weall ~~were~~of ~~treated~~our sales are earned by our PRC subsidiary. However, as adiscussed more fully under Item 1 “~~resident~~Business ~~enterprise~~—Regulation—Dividend Distributions,” byPRC regulations restrict the ability of our PRC ~~tax~~subsidiary ~~authorities,~~to wemake dividends ~~would~~and beother ~~subject~~payments to ~~taxation~~its inoffshore ~~both~~parent company. Any limitations on the ~~U.S.~~ability ~~and~~of ~~China,~~our PRC subsidiary to transfer funds to us could materially and adversely limit our ~~PRC~~ability ~~tax~~to ~~may~~grow, ~~not~~make beinvestments ~~creditable~~or ~~against~~acquisitions that could be beneficial to our ~~U.S.~~business, ~~tax.~~pay dividends and otherwise fund and conduct our business.

~~The~~Failure ~~value~~to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our ~~securities~~PRC ~~will~~resident bestockholders ~~affected~~to bypersonal ~~the~~liability, ~~currency~~limit ~~exchange~~our ~~rate~~ability ~~between~~to ~~U.S.~~acquire ~~dollars~~PRC companies or to inject capital into our PRC subsidiary and ~~RMB.~~VIEs, limit our PRC subsidiary's ability to distribute profits to us or otherwise materially adversely affect us.

~~The~~In ~~value~~October of2005, ~~our~~SAFE ~~common~~issued ~~stock will be affected by~~ the ~~foreign~~Notice ~~exchange~~on ~~rate~~Relevant ~~between~~Issues ~~U.S.~~in ~~dollars~~the ~~and~~Foreign ~~RMB,~~Exchange ~~and~~Control ~~between~~over ~~those~~Financing ~~currencies~~ and ~~other~~Return ~~currencies~~Investment inThrough ~~which~~Special ~~our~~Purpose ~~sales~~Companies ~~may~~by beResidents ~~denominated.~~Inside ~~For example~~China, ifgenerally wereferred ~~need~~ to ~~convert~~as ~~U.S.~~Circular ~~dollars into RMB for our operational needs and the RMB appreciates against the U~~75.S. ~~dollar~~Circular at75 ~~that~~requires PRC ~~time,~~residents ~~our~~to ~~financial~~register ~~position,~~with ~~our business, and~~ the ~~price~~competent oflocal ~~our~~SAFE ~~common~~branch ~~stock~~before ~~may~~establishing beor ~~harmed.~~acquiring ~~Conversely,~~control ifover wean ~~decide~~SPV ~~to convert our RMB into U.S. dollars~~ for the purpose of ~~declaring~~engaging ~~dividends~~in onan ~~our~~equity ~~common~~financing ~~stock~~outside orof ~~for other business purposes and the U~~China.S. ~~dollar~~See ~~appreciates~~Item ~~against~~1 ~~the~~“Business—Regulation—Circular 75” ~~RMB,~~for ~~the~~a ~~U.S.~~detailed ~~dollar~~discussion ~~equivalent~~ of ~~our~~Circular ~~earnings~~75 ~~from~~and ~~our~~its ~~subsidiaries in China would be reduced~~implementation.

~~RISKS~~We ~~RELATED~~have TOasked ~~THE~~our ~~MARKET~~stockholders, ~~FOR~~who ~~OUR~~are ~~STOCK~~PRC residents as defined in Circular 75, to register with the relevant branch of SAFE as currently required in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiary. However, we cannot provide any assurances that they can obtain the above SAFE registrations required by Circular 75. Moreover, because of uncertainty over how Circular 75 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict how it will affect our business operations or future strategies. For example, our present and prospective PRC subsidiaries and VIEs’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC resident beneficial holders.

~~Our~~25 ~~common stock is quoted on the OTC Bulletin Board which may have an unfavorable impact on our stock price and liquidity.~~

~~Our~~In ~~common~~addition, ~~stock~~such isPRC ~~quoted~~residents onmay ~~the~~not ~~OTC~~always ~~Bulletin~~be ~~Board.~~able ~~The~~to ~~OTC~~complete ~~Bulletin~~the ~~Board~~necessary isregistration aprocedures ~~significantly~~required ~~more~~by ~~limited~~Circular ~~market~~75. ~~than~~We ~~the~~also ~~New~~have ~~York~~little ~~Stock~~control ~~Exchange~~over oreither ~~NASDAQ~~our ~~system.~~present ~~The~~or ~~quotation~~prospective ofdirect ~~our~~or ~~shares~~indirect onstockholders or the ~~OTC~~outcome ~~Bulletin~~of such ~~Board~~registration ~~may~~procedures. ~~result~~A infailure aby ~~less~~our ~~liquid market~~PRC ~~available~~resident ~~for~~beneficial ~~existing~~holders ~~and~~or ~~potential~~future PRC resident stockholders to ~~trade~~comply ~~shares~~with ofCircular ~~our~~75, ~~common~~if ~~stock~~SAFE requires it, could ~~depress~~subject ~~the~~these ~~trading~~PRC ~~price~~resident ofbeneficial ~~our~~holders ~~common~~to ~~stock~~fines ~~and~~or ~~could~~legal ~~have~~sanctions, restrict aour ~~long~~overseas or cross-~~term~~border ~~adverse~~investment ~~impact~~activities, onlimit our subsidiaries’ ability to ~~raise~~make ~~capital~~distributions inor ~~the~~pay ~~future~~dividends or affect our ownership structure, which could adversely affect our business and prospects.

We ~~are~~may ~~subject~~be unable to ~~penny~~complete ~~stock~~a ~~regulations~~business combination transaction efficiently or on favorable terms due to complicated merger and ~~restrictions.~~acquisition regulations.

~~The~~On ~~SEC~~August ~~has~~8, ~~adopted~~2006, ~~regulations~~six ~~which~~PRC ~~generally~~regulatory ~~define~~agencies ~~so-called~~promulgated ~~“penny~~the ~~stocks”~~Regulation toon beMergers anand ~~equity~~Acquisitions ~~security~~of ~~that~~Domestic ~~has~~Companies aby ~~market~~Foreign ~~price~~Investors, ~~less~~or ~~than~~the $5M&A Rule, which became effective on September 8, 2006 and was amended on June 22, 2009.00 ~~per~~The M&A ~~share~~Rule orgoverns anthe ~~exercise~~approval ~~price~~process by which a Chinese company may participate in an acquisition of ~~less~~assets ~~than~~or $5equity interests.00 ~~per~~Depending ~~share~~on the structure of the transaction, ~~subject~~the M&A Rule will require the parties to ~~certain~~the transaction to make ~~exemptions.~~a Ifseries ~~our~~of ~~common~~applications ~~stock~~to ~~becomes~~certain agovernment ~~“penny~~agencies. ~~stock~~In some instances,” wethe application process may ~~become~~require ~~subject~~the topresentation ~~Rule~~of ~~15g-9~~economic ~~under~~data concerning a transaction, including appraisals of the ~~Exchange~~target ~~Act~~business and evaluations of the acquirer, which orare designed to allow the ~~Penny~~government ~~Stock~~to ~~Rule~~assess the transaction. ~~This~~Government ~~rule~~approvals ~~imposes~~will ~~additional~~have ~~sales~~expiration ~~practice~~dates ~~requirements~~by onwhich ~~broker-dealers~~a ~~that~~transaction ~~sell~~must ~~such securities~~be completed and reported to ~~persons~~the ~~other~~government ~~than~~agencies. ~~established~~Compliance ~~customers~~with the M&A Rule is likely to be more time consuming and ~~“accredited~~expensive ~~investors”~~than ~~(generally~~in the past, ~~individuals~~and ~~with~~the agovernment ~~net~~can ~~worth~~now inexert ~~excess~~more control over the combination of $1two businesses. Accordingly,~~000~~ due to the M&A Rule,~~000~~ orour ~~annual~~ability ~~incomes~~to ~~exceeding~~engage ~~$200~~in business combination transactions has become significantly more complicated,~~000,~~ ortime ~~$300~~consuming and expensive,~~000~~ ~~together~~and ~~with~~we may not be able to negotiate a transaction that is acceptable to our stockholders or sufficiently protect their ~~spouses).~~ ~~For~~interests ~~transactions~~in ~~covered~~a bytransaction. The M&A Rule ~~15g-9,~~allows Chinese government agencies to assess the economic terms of a ~~broker-dealer~~business ~~must~~combination ~~make~~transaction. Parties to a ~~special~~business ~~suitability~~combination ~~determination~~transaction ~~for~~may ~~the~~have ~~purchaser~~to submit to MOFCOM and ~~have~~other ~~received~~relevant government agencies an appraisal report and the ~~purchaser's~~acquisition agreement, ~~written~~all ~~consent~~of towhich form part of the ~~transaction~~application ~~prior~~for toapproval, ~~sale~~depending on the structure of the transaction. AsThe M&A Rule also prohibits a ~~result,~~transaction ~~this~~at ~~rule~~an ~~may~~acquisition ~~affect~~ price obviously lower than the ~~ability~~appraised value of ~~broker-dealers~~the toChinese ~~sell~~business or assets and, in certain transaction structures, requires that consideration must be paid within defined periods, generally not in excess of a year. The M&A Rule also limits our ~~securities~~ability ~~and~~to ~~may~~negotiate ~~affect~~various terms of the ~~ability~~acquisition, including aspects of ~~purchasers~~the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions relating to ~~sell~~the ~~any~~assumption and allocation of ~~our~~assets ~~securities~~and inliabilities. ~~the~~Transaction ~~secondary~~structures ~~market~~involving trusts, nominees and similar entities are prohibited. Therefore, the M&A Rule may impede our implementation of our growth strategy.

~~For~~Under ~~any~~the ~~transaction~~Enterprise ~~involving~~Income aTax ~~penny stock~~Law, ~~unless~~we ~~exempt,~~may ~~the~~be ~~rules~~classified ~~require~~as ~~delivery, prior to any transaction in~~ a ~~penny~~“resident ~~stock,~~enterprise” of ~~a disclosure schedule prepared by the SEC relating to the penny stock market~~China. ~~Disclosure~~Such isclassification ~~also~~will ~~required~~likely toresult ~~be made~~in ~~about~~unfavorable ~~sales~~tax ~~commissions~~consequences ~~payable~~ to ~~both~~us ~~the broker-dealer~~ and ~~the~~our ~~registered~~non-PRC ~~representative and current quotations for the securities~~stockholders. ~~Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.~~

24On March 16, 2007, the National People’s Congress of China passed the EIT Law, and on November 28, 2007, the State Council of China passed its implementing rules, which took effect on January 1, 2008. Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. See Item 1 “Business—Regulation—Taxation” for a detailed discussion of the EIT Law.

~~There~~It ~~can~~remains unclear whether the PRC tax authorities would require or permit our overseas registered entities to be notreated ~~assurance~~as ~~that~~PRC resident enterprises. We do not currently consider our ~~common~~company ~~stock~~to ~~will~~be ~~qualify~~a PRC resident enterprise. However, if the PRC tax authorities determine that we are a “resident enterprise” for ~~exemption~~PRC ~~from~~enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the ~~Penny~~enterprise ~~Stock~~income ~~Rule~~tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In ~~any~~our ~~event~~case, ~~even~~this ifwould ~~our~~mean ~~common~~that ~~stock~~income ~~were~~such ~~exempt~~as ~~from~~interest ~~the~~on ~~Penny~~offering ~~Stock~~proceeds ~~Rule,~~and wenon-China source income would ~~remain~~be subject to ~~Section~~PRC ~~15(b)(6)~~enterprise income tax at a rate of 25%. Second, although under the ~~Exchange~~EIT ~~Act~~Law and its implementing rules dividends paid to us from our PRC subsidiary may qualify as “tax-exempt income,” we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which ~~gives~~enforce the ~~SEC~~withholding tax, have not yet issued guidance with respect to the ~~authority~~processing of outbound remittances to ~~restrict~~entities ~~any~~that ~~person~~are ~~from~~treated ~~participating~~as inresident aenterprises ~~distribution~~for ofPRC enterprise ~~penny~~income ~~stock~~tax purposes. Finally, ifit is possible that future guidance issued with respect to the ~~SEC~~new ~~finds~~“resident ~~that~~enterprise” ~~such~~classification acould ~~restriction~~result ~~would~~in bea situation in ~~the~~which ~~public~~a ~~interest~~10% withholding tax is imposed on dividends we pay to our non-PRC stockholders and with respect to gains derived by our non-PRC stockholders from transferring our stock.

~~Certain~~26 ~~provisions of our Certificate of Incorporation may make it more difficult for a third party to effect a change-in-control.~~

~~Our~~We ~~Certificate~~face ofuncertainty ~~Incorporation~~from ~~authorizes~~China’s ~~the~~Circular ~~Board~~on ofStrengthening ~~Directors to issue up to 50 million shares of preferred stock. The preferred stock may be issued in one or more series,~~ the ~~terms~~Administration of ~~which~~Enterprise ~~may~~Income beTax ~~determined at the time of issuance by the board of directors without further action by the stockholders. These terms may include voting rights including the right to vote as a series~~ on ~~particular~~Non-Resident ~~matters,~~Enterprises' ~~preferences~~Share asTransfer tothat ~~dividends~~was ~~and~~released ~~liquidation,~~in ~~conversion~~December ~~rights~~2009 and redemption rights provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, orretroactive ~~sell assets to, a third party. The ability of the board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or~~ effect ~~a change-in-control, which in turn could prevent the stockholders~~ from ~~recognizing~~January a1, ~~gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock~~2008.

~~Item~~ The 2Chinese State Administration of Taxation, or SAT, released a circular on December 15, 2009 that addresses the transfer of shares by nonresident companies, generally referred to as Circular 698. ~~Properties~~Circular 698, which was effective retroactively to January 1, 2008, may have a significant impact on many companies that use offshore holding companies to invest in China. Circular 698, which provides parties with a short period of time to comply with its requirements, indirectly taxes foreign companies on gains derived from the indirect sale of a Chinese company. Where a foreign investor indirectly transfers equity interests in a Chinese resident enterprise by selling the shares in an offshore holding company, and the latter is located in a country or jurisdiction where the effective tax burden is less than 12.5% or where the offshore income of his, her, or its residents is not taxable, the foreign investor is required to provide the tax authority in charge of that Chinese resident enterprise with the relevant information within 30 days of the transfers. Moreover, where a foreign investor indirectly transfers equity interests in a Chinese resident enterprise through an abuse of form of organization and there are no reasonable commercial purposes such that the corporate income tax liability is avoided, the PRC tax authority will have the power to re-assess the nature of the equity transfer in accordance with PRC’s “substance-over-form” principle and deny the existence of the offshore holding company that is used for tax planning purposes. There is uncertainty as to the application of Circular 698. For example, while the term "indirectly transfer" is not defined, it is understood that the relevant PRC tax authorities have jurisdiction regarding requests for information over a wide range of foreign entities having no direct contact with China. Moreover, the relevant authority has not yet promulgated any formal provisions or formally declared or stated how to calculate the effective tax in the country or jurisdiction and to what extent and the process of the disclosure to the tax authority in charge of that Chinese resident enterprise. In addition, there are not any formal declarations with regard to how to decide “abuse of form of organization” and “reasonable commercial purpose,” which can be utilized by us to balance if our Company complies with the Circular 698. As a result, we may become at risk of being taxed under Circular 698 and we may be required to expend valuable resources to comply with Circular 698 or to establish that we should not be taxed under Circular 698, which could have a material adverse effect on our financial condition and results of operations.

~~Land~~We ~~Use~~may ~~Rights~~ be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.

We ~~There~~are issubject noto ~~private~~the ~~land~~Foreign ~~ownership~~Corrupt inPractice ~~China.~~Act, ~~Individuals~~or FCPA, and ~~companies~~other ~~are~~laws ~~permitted~~that prohibit improper payments or offers of payments to ~~acquire~~foreign ~~land~~governments ~~use~~and ~~rights~~their ~~for~~officials ~~specific~~and ~~purposes~~political parties by U.S. ~~Land~~persons ~~use~~and ~~rights~~issuers ~~typically~~as defined by the statute, for the purpose of obtaining or retaining business. We have aoperations, ~~specific~~agreements ~~term~~with ~~that~~third ~~may~~parties, beand ~~renewed~~make atmost of our sales in China. The PRC also strictly prohibits bribery of government officials. Our activities in China create the ~~expiration~~risk of unauthorized payments or offers of payments by the ~~initial~~employees, ~~term~~consultants, sales agents, or distributors of our Company, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents, or distributors of our Company may engage in conduct for which we might be ~~subsequent~~held ~~terms~~responsible. ~~Granted~~Violations ~~land~~of ~~use~~the ~~rights~~FCPA ~~are~~or ~~transferable~~Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be ~~used~~subject asto ~~security~~other ~~for~~liabilities, ~~borrowings~~which could negatively affect our business, operating results and ~~other~~financial condition. ~~obligations~~In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

The Wedisclosures ~~were~~in ~~granted~~our ~~land~~reports ~~use~~and ~~rights~~other ~~from~~filings with the ~~People’s~~SEC ~~Government~~and ofour ~~Wujin~~other ~~District~~public inpronouncements ~~Changzhou~~are ~~City~~not ~~approximately~~subject ~~16,000~~to ~~square~~the ~~meters~~scrutiny of ~~land~~any ~~located~~regulatory atbodies ~~Qinxiang~~in ~~Village~~the ofPRC. ~~Lijia Town~~Accordingly, ~~China.~~our ~~The~~public ~~term~~disclosure should be reviewed in light of the ~~land~~fact that ~~use~~no ~~rights~~governmental ~~for~~agency ~~such~~that ~~land~~is ~~will expire~~located onin ~~April~~China ~~30,~~where ~~2055.~~substantially ~~These~~all ~~periods~~of ~~may~~our beoperations ~~renewed~~and atbusiness ~~the~~are ~~expiration~~located ofhave ~~the~~conducted ~~initial~~any ~~and~~due diligence on our operations or reviewed or cleared any ~~subsequent~~of ~~terms~~our disclosure.

We ~~were~~are ~~granted~~regulated ~~land~~by ~~use~~the ~~rights~~SEC ~~from~~and our reports and other filings with the ~~People’s~~SEC ~~Government~~are ofsubject ~~Wujin~~to ~~District~~SEC ofreview ~~Changzhou~~in ~~City~~accordance ~~for~~with ~~approximately~~the 34rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Unlike public reporting companies whose operations are located primarily in the United States,~~000~~ ~~square~~however, ~~meters~~substantially all of ~~land~~our operations are located in China. ~~The~~Since ~~term~~substantially all of ~~the~~our ~~land~~operations ~~use~~and ~~rights~~business takes place in China, it may be more difficult for the Staff of ~~such~~the ~~land~~SEC ~~will~~to ~~expire~~overcome onthe ~~December~~geographic ~~30,~~and ~~2056~~cultural obstacles that are present when reviewing our disclosure. These same ~~periods~~obstacles ~~may~~are not present for similar companies whose operations or business take place entirely or primarily in the United States. Furthermore, our SEC reports and other disclosure and public pronouncements are not subject to the review or bescrutiny ~~renewed~~of atany PRC regulatory authority. For example, the ~~expiration~~disclosure in our SEC reports and other filings are not subject to the review of the ~~initial~~China Securities Regulatory Commission, a PRC regulator that is tasked with oversight of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the understanding that no local regulator has done any ~~subsequent~~due ~~terms~~diligence on our company and with the understanding that none of our SEC reports, other filings or any of our other public pronouncements has been reviewed or otherwise been scrutinized by any local regulator.

~~The~~27 ~~buildings described below sit on these land use rights.~~

~~Buildings~~ RISKS RELATED TO THE MARKET FOR OUR STOCK

Our ~~principal~~common ~~corporate~~stock ~~and~~is ~~administrative~~quoted ~~offices,~~on asthe ~~well~~OTC asBulletin ~~significant~~Board ~~manufacturing~~which ~~activities,~~may ~~are~~have ~~located~~an inunfavorable ~~buildings~~impact weon ~~own~~our instock ~~Jiangsu~~price ~~Wujin~~and ~~Lijia Industrial Park, Lijia Town, Wujin District, Changzhou City, in Jiangsu Province, in the People’s Republic of China~~liquidity.

~~Best~~Our ~~Cables~~common ~~currently~~stock ~~owns~~is ~~four~~quoted ~~buildings~~on ~~with~~the anOTC ~~aggregate~~Bulletin Board. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or NASDAQ system. The quotation of 3our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock,~~400~~ ~~square~~could ~~meters~~depress the trading price of ~~space~~our common stock and could have a long-term adverse impact on our ability to raise capital in the future.

We ~~Best~~may ~~Appliances~~be ~~currently~~subject ~~owns~~to 13penny ~~buildings~~stock ~~with~~regulations anand ~~aggregate~~restrictions ofand ~~43,385~~you ~~square~~may ~~meters~~have ofdifficulty ~~space.~~selling ~~Five~~shares of ~~these~~our ~~buildings~~common ~~comprise an aggregate of 31,953 square meters of space~~stock.

The WeSEC ~~believe~~has adopted regulations which generally define so-called “penny stocks” to be an equity security that ~~all~~has ~~our~~a ~~properties~~market ~~have~~price ~~been~~less ~~adequately~~than ~~maintained~~$5.00 per share or an exercise price of less than $5.00 per share, ~~are~~subject to certain exemptions. Our common stock is currently a “penny stock” and is subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in ~~good~~excess ~~condition~~of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and ~~are~~have ~~suitable~~received the purchaser's written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and ~~adequate~~may ~~for~~affect the ability of purchasers to sell any of our ~~business~~securities in the secondary market, thus possibly making it more difficult for us to raise additional capital.

For 25any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

~~Item~~ There 3can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule. ~~Legal~~In ~~Proceedings~~any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We ~~are~~do ~~currently~~ not ~~aware~~intend ofto ~~any~~pay ~~such~~dividends ~~legal~~for ~~proceedings~~the orforeseeable ~~claims that we believe will have a material adverse affect on our business, financial condition or operating results~~future.

~~Item~~ For 4the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. ~~(Removed~~Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and ~~Reserved)~~will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.

~~PART~~28 II

~~Item~~Certain 5.provisions ~~Market~~of ~~for~~our ~~Registrant’s~~Articles ~~Common~~of ~~Equity,~~Incorporation ~~Related~~may make ~~Stockholder~~it ~~Matters~~more ~~and~~difficult ~~Issuer~~for ~~Purchases~~a ofthird ~~Equity~~party ~~Securities~~to effect a change-of-control.

Our Articles of Incorporation authorize our board of directors to ~~Our~~issue ~~common~~up to 50,000,000 shares of preferred stock. isThe ~~quoted~~preferred onstock may be issued in one or more series, the ~~OTC~~terms ~~Bulletin~~of ~~Board~~which ~~trades~~may ~~under~~be determined at the ~~symbol~~time of ~~“CGRE~~issuance by our board of directors without further action by the stockholders.OB These terms may include voting rights including the right to vote as a series on particular matters,” ~~however~~preferences ~~there~~as ~~has~~to ~~been~~dividends ~~limited~~and ~~trading~~liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and notherefore ~~historical~~could ~~information~~reduce isthe ~~available~~value ~~for~~of ~~the~~such ~~prices~~common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ~~common~~ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent our stockholders from ~~2010..~~recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

~~Approximate~~ITEM ~~Number~~1B. ofUNRESOLVED ~~Holders~~STAFF ~~of Our Common Stock~~ COMMENTS.

AsNot ~~of March 28, 2011, there were approximately 277 stockholders of record of our common stock, as reported by our transfer agent~~applicable. ~~This number excludes the shares of our common stock owned by stockholders holding stock under nominee security position listings.~~

~~Dividends~~ ITEM 2. PROPERTIES.

WeLand ~~have~~Use ~~never~~Rights declared dividends or paid cash dividends. Our board of directors will make any future decisions regarding dividends. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the near future. Our board of directors has complete discretion over whether to pay dividends, subject to the approval of our shareholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

~~Item~~There 6is no private land ownership in China. ~~Selected~~Individuals ~~Financial~~and companies ~~Data~~are permitted to acquire land use rights for specific purposes.

We were granted land use rights from the People’s Government of ~~Not~~Wujin ~~required~~District in Changzhou City to approximately 16,000 square meters of land located at Qinxiang Village of Lijia Town, China. The term of the land use rights for such land will expire on April 30, 2055. These periods may be renewed at the expiration of the initial and any subsequent terms.

~~Item~~We 7.were ~~Management~~also granted land use rights from the People’s Government ~~Discussion~~of ~~and~~Wujin ~~Analysis~~District of ~~Financial~~Changzhou ~~Condition~~City ~~and~~for ~~Results~~approximately 34,000 square meters of ~~Operations~~land. The term of the land use rights of such land will expire on December 30, 2056. These periods may be renewed at the expiration of the initial and any subsequent terms.

The buildings described below sit on these land use rights. ~~Overview~~

WeBuildings manufacture and distribute clean technology-based consumer products. We also manufacture and distribute network and HDMI cable. Our products consist of light electric vehicles, or LEVs, and cryogen-free refrigerators. We manufacture several different varieties of LEVs and cryogen-free refrigerators. We sell some of our products under our own brand name of “BEST” and the balance of our products as an original equipment manufacturer, or OEM, for other companies, who are our customers.

AsOur ofprincipal ~~December~~corporate ~~31,~~and ~~2010~~administrative offices, weas ~~had~~well ~~526~~as significant ~~employees. Our corporate headquarters and~~ manufacturing ~~base~~activities, are located in ~~Changzhou,~~buildings ~~China, where~~ we own anin ~~aggregate~~Jiangsu Wujin ofLijia ~~approximately~~Industrial 46Park,~~800~~ ~~square~~Lijia ~~meters~~Town, ofWujin ~~manufacturing~~District, ~~facilities~~Changzhou ~~and~~City, ~~office space. We own~~in ~~the~~Jiangsu ~~right to use a total of 49~~Province,~~900~~ ~~square meters of land~~ in ~~China. We believe that our existing and planned facilities are adequate for our requirements for~~ the ~~foreseeable~~People’s ~~future.~~Republic ~~Our annual manufacturing capacity for our LEVs, Cryogen-free refrigerators and sets~~ of ~~network and HDMI cables (combined) is 20,000 units, 115,000 units and 25 million sets, respectively~~China.

WeBest ~~generate~~Cable ~~revenues~~currently ~~through~~owns ~~the~~four ~~sale~~buildings ~~of our products both directly to end users and through OEM arrangements~~ with ~~companies~~an ~~that~~aggregate ~~sell~~of 3,400 ~~our~~square ~~products~~meters ~~under~~of ~~their own private label to the end users~~space.

Best Appliances currently owns 13 buildings with an aggregate ~~Principal~~of ~~Factors~~43,385 ~~Affecting~~square ~~our~~meters ~~Financial~~of ~~Performance~~space. Five of these buildings comprise an aggregate of 31,953 square meters of space.

We believe that ~~the~~all ~~following~~our ~~factors~~properties ~~will~~have ~~continue~~been toadequately maintained, ~~affect~~are generally in good condition and are suitable and adequate for our ~~financial~~business. ~~performance:~~

~~Growth~~ITEM ~~of China’s LEV and Small Appliances Markets~~3. ~~The~~LEGAL ~~Chinese market for LEVs is very large and has been growing rapidly~~PROCEEDINGS. According to the China Electronic Components Association, 21.5 million LEVs were sold in China in 2008, representing growth of 26.5% over 2007. And in 2009, 24.5 million LEVs were sold in China. On the other hand, CAGR of small home appliance sales in China was 15% during 2003 to 2008. We believe the rapid growth of the markets will increase the demand for our products.

From time to time, we may become involved in various lawsuits 26and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

~~Heightened~~ITEM ~~Environmental Awareness~~4. ~~According~~MINE toSAFETY a joint report by the World Bank and Chinese Environmental Protection Administration, the economic burden of premature mortality and morbidity associated with air pollution was $23 billion in 2003, or 1DISCLOSURES.16% of GDP. As people become more aware of the significance of environmental protection, many consumers will choose products with clean technology such as cryogen-free refrigerators or LEVs which will help reduce carbon dioxide emissions.

~~Government~~Not ~~Policies Promoting the Use of Clean Technology~~applicable. ~~China~~ has increased its investment in clean technology in recent years. It plans to produce half a million electric vehicles in 2011 and China's economic stimulus package invested $221 billion in technology for reducing greenhouse-gas emissions. We believe that the government policies will have a positive impact on the sales of our products.

~~Recent~~29 ~~Developments~~

OnPART ~~January~~II 25, 2011, Best Appliances acquired the NICONIA LEV brand and retail sales network which will allow the Company to place its light electrical vehicles (”LEV”) line within privately owned stores. The NICONIA brand was purchased from Changzhou Benshen Bicycle Co., Ltd. (“Benshen”) and will compliment the Company’s line of LEV’s. The total purchase price for the NICONIA brand and retail sales network was approximately $3.0 million pursuant to a Purchase Agreement, dated January 25, 2011, among Best Appliances and Benshen. The Company expects to recognize the acquisition as one or more intangible assets once it has completed its initial assessment for the acquisition. At January 25, 2011, $1.5 million of cash was paid upon signing the Purchase Agreement and the remaining cash payable of $1.5 million is due on January 25, 2012.

~~Taxation~~ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

~~United~~Market ~~States~~Information

WeOur ~~are~~common ~~subject~~stock tois ~~United~~quoted ~~States~~on ~~tax at a federal tax rate of 34%. No provision for income taxes in~~ the ~~United~~OTC ~~States~~Bulletin ~~has~~Board ~~been~~under ~~made as we had~~the nosymbol ~~United States taxable income for 2010 and 2009~~“CGRE.”

~~BVI~~The following table sets forth, for the periods indicated, the high and low closing bid prices of our common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

Best Green BVI was incorporated in the British Virgin Islands under the current BVI laws and is not subject to any tax.

		Closing Prices⁽¹⁾
		High		Low
*Year Ended December 31, 2011*
1^stQuarter	$	4.15	$	2.70
2^ndQuarter		4.15		1.50
3^rdQuarter		2.00		1.00
4^thQuarter		2.00		2.00

*Year Ended December 31, 2010*
1^stQuarter	$	N/A	$	N/A
2^ndQuarter		N/A		N/A
3^rdQuarter		5.10		2.01
4^thQuarter		3.75		3.00

~~China~~(1) The above table sets forth the range of high and low closing bid prices per share of our common stock as reported by www.quotemedia.com for the periods indicated.

~~Best~~Approximate ~~Cable~~Number ~~and~~of ~~Best~~Holders ~~Appliances are subject to China Enterprise Income Tax (“EIT”) at a tax rate~~ of ~~25%~~Our ~~for~~Common ~~fiscal~~Stock ~~years 2010 and 2009.~~

~~China~~As ~~passed~~of aApril ~~new Enterprise Income Tax Law~~13, ~~or the new EIT Law~~2012, ~~and~~there ~~it’s~~were ~~implementing~~approximately ~~rules,~~277 ~~both~~holders of record ~~which~~of ~~became~~our ~~effective~~common ~~on January 1, 2008~~stock. ~~The~~This ~~new~~number ~~EIT~~excludes ~~Law~~the ~~and~~shares ~~its~~of ~~implementing~~our ~~rules~~common ~~generally provide that a 10%~~stock ~~withholding~~owned ~~tax applies to China-sourced income derived~~ by ~~non-resident enterprises~~stockholders ~~for~~holding ~~PRC~~stock ~~enterprise~~under ~~income~~nominee ~~tax~~security ~~purposes~~position ~~unless the jurisdiction of incorporation of such enterprises’ shareholder has a tax treaty with China that provides for a different withholding arrangement~~listings.

WeDividend ~~incurred~~Policy income tax expense of approximately $1,431,000 for the year ended December 31, 2010, an increase of 165.3% from the income tax expense we incurred in the same period of 2009, which was approximately $539,000. This increase in income tax expense was due to the growth of our operating profit over such periods.

~~Our~~We have never declared dividends or paid cash dividends. Any future ~~effective~~decisions ~~income~~regarding ~~tax~~dividends ~~rate~~will ~~depends~~be onmade ~~various~~by our board of directors. We ~~factors,~~currently ~~such~~intend asto ~~tax~~retain ~~legislation,~~and use any future earnings for the ~~geographic~~development ~~composition~~and expansion of our ~~pre-tax income~~business and ~~non-tax~~do ~~deductible~~not ~~expenses~~anticipate ~~incurred~~paying any cash dividends in the foreseeable future. Our ~~management~~board ~~carefully~~of directors has complete discretion on whether to ~~monitors~~pay ~~these~~dividends, ~~legal~~subject ~~developments~~to the approval of our stockholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will ~~timely~~depend upon ~~adjust~~ our ~~effective~~future ~~income~~operations and earnings, capital requirements and surplus, ~~tax~~general ~~rate~~financial ~~when~~condition, ~~necessary~~contractual restrictions and other factors that the board of directors may deem relevant.

~~Results~~Securities ofAuthorized ~~Operations~~for Issuance under Equity Compensation Plans

~~Sales~~We ~~revenue~~do not have any compensation plans in effect under which our equity securities are authorized for issuance.

ToRecent ~~date,~~Sales ~~most~~ of ~~our~~Unregistered ~~revenues~~Securities have been generated through sales in the PRC and Hong Kong region. Domestic sales which include the PRC and Hong Kong region represented approximately 71.9% and 62.2% of our total sales revenue for the fiscal years ended December 31, 2010 and 2009, respectively.

27We have not sold any equity securities during the 2011 fiscal year that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during the 2011 fiscal year.

~~The~~30 ~~following table sets forth our revenues by geographic regions:~~

		Year ended December 31,
(In thousands, except %)		2010	%		2009	%
Domestic sales
PRC	$	18,058	63.2	$	6,097	50.4
Hong Kong		2,500	8.7		1,427	11.8
Total domestic sales		20,558	71.9		7,524	62.2
Overseas sales
United States of America		1,692	5.9		870	7.2
Taiwan		1,153	4.0		250	2.0
United Kingdom		1,049	3.7		878	7.3
Demark		864	3.0		-	-
Germany		686	2.4		431	3.6
Australia		586	2.1		366	3.0
France		323	1.13		580	4.8
Other region		1,678	5.9		1,194	9.9
Total overseas sales		7,167	28.1		4,569	37.8
Total	$	28,589	100.0	$	12,093	100.0

Purchases of Equity Securities

~~Our~~No ~~sales~~repurchases revenue increased by 136.4% from $12.1 million in the fiscal year ended December 31, 2009 to $28.6 million in the fiscal year ended December 31, 2010. The increase was primarily due to an increase in sales of ~~cable~~ ~~products~~our ~~and~~common ~~refrigerators.~~stock ~~Revenue~~were ofmade ~~cable~~during ~~products increased by 148.1% from $7.4 million in~~ the ~~fiscal year ended December 31, 2009 to $18.4 million in~~fourth ~~the~~quarter ~~fiscal year ended December 31, 2010, which was driven by an increased demand for cable products by our existing customers. Revenue~~ of ~~refrigerators increased by 106~~2011.3% from $4.6 million in fiscal year ended December 31, 2009 to $9.5 million in fiscal year ended December 31, 2010. The increase was mainly attributable to sales volume increase of our refrigerators, which was driven by an increased demand for our refrigerators by existing customers as well as expansion of our customer base. This increase was also contributed by sales volume increase in fans, a sub-group productions of refrigerators, whose sales increased by 10% in the fiscal year ended December 31, 2010. We were able to increase our production volume to satisfy market demand with our existing manufacturing capacity.

~~The~~ITEM ~~following~~6. ~~table~~SELECTED ~~sets~~FINANCIAL ~~forth our sales revenue by product categories:~~DATA.

		Year ended December 31,
(In thousands)		2010		2009
Refrigerators	$	9,478	$	4,594
LEV		707	$	80
Cable products		18,404	$	7,419
Sales revenue	$	28,589	$	12,093

Not applicable.

~~Cost~~ITEM of7. ~~sales~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

~~Our~~The ~~cost~~following ofmanagement’s ~~sales~~discussion isand ~~primarily~~analysis ~~comprised~~should ofbe read ~~the~~in ~~costs~~conjunction ofwith our ~~raw~~ ~~materials,~~financial ~~components,~~statements ~~labor~~ and ~~overhead.~~the ~~Our~~notes ~~cost~~thereto ofand ~~sales increased by~~the ~~138.5%~~other ~~from~~financial ~~$8.6~~information ~~million~~appearing elsewhere in ~~the~~this ~~fiscal~~report. ~~year~~In ~~ended~~addition ~~December 31, 2009~~ to ~~$20.4~~ ~~million~~historical ininformation, the ~~fiscal~~following ~~year~~discussion ~~ended~~contains ~~December~~certain forward-looking ~~31, 2010~~information. ~~The~~See ~~increase~~“Special inNote ~~our~~Regarding ~~cost~~Forward ofLooking ~~sales~~Statements” ~~was~~above ~~primarily~~for ~~due~~certain toinformation ~~the~~concerning ~~increase~~those inforward ~~the~~looking statements. ~~volume~~Our offinancial ~~cable~~statements ~~products~~are ~~and refrigerators~~prepared ~~sold~~ in ~~the~~U.S. ~~fiscal~~dollars ~~year ended December 31, 2010~~ and ~~increase of~~in ~~raw~~accordance ~~materials~~with ~~price~~United ~~during~~States ~~the~~generally ~~same~~accepted ~~period~~accounting principles.

~~Our~~Overview cost of sales as a percentage of sales revenue increased to 71.4% in the fiscal year ended December 31, 2010 from 70.7% in the fiscal year ended December 31, 2009. This increase was primarily attributable to an increase in raw materials prices in the fiscal year ended December 31, 2010.

~~Gross~~We ~~profit~~manufacture and distribute clean technology-based consumer products, including LEVs and cryogen-free refrigerators. We also manufacture and distribute network and HDMI cables. We sell some of our products under our own brand name of “BEST” and the balance of our products as an OEM for other companies, who are our customers. On January 25, 2011, we acquired the “NICONIA LEV” brand name which we believe will compliment our line of LEVs. At end of 2011, we have expanded our LEVs Market and sustained a steady group of distributions.

AsWe awill ~~result~~make ofgreater ~~the~~effort ~~foregoing,~~to ~~our~~expand ~~gross~~LEVs ~~profit~~Market ~~increased by 131.3% from $3.5 million~~ in ~~the fiscal year ended December 31~~2012, ~~2009~~especially toaround $8U.~~2 million~~S. inand ~~fiscal year ended December 31~~Europe, ~~2010,~~where ~~and~~green ~~our~~energy ~~gross~~technology ~~profit~~is ~~margin decreased from 29.3%~~ in ~~the~~high ~~fiscal year ended December 31, 2009 to 28~~demand.~~6% in the fiscal year ended December 31, 2010.~~

~~Selling~~Our ~~expenses~~corporate headquarters and manufacturing base are located in Changzhou, PRC, where we own an aggregate of approximately 46,800 square meters of manufacturing facilities and office space. We own the right to use a total of 49,900 square meters of land in China. Our annual manufacturing capacity for our LEVs, Cryogen-free refrigerators and sets of network and HDMI cables (combined) is 35,000 units, 115,000 units and 25 million sets, respectively.

~~Selling~~Executive ~~expenses~~Overview ~~include the cost~~ of ~~advertising~~Financial ~~and promotional~~Results materials, travel expenses and other related costs. Our selling expenses increased by 113.5% from $0.3 million in the fiscal year ended December 31, 2009 to $0.6 million in the fiscal year ended December 31, 2010. The increase was primarily attributable to increased freight charge because of sales increases and increased spending on advertising. We anticipate that our selling expenses will increase as we intend to enhance our sales and marketing efforts to support our business expansion and capture additional market opportunities.

~~General~~Principal ~~and~~Factors ~~administrative~~Affecting ~~expenses~~our Financial Performance

~~General~~We ~~and~~believe ~~administrative~~that ~~expenses consist of~~ the ~~costs associated~~following ~~with~~factors ~~staff~~will ~~who~~continue ~~manage our business activities, product inspection fees, entertainment expenses and professional fees paid~~ to ~~third parties. Our~~affect ~~general~~our ~~and~~financial ~~administrative~~performance: expenses increased by 125.3% from $0.90 million in the fiscal year ended December 31, 2009 to $2.0 million in the fiscal year ended December 31, 2010. Of this increase, approximately $401,000 was related to increases in legal, audit and other consulting fees in connection with the reverse acquisition. This increase was also attributable to increases in administrative staff salary from approximately $108,000 to approximately $392,000 as a result of increased administrative staff numbers and average salaries. The Company also incurred approximately $160,000 in currency losses due to the change in the RMB to US exchange rates.

28Growth of China’s LEV and Small Appliances Markets. The Chinese market for LEVs is very large and has been growing rapidly. According to the China Electronic Components Association, 29.7 million LEVs were sold in China in 2011 with 2004 to 2011 CAGR of 23%. We believe the rapid growth of the markets will increase the demand for our products.
~~Interest~~Heightened ~~income~~Environmental Awareness. As people become more aware of the significance of environmental protection, we believe that many consumers will choose products with clean technology such as cryogen-free refrigerators or LEVs which will help reduce carbon dioxide emissions.
~~Interest~~Government ~~income~~Policies ~~consists~~Promoting ofthe ~~interest~~Use ~~from~~of ~~cash~~Clean ~~deposits and~~Technology. ~~from~~ China ~~loans~~has toincreased aits ~~related~~investment ~~party,~~in ~~Jiangsu~~clean ~~Dachao,~~technology ~~and~~in ~~other~~recent ~~unrelated third parties~~years. ~~Interest income increased 427.8% from approximately $66,000 during the~~Its ~~fiscal~~ economic ~~year~~stimulus ~~ended~~package ~~December~~invested ~~31, 2009 to~~ $~~346,000~~221 ~~during~~billion ~~the~~in ~~fiscal~~technology ~~year~~for ~~ended~~reducing ~~December~~ greenhouse-gas ~~31, 2010~~emissions. ~~The~~We ~~increase~~believe isthat ~~primarily~~the ~~due~~government topolicies ~~interest~~will ~~generated~~have ~~from~~a ~~increased~~ positive ~~loan~~impact ~~balances~~on to the ~~related~~sales ~~party~~of ~~and~~our ~~other third parties~~products.

~~Finance~~31 ~~costs~~

~~Finance~~Results ~~costs consist~~ of ~~interest~~Operations payable in connection with loans from banks. Finance costs increased 42.4% from approximately $332,000 during the fiscal year ended December 31, 2009 to approximately $472,000 during the fiscal year ended December 31, 2010 due to increased borrowing during the year. Interest expense for the year end December 31, 2009 was in connection with our bank borrowings and bills discounting interests while during the year ended December 31, 2010, we only incurred bank borrowings interest .

~~Income~~The ~~before~~following ~~income~~table ~~tax~~sets forth key components of our results of operations during the fiscal years ended December 31, 2011 and 2010, both in dollars and as a percentage of our revenues.

As a result of the foregoing, income before income tax increased by 158.0% from $2.2 million in the fiscal year ended December 31, 2009 to $5.6 million in the fiscal year ended December 31, 2010.

		Year Ended December 31, 2011					Year Ended December 31, 2010
				Percentage					Percentage
		Amount		of Revenues			Amount		of Revenues
Revenues	$	24,905,073		100.00%		$	28,589,395		100.00%
Cost of revenues		21,074,523		84.62%			20,398,286		71.35%
Gross profit		3,830,550		15.38%			8,191,109		28.65%
Operating expenses
General and administrative expenses		4,115,014		16.52%			2,031,956		7.11%
Selling expenses		1,218,754		4.89%			649,198		2.27%
Total operating expenses		5,333,768		21.42%			2,681,154		9.38%
Income (loss) from operations		(1,503,218	)	(6.04%	)		5,509,955		19.27%
Interest income		33,446		0.13%			345,745		1.21%
Interest expenses		(765,452	)	(3.07%	)		(472,307	)	(1.65%	)
Other income, net		(75,597	)	0.30%			183,722		0.64%
Income (loss) before income taxes		(2,310,821	)	(9.28%	)		5,567,115		19.47%
Income taxes		-		-			(1,430,640	)	(5.00%	)
Net Income (loss)		(2,310,821	)	(9.28%	)		4,136,475		14.47%
Foreign currency translation adjustments		170,119		0.68%			160,484		0.56%
Total comprehensive income (loss)	$	(2,140,702	)	(8.60%	)	$	4,296,959		15.03%

~~Income~~Revenues. ~~tax~~Our revenues decreased by $3.7 million, or 12.9%, to $24.9 million in 2011, from $28.6 million in 2010. The decrease was due primarily to a decrease in sales of both cable products and refrigerators. Revenue of cable products decreased by 26.7% from $18.4 million in 2010 to $13.5 million in 2011. The decrease was mainly due to reduced customer demand as a result of general market decline and the loss of a larger customer in the latter half of 2010. Revenue from refrigerators decreased by 54.7% from $9.5 million in 2010 to $4.3 million in the 2011. The decrease was mainly due to reduced customer demand as a result of general market decline. We experienced an increase in LEV sales from $0.7 million in 2010 to $7.2 million in 2011. The increase was largely attributable to the acquisition of the Niconia LEV brand. We were able to increase our production volume to satisfy expected orders with our existing manufacturing capacity.

WeOn ~~incurred~~a ~~income~~geographic ~~tax~~basis, ~~expense~~revenues generated from outside of China was approximately $110.5 million,~~431,000~~ ~~for~~or ~~the~~42.4% ~~fiscal year~~of ~~ended~~the ~~December~~total 31revenues, ~~2010~~for 2011, anas compared ~~increase~~to of$10.5 ~~165~~million, or 36.18% ~~from~~of the ~~income~~total ~~tax~~revenues, ~~expense we~~for ~~incurred~~2010. inThe increase ~~the~~was ~~same~~mainly ~~period~~resulted offrom ~~2009,~~our ~~which~~efforts ~~was~~to ~~$539,000.~~expand ~~This~~product ~~increase~~penetration ininto ~~income~~new ~~tax~~and ~~expense~~existing ~~was~~markets ~~due~~and tofoster ~~the~~acceptance ~~growth~~ of our ~~operating~~products ~~profit~~in ~~over~~ the international ~~years~~markets.

~~Net~~32 ~~income~~

AsThe afollowing ~~result~~table ofsets ~~the~~forth ~~cumulative~~revenues ~~effect~~by ofbusiness ~~the~~segment ~~above factors, net~~and ~~income increased~~ by ~~155.5%~~geography ~~from~~for ~~$1.6 million in~~ the ~~fiscal~~years ~~year~~ ended December ~~31,~~ ~~2009 to $4.1 million in the fiscal year ended December~~ 31, ~~2010.~~2011 ~~Our~~and ~~net margin increased from 13.4% in the fiscal year ended December 31, 2009 to 14.5% in the fiscal year ended December 31,~~ 2010.

Liquidity and Capital Resources

		Year Ended December 31, 2011			Year Ended December 31, 2010
			Percentage			Percentage
		Amount	of Revenues		Amount	of Revenues
Segment Data
Cryogen-free refrigerators	$	4,255,356	17.09%	$	9,478,362	33.15%
Cable products		13,496,017	54.19%		18,403,811	64.37%
LEVs		7,153,700	28.72%		707,222	2.47%
	$	24,905,073		$	28,589,395
Geographic Data

PRC	$	14,378,649	57.73%	$	18,057,609	63.16%
Hong Kong		2,986,416	11.99%		2,499,572	8.74%
United States of America		2,645,902	10.62%		1,691,777	5.92%
Taiwan		1,513,353	6.08%		1,153,456	4.03%
United Kingdom		16,970	0.07%		1,049,138	3.67%
Denmark		36,146	0.15%		864,481	3.02%
Germany		108,469	0.44%		686,272	2.40%
Australia		971,267	3.90%		586,038	2.05%
France		273,359	1.10%		323,270	1.13%
Others		1,974,542	7.93%		1,677,782	5.87%
	$	24,905,073		$	28,589,395

AsCost of ~~December~~revenues. 31Cost of revenues consists primarily of materials costs, ~~2010~~wages, weemployee ~~had~~compensation, ~~cash~~depreciation and amortization ~~cash~~and ~~equivalents~~other ofcosts, which are directly attributable to the production of products. Our cost of revenues increased by $10.17 million, ~~and~~or ~~restricted~~3.3%, ~~cash~~to of$21.1 million in 2011, from $320.4 million in 2010. ~~The~~As ~~following~~a ~~table~~percentage ~~provides~~of revenues, our ~~detailed~~cost ~~information~~of ~~about~~revenues ~~our~~increased ~~net~~from ~~cash~~71.3% ~~flow~~in ~~for~~2010 ~~all~~to ~~financial~~84.6% ~~statement~~in ~~periods~~2011. The increase was ~~presented~~primarily indue ~~this~~to ~~report~~increased raw material prices and fixed production costs .

~~Cash~~Gross ~~Flow~~profit. ~~(All~~Our ~~amounts~~gross profit is equal to the difference between our revenue and our cost of revenues. Our gross profit decreased by $4.4 million, or 53.2%, to $3.8 million in ~~thousands~~2011, from $8.2 million in 2010. Such decrease was generally in line with our increased cost of revenues, Uattributed to the increase in raw material costs and fixed production costs.S Gross profit as a percentage of revenue was 15.4% ~~dollars)~~and 28.7% for the years ended December 31, 2011 and 2010, respectively. Such decrease was principally attributed to the increase in raw material cost. Copper is one of the key raw materials for our HDMI cable product. In 2011, copper prices fluctuated significantly worldwide beyond our expectations, especially during the third quarter of the year. During the year, we locked down selling prices of cables with certain customers, however, we did not lock down purchase prices of copper with our suppliers. As a result, the gross profit on cable sales were significantly reduced. Since first quarter of 2012, the copper prices have become stable. We have also implemented a new approach in order to manage gross profit, whereby, we will lock down prices of key raw materials before we lock down selling prices with customers.

		Fiscal Year Ended December 31,
		2010			2009
Net cash provided by operating activities	$	3,305		$	2,332
Net cash used in investing activities		(6,116	)		(5,783	)
Net cash provided by financing activities		3,100			3,552
Net cash flows		289			103

In addition, we expanded LEV production in 2011 as a result of the newly purchased brand name of Niconia LEV. Accordingly, we identified new suppliers throughout the year but we were not able to manage costs for LEV materials in the first year of LEV production. At end of 2011, we have established a group of selective and stable suppliers with who we have negotiated competitive prices based on long-term relationships. We believe the cost of LEV materials will be more manageable and will reduce accordingly.

~~Operating~~General ~~Activities~~and administrative expenses. General and administrative expenses consist primarily of office expenses, professional fees, certain reserves and provisions, entertainment, traveling expenses, staff welfare, consumables, labor protection and salaries and wages which are incurred at the administrative level and foreign exchange differences. Our general and administrative expenses increased by $2.1 million, or 102.5%, to $4.1 million in 2011, from $2.0 million in 2010. Such increase was attributable to increased payroll expenses by approximately $0.7 million resulting from an increase in staff due to the expansion of the LEV business, as well as additional bad debt reserve by approximately $1.0 million due to the aging of trade accounts receivable and provision for loans and guaranty obligation for loans to others by approximately $0.3 million, which was not accrued in fiscal year 2010.

~~Net~~Selling ~~cash~~expenses. ~~provided~~Selling byexpenses ~~operating activities for the fiscal year~~consist ~~ended~~primarily ~~December~~of 31advertising, ~~2010~~salaries ~~was~~and ~~$3.3~~transportation ~~million,~~costs ~~compared~~incurred ~~with $2.3 million net cash~~in ~~provided~~connection bywith ~~operating~~selling activities. ~~for~~Our ~~the~~selling ~~fiscal~~expenses ~~year~~increased ~~ended~~by ~~December 31, 2009~~$0.6 ~~The~~million, ~~increase~~or ~~was~~87.7%, ~~primarily attributable~~ to ~~(i)~~$1.2 ~~our~~million ~~net~~in ~~income~~2011, offrom $40.16 million~~, (ii)~~ ~~increase~~ in ~~trade~~2010. ~~accounts~~The increase ~~payable~~was ofprimarily ~~$5.2~~attributable ~~million,~~to ~~and~~increased ~~(iii)~~spending ~~increase~~on inmarketing and ~~other~~exhibitions ~~payables~~for ~~(including~~all ~~income~~products ~~tax~~lines ~~payable)~~by ofapproximately $30.32 million, ~~partially~~compared ~~offset~~to bythat ~~an increase~~ in ~~trade accounts receivable of $8~~2010.7 ~~million.~~

29Interest expenses. Our interest expenses increased by $0.3 million, or 62.1%, to $0.8 million for 2011, from $0.5 million for 2010. Such increase was mainly due to an increase in bank loans.

~~Investing~~33 ~~Activities~~

~~Net~~Income ~~cash~~(loss) ~~used~~before inincome ~~investing activities for the fiscal year ended December 31, 2010 was $6~~taxes.1, ~~compared~~Our ~~with $5.8 million net cash used in investing activities for the fiscal year 2009. The increase was attributable to the following factors:~~income (iloss) ~~our~~before ~~purchase~~income oftaxes ~~property,~~decreased ~~plant and equipment of~~ $27.9 million, ~~(ii) increases in a loan~~ to a ~~related party, Jiangsu Dachao, for~~ $32.13 million, ~~and~~loss ~~(iii) increase~~ in 2011, ~~loans~~from ~~to third parties totaling~~ $0.5.6 million. ~~This~~in ~~was~~income ~~offset~~in by2010, ~~the change~~as ina ~~restricted~~result ~~cash~~ of ~~$2.1~~the ~~million~~factors described above.

Income taxes. We had no income expense for 2011, ~~Financing~~a ~~Activities~~decrease of $1.4 million from an income tax expense of $1.4 million for 2010. This decrease in income tax expense was due to the decrease in our taxable profit.

Net ~~cash~~income ~~provided~~(loss). byAs ~~financing~~a ~~activities~~result ~~for~~of the ~~fiscal~~factors described ~~year ended December 31~~above, ~~2010~~we ~~was~~generated ~~$3.1~~a ~~million,~~net ~~compared~~loss ~~with~~of $32.63 million ~~for~~in ~~the fiscal year ended December 31~~2011, ~~2009.~~a ~~The~~ decrease ~~was~~of $6.4 ~~primarily~~million, ~~attributable~~from toa ~~the~~net ~~proceeds~~income ~~from bank loans~~ of $34.1 million in 2010 ~~and the reduction in the utilization of bills payable~~.

WeLiquidity ~~believe that we maintain good relationships with the various banks we deal with~~ and ~~our~~Capital ~~current~~Resources ~~available working capital, and bank loans referenced above, should be adequate to sustain our operations at our current level through at least the next twelve months.~~

As of ~~the~~December ~~date~~31, 2011, we had cash and cash equivalents of approximately ~~the~~$1.0 ~~Report~~million, weprimarily ~~are~~consisting ~~party~~of tocash ~~several~~on ~~loan~~hand and ~~bill~~demand deposits. ~~acceptance~~The ~~agreements~~following astable ~~follows:~~provides a summary of our net cash flows from operating, investing, and financing activities.

~~Loan~~Cash ~~Agreements:~~ Flow

Loan Agreement between Best Cable and Wujin Rural Commercial Bank, pursuant to which Wujin Rural Commercial Bank provided a loan with a total amount of RMB1,450,000 (approximately $220,000) at December 31, 2010. The loan agreement is for a term from July 12, 2010 to July 25, 2011. The monthly interest rate is 0.0523%. The loan outstanding at December 31, 2010 totaled approximately $220,000.

		Years Ended December 31,
		2011			2010
Net cash (used in) provided by operating activities	$	(4,441,115	)	$	3,304,643
Net cash (used in) investing activities		(10,260,428	)		(6,115,932	)
Net cash provided by financing activities		14,596,572			3,099,601
Effects of exchange rate change in cash		37,917			34,733
Net (decrease) increase in cash and cash equivalents		(67,054	)		323,045
Cash and cash equivalents at beginning of the year		1,080,787			757,742
Cash and cash equivalent at end of the year	$	1,013,733		$	1,080,787

~~Loan~~Operating ~~Agreement~~Activities between Best Cable and Wujin Agriculture Bank pursuant to which Wujin Agriculture Bank provided loans with a total amount available to borrow of RMB10,000,000 (approximately $1,517,000) at December 31, 2010. The Company borrowed RMB3,000,000 (approximately $455,000) at December 31, 2010 and RMB5,000,000 (approximately $758,000) at December 31, 2010 respectively to Best Cable, for a term from September 10, 2010 to February 27, 2011 and December 22, 2010 to June 21, 2011, respectively. The monthly interest rate is 0.425% and 0.446%, respectively. The loans outstanding at December 31, 2010 totaled approximately $1,213,000.

~~Loan~~Net ~~Agreement~~cash ~~between~~used ~~Best~~in ~~Cable~~operating ~~and~~activities ~~Wujin~~was ~~ICBC~~$4.4 ~~pursuant~~million tofor 2011, ~~which~~as ~~Wujin~~compared ~~ICBC provided loans with a total amount available~~ to ~~borrow~~$3.3 ofmillion ~~RMB26,000,000~~net ~~(approximately~~cash ~~$3,939,000)~~provided atby ~~December~~operating ~~31,~~activities for 2010. The ~~agreement~~decrease iswas ~~for~~primarily aattributable ~~term~~to ~~from~~(i) ~~November~~net ~~16, 2009~~income todecreasing ~~October~~by $6.4 31million, ~~2011.~~(ii) ~~Wujin~~increase ~~ICBC~~in ~~has~~inventories ~~disbursed~~of ~~RMB24~~$1.2 million,~~800,000~~ (~~approximately $3,757,000~~iii) atincrease ~~December~~in prepayments ~~31,~~and ~~2010~~other tocurrent ~~Best~~assets ~~Cable,~~by ~~with~~$4.7 ~~terms~~million, ~~starting~~and ~~from~~(iv) ~~March~~decrease ~~10,~~in payables ~~2010~~(including ~~and~~accounts ~~ending~~payable, ataccrued ~~March~~liabilities ~~18,~~and ~~2011.~~other ~~The~~payables ~~monthly~~and income ~~interest~~tax ~~rate~~payable) ~~ranges~~of ~~from 0~~$10.~~443%~~1 ~~to 0.487%.~~million, ~~The~~mostly ~~loan~~offset ~~outstanding~~by atan ~~December~~increase ~~31,~~in ~~2010~~trade accounts ~~totaled~~receivable ~~approximately~~of $~~3,757,000~~9.8 million.

~~Loan~~Investing ~~Agreement~~Activities between Best Appliances and Wujin Rural Commercial Bank for a loan with a total amount available to borrow of RMB21,000,000 (approximately $3,182,000 at December 31, 2010). Wujin Rural Commercial Bank has disbursed an aggregate of RMB19,670,000 (approximately $2,980,000) at December 31, 2010 to Best Appliances. The monthly interest rate is 0.523%. The term of loan is from December 10, 2008 to September 25, 2011. The loan outstanding at December 31, 2010 totaled approximately $2,980,000.

~~Loan~~Net ~~Agreement~~cash ~~between~~used ~~Best~~in ~~Appliance~~investing ~~and~~activities ~~Wujin~~for ~~Rural~~2011 ~~Commercial~~was ~~Bank~~$10.3 million, ~~pursuant~~as tocompared ~~which Wujin Rural Commercial Bank provided a loan with a total amount available~~ to ~~borrow of RMB7,000,000 (approximately~~ $6.1~~,061,000~~ atmillion ~~December 31, 2010). The agreement is~~ for ~~a term from May 27,~~ 2010 ~~to May 26, 2013~~. The ~~monthly~~increase ~~interest~~in ~~rate~~net iscash ~~0.0523%.~~used ~~Wujin~~in investing ~~Rural~~activities ~~Commercial~~was ~~Bank~~mainly ~~has~~attributable ~~disbursed~~to ~~RMB5,000,000~~ (~~approximately $758,000~~i) atan ~~December~~increase ~~31,~~in ~~2010~~spending ~~to Best Appliance for a term from June 7, 2010~~on tointangible ~~May~~assets ~~25,~~by ~~2011~~$2.0 ~~The~~million ~~loan~~primarily ~~outstanding~~resulting atfrom ~~December~~the ~~31,~~purchase ~~2010~~of ~~totaled approximately $758,000.~~the ~~Certain~~Niconia ~~bank~~LEV ~~loans~~brand ~~are secured by our buildings~~ and ~~land~~(ii) ~~rights.~~additional ~~Other~~restricted ~~unsecured~~cash ~~bank~~deposit ~~loans~~requirements ~~were guaranteed by Mr. Shi, his wife Ms. Wang, and one non-related party. Four loans totaling approximately~~ of $37.3 million ~~were~~as ~~renewed~~a inresult ~~2011~~of ~~under similar~~the ~~terms~~issuance ~~for~~of anbills ~~additional year~~payable.

~~Bill~~Financing ~~Acceptance~~Activities ~~Agreements:~~

~~Commercial~~Net ~~Bill~~cash ~~Acceptance~~provided ~~Agreement,~~by ~~between~~financing ~~Best~~activities ~~Cable~~for ~~and~~2011 ~~Wujin~~was ~~Agricultural Bank~~$14.6 million, ~~pursuant~~as tocompared ~~which Wujin ABC provided four commercial bills with a total amount available~~ to ~~borrow of RMB12,000,000 (approximately~~ $3.1~~,818,000)~~ atmillion ~~December~~for ~~31,~~ 2010. The ~~agreement~~increase iswas ~~for~~mainly attributable ~~a term from June 1, 2009~~ to ~~June~~increase ~~30,~~in ~~2011, guaranteed by our CEO Mr. Shi, his wife, Ms. Wang, and KK Lighting, an unrelated party however, the~~ bills payable atof ~~December~~$12.7 31million, ~~2010~~partially ~~become~~offset ~~due at various times through April~~by ~~2011.~~an Asincrease ~~the~~in ~~Company~~bank ~~incurs~~loans ~~future~~of ~~expenses, it will borrow additional funds under these arrangements. The bills outstanding at December 31, 2010 totaled~~ $1~~,667,000~~.2 million.

~~Bank~~As ~~Acceptance Agreement, between Best Cable and Wujin Subbranch~~ of ~~China~~the ~~Construction~~date ~~Bank (“Wujin CCB”) pursuant to which Wujin CCB provided a bill with a total amount available to borrow~~ of ~~RMB6,000,000~~the ~~(approximately $909~~report,~~000)~~ ~~at December 31,~~we ~~2010.~~are ~~The~~party ~~agreement is for a term from September 15, 2010~~ to ~~March~~several ~~15,~~loan ~~2011. Bank Acceptance Agreement, between Best Cable~~ and ~~Wujin Subbranch of China Construction Bank (“Wujin CCB”) pursuant to which Wujin CCB provided a~~ bill ~~with~~acceptance a total amount of RMB4,000,000 (approximately $606,000) at December 31, 2010. The agreement is for a term from August 16, 2010 to February 16, 2011. The bills outstanding at December 31, 2010 totaled $1,515,000. As of March 29, 2011, the Company has repaid these bills and entered new agreements ~~for~~as ~~additional~~follows: ~~borrowings under similar terms.~~

3034

~~Bank~~Loan ~~Acceptance~~Agreements: Agreement, between Best Cable and Wujin Rural Commercial Bank pursuant to which Wujin Rural Commercial Bank provided a bill with a total amount available to borrow of RMB24,000,000 (approximately $3,636,000) at December 31, 2010. The agreement is for a term from April 21, 2010 to April 20, 2012, however, the bills payable at December 31, 2010 become due at various times through May 2011. As the Company incurs future expenses, it will borrow additional funds under these arrangements. The bills outstanding at December 31, 2010 totaled $3,636,000.

Loan Agreement between Best Cable and Wujin Rural Commercial Bank, ~~Critical~~ pursuant ~~Accounting~~to ~~Policies~~which Wujin Rural Commercial Bank provided a loan with a total amount of RMB1,450,000 (approximately $227,800) at December 31, 2011. The loan matures on June 20, 2012. The annual interest rate is 8.75%. The loan outstanding at December 31, 2011 totaled approximately $227,800.
~~Trade~~Loan Agreements between Best Cable and ~~other~~Wujin ~~accounts~~Agriculture ~~receivables~~Bank, pursuant to which we borrowed RMB3,000,000 (approximately $471,300) in August 2011, for a term maturing June 25, 2012. The annual interest rate is 7.21%. We borrowed RMB5,000,000 (approximately $785,500) in November 2011, for a term maturing February 2012. The annual interest rate is 6.41%. We borrowed RMB10,000,000 (approximately $1,571,000) in December 2011, for a term maturing March 2012. The annual interest rate is 6.41%. For the RMB5,000,000 loan that matured in February 2012, the Company extended the loan through May 31, 2012. For the RMB 10,000,000 loan, which matured in March 2012, the Company repaid the loan in March 2012. The amount outstanding at December 31, 2011 totaled approximately $2,827,800.
~~Trade~~Loan ~~and~~Agreement ~~other~~between ~~accounts~~Best ~~receivables~~Cable ~~are~~and ~~recorded~~Wujin ~~at the sales value~~ICBC, ~~net~~pursuant ofto ~~allowances~~which ~~for~~Wujin ~~doubtful~~ICBC ~~accounts~~provided ~~and~~loans ~~sales~~with ~~returns.~~a ~~The~~total ~~allowance~~amount ~~for~~available ~~doubtful~~to ~~accounts~~borrow ~~is the Company’s best estimate~~ of ~~the~~RMB17, ~~amount~~000,000 of(approximately ~~probable~~$2,670,70) ~~credit~~at ~~losses~~December in31, ~~the Company’s existing trade and other accounts receivable~~2011. The ~~Company~~loan ~~determines~~will ~~the~~mature ~~allowance~~in ~~based~~October on2012. ~~historical~~The annual ~~write-off~~interest ~~experience,~~rate ~~customer~~is ~~specific facts and economic conditions~~6.56%. ~~Changes~~The inloan ~~allowance~~outstanding ~~for~~at ~~doubtful~~December ~~accounts~~31, ~~are~~2011 ~~included~~totaled ~~in the~~approximately ~~general and administrative expenses~~$2,670,700.
~~Outstanding~~Loan ~~accounts~~Agreement ~~balances~~between ~~are~~Best ~~reviewed~~Appliances ~~individually~~and ~~for~~Wujin ~~collectability.~~Rural ~~Accounts~~Commercial ~~balances~~Bank ~~are~~for ~~charged~~a ~~off~~loan ~~against~~with ~~the~~a ~~allowance~~total ~~after~~amount ~~all~~available ~~means~~to borrow of ~~collection~~RMB19,670,000 ~~have~~(approximately ~~been~~$3,090,200) ~~exhausted~~at ~~and~~December ~~the~~31, ~~potential~~2011. ~~for~~The ~~recovery~~annual isinterest ~~considered~~rate ~~remote.~~ranges Tois ~~date,~~9.72% and the loan ~~Company~~will ~~has~~mature ~~not~~in ~~charged~~November ~~off~~2012. ~~any~~The ~~balances~~amount asoutstanding ~~they~~at ~~have~~December ~~yet~~31, to2011 ~~exhaust~~approximately ~~all~~totaled ~~means of collection~~$3,090,200.
~~Loans~~Loan Agreement between Best Appliance and ~~Investments~~Wujin inRural ~~Privately~~Commercial ~~Held~~Bank, ~~Entities~~pursuant to which Wujin Rural Commercial Bank provided a loan with a total amount available to borrow of RMB5,000,000 (approximately $785,500) at December 31, 2011. The loan matures on April 15, 2012. The annual interest rate is 8.75%. The amount outstanding at December 31, 2011 totaled approximately $785,500.
~~From~~Loan ~~time-to-time,~~Agreement ~~the~~between ~~Company~~Best ~~makes~~Cable ~~investments in~~ and~~/or~~ ~~loans~~Pudong toDevelopment ~~privately-held~~Bank ~~companies.~~Changzhou ~~The~~Branch, ~~Company~~pursuant ~~determines~~to ~~whether~~which ~~the~~Pudong ~~fair~~Development ~~values~~Bank ofChangzhou ~~any~~Branch ~~investments~~provided ina ~~privately~~loan ~~held~~with ~~entities~~a ~~have~~total ~~declined~~amount ~~below~~available ~~their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considers any such decline~~ to beborrow ~~other~~of ~~than~~RMB ~~temporary~~10,000,000 (~~based~~approximately ~~on various factors~~$1, ~~including historical financial results~~571,000) ~~and the overall health~~at ofDecember ~~the investee’s industry)~~31, a2011. ~~write-down~~The toloan ~~estimated~~matured ~~fair~~on ~~value~~March ~~is recorded. On a quarterly basis~~19, ~~the~~2012 ~~Company~~and ~~reviews~~was ~~outstanding~~extended ~~loans receivable~~ to ~~determine~~December if14, a2012. ~~provision~~The ~~for~~annual ~~doubtful~~interest ~~loans~~rate is ~~necessary~~7.93%. ~~These~~The ~~reviews~~amount ~~include~~outstanding ~~discussions with~~at ~~senior~~December ~~management of the investee~~31, ~~and~~2011 ~~evaluations~~totaled ~~of,~~approximately ~~among other things~~$1, ~~the investee’s progress against its business plan~~571, ~~its product development activities and customer base, industry market conditions, historical and projected financial performance, expected cash needs and recent funding events~~000.
Loan Agreement between Best Appliance and Wujin ICBC, pursuant to which Wujin ICBC provided loans with a total amount of RMB10,000 (approximately $1,600) at December 31, 2011. Wujin ICBC loaned RMB10,000 (approximately $1,600) to Best ~~Inventories~~Appliance, which will mature in February 2012 . The annual interest rate is 6.10%. When the loan matured in February 2012, the Company repaid the loan. The loan outstanding at December 31, 2011 totaled approximately $1,600.

~~Inventories~~Certain ~~are~~bank ~~stated~~loans atare ~~the~~secured ~~lower~~by ofour ~~cost~~buildings and ~~market~~land rights. ~~The~~Other ~~cost~~unsecured ofbank ~~inventories~~loans iswere ~~determined~~guaranteed ~~using~~by ~~weighted~~Mr. ~~average cost method~~Shi, ~~and~~our ~~includes~~Chairman ~~expenditure incurred in acquiring the inventories~~ and ~~bringing~~Chief ~~them~~Executive toOfficer, ~~their~~his ~~existing~~wife ~~location and condition~~Ms. InXueqin ~~the case of finished goods and work in progress~~Wang, ~~cost includes materials, labor~~ and anthree ~~appropriate~~non-related ~~share of production overhead based on normal operating capacity~~parties.

~~The~~Bill ~~Company~~Acceptance ~~regularly~~Agreements: ~~reviews the cost of inventories against their estimated fair market value and may record a write-down for inventories that have cost in excess of estimated market value.~~

~~Property~~Commercial Bill Acceptance Agreement, ~~plant~~between Best Cable and ~~equipment~~Pudong Development Bank Changzhou Branch, pursuant to which Pudong Development Bank Changzhou Branch provided commercial bills with a total amount of RMB40,000,000 (approximately $6,284,000) at December 31, 2011. The agreement matures on January 10, 2013, however, the bills payable at December 31, 2011 become due at various times through March 2012. As we incur future expenses, we will borrow additional funds under these arrangements. The amount outstanding at December 31, 2011 totaled $6,284,000.
~~Property~~Commercial Bill Acceptance Agreement, ~~plant~~between Best Cable and ~~equipment~~Communication ~~are~~Bank ~~stated~~Fangzhicheng atSubbranch, ~~cost~~pursuant ~~less~~to ~~accumulated~~which ~~depreciation.~~Communication ~~Cost~~Bank ~~represents~~Fangzhicheng ~~the~~Subbranch ~~purchase~~provided ~~price~~commercial ofbills ~~the~~with ~~asset~~a ~~and~~total ~~other~~amount ~~costs~~of ~~incurred~~RMB10,000,000 to(approximately $1,571,000) ~~bring~~at ~~the~~December ~~asset~~31, ~~into~~2011. ~~its~~The ~~existing~~agreement ~~use~~matured on March 28, 2012. ~~Depreciation~~The isbills ~~provided~~payable onat ~~the~~December ~~straight-line~~31, ~~basis~~2011 become due at various times through ~~(after~~March ~~taking~~2012. ~~into~~As ~~account~~we ~~the~~incur ~~respective~~future ~~estimated~~expenses, ~~residual~~we ~~values)~~will ~~over~~borrow ~~the~~additional ~~estimated~~funds ~~useful~~under ~~lives~~these arrangements. ofThe ~~property~~amount outstanding at December 31, ~~plant~~2011 ~~and~~totaled ~~equipment~~$1,571,000.
~~Maintenance~~Commercial orBill ~~repairs~~Acceptance ~~are~~Agreement, ~~charged~~between Best Cable and Wujin Agricultural Bank, pursuant to ~~expense~~which asWujin ~~incurred~~Agricultural Bank provided two commercial bills with a total amount available to borrow of RMB7,000,000 (approximately $1,099,700) at December 31, 2011. ~~Upon~~The ~~sale~~agreement ormatures ~~disposition~~on December 13, ~~the~~2012, ~~applicable~~guaranteed ~~amounts~~by ofour ~~asset~~CEO ~~cost~~Mr. Shi, Ms. Wang, and ~~accumulated~~KK ~~depreciation~~Lighting, ~~are~~an ~~removed~~unrelated ~~from~~party. ~~the~~The ~~accounts~~bills ~~and~~payable ~~the~~at ~~net~~December ~~amount~~31, ~~less~~2011become ~~proceeds~~due ~~from~~at ~~disposal~~various istimes ~~charged~~through ~~or credited~~May to2012. ~~income~~As we incur future expenses, we will borrow additional funds under these arrangements. The amount outstanding at December 31, 2011 totaled $1,099,700.

~~Construction~~35 in progress mainly represents expenditures in respect of the Company’s offices and factories under construction. All direct costs relating to the acquisition or construction of the Company’s offices and factories are capitalized as construction in progress. No depreciation is provided in respect of construction in progress.

Bank Acceptance Agreement, between Best Cable and Wujin Rural Commercial Bank pursuant to which Wujin Rural Commercial Bank provided a bill with a total amount of RMB24,000,000 (approximately $3,770,400) at December 31, 2011. The agreement ~~Variable~~matures ~~interest~~on ~~entities~~April 15, 2012, however, the bills payable at December 31, 2011 become due at various times through June 2012. As we incur future expenses, we will borrow additional funds under these arrangements. The amount outstanding at December 31, 2011 totaled $3,770,400.
~~Each~~Bank ofAcceptance ~~the~~Agreement, ~~VIEs~~between Best Cable and ~~Mr.~~Wujin ~~Jianliang~~ICBC ~~Shi~~pursuant ~~("Mr.~~to ~~Shi")~~which ~~and~~Wujin ~~Ms.~~ICBC ~~Xueqin~~provided ~~Wang~~a bill with a total amount of RMB10,000,000 (~~"Mrs.~~approximately ~~Shi"~~$1,571,000) ~~entered~~at ~~into~~December ~~the~~31, ~~following~~2011. ~~agreements~~The ~~with~~agreement ~~Best~~matures ~~Green~~on ~~Changzhou~~October 31, ~~pursuant~~2013. toAs ~~which~~we incur ~~the~~future ~~VIEs~~expenses, ~~became~~we ~~the~~will ~~VIE~~borrow ofadditional ~~Best~~funds ~~Green~~under ~~Changzhou~~these arrangements. The amount outstanding at December 31, 2011 totaled $1,571,000.
Bank Acceptance Agreement, between Best Cable and Wujin Construction Bank pursuant to which Wujin Construction Bank provided a bill with a total amount available to borrow of RMB9,000,000 (approximately $1,413,900) at December 31, 2011. The agreement matures on January 14, 2014. As we incur future expenses, we will borrow additional funds under these arrangements. The amount outstanding at December 31, 2011 totaled $1,413,900.
~~Consulting~~Bank Acceptance Agreement, between Best Appliance and Jiangsu Bank University Subbranch pursuant to which Jiangsu Bank University Subbranch provided a bill with a total amount of RMB27,450,000 (approximately $4,312,400) at December 31, 2011. The agreement matures on December 14, 2012, however, the bills payable at December 31, 2011 become due at various times through June 2012. As we incur future expenses, we will borrow additional funds under these arrangements. The amount outstanding at December 31, 2011 totaled approximately $4,312,400.

~~Under~~Capital a Consulting Agreement, Best Green Changzhou provides exclusive technical, business and management consulting services to the VIEs in exchange for service fees equal to 100% of the total annual net profits of the VIEs. Expenditures

~~Business~~Our ~~Operation~~capital ~~Agreement~~expenditures for 2011 and 2010 were $3.3 million and $2.9 million, respectively, representing the total amount of investment activities. Our capital expenditures during 2011 consisted of capital expenditures relating to the purchase of the Niconia LEV brand and certain equipment and improvements of office buildings and workshops, as compared to 2010, when we acquired certain equipment.

~~Business~~Going Operation Agreement imposes restrictions on the operations of the VIEs. Under the Business Operation Agreement, the VIEs are each prohibited from engaging in any transaction which may materially affect their assets, obligations, rights or business operations without prior consent from Best Green Changzhou. The VIEs are also required to accept policies and suggestions provided by Best Green Changzhou from time to time with respect to employment or dismissal of employees, corporate management and financial management systems. The VIEs are also required to appoint the directors and members of senior management that Best Green Changzhou designates. concern

~~Equity~~To ~~Interest~~date, ~~Pledge~~we ~~Agreement~~have financed our operations primarily through cash flows from operations, augmented by short-term bank loans and equity contributions by stockholders. We believe that cash on hand and cash flow from operations will meet a portion of our present cash needs and will require additional cash resources, including equity investment, to meet expected capital expenditures and working capital requirements for the next 12 months. We may, however, in the future, require additional cash resources due to changed business conditions, implementation of management’s strategy to expand our marketing efforts and increase brand awareness, or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict operations. Financing may not be available in amounts or on terms acceptable to the Company, if at all. Any failure by management to raise additional funds on terms favorable to the Company, or at all, could limit the Company’s ability to expand business operations and could harm overall business prospects. The Company currently does not have any agreements to extend or refinance the debts beyond one year term. In addition, the Company has experienced a significant net loss in 2011. As a result of these factors, there is substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to that might result from the outcome of this uncertainty.

~~Mr.~~Obligations ~~and~~Under ~~Mrs.~~Material ~~Shi~~Contracts have pledged their entire equity interests in the VIEs to Best Green Changzhou pursuant to an Equity Interest Pledge Agreement. The equity interests are pledged as collateral security for the obligations of the VIEs under the Consulting Agreement and the Business Operation Agreement.

~~Proxy~~Except ~~Agreement~~ with respect to the loan obligations disclosed above, we have no material obligations to pay cash or deliver cash to any other party.

~~The~~36 Proxy Agreement among Best Green Changzhou and Mr. and Mrs. Shi requires Mr. and Mrs. Shi to vote all of the equity interests in the VIEs at any shareholders’ meeting or other time when shareholders of the VIEs vote in accordance with Best Green Changzhou’s instructions.

~~Revenue recognition~~ Seasonality

~~The~~Our ~~Company~~operating ~~recognizes~~results ~~revenues~~and inoperating ~~accordance~~cash ~~with~~flows ~~ASC~~historically ~~605-10-S99,~~have ~~“Revenue~~been ~~Recognition”~~subject ~~when~~to ~~the~~seasonal ~~significant~~variations. ~~risks~~Our ~~and~~revenues ~~rewards~~usually ofincrease ~~ownership~~over ~~have~~each ~~been~~quarter ~~transferred~~of to the ~~customer~~calendar ~~pursuant~~year towith ~~applicable~~the ~~laws~~first ~~and~~quarter ~~regulations.~~usually ~~Accordingly, all of~~ the ~~following~~slowest ~~criteria~~quarter ~~must~~because befewer ~~met~~projects inare undertaken ~~order~~during ~~for~~and around the ~~Company~~Chinese tospring ~~recognize revenue:~~ festival.

~~Persuasive~~ Inflation ~~evidence of an arrangement exists;~~

~~Delivery~~ Inflation ~~has~~and ~~occurred~~changing orprices ~~services~~ have ~~been~~a ~~rendered;~~material effect on our business, and due to the inflation and changing prices in 2011, the cost of sales increased while the sales decreased, and the gross margin decreased from 29% in 2010 to 15% in 2011. Inflation, rising raw material prices and labor costs may materially affect our business in the foreseeable future. However, our management will closely monitoring price changes in the Chinese economy and in our industry and continually tries to maintain effective cost controls in operations.

~~The~~ Off-Balance ~~seller's~~Sheet ~~price~~Arrangements ~~to the buyer is fixed or determinable; and~~

~~Collectibility~~ Except isas set forth below, we do not have any off-balance sheet arrangements that have or are reasonably ~~assured~~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 are material to our investors.

~~Net~~As ~~sales~~ of ~~products~~December ~~represent~~31, ~~the~~2011 ~~value~~and ~~of goods~~2010, ~~net~~we ofhad ~~value~~capital ~~added~~commitments ~~taxes~~amounting ~~(“VAT”),~~to ~~sales returns~~$590,382 ~~trade discounts~~ and ~~allowances.~~$610,242, ~~The~~respectively, ~~Company~~with isrespect ~~subject~~ to ~~VAT which is levied on majority of their products at~~ the ~~rate~~acquisition of ~~17%~~property, onplant ~~the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales~~ and ~~input~~equipment ~~VAT~~that iswere ~~borne~~contracted byfor ~~the~~but ~~Company in addition to the invoiced value of purchases to the extent~~ not ~~refunded~~provided ~~for export sales. Provision for sales returns are recorded as a reduction of revenue~~ in the ~~same~~consolidated financial ~~period that revenue is recognized~~statements. ~~The~~Such ~~provision~~commitments ~~for~~will ~~sales~~be ~~returns,~~recorded ~~which~~to ~~is based on historical sales returns data, is~~ the ~~Company’s~~financial ~~best~~statements ~~estimate~~when of the ~~amounts of goods that will be returned from their customers. During the reporting periods~~property, ~~there~~plant ~~were no sales returns~~ and ~~the~~equipment ~~Company~~is ~~did not recognize any provision for sales returns~~received.

~~Recently~~As ~~issued~~of ~~accounting~~December ~~pronouncements~~31, 2011 and 2010, we acted as guarantor for bank loans granted to certain business associates totaling $6,393,970 and $6,272,100, respectively. The maximum amount that can be drawn on these guaranteed loans is $9,221,770 at December 31, 2011 and these guarantees expire at various times through November 2012. None of our directors or executive officers are involved in the normal operations or have invested in the business of the guaranteed business associates. All the business associates have a healthy record of paying back the loans in a timely manner.

~~Consolidation~~All ofthe ~~Variable~~above ~~Interest~~guarantees ~~Entities~~have -no ~~Amended~~recourse ~~(Included~~provisions inthat ~~amended~~would ~~Topic~~enable ~~ASC~~us ~~810 “Consolidation”, previously SFAS 167 “Amendments~~ to ~~FASB~~recover ~~Interpretation~~from ~~No.~~the ~~46(R)”).~~business ~~The~~associates ~~amended~~any ~~topic~~amounts ~~requires~~paid anunder ~~enterprise~~the toguarantees ~~perform~~and ~~an analysis~~any toassets ~~determine~~held ~~the~~as ~~primary~~collateral ~~beneficiary~~that ofwe acan ~~variable~~obtain ~~interest~~or ~~entity;~~liquidate to ~~require~~recover ~~ongoing~~all ~~reassessments~~or ~~of whether an enterprise is the primary beneficiary of~~ a ~~variable~~portion ~~interest entity and to eliminate the quantitative approach previously~~of ~~required for determining~~ the ~~primary~~amounts ~~beneficiary of a variable interest entity. The amended topic also requires enhanced disclosures~~ that ~~will~~could ~~provide~~be ~~users~~paid ofunder ~~financial~~the ~~statements with more transparent information about an enterprise’s involvement in a variable interest entity~~guarantees. ~~The~~If ~~amended topic is effective for~~ the ~~first~~business ~~annual~~associates ~~reporting~~fail ~~period~~to ~~beginning~~perform ~~after~~under ~~November~~their 15contractual obligation, ~~2009~~we ~~and~~are ~~will~~obligated beto ~~effective~~make ~~for~~future uspayments asincluding ofthe ~~January~~contractual 1principal amounts, ~~2010.~~related ~~The~~interest ~~adoption~~and ~~of this amended topic has no material~~penalties. ~~impact~~ ~~on the Company’s financial statements.~~

InManagement ~~February~~has ~~2010,~~assessed the ~~FASB~~fair ~~issued~~value ~~ASU~~of ~~2010-09,~~the ~~Subsequent~~obligation ~~Events:~~arising ~~Amendments~~from tothe ~~Certain~~above ~~Recognition~~financial guarantees and ~~Disclosure~~recognized ~~Requirements~~$255,759 ~~which~~and ~~amends~~$0 ~~FASB~~as ~~ASC~~of ~~Topic~~December ~~855~~31, ~~Subsequent~~2011 ~~Events.~~and ~~The update provides that SEC filers, as defined in ASU~~ 2010~~-09~~, ~~are no longer required to disclose the date through~~ which ~~subsequent~~is ~~events~~included ~~have been evaluated~~ in ~~originally~~accrued ~~issued~~liabilities and ~~revised~~other ~~financial~~payables ~~statements.~~in ~~The update also requires SEC filers to evaluate subsequent events through~~ the ~~date the financial~~ ~~statements~~consolidated ~~are issued rather than the date the~~ financial statements ~~are available to be issued~~. ~~The Company adopted ASU 2010-09 upon issuance. The adoption of this ASU update has no material impact on the Company’s financial statements.~~

InCritical ~~July,~~Accounting ~~2010, the FASB issued ASU 2010-20 “Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses”.~~Policies The objective of ASU 2010-20 is to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. Under ASU 2010-20, a entity is required to provide disclosures so that financial statement users can evaluate the nature of the credit risk inherent in the entity’s portfolio of financing receivables, how that risk is analyzed and assessed to arrive at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses. ASU 2010-20 is applicable to all entities, both public and non-public and is effective for interim and annual reporting periods that ending on or after December 15, 2010. Comparative disclosure for earlier reporting periods that ended before initial adoption is encouraged but not required. However, comparative disclosures are required to be disclosed for those reporting periods ending after initial adoption. The Company is currently evaluating the impact of the adoption of ASU 2010-20 on its financial statements.

32Trade and other accounts receivables

~~Inflation~~Trade and other accounts receivables are recorded at the sales value, net of allowances for doubtful accounts and sales returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing trade and other accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Changes in allowance for doubtful accounts are included in the general and administrative expenses.

Outstanding ~~Inflation~~accounts ~~and~~balances ~~changing~~are ~~prices~~reviewed ~~have~~individually ~~not~~for ~~had~~collectability. aAccounts ~~material~~balances ~~effect~~are oncharged ~~our~~off ~~business,~~against ~~and~~the weallowance doafter ~~not~~all ~~expect~~means ~~that~~of ~~inflation~~collection orhave ~~changing~~been ~~prices~~exhausted ~~will~~and ~~materially~~the ~~affect~~potential ~~our~~for ~~business~~recovery inis ~~the~~considered ~~foreseeable future~~remote. ~~However~~To date, ~~our management will closely monitor price~~the ~~changes~~Company inhas ~~the~~not ~~Chinese~~charged ~~economy~~off ~~and~~any ~~the~~balances ~~real~~as ~~estate~~they ~~industry,~~have ~~and~~yet ~~continually~~to ~~maintain~~exhaust ~~effective~~all ~~cost~~means ~~controls~~of ~~in operations~~collection.

~~Off-Balance~~37 ~~Sheet Transactions~~

~~Capital~~Loans ~~commitment~~and Investments in Privately Held Entities

AsFrom time-to-time, the Company makes investments in and/or loans to privately-held companies. The Company determines whether the fair values of ~~December~~any ~~31,~~investments ~~2010,~~in privately held entities have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company ~~had~~considers ~~capital~~any ~~commitments~~such ~~amounting~~decline to ~~$610~~be other than temporary (based on various factors,~~242~~ ~~for~~including historical financial results, and the ~~acquisition~~overall health of ~~property~~the investee’s industry), ~~plant~~a ~~and~~write-down ~~equipment~~to ~~that~~estimated ~~were~~fair ~~contracted~~value ~~for~~is ~~but~~recorded. ~~not~~On ~~provided~~a inquarterly basis, the ~~consolidated~~Company ~~financial~~reviews ~~statements.~~outstanding ~~The~~loans ~~amounts~~receivable ~~will~~to bedetermine ~~paid~~if a provision for doubtful loans is necessary. These reviews include ~~upon~~discussions with senior management of the ~~delivery~~investee, and evaluations of, among other things, the ~~equipment~~investee’s ~~ordered~~progress oragainst ~~work~~its ~~performed~~business plan, its product development activities and customer base, industry market conditions, historical and projected financial performance, expected cash needs and recent funding events. The Company has assessed the loans for potential uncollectibility and has recorded a loan reserve.

~~Contingencies~~ Inventories

~~The~~Inventories ~~Company~~are ~~acted~~stated asat ~~guarantor~~the ~~for~~lower ~~bank~~of ~~loans~~cost ~~granted~~and tomarket. ~~certain~~The ~~business~~cost ~~associates~~of ~~with~~inventories ~~amounts~~is ~~outstanding~~determined ~~totaling~~using ~~$6,272,100~~weighted ataverage ~~December~~cost 31method, ~~2010.~~and ~~The~~includes ~~maximum~~expenditure ~~amount~~incurred ~~that~~in ~~can~~acquiring bethe ~~drawn~~inventories ~~on these guarantees is $7,938,600 at December 31, 2010~~ and ~~these~~bringing ~~guarantees~~them ~~expire~~to attheir ~~various~~existing ~~times~~location ~~through September 2013~~and condition. ~~None~~In of the ~~Company’s~~case ~~directors~~of orfinished ~~executive~~goods ~~officers~~and ~~are~~work ~~involved~~ in ~~the~~progress, ~~normal~~cost ~~operations~~includes ormaterials, ~~are~~labor ~~owners~~and inan ~~the~~appropriate ~~business~~share of ~~the~~production ~~guaranteed~~overhead ~~business~~based ~~associates. All~~on ~~the business~~normal ~~associates~~operating ~~have a healthy record of paying back the loans in a timely manner~~capacity.

~~All~~The ~~the~~Company ~~above~~regularly ~~guarantees~~reviews ~~have no recourse provisions that would enable~~ the ~~Company~~cost toof ~~recover~~inventories ~~from~~against ~~third~~their ~~parties~~estimated ~~any~~fair ~~amounts~~market ~~paid~~value ~~under the guarantees~~ and ~~any~~may ~~assets~~record ~~held~~a aswrite-down ~~collateral~~for inventories that ~~the~~have ~~Company~~cost ~~can~~in ~~obtain~~excess ~~or liquidate to recover all or a portion~~ of ~~the~~estimated ~~amounts~~market ~~paid~~value. ~~under~~Also ~~the~~for ~~guarantees. If~~ the ~~third~~obsolete ~~parties fail to perform under their contractual obligations~~inventories, the Company ~~will~~has assessed ~~make~~its ~~future~~inventories ~~payments~~and ~~including~~has ~~the~~recorded ~~contractual~~a ~~principal amounts, related interest and penalties~~provision.

~~Seasonality~~ Property, plant and equipment

Property, ~~Our~~plant ~~operating~~and ~~results~~equipment ~~and~~are ~~operating~~stated ~~cash~~at ~~flows~~cost ~~historically~~less ~~have~~accumulated ~~not~~depreciation. ~~been~~Cost ~~subject~~represents the purchase price of the asset and other costs incurred to ~~seasonal~~bring ~~variations~~the asset into its existing use. ~~This~~Depreciation ~~pattern~~is ~~may~~provided ~~change,~~on ~~however,~~the asstraight-line abasis (after ~~result~~taking ofinto ~~new~~account ~~market~~the ~~opportunities~~respective orestimated ~~new~~residual ~~product~~values) ~~introductions.~~over the estimated useful lives of property, plant and equipment.

~~Item~~ Maintenance 7Aor repairs are charged to expense as incurred. ~~Quantitative~~Upon sale or disposition, the applicable amounts of asset cost and ~~Qualitative~~accumulated ~~Disclosure~~depreciation ~~About~~are ~~Market~~removed ~~Risk~~from the accounts and the net amount less proceeds from disposal is charged or credited to income.

~~Not~~Construction ~~required~~in progress mainly represents expenditures in respect of the Company’s offices and factories under construction. All direct costs relating to the acquisition or construction of the Company’s offices and factories are capitalized as construction in progress. No depreciation is provided in respect of construction in progress.

~~Item~~ Variable 8.interest ~~Financial~~entities ~~Statements and Supplementary Financial Data~~

Each ~~The~~of ~~full~~the ~~text~~VIEs ofand ~~our~~Mr. ~~audited~~Jianliang ~~consolidated~~Shi ~~financial~~("Mr. ~~statements~~Shi") asand ofMs. ~~December~~Xueqin ~~31,~~Wang ~~2010~~("Mrs. ~~and~~Shi") ~~2009~~entered ~~begins~~into onthe ~~page~~following ~~F-1~~agreements ofwith ~~this~~Best ~~Annual~~Green ~~Report~~Changzhou, onpursuant ~~Form~~to ~~10-K~~which the VIEs became the VIE of Best Green Changzhou.

~~Item~~ Consulting 9.Agreement ~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.~~

~~Change~~Under a Consulting Agreement, Best Green Changzhou provides exclusive technical, business and management consulting services to the VIEs in ~~Accountants~~ exchange for service fees equal to 100% of the total annual net profits of the VIEs.

Business ~~Prior~~Operation toAgreement July 21, 2010, our independent registered public accounting firm was Weinberg & Baer LLC, or Weinberg, while the independent registered public accounting firm of Best Green Energy BVI was PKF, Certified Public Accountants, Hong Kong, China, a member firm of PKF International Limited network of legally independent firms (“PKF HK”). On July 21, 2010, our board of directors approved the appointment of PKF HK and the dismissal of Weinberg, as our independent auditor effective July 21, 2010.

Business ~~Weinberg’s~~Operation ~~reports~~Agreement onimposes ~~our~~restrictions ~~financial~~on ~~statements~~the ~~for~~operations of the ~~fiscal~~VIEs. ~~years~~Under ~~ended~~the ~~October~~Business 31Operation Agreement, ~~2009~~the ~~and~~VIEs ~~October~~are ~~31,~~each ~~2008~~prohibited ~~did~~from ~~not~~engaging ~~contain~~in anany ~~adverse~~transaction ~~opinion~~which may materially affect their assets, obligations, rights or business aoperations ~~disclaimer~~without ofprior ~~opinion~~consent ~~and~~from ~~were~~Best ~~not~~Green ~~qualified~~Changzhou. orThe ~~modified~~VIEs asare also required to ~~uncertainty,~~accept ~~audit~~policies ~~scope,~~and ~~or accounting~~suggestions ~~principles,~~provided ~~except~~by ~~that~~Best ~~its~~Green ~~report~~Changzhou ~~for~~from ~~the~~time ~~fiscal~~to ~~year~~time ~~ended~~with ~~October~~respect 31to employment or dismissal of employees, ~~2009~~corporate management ~~contained~~and afinancial ~~going~~management ~~concern~~systems. ~~qualification~~The asVIEs are also required to appoint the ~~ability~~directors and members of ussenior tomanagement ~~continue~~that Best Green Changzhou designates.

38 During the years ended October 31, 2009 and October 31, 2008 and the subsequent interim period through the date of Weinberg’s dismissal on July 21, 2010, there were no disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope of procedure which disagreement(s), if not resolved to the satisfaction of Weinberg, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report as described in Item 304 (a)(1)(iv) of Regulation S-K. There have been no reportable events as provided in Item 304(a)(1)(v) of Regulation S-K during the Company's fiscal year ended October 31, 2009 and October 31, 2008, and any later interim period, including the interim period up to and including the date the relationship with Weinberg ceased.

Equity 33Interest Pledge Agreement

Mr. Weand ~~furnished~~Mrs. ~~Weinberg~~Shi ~~with~~have apledged ~~copy~~their ofentire ~~this~~equity ~~disclosure~~interests ~~on August 10, 2010, providing Weinberg with~~ in the ~~opportunity~~VIEs to ~~furnish~~Best usGreen ~~with~~Changzhou apursuant ~~letter addressed~~ to ~~the~~an ~~SEC~~Equity ~~stating~~Interest ~~whether~~Pledge Agreement. itThe ~~agrees~~equity ~~with~~interests ~~the~~are ~~statement~~pledged ~~made~~as bycollateral ussecurity ~~herein~~for ~~in response to Item~~the ~~304(a)~~obligations of ~~Regulation~~the ~~S-K~~VIEs ~~and,~~under ~~if not, stating~~ the ~~respect~~Consulting inAgreement ~~which~~and ~~it does not agree. A letter from Weinberg, dated August 10, 2010 is filed as Exhibit 16.1 to~~ the ~~current~~Business Operation ~~report on Form 8-K/A filed on August 10, 2010~~Agreement.

Proxy OnAgreement January 7, 2011, the Company engaged PKF, Certified Public Accountants, A Professional Corporation, of San Diego, California, a member firm of PKF International Limited network of legally independent firms (“PKF California”) as its new independent registered public accounting firm, and dismissed PKF, Certified Public Accountants, Hong Kong, China, a member firm of PKF International Limited network of legally independent firms from that role. The change in accountants was approved by the Company’s Audit Committee and did not result from any dissatisfaction with the quality of professional services rendered by PKF HK. Neither the Company, nor anyone on its behalf, consulted PKF California during the Company’s two most recent fiscal years and any subsequent interim period prior to the Company’s engagement of PKF California regarding any of the matters set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

The ~~Company~~Proxy ~~engaged~~Agreement ~~PKF~~among HKBest ~~from~~Green ~~July~~Changzhou ~~21,~~and ~~2010~~Mr. ~~through~~and ~~January~~Mrs. Shi 6,requires ~~2011~~Mr. ~~(the~~and ~~“Engagement Period”)~~Mrs. ~~During~~Shi ~~the~~to ~~Engagement~~vote ~~Period,~~all ~~PKF~~of ~~HK did not issue any reports on~~ the ~~Company’s~~equity ~~financial~~interests ~~statements.~~in ~~During~~ the ~~Engagement~~VIEs ~~Period, the~~at ~~Company did not have~~ any ~~disagreements~~shareholders’ ~~with~~meeting ~~PKF HK on any matter of accounting principles~~ or ~~practices,~~other ~~financial~~time ~~statement~~when ~~disclosure~~shareholders ~~or auditing scope or procedure, which disagreements, if not resolved to PKF HK’s satisfaction, would have caused them to make reference to the subject matter~~ of the ~~disagreement(s)~~VIEs invote ~~connection with their report as described~~ in ~~Item 304 (a)(1)(iv) of Regulation S-K. There have been no reportable events as provided in Item 304(a)(1)(v) of Regulation S-K~~ ~~during~~accordance ~~the Engagement Period up to and including the date the relationship~~ with ~~PKF~~Best HKGreen ~~ceased~~Changzhou’s instructions.

Revenue Werecognition furnished PKF HK with a copy of this disclosure on February 3, 2011, providing PKF HK with the opportunity to furnish us with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statement made by us herein in response to Item 304(a) of Regulation S-K and, if not, stating the respect in which it does not agree. A letter from PKF HK, dated February 7, 2011 is filed as Exhibit 16 to the current report on Form 8-K/A filed on February 7, 2011.

~~Item~~The ~~9A.~~Company ~~Controls~~recognizes revenues in accordance with ASC 605-10-S99, “Revenue Recognition” when the significant risks and ~~Procedures~~rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations. Accordingly, all of the following criteria must be met in order for the Company to recognize revenue:

~~Evaluation~~1. Persuasive evidence of ~~Disclosure~~an ~~Controls~~arrangement exists; 2. Delivery has occurred or services have been rendered; 3. The seller's price to the buyer is fixed or determinable; and ~~Procedures~~ 4. Collectibility is reasonably assured.

WeNet ~~have~~sales ~~performed~~of anproducts ~~evaluation~~represent ~~under~~ the ~~supervision~~value ~~and~~of ~~with~~goods, ~~the~~net ~~participation~~ of value ~~our~~added ~~management~~taxes (“VAT”), ~~including~~sales ~~our~~returns, ~~Chief~~trade ~~Executive~~discounts ~~Officer~~and ~~(CEO)~~allowances. ~~and~~The Company ~~Chief~~is ~~Financial~~subject ~~Officer~~to ~~(CFO),~~VAT ofwhich ~~the~~is ~~effectiveness~~levied ofon ~~our~~majority ~~disclosure~~of ~~controls~~their ~~and~~products ~~procedures,~~at asthe ~~defined~~rate inof ~~Rule~~17% ~~13a-15(e)~~on ~~under~~ the ~~Exchange~~invoiced ~~Act~~value of sales. ~~Based~~Output onVAT ~~that~~is ~~evaluation,~~borne ~~our~~by ~~management,~~customers ~~including~~in addition ~~our~~to ~~CEO~~the ~~and~~invoiced ~~CFO,~~value ~~concluded~~of ~~that~~sales ~~our~~and ~~disclosure~~input ~~controls~~VAT ~~and~~is ~~procedures~~borne ~~were~~by ~~effective~~the asCompany ofin addition ~~December~~to ~~31,~~the ~~2010~~invoiced value of purchases to ~~provide~~the ~~reasonable~~extent ~~assurance~~not ~~that~~refunded for ~~information~~export ~~required~~sales. toProvision befor ~~disclosed~~sales byreturns usare recorded as a reduction of revenue in the ~~reports~~same ~~filed~~period orthat ~~submitted~~revenue byis usrecognized. ~~under~~The ~~the~~provision ~~Exchange~~for ~~Act~~sales returns, which is ~~recorded,~~based ~~processed~~on historical sales returns data, ~~summarized~~is ~~and~~the ~~reported~~Company’s ~~within~~best estimate of the ~~time~~amounts ~~periods~~of ~~specified~~goods inthat will be returned from their customers. During the reporting ~~SEC’s~~periods, ~~rules~~there were no sales returns and ~~forms~~the Company did not recognize any provision for sales returns.

~~Management’s~~Recently ~~Report~~issued onaccounting ~~Internal~~pronouncements ~~Control over Financial Reporting~~

In June 2011, the FASB (Financial Accounting Standards Board) ~~Management~~issued isASU ~~responsible~~No. ~~for~~2011-05, ~~establishing~~“Comprehensive ~~and~~Income ~~maintaining~~(Topic ~~adequate~~220) ~~internal~~– ~~control~~Presentation ~~over~~of Comprehensive ~~financial~~Income” ~~reporting~~(ASU ~~for~~2011-05). ASU 2011-05 eliminates the ~~Company.~~option ~~Internal~~to present ~~control~~the ~~over~~components ~~financial~~of ~~reporting~~other iscomprehensive ~~defined~~income as part of the statement of change in ~~Exchange~~stockholders’ ~~Act~~equity. ~~Rules~~Instead, ~~13a~~ASU 2011-~~15(f)~~05 ~~and~~requires ~~15d~~entities to report all non-~~15(f)~~owner aschanges in stockholders’ equity in either a ~~process~~single ~~designed~~continuous bystatement of comprehensive income, or ~~under~~in ~~the~~two ~~supervision of~~separate, but consecutive statements. ASU 2011-05 does not change the ~~Company’s~~items ~~principal~~that ~~executive~~must ~~and~~be ~~financial~~reported ~~officers~~in other comprehensive income, or ~~persons~~when ~~performing~~an ~~similar~~item ~~functions,~~must ~~and~~be ~~effected~~reclassified byto ~~the~~net ~~Company’s~~income. ~~board~~ASU 2011-05 ofrequires ~~directors,~~retrospective ~~management~~application and ~~other~~is ~~personnel,~~effective tofor ~~provide~~fiscal ~~reasonable~~years, ~~assurance~~and ~~regarding~~interim ~~the~~periods ~~reliability~~within ofthose ~~financial~~years, ~~reporting~~beginning ~~and~~after ~~the~~December ~~preparation~~15, of2011. ~~financial~~The Company ~~statements~~does ~~for~~not ~~external~~expect ~~purposes~~that inthis ~~accordance~~authoritative ~~with~~guidance ~~generally~~will ~~accepted~~have ~~accounting~~any ~~principles~~material effect on the Company’s financial statements.

AsIn ~~discussed~~May ~~more~~2011, ~~fully in Note 1 to~~ the ~~Company’s~~FASB ~~Consolidated~~issued ~~Financial~~ASU ~~Statements and elsewhere in this Annual Report on Form 10~~2011-K04, on“Amendments ~~June 9, 2010, TradeOn. Inc., a Nevada public company, acquired Best Green BVI, a privately held company,~~to inAchieve aCommon ~~business~~Fair ~~combination~~Value ~~that~~Measurement ~~was accounted for as a reverse acquisition. Because the financial statements~~ and ~~information~~Disclosure ~~relating~~Requirements toin ~~Best~~US ~~Green~~GAAP ~~BVI now constitute the financial statements~~ and ~~information of the “Company~~ IFRS”. ~~and~~The ~~the operations~~objective of ~~TradeOn,~~this ~~Inc.~~amendment ~~were~~is ~~insignificant prior~~ to ~~and~~achieve ~~subsequent~~common tofair ~~the~~value measurement ~~business~~and ~~combination~~disclosure ~~compared~~requirements toin ~~those~~US ofGAAP ~~the~~and ~~post-combination~~IFRS. ~~consolidated~~This ~~entity,~~amendment ~~meaningful evaluation of the effectiveness of internal control over financial reporting~~is asto ofensure ~~December~~that ~~31,~~fair ~~2010~~value ~~would~~has ~~need to focus on~~ the ~~internal~~same ~~controls~~meaning ofin ~~Best~~US ~~Green~~GAAP ~~BVI~~ and ~~its~~IFRS ~~operating subsidiaries. Prior to the transaction, Best Green BVI~~ and ~~its operating subsidiaries were privately held companies, and therefore~~ their ~~controls~~respective ~~were~~fair ~~not~~value ~~required~~measurement toand bedisclosure ~~designed~~requirements orare ~~maintained~~the ~~in accordance with Exchange Act Rule 13a-15~~same. ~~The~~This guidance ~~design~~is ofeffective ~~public company internal control over financial reporting~~ for ~~Best Green BVI and~~ the ~~implementation~~first quarter of internal control over financial reporting for the post-combination consolidated entities, have required and will continue to require significant time and resources from our management and other personnel2012. AsThe aCompany ~~result,~~does ~~management~~not ~~was unable, without incurring unreasonable effort or~~expect ~~expense,~~that tothis ~~conduct~~authoritative anguidance ~~assessment~~will ofhave ~~the~~any ~~internal~~material ~~control~~effect ~~over~~on ~~financial reporting of~~ the Company ~~as of December 31, 2010. Therefore, the Company has excluded management~~’s ~~report on internal control over~~ financial ~~reporting from this Annual Report on Form 10-K~~statements.

34ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Because~~Not ~~the Company is a smaller reporting company, this annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting~~applicable. ~~Management’s report was not subject to attestation by our registered public accounting firm.~~

~~Changes~~ITEM in8. ~~Internal~~FINANCIAL ~~Controls~~STATEMENTS AND SUPPLEMENTARY DATA.

~~There~~The ~~was~~full atext ~~change~~of in our ~~internal~~audited ~~control~~consolidated ~~over~~ financial ~~reporting~~ ~~that occurred during the quarter ended December 31, 2010 that has~~statements materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. On June 9, 2010, we closed the reverse merger transaction with Best Green BVI, which has been accounted for as ~~a reverse acquisition. The financial statements and information relating to Best Green BVI, a privately held company, now constitute the financial statements and information~~ of ~~the~~December ~~“Company.” Because Best Green BVI was a privately held company prior to the reverse merger transaction~~31, it2011 was not required to design or maintain its controls in accordance with Exchange Act Rule 13a-15 prior to the reverse merger transaction. The operations of TradeOn, Inc., a publicly held company, were insignificant prior to and ~~subsequent~~2010 tobegins ~~the~~on ~~completion~~page ~~of the reverse merger transaction compared to those of the post~~F-~~combination consolidated~~1 ~~entity. As such, significant time and resources from our management and other personnel have been required and will continue to be required for the design and implementation~~ of ~~public~~this ~~company internal control over financial reporting for the post-combination consolidated Company~~report.

~~Inherent~~39 ~~Limitations on Effectiveness of Controls~~

~~Internal~~ITEM ~~control over financial reporting may not prevent or detect all errors and all fraud~~9. ACHANGES ~~control~~IN ~~system,~~AND noDISAGREEMENTS ~~matter~~WITH ~~how~~ACCOUNTANTS ~~well~~ON ~~conceived and~~ACCOUNTING ~~operated,~~AND ~~can~~FINANCIAL ~~provide only reasonable, not absolute, assurance that the objectives of the control system are met~~DISCLOSURE. Also, projections of any evaluation of effectiveness of internal control to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met and, as set forth above, our principal executive officer and principal financial officer have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures were effective at the reasonable assurance level to ensure the information required to be disclosed in this report is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

~~Item 9B~~None. ~~Other Information.~~

~~None~~ITEM 9A. CONTROLS AND PROCEDURES.

~~PART~~Evaluation ~~III~~of Disclosure Controls and Procedures

~~Item~~We ~~10.~~maintain ~~Directors~~disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, ~~Executive~~processed, ~~Officers~~summarized and reported within the time period specified in the SEC’s rules and forms, and ~~Corporate~~that ~~Governance~~such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Directors~~As ~~and~~required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive ~~Officers~~Officer, Mr. Jianliang Shi, and Chief Financial Officer, Ms. Jianfeng Xu, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2011. Based on that evaluation, Mr. Shi and Ms. Xu concluded that, because of the material weaknesses in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of December 31, 2011.

~~The~~Notwithstanding ~~following~~management’s ~~table~~assessment ~~sets~~that ~~forth~~our ~~the~~internal control ~~name~~over ~~and~~financial ~~position~~reporting ofwas ~~each~~ineffective as of December 31, 2011 due to the material weaknesses described below, we believe that the consolidated financial statements included in this report correctly present our ~~current~~financial condition, ~~executive~~results ~~officers~~of operations and ~~directors~~cash flows for the fiscal years covered thereby in all material respects.

Name	Age	Position
Haifeng Lu (1)	23	Sole Director, President, Chief Financial Officer and Secretary
Jianliang Shi	46	Chairman and Chief Executive Officer
Zhengxing Shangguan	41	Director and Executive Vice President
Jianfeng Xu	36	Chief Financial Officer
Haoru Tao	35	Director
Ying Wang	43	Director
Jinrong Shen	41	Director

Management’s Annual Report on Internal Control over Financial Reporting

~~(1)~~Our ~~Former~~management ~~President~~is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected ~~Secretary~~by ~~prior~~our toBoard ~~June~~of 30Directors, ~~2009~~management and ~~current~~other ~~director~~personnel, ~~until~~to provide reasonable assurance regarding the ~~10th~~reliability ~~day~~of ~~following~~our ~~the~~financial ~~mailing~~reporting byand the uspreparation of ~~the~~financial ~~Information~~statements ~~Statement~~for toexternal ~~our~~purposes ~~stockholders~~in accordance with U.S. GAAP, and includes those policies and procedures that:

Jianliang Shi. Mr. Shi became our Chairman and CEO on June 9, 2010, the day that we consummated our reverse acquisition of Best Green BVI. Mr. Shi founded our VIEs in 1990 and became the chairman and chief executive officer of our VIEs at that time. He is currently the honored executive member of Wujin Light Industry Chamber of Commerce. He was also acknowledged as a Top 10 Entrepreneur by local government each year from 2002 to 2009.

	(1)	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

	(2)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and

	(3)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

~~Zhengxing~~Management ~~Shangguan.~~evaluated ~~Mr.~~the ~~Shangguan~~effectiveness ~~became~~of our ~~Director~~internal control ~~and~~over ~~Executive~~financial ~~Vice~~reporting ~~President~~as onof ~~June~~December 931, ~~2010~~2011. In making this evaluation, management used the ~~day~~framework ~~that~~established wein ~~consummated~~Internal ~~our~~Control - Integrated ~~reverse~~Framework ~~acquisition~~issued by the Committee of ~~Best~~Sponsoring ~~Green~~Organizations ~~BVI.~~of Hethe ~~has~~Treadway Commission, ~~served~~or asCOSO. aThe ~~director~~COSO ~~and~~framework ~~executive vice~~summarizes ~~president~~each of ~~our~~the ~~VIEs~~components ~~since~~of ~~1996.~~a company’s Heinternal ~~has~~control ~~more~~system, ~~than~~including 10(i) ~~years~~the ofcontrol ~~experience~~environment, (ii) inrisk ~~management~~assessment, ~~positions~~(iii) ascontrol ~~production~~activities, ~~and~~(iv) ~~sales~~information ~~manager~~and communication, and ~~focusing~~(v) monitoring. Based on ~~sales~~this ~~and~~assessment, Management concluded the Company ~~production~~did not maintain effective internal control over financial reporting as of December 31, 2011.

35Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act. Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Management conducted its evaluation of disclosure controls and procedures under the supervision of our Chief Executive Officer and our Chief Financial Officer. Based upon, and as of the date of this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2011, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting described below:

40 Jianfeng Xu. Ms. Xu became our CFO on June 9, 2010, the day that we consummated our reverse acquisition of Best Green BVI. She has served as the chief financial officer of our VIEs since 2000. Prior to joining our company, she was account of Wujin Dyeing Machine Company from 1993 to 1999. Ms. Xu received bachelor’s degree in accounting from Changzhou Institute of Technology in 2003.

~~Haoru~~- ~~Tao.~~We ~~Ms.~~failed ~~Tao was appointed on January 6, 2011~~ to ~~serve~~record onadequate ~~the~~loan ~~audit~~reserves ~~committee, compensation committee~~ and ~~nominating~~guaranty ~~and~~loan ~~governance~~reserves ~~committee~~which ofwere ~~the~~not board, and as chairman of the audit committee. Ms. Haoru Tao has served as a Senior Manager at Shanghai ThinkBridge Certified Public Accountants, a member of HLB International since 2010. Prior to joining ThinkBridge, she was the Asia Pacific Financial Controller for Ascend Performance Materials, a chemical manufacturing company. From 2002 to 2009, Ms. Tao served various senior finance, accounting and internal audit positions in ~~the~~compliance ~~United~~with ~~States~~US ~~at Levi Strauss & Co~~GAAP., New York Times Co. and Analog Devices Inc. Prior to that, she was a Senior Auditor at Arthur Andersen LLP Shanghai Office from 1999 to 2002. Ms. Tao is a Certified Public Accountant in both USA and China. She is also a Certified Internal Auditor. Ms. Tao holds a Master’s degree in Accounting from Boston College and a Bachelor’s degree in Finance from Fudan University, China.

~~Ying~~- ~~Wang.~~We ~~Ms.~~had ~~Wang~~certain ~~was~~prohibitive ~~appointed on January 6~~transactions, ~~2011~~as todefined ~~serve~~by on the ~~audit~~Sarbanes-Oxley ~~committee~~Act, ~~compensation~~with ~~committee~~an ~~and~~officer ~~nominating and governance committee~~ of ~~the~~one ~~board, and as chairman~~ of the ~~compensation committee. Ms. Ying Wang has served as director of Changzhou Tsinghua New Energy Vehicle Engineering and Technology Research Institute since 2009. From 2006 to 2009~~VIEs, ~~Ms.~~where ~~Wang~~Company ~~worked~~funds inwere acommingled ~~postdoctoral~~with ~~program~~personal inaccounts ~~new~~for ~~energy~~various ~~vehicle~~periods ~~research~~ of ~~China~~time ~~National~~resulting ~~863 Program at Tsinghua University. Ms. Wang received her Doctor’s degree~~ in ~~engineering~~loans ~~from~~to ~~Southwest Jiaotong University in 2006~~officers. ~~Ms. Wang holds 25 patents in fuel cell and new energy vehicles.~~

~~Jinrong~~Because ~~Shen.~~of ~~Mr.~~its ~~Shen~~inherent ~~was appointed on January 6~~limitations, ~~2011~~internal tocontrol ~~serve~~over onfinancial ~~the~~reporting ~~audit~~may ~~committee,~~not ~~compensation~~prevent ~~committee~~or ~~and~~detect ~~nominating and governance committee of the board, and as chairman of the nominating and governance committee~~misstatements. ~~Mr. Jinrong Shen has served as technology director of Hohai University~~Therefore, ~~Changzhou~~even ~~School~~those ~~since~~systems ~~2002.~~determined ~~From 1994~~ to ~~2002,~~be ~~Mr.~~effective ~~Shen~~can ~~served~~provide asonly areasonable ~~faculty~~assurance ~~member~~with ofrespect ~~Hohai~~to ~~University. Mr. Shen received his Master’s degree in Engineering from Hohai University, where he~~financial ~~majored~~statement inpreparation ~~electronics~~ and ~~mechanical engineering~~presentation.

This ~~Except~~annual asreport ~~noted~~does ~~above,~~not ~~there~~include ~~are~~an noattestation ~~other~~report ~~agreements~~of orthe ~~understandings~~Company’s ~~for~~registered ~~any~~public ofaccounting ~~our~~firm ~~executive~~regarding ~~officers~~internal orcontrol ~~directors~~over tofinancial ~~resign~~reporting. atManagement’s ~~the~~report ~~request~~was ofnot ~~another~~subject ~~person~~to ~~and~~attestation noby ~~officer~~our orregistered ~~director~~public accounting isfirm ~~acting~~pursuant onto ~~behalf~~rules of nothe ~~will~~Securities ~~any~~and ofExchange ~~them~~Commission ~~act~~that atpermit the ~~direction~~ ofCompany ~~any~~to ~~other~~provide ~~person~~only management’s report in this Annual Report.

~~Directors~~Remediation ~~are~~Initiative ~~elected until their successors are duly elected and qualified.~~

~~Board~~During ~~Composition~~the ~~and~~year, ~~Committees~~we failed to properly apply US GAAP in accounting for shares issued for services. We have implemented procedures, whereby any capital transactions entered into by the Company will be reviewed to determine whether the fair value of the issuance is properly calculated.

During ~~The~~the ~~Board~~year, ofwe ~~Directors~~also isinappropriately ~~currently~~recorded ~~composed~~certain oftransactions ~~five~~as ~~members:~~additional ~~Jianliang~~paid-in ~~Shi,~~capital ~~Zhengxing~~which ~~Shangguan,~~was ~~Haoru~~not ~~Tao~~in compliance with US GAAP. Although allowable under Chinese law, ~~Ying~~we ~~Wang~~have ~~and~~taken ~~Jinrong~~steps ~~Shen~~to discuss any future capital transactions with our consulting firm which has US GAAP experience to ascertain whether the transactions contemplated as appropriate before they occur.

WeDuring ~~currently~~the year, we failed to adequately reserve for doubtful accounts. We have ~~standing~~implemented ~~audit,~~procedures ~~corporate~~to ~~governance~~better track aged account balances and ~~nominating~~set up reserves for customers with delinquent payments, ~~and~~based ~~compensation~~on ~~committees~~specified aging requirements.

We ~~Our~~continue ~~audit~~to ~~committee~~engage isa ~~comprised~~consulting offirm ~~Haoru~~to ~~Tao,~~help ~~Ying~~us ~~Wang~~modify ~~and~~our ~~Jinrong~~accounting ~~Shen.~~policies ~~Haoru~~and ~~Tao~~procedures ~~serves~~based ason ~~the~~US ~~chairman of the audit committee~~GAAP. The ~~audit~~modifications ~~committee~~are isbeing ~~primarily~~reviewed ~~responsible~~by ~~for reviewing~~ the ~~services performed by our independent auditors~~management, ~~evaluating~~ ~~our accounting policies~~ and ~~our~~they ~~system~~will ofbe ~~internal~~released ~~controls.~~and ~~Ms.~~implemented ~~Tao~~upon ~~serves~~approval asof ~~our~~the ~~audit~~management ~~committee financial expert as that term is defined by~~ and the ~~applicable~~audit ~~SEC rules~~committee.

Management ~~The~~is ~~corporate~~committed ~~governance~~to ~~and~~improving ~~nominating~~its ~~committee~~internal iscontrol ~~comprised~~over offinancial ~~Haoru~~reporting ~~Tao,~~and ~~Ying~~will ~~Wang~~continue ~~and~~to ~~Jinrong~~work ~~Shen~~to ~~with~~put ~~Mr.~~effective ~~Shen~~controls asin ~~the chairman~~place. The ~~committee~~reportable isconditions ~~primarily~~and ~~responsible~~other ~~for~~areas ~~nominating~~of ~~directors~~our ~~and~~internal ~~setting~~control ~~policies~~over ~~and~~financial ~~procedures~~reporting ~~for~~identified ~~the~~by ~~nomination~~us ofas ~~directors.~~needing ~~The~~improvement ~~committee~~have isnot ~~also~~resulted ~~responsible~~in ~~for~~a ~~overseeing~~material ~~the~~restatement ~~creation and implementation~~ of our ~~corporate~~financial ~~governance policies and procedures~~statements.

Because ~~The~~of ~~compensation~~its ~~committee~~inherent islimitations, ~~comprised~~internal ofcontrol ~~Haoru~~over ~~Tao,~~financial ~~Ying~~reporting ~~Wang~~may ~~and~~not ~~Jinrong~~prevent ~~Shen~~or ~~with~~detect Msmisstatements. ~~Wang~~Projections asof ~~the~~any ~~chairman.~~evaluation ~~The~~of ~~compensation~~effectiveness ~~committee~~to isfuture ~~primarily~~periods ~~responsible~~are ~~for~~subject ~~reviewing~~to ~~and~~the ~~approving~~risk ~~our~~that ~~compensation~~controls ~~and~~may ~~benefit~~become ~~policies~~inadequate because of changes in conditions, ~~including compensation~~or that the degree of ~~executive~~compliance ~~officers.~~with the policies and procedures may deteriorate.

~~Independent~~Changes ~~Directors~~ in Internal Controls over Financial Reporting

We ~~Our~~regularly ~~Board~~review isour ~~currently~~system ~~composed~~ of ~~five~~internal ~~members,~~control ~~three~~over offinancial ~~which,~~reporting ~~Haoru~~and ~~Tao,~~make ~~Ying~~changes ~~Wang~~to our processes and ~~Jinrong~~systems ~~Shen,~~to ~~are~~improve ~~“independent”~~controls asand ~~that~~increase ~~term~~efficiency, iswhile ~~defined~~ensuring bythat ~~Rule~~we ~~4200(a)(15)~~maintain ofan ~~the~~effective ~~NASDAQ~~internal ~~listing~~control ~~standards~~environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

~~Policy~~41 ~~Regarding Board Attendance~~

Other ~~Our~~than ~~directors~~in ~~are~~connection ~~expected~~with tothe ~~attend~~implementation ~~Board~~of ~~meetings~~the remedial asmeasures ~~frequently~~described asabove, ~~necessary~~there tohave ~~properly~~been ~~discharge~~no ~~their~~changes ~~responsibilities~~in ~~and~~our tointernal control ~~spend~~over ~~the~~financial ~~time~~reporting ~~needed~~during tothe ~~prepare~~fourth ~~for~~quarter ~~each~~of ~~such~~fiscal ~~meeting.~~year ~~Our~~2011 that ~~directors~~have ~~are~~materially ~~expected to attend annual meetings of stockholders~~affected, ~~but~~or weare doreasonably ~~not~~likely ~~have~~to amaterially ~~formal~~affect, our ~~policy~~internal ~~requiring~~control ~~them~~over tofinancial ~~do so~~reporting.

ITEM 369B. OTHER INFORMATION.

We have no information to disclose that was required to be ~~Family~~disclosed ~~Relationships~~in a report on Form 8-K during fourth quarter of fiscal year 2011, but was not reported.

PART ~~There~~III ~~are no family relationships among our directors or officers.~~

~~Involvement~~ITEM in10. ~~Certain~~DIRECTORS, ~~Legal~~EXECUTIVE ~~Proceedings~~ OFFICERS AND CORPORATE GOVERNANCE.

~~None~~Directors ofand ~~our~~Executive ~~directors~~Officers ~~or executive officers has, during the past ten years:~~

~~been~~The ~~convicted~~following insets aforth ~~criminal~~information ~~proceeding~~about orour ~~been~~directors ~~subject~~and executive toofficers aas ~~pending~~of ~~criminal~~the ~~proceeding~~date ~~(excluding~~of ~~traffic~~this ~~violations~~report: ~~and other minor offences);~~

had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

Name	Age	Position
Jianliang Shi	47	Chairman, Chief Executive Officer and President
Zhengxing Shangguan	42	Director and Executive Vice President
Jianfeng Xu	37	Chief Financial Officer
Haoru Tao	36	Director
Ying Wang	44	Director
Jinrong Shen	42	Director

~~been~~Mr. ~~subject~~Jianliang toShi. ~~any~~Mr. ~~order,~~Shi ~~judgment,~~has orserved ~~decree~~as our Chairman, ~~not~~Chief ~~subsequently~~Executive ~~reversed,~~Officer ~~suspended~~and orPresident ~~vacated~~since June 9, of2010, ~~any~~the ~~court~~day that we consummated our reverse acquisition of ~~competent~~Best ~~jurisdiction~~Green orBVI. ~~federal~~Mr. orShi ~~state~~founded ~~authority,~~our VIEs ~~permanently~~in or1990 ~~temporarily~~and ~~enjoining,~~became ~~barring,~~the ~~suspending~~chairman orand ~~otherwise~~chief ~~limiting,~~executive officer of our VIEs at ~~his~~that ~~involvement~~time. inHe ~~any~~is ~~type~~currently the honored executive member of ~~business,~~Wujin ~~securities,~~Light ~~futures,~~Industry Chamber ~~commodities,~~of ~~investment,~~Commerce. ~~banking,~~He ~~savings~~was ~~and~~also ~~loan,~~acknowledged oras ~~insurance~~a ~~activities,~~Top or10 toEntrepreneur beby ~~associated~~local government ~~with~~each ~~persons~~year ~~engaged~~from in2002 ~~any~~to ~~such~~2009. ~~activity;~~

~~been~~Mr. ~~found~~Zhengxing byShangguan. aMr. ~~court~~Shangguan ofhas ~~competent~~served ~~jurisdiction~~as inour Executive Vice President and as a ~~civil~~member ~~action~~of orour byBoard of Directors since June 9, 2010, the ~~Securities~~day ~~and~~that ~~Exchange~~we ~~Commission~~consummated orour ~~the~~reverse ~~Commodity~~acquisition ~~Futures~~of ~~Trading~~Best ~~Commission~~Green toBVI. ~~have~~He has ~~violated~~served as a ~~federal~~director orand ~~state~~executive ~~securities~~vice orpresident ~~commodities~~of ~~law,~~our ~~and~~VIEs ~~the~~since ~~judgment~~1996. He has ~~not~~more than 10 years of experience in management positions as production and ~~been~~sales ~~reversed~~manager, ~~suspended,~~focusing oron ~~vacated;~~sales and production.

~~been~~Ms. ~~the~~Jianfeng ~~subject~~Xu. ~~of,~~Ms. orXu ahas ~~party~~served ~~to,~~as ~~any~~our ~~federal~~Chief Financial orOfficer ~~state~~since ~~judicial~~June ~~or administrative order~~9, ~~judgment~~2010, ~~decree,~~the orday ~~finding,~~that ~~not~~we ~~subsequently~~consummated ~~reversed,~~our ~~suspended or vacated (not including any settlement of a civil proceeding among private litigants),~~reverse ~~relating~~acquisition ~~to an alleged violation~~ of ~~any~~Best ~~federal~~Green orBVI. ~~state~~She ~~securities~~has orserved ~~commodities~~as ~~law~~the orchief ~~regulation, any law or regulation respecting~~ financial ~~institutions~~officer orof our ~~insurance~~VIEs ~~companies~~since ~~including,~~2000. ~~but~~Prior ~~not limited~~ to, ajoining ~~temporary~~our ~~or permanent injunction~~company, ~~order~~ ofshe ~~disgorgement~~worked orat ~~restitution,~~Wujin ~~civil~~Dyeing Machine ~~money~~Company ~~penalty~~from or1993 ~~temporary~~to or1999. ~~permanent~~Ms. ~~cease-and-desist~~Xu ~~order,~~received orbachelor’s ~~removal~~degree orin accounting ~~prohibition~~from ~~order,~~Changzhou orInstitute ~~any~~of ~~law~~Technology ~~or regulation prohibiting mail or wire fraud or fraud~~ in ~~connection~~2003. ~~with any business entity; or~~

~~been~~Ms. ~~the~~Haoru ~~subject~~Tao. Ms. Tao has served as a member of our Board of Directors since January 6, or2011. She has served as a ~~party~~Senior toManager at Shanghai ThinkBridge Certified Public Accountants, ~~any~~a ~~sanction~~member orof ~~order~~HLB International since 2010. Prior to joining ThinkBridge, ~~not~~she ~~subsequently~~was ~~reversed~~the Asia Pacific Financial Controller for Ascend Performance Materials, ~~suspended~~a orchemical ~~vacated~~manufacturing company. From 2002 to 2009, ofMs. ~~any~~Tao ~~self-regulatory~~served ~~organization~~various ~~(as~~senior ~~defined~~finance, inaccounting and ~~Section~~internal ~~3(a)(26)~~audit ofpositions in the ~~Exchange~~United ~~Act~~States ~~(15~~at ULevi Strauss & Co.S, New York Times Co.C and Analog Devices Inc. ~~78c(a)(26)))~~Prior to that, ~~any~~she ~~registered~~was ~~entity~~a ~~(as~~Senior Auditor ~~defined~~at inArthur ~~Section~~Andersen ~~1(a)(29)~~LLP ofShanghai ~~the~~Office ~~Commodity~~from ~~Exchange~~1999 ~~Act~~to (72002. UMs.~~S.C.~~ 1(Tao is a~~)(29))),~~ orCertified Public ~~any~~Accountant ~~equivalent~~in ~~exchange,~~both ~~association,~~USA ~~entity~~and orChina. ~~organization~~She ~~that~~is ~~has~~also ~~disciplinary~~a ~~authority~~Certified ~~over~~Internal Auditor. ~~its~~Ms. ~~members~~Tao orholds ~~persons~~a ~~associated~~Master’s ~~with~~degree in Accounting from Boston College and a Bachelor’s ~~member~~degree in Finance from Fudan University, China.

Ms. Ying Wang. Ms. Wang has served as a member of ~~Section~~our ~~16(A)~~Board ~~Beneficial~~of ~~Ownership~~Directors ~~Reporting~~since ~~Compliance~~January 6, 2011. She has served as director of Changzhou Tsinghua New Energy Vehicle Engineering and Technology Research Institute since 2009. From 2006 to 2009, Ms. Wang worked in a postdoctoral program in new energy vehicle research of China National 863 Program at Tsinghua University. Ms. Wang received her Doctor’s degree in engineering from Southwest Jiaotong University in 2006. Ms. Wang holds 25 patents in fuel cell and new energy vehicles.

42 Under U.S. securities laws, directors, certain executive officers and persons holding more than 10% of our common stock must report their initial ownership of the common stock, and any changes in that ownership, to the SEC. The SEC has designated specific due dates for these reports. Form 3s for Haoru Tao, Ying Wang and Jinrong Shen were filed late due to administrative oversight.

~~Code~~Mr. Jinrong Shen. Mr. Shen has served as a member of ~~Ethics~~our Board of Directors since January 6, 2011. He has served as technology director of Hohai University, Changzhou School since 2002. From 1994 to 2002, Mr. Shen served as a faculty member of Hohai University. Mr. Shen received his Master’s degree in Engineering from Hohai University, where he majored in electronics and mechanical engineering.

Directors Onare ~~January~~elected 6,until ~~2011,~~their ~~our~~successors ~~board~~are ofduly ~~directors~~elected ~~adopted a new code of ethics that applies to all of our directors, officers~~ and ~~employees, including our principal executive officer, principal financial officer and principal accounting officer~~qualified. The new code replaces our prior code of ethics that applied only to our principal executive officer, principal financial officer, principal accounting officer or controller and any person who performed similar functions, and addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, confidentiality, trading on inside information, and reporting of violations of the code. A copy of the Code of Ethics can be found as Exhibit 14.1 in our current report on Form 8-K filed on January 6, 2011.

Except as set forth in our discussion below in Item ~~11.~~13 ~~Executive~~“Certain ~~Compensation~~Relationships and Related Transactions, and Director Independence—Transactions with Related Persons,” none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

~~Summary~~There ~~Compensation~~are ~~Table—~~no ~~Fiscal~~agreements ~~Years~~or ~~Ended~~understandings ~~December~~for ~~31,~~any ~~2010~~of our executive officers or directors to resign at the request of another person and ~~2009~~ no officer or director is acting on behalf of nor will any of them act at the direction of any other person.

~~The~~Director following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods.Qualifications ~~No executive officer received total annual salary and bonus compensation in excess of $100,000.~~

37Directors are responsible for overseeing our business consistent with their fiduciary duty to stockholders. This significant responsibility requires highly-skilled individuals with various qualities, attributes and professional experience. The Board believes that there are general requirements for service on our Board of Directors that are applicable to all directors and that there are other skills and experience that should be represented on the Board as a whole, but not necessarily by each director. The Board considers the qualifications of directors and director candidates individually and in the broader context of the Board’s overall composition and our current and future needs.

Name and Principal Position	Year	Salary	Total
		($)	($)
Jianliang Shi (1)	2010	$8,000	$8,000
	2009	$8,000	$8,000
Amit Sachs (2)	2010	-	-
	2009	-	-
Moshe Basson (3)	2010	-	-
	2009	-	-
Haifeng Lu (2)	2010	-	-
	2009	-	-

Qualifications for All Directors

~~(1)~~ In Onits ~~June~~assessment 9,of ~~2010,~~each wepotential ~~acquired~~candidate, ~~Best~~including ~~Green~~those ~~BVI~~recommended inby astockholders, ~~reverse acquisition~~the ~~transaction~~Board ~~that~~considers ~~was~~the ~~structured~~nominee’s asjudgment, aintegrity, ~~share~~experience, ~~exchange~~independence, ~~and~~understanding ~~in connection~~of ~~with~~our ~~that~~business ~~transaction,~~or ~~Mr.~~other ~~Jianliang~~related ~~Shi~~industries ~~became~~and ~~our~~such other ~~Chairman~~factors of the Board ofdetermines ~~Directors~~are ~~and~~pertinent ~~Chief~~in ~~Executive~~light ~~Officer.~~of ~~Prior to~~ the ~~effective~~current ~~date~~needs of the ~~reverse acquisition, Mr~~Board. ~~Shi~~The ~~served~~Board atalso ~~Best~~takes ~~Green~~into ~~BVI’s~~account ~~wholly~~the ~~owned subsidiary~~ability ~~Best~~of ~~Green~~a ~~Changzhou~~director asto ~~its~~devote ~~Chief~~the ~~Executive~~time ~~Officer. The annual, long term~~ and ~~other~~effort ~~compensation~~necessary ~~shown~~to infulfill ~~this~~his ~~table~~or ~~includes~~her ~~the~~responsibilities ~~amount Mr. Shi received from Best Green Changzhou prior~~ to the ~~consummation of the reverse acquisition~~Company.

~~(2)~~ The ~~Amit~~Board ~~Sachs~~requires ~~and~~that ~~Haifeng~~each Ludirector ~~resigned~~be ~~from~~a ~~all~~recognized ~~offices~~person ~~they held~~of high integrity with usa ~~and~~proven ~~their~~record ~~position~~of assuccess ~~our~~in his or her field. Each director ~~upon~~must demonstrate innovative thinking, familiarity with and respect for corporate governance requirements and practices, an appreciation of multiple cultures and a commitment to sustainability and to dealing responsibly with social issues. In addition to the ~~closing~~qualifications required of all directors, the ~~reverse~~Board assesses intangible qualities ~~acquisition~~including ofthe ~~Best~~individual’s ~~Green~~ability ~~BVI~~to onask ~~June~~difficult 9questions and, ~~2010~~simultaneously, to work collegially.

~~(3)~~ The ~~Moshe~~Board ~~Basson~~does ~~resigned~~not ~~from~~have ~~all~~a ~~offices~~specific hediversity ~~held~~policy, ~~with~~but usconsiders diversity of race, ethnicity, gender, age, cultural background and professional experiences in evaluating candidates for Board membership. Diversity is important because a variety of ~~his~~points ~~position~~of asview ~~our~~contribute ~~director~~to ona ~~May~~more ~~10,~~effective ~~2010~~decision-making process.

~~Employment~~ Qualifications, ~~Agreements~~Attributes, Skills and Experience to be Represented on the Board as a Whole

We The doBoard ~~not~~has ~~have~~identified ~~any~~particular ~~employment~~qualifications, ~~agreement~~attributes, ~~with~~skills ~~any~~and experience that are important to be represented on the Board as a whole, in light of our current needs and business priorities. We are a U.S. public company that manufactures ~~management~~and sells clean technology-based consumer products, including LEVs and cryogen-free refrigerators, as well as network and HDMI cables. Therefore, the Board believes that a diversity of professional experiences in these industries, specific knowledge of key geographic growth areas, and knowledge of U.S. capital markets and of U.S. accounting and financial reporting standards should be represented on the Board.

~~We have not provided retirement benefits (other than a state~~ ~~pension~~Summary ~~scheme in which all~~ of ~~our~~Qualifications ~~employees in China participate) or severance or change~~ of ~~control~~Directors ~~benefits to our named executive officer.~~

~~Outstanding~~ Set ~~Equity~~forth ~~Awards~~below atis ~~Fiscal~~a ~~Year~~narrative ~~End~~disclosure that summarizes some of the specific qualifications, attributes, skills and experiences of our directors. For more detailed information, please refer to the biographical information for each director set forth above.

~~None of our executive officers received any equity awards,~~ ~~including,~~43 ~~options, restricted stock or other equity incentives during the fiscal year ended December 31, 2010.~~

~~Payment~~ Mr. Jianliang Shi. Mr. Shi founded our VIEs in 1990 and became the chairman and chief executive officer of ~~Post~~our VIEs at that time. He contributes invaluable long-~~Termination~~term ~~Compensation~~knowledge of our business and operations to our Board.

~~The~~ Mr. ~~Company~~Zhengxing ~~does~~Shangguan. ~~not~~Mr. ~~have~~Shangguan ~~change-in-control~~has ~~agreements~~served ~~with~~as ~~any of~~a ~~its~~director and executive ~~officers~~vice president of our VIEs since 1996. He has more than 10 years of experience in management positions as production and sales manager, focusing on sales and production. ~~the~~He ~~Company~~contributes isinvaluable ~~not~~long-term ~~obligated~~knowledge toof ~~pay~~our ~~severance~~business ~~or other~~and ~~enhanced~~operations, ~~benefits~~as towell ~~executive~~as ~~officers~~extensive ~~upon~~experience, ~~termination~~to ofour ~~their employment~~Board.

~~Director~~ Ms. ~~Compensation~~Haoru Tao. Ms. Tao has served in various senior finance, accounting and internal audit positions, both with accounting firms and private companies. She is a Certified Internal Auditor. Her extensive financial experience makes her a valuable member of our Board.

~~The~~ Ms. ~~following~~Ying ~~table~~Wang. ~~sets~~Ms. ~~forth~~Wang ~~all~~has ~~compensation~~extensive ~~awarded~~knowledge ~~to, earned~~of bythe ornew ~~paid~~energy tovehicle ~~the~~industry. ~~directors~~She also holds a Doctor’s degree in ~~2010:~~engineering and holds 25 patents in fuel cell and new energy vehicles. She contributes invaluable knowledge of the new energy vehicle industry to our Board.

~~Name~~ Mr. ~~Fees~~Jinrong ~~Earned~~Shen. orMr. ~~Paid~~Shen incontributes ~~Cash~~invaluable ~~Stock~~technical ~~Awards~~knowledge ~~Option~~to ~~Awards~~the ~~Total~~Board, ~~Jianliang~~having ~~Shi~~served ~~N/A~~as ~~N/A~~technology ~~N/A~~director ~~N/A~~of ~~Zhengxing~~Hohai ~~Shangguan~~University, ~~N/A~~Changzhou ~~N/A~~School ~~N/A~~since ~~N/A~~2002. ~~Haoru~~He ~~Tao~~also ~~N/A~~holds ~~N/A~~a ~~N/A~~Master’s ~~N/A~~degree ~~Ying~~in ~~Wang N/A N/A N/A N/A Jinrong Shen N/A N/A N/A N/A~~engineering.

~~Haoru Tao, Ying Wang and Jinrong Shen were appointed director~~ ~~effective~~Family as of January 6, 2011. On the same day, the Company entered into separate independent director contracts and indemnification agreements with each of them. Under the terms of the independent director’s contracts, the Company agreed to pay Mr. Tao an annual fee of $30,000, Ms. Wang and Mr. Shen an annual fee of $10,000 each, as compensation for the services to be provided by them as independent directors. Under the terms of the indemnification agreement, we agreed to indemnify the independent director against expenses, judgments, fines, penalties or other amounts actually and reasonably incurred by the independent director in connection with any proceeding if the independent director acted in good faith and in our best interests. It is our practice to reimburse our directors for reasonable travel expenses related to attendance at board of directors and committee meetings. Relationships

~~Mr.~~ There ~~Jianliang Shi and Mr. Zhengxing Shangguan~~ are ~~paid~~no infamily ~~their capacity~~relationships asamong ~~executive~~any ~~officers~~ of ~~the~~our ~~Company~~officers ~~and~~or ~~they do not receive any additional compensation for their service as~~ directors.

38 Involvement in Certain Legal Proceedings

~~Limitation~~ To the best of ~~Liability~~our ~~and~~knowledge, ~~Indemnification~~none of ~~Officers~~our ~~and Directors~~directors or executive officers has, during the past ten years:

~~Our~~been ~~bylaws~~convicted ~~provide for the indemnification of our present and prior directors and officers or any person who may have served at our request as a director or officer of another corporation~~ in ~~which we own shares of capital stock or of which we are~~ a ~~creditor~~criminal ~~against~~proceeding ~~expenses actually and necessarily incurred by them in connection with the defense of any actions, suits~~ or ~~proceedings~~ inbeen ~~which~~subject ~~they,~~to ~~or any of them, are made parties, or~~ a ~~party,~~pending ~~by reason~~criminal ofproceeding ~~being or having been director~~(s)excluding ortraffic ~~officer(s)~~violations ofand ~~us or of such~~ other ~~corporation,~~ inminor ~~the absence of negligence or misconduct in the performance of their duties. This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.~~ offences);
~~Insofar~~had asany ~~indemnification~~bankruptcy bypetition usfiled ~~for~~by ~~liabilities~~or ~~arising~~against ~~under~~ the ~~Securities~~business ~~Exchange~~or ~~Act~~property of ~~1934 may be permitted to our directors, officers and controlling persons pursuant to provisions of~~ the ~~Articles of Incorporation and Bylaws~~person, or ~~otherwise, we have been advised that in the opinion~~ of ~~the~~any ~~SEC~~partnership, ~~such~~ ~~indemnification~~corporation ~~is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification by such director, officer~~ or ~~controlling~~ ~~person~~business ofassociation ~~us in the successful defense~~ of ~~any~~which ~~action,~~he ~~suit~~was ~~or proceeding~~a isgeneral ~~asserted~~partner ~~by such director, officer~~ or ~~controlling~~executive ~~person~~officer, weeither ~~will, unless~~at in the ~~opinion~~time of ~~our counsel~~ the ~~matter~~bankruptcy ~~has~~filing ~~been~~or within ~~settled~~two byyears ~~controlling precedent,~~prior ~~submit~~ to athat ~~court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.~~ time;
Atbeen ~~the~~subject ~~present~~to ~~time~~any order, ~~there~~judgment, isor nodecree, ~~pending~~not ~~litigation~~subsequently ~~or proceeding~~reversed, ~~involving~~suspended aor ~~director~~vacated, ~~officer,~~of ~~employee~~any court of competent jurisdiction or ~~other~~federal ~~agent~~or ofstate ~~ours~~authority, ~~in which~~permanently ~~indemnification~~or ~~would~~temporarily beenjoining, ~~required~~barring, suspending or ~~permitted.~~otherwise Welimiting, his ~~are~~involvement ~~not~~in ~~aware~~any type of ~~any threatened~~business, ~~litigation~~securities, futures, commodities, investment, banking, savings and loan, or ~~proceeding~~insurance ~~which~~activities, ~~may~~or ~~result~~to inbe aassociated ~~claim~~with ~~for~~persons engaged in any such ~~indemnification.~~ activity;
~~Item~~been ~~12.~~found ~~Security~~by ~~Ownership~~a court of ~~Certain~~competent ~~Beneficial~~jurisdiction ~~Owners~~in ~~and~~a ~~Management~~civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and ~~Related~~the ~~Stockholder~~judgment ~~Matters.~~has not been reversed, suspended, or vacated;
~~The~~been ~~following~~the ~~table~~subject ~~sets~~of, ~~forth~~or ~~information~~a ~~regarding~~party ~~beneficial ownership~~to, ofany ~~our~~federal ~~common~~or ~~stock~~state asjudicial ofor ~~March~~administrative 28order, ~~2011~~judgment, decree, or finding, not subsequently reversed, suspended or vacated (i)not byincluding ~~each~~any ~~person~~settlement ~~who~~of ~~is known~~a bycivil usproceeding toamong ~~beneficially~~private ~~own~~litigants), relating ~~more~~to ~~than~~an 5%alleged violation of ~~our~~any ~~common~~federal ~~stock;~~or ~~(ii)~~state bysecurities ~~each~~or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of ~~our~~disgorgement ~~officers~~or ~~and~~restitution, ~~directors;~~civil money penalty or temporary or permanent cease-and-desist ~~(iii)~~order, byor ~~all~~removal ofor ~~our~~prohibition ~~officers~~order, ~~and~~or ~~directors~~any ~~as a~~law ~~group.~~or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
~~Unless~~been ~~otherwise~~the ~~specified~~subject of, ~~the~~or ~~address~~a ofparty ~~each~~to, any sanction or order, not subsequently reversed, suspended or vacated, of ~~the~~any ~~persons set~~self-regulatory ~~forth~~organization ~~below~~(as isdefined in ~~care~~Section 3(a)(26) of ~~Jiangsu~~the ~~Best~~Exchange ~~Electrical~~Act ~~Appliances~~(15 CoU.~~, Ltd~~S.C. 78c(a)(26))), ~~Jingsu~~any ~~Wujing~~registered ~~Lijia~~entity ~~Industrial~~(as defined ~~Park,~~in ~~Lijia~~Section ~~Town~~1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), ~~Wujin~~or ~~District~~any equivalent exchange, ~~Changzhou City~~association, ~~Jiangsu~~entity ~~Province~~or ~~213176,~~organization ~~People’s~~that ~~Republic~~has ofdisciplinary ~~China.~~authority over its members or persons associated with a member.

			Amount and
			Nature of
Name and Address of			Beneficial	Percent of
Beneficial Owner	Office, If Any	Title of Class	Ownership(1)	Class(2)
Officers and Directors
Haifeng Lu	Director, Chief Financial Officer and Secretary	Common stock, par value $0.0001	0	*
Jianliang Shi	Chairman and Chief Executive Officer	Common stock, par value $0.0001	20,734,531(3)	88.1%
Jianfeng Xu	Chief Financial Officer	Common stock, par value $0.0001	0	*
Zhengxing Shangguan	Director and Executive Vice President	Common stock, par value $0.0001	0	*
Jinrong Shen	Director	Common stock, par value $0.0001	0	*
Haoru Tao	Director	Common stock, par value $0.0001	0	*
Ying Wang	Director	Common stock, par value $0.0001	0	*
5% Security Holders
Best Green Investments Limited		Common stock, par value $0.0001	20,734,531	88.1%
Xueqin Wang and Jianliang Shi		Common stock, par value $0.0001	20,734,531	88.1%

* Section ~~Less~~16(A) ~~than~~Beneficial 1%Ownership Reporting Compliance

Section 16(1a) ~~Beneficial~~of ~~Ownership~~the isExchange ~~determined~~Act inrequires ~~accordance~~our ~~with~~executive ~~the~~officers, ~~rules~~directors and beneficial owner of more than 10% of a registered class of our equity securities to file with the SEC ~~and~~statements ~~generally~~of ~~includes~~ownership ~~voting~~and orchanges ~~investment~~in ~~power~~ownership. ~~with~~The ~~respect~~same persons are required to ~~securities.~~furnish ~~Each~~us with copies of ~~the~~all ~~beneficial~~Section ~~owners~~16(a) ~~listed~~forms ~~above~~they ~~has~~file. ~~direct~~Except ~~ownership~~as set forth below, we believe that all of ~~and~~our ~~sole~~executive ~~voting~~officers, ~~power~~directors and ~~investment~~beneficial ~~power~~owner ~~with~~of ~~respect~~more tothan ~~the~~10% ~~shares~~of a registered class of our ~~common~~equity ~~stock~~securities complied with the applicable filing requirements during fiscal year 2011.

39 In making these statements, we have relied upon examination of the copies of all Section 16(a) forms provided to us and the written representations of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities.

(2)

A total of 23,529,411 shares of our common stock are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) as of March 28, 2011. For each beneficial owner above, any options exercisable within 60 days have been included in the denominator.

(3)

Represents 20,734,531 shares that are indirectly held by our CEO Mr. Jianliang Shi and his wife Ms. Xueqin Wang, through Best Green Investments Limited, a BVI company owned and controlled by them. Mr. Jianliang Shi and his wife Xueqin Wang have 51% and 49% equity interest of Best Green Investments, respectively. For details regarding these option agreements, see “Transactions with Related Persons” below.

Code of Ethics

~~Changes~~On inJanuary ~~Control~~6, 2011, our board of directors adopted a code of ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. The code of ethics addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, confidentiality, trading on inside information, and reporting of violations of the code. A copy of the Code of Ethics can be found as Exhibit 14.1 to our current report on Form 8-K filed on January 6, 2011.

Board OnComposition ~~April 24, 2010, Marsel Gilyazov, the sole director of Best Green Investments, entered into an option agreement (the “Option Agreement”) with our Chairman~~ and CEO, Mr. Jianliang Shi and his wife Xueqin Wang. Best Green Investment is the indirect beneficial owner of 20,734,531 shares, or 88.1% of the Company’s issued and outstanding common stock. Pursuant to the Option Agreement, Mr. Shi and Ms. Wang were granted options to purchase 51% and 49% equity interest of Best Green for an aggregate price of $1,000. Committees

The OnCompany ~~October~~is ~~20,~~governed ~~2010,~~by a Board of Directors that currently consists of five members: Mr. Jianliang Shi, ~~and~~Mr. Zhengxing Shangguan, Ms. Haoru Tao, Ms. Ying Wang ~~exercised~~and ~~their~~Mr. ~~options~~Jinrong toShen. ~~purchase~~Our ~~the~~“independent” ~~equity~~directors, ~~interest~~within the meaning of the ~~Best~~NASDAQ ~~Green~~Marketplace ~~Investments.~~Rules, Asare aMs. ~~result~~Haoru Tao, MrMs. ~~Shi~~Ying Wang and MsMr. ~~Wang~~Jinrong ~~own~~Shen. anAll ~~aggregate~~actions of ~~20,734,531~~the ~~shares,~~Board orof ~~88.1%~~Directors ofrequire the ~~total~~approval ~~outstanding~~of ~~shares~~a majority of the ~~Company’s~~ ~~capital~~directors ~~stock~~in ~~and~~attendance ~~88.1%~~at ~~total~~a ~~voting~~meeting ~~power~~at ofwhich ~~all~~a ofquorum ~~the~~is ~~Company’s outstanding voting securities~~present.

~~Other~~The ~~than~~Board has established three standing committees: the ~~foregoing~~Audit Committee, wethe doCompensation ~~not~~Committee ~~currently~~and ~~have~~the ~~any~~Governance ~~arrangements~~and ~~which~~Nominating ifCommittee. ~~consummated~~Each of the Audit Committee, Compensation Committee and Governance and Nominating Committee are comprised entirely of independent directors. From time to time, the Board may ~~result~~establish inother committees. The Board has adopted a ~~change~~written ofcharter ~~control~~for each of ~~our~~the ~~Company~~Committees, which can be found as Exhibits 99.2, 99.3 and 99.4 to our current report on Form 8-K filed on January 6, 2011.

~~Item~~ Audit ~~13.~~Committee ~~Certain Relationships~~ and ~~Related~~Audit ~~Transactions,~~Committee ~~and~~Financial ~~Director~~Expert ~~Independence~~

~~Transactions~~Our ~~with~~Audit ~~Related~~Committee ~~Persons~~is currently composed of five members, Ms. Haoru Tao, Ms. Ying Wang and Mr. Jinrong Shen. Our Board of Directors determined that each member of the Audit Committee meets the independence criteria prescribed by applicable regulation and the rules of the SEC for audit committee membership and is an “independent” director within the meaning of the NASDAQ Marketplace Rules. Each Audit Committee member also meets NASDAQ’s financial literacy requirements. Ms. Tao serves as Chair of the Audit Committee.

Our ~~The~~Audit ~~following~~Committee ~~includes~~oversees aour ~~summary~~accounting ofand ~~transactions~~financial ~~since~~reporting ~~the~~processes ~~beginning of the last fiscal year, or any currently proposed transaction, in which we were or are to be a participant~~ and the ~~amount~~audits ~~involved~~of ~~exceeded~~our orfinancial ~~exceeds $120,000, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Executive Compensation”)~~statements. We ~~believe~~Our ~~the~~Audit ~~terms~~Committee ~~obtained~~is orresponsible ~~consideration that we paid or received~~for, asamong ~~applicable,~~other ~~in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm's-length transactions.~~ things:

On selecting ~~June~~our 9,independent ~~2010,~~auditors weand ~~entered~~pre-approving ~~into~~all aauditing ~~cancellation~~and ~~agreement,~~non-auditing orservices ~~the~~permitted ~~Cancellation Agreement, with Mr. Haifeng Lu, whereby Mr. Lu agreed~~ to ~~the~~be ~~cancellation~~performed ~~of 4,000,000 shares of our common stock owned~~ by ~~him. At the time he entered into the Cancellation Agreement, Mr. Lu was~~ our ~~sole~~independent ~~director and officer.~~auditors;
On reviewing ~~April 24, 2010, Marsel Gilyazov entered into an option agreement~~ with our ~~Chairman~~independent ~~and~~auditors ~~CEO~~any ~~Mr.~~audit ~~Jianliang~~problems ~~Shi~~or ~~and~~difficulties ~~his wife Xueqin Wang, pursuant to which they were granted options to purchase 51%~~ and ~~49%~~management’s equity interest of Best Green Investments. They may exercise these options sixty (60) days after the date on which this current report is filed with the SEC in respect of the Share Exchange, and ending on the fifth annual anniversary of that date.response;
~~Best Cable entered into a Maximum Amount Guarantee Contract with Wujin ABC under which KK Lighting~~ (areviewing ~~third party), our CEO Mr. Jianliang Shi~~ and ~~his~~approving ~~wife~~all ~~Xueqin~~proposed ~~Wang~~related-party agreed to act as guarantor for loans borrowed by Best Cable from Wujin ABC The maximum guaranteed amount is RMB10,000,000 (approximately $1,517,000 at December 31, 2010) for any loans borrowed by Best Cable from Wujin ABC from June 1, 2009 to June 30, 2011transactions;
~~Best~~ discussing ~~Cable~~the ~~entered~~annual ~~into~~audited afinancial ~~Maximum~~statements ~~Amount Guarantee Contract~~ with ~~Wujin~~management ~~ICBC,~~and ~~under which KK Lighting (a third party),~~ our ~~CEO~~independent Mr. Jianliang Shi agreed to act as guarantor for loans borrowed by Best Cable from Wujin ICBC. The maximum guaranteed amount is RMB26,000,000 (approximately $3,939,000 at December 31, 2010) for any loans borrowed by Best Cable from Jiangnan Rural Commercial Bank from November 16, 2009 to October 31, 2011.auditors;
~~Except~~reviewing asmajor ~~set~~issues ~~forth~~as into ~~our~~the ~~discussion~~adequacy ~~above, none~~ of our ~~directors,~~internal ~~director~~controls ~~nominees~~and orany ~~executive~~special ~~officers~~audit ~~has~~steps ~~been~~adopted ~~involved~~ in ~~any~~light ~~transactions with us or any~~ of ~~our~~significant ~~directors,~~internal ~~executive~~control ~~officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.~~ deficiencies;
~~Promoters~~annually reviewing and ~~Certain~~reassessing ~~Control~~the ~~Persons~~ adequacy of our Audit Committee charter;
Wemeeting ~~did~~separately ~~not~~and ~~have~~periodically ~~any~~with ~~promoters~~management atand ~~any~~our ~~time~~internal ~~during~~and ~~the~~independent ~~past five fiscal years.~~auditors;
40reporting regularly to the full Board of Directors; and
~~Director~~such ~~Independence~~other matters that are specifically delegated to our Audit Committee by our Board of Directors from time to time.

~~Our Board is currently composed of 5 members, of which Haoru~~ ~~Tao,~~45 ~~Ying Wang and Jinrong Shen are “independent” as that term is defined under the NASDAQ listing standards.~~

~~All~~Our ~~actions~~Board of ~~the~~Directors ~~board~~has ofdetermined ~~directors~~that ~~require~~Ms. ~~the~~Tao ~~approval~~is ~~of a~~the ~~majority~~“audit ofcommittee ~~the~~financial ~~directors~~expert” inas ~~attendance~~such atterm ~~a meeting at which a quorum~~ is ~~present.~~ ~~Our~~defined ~~directors have a duty of to act~~ in ~~good~~Item ~~faith~~407(d) ~~with a view to our~~of ~~interests.~~Regulation InS-K ~~fulfilling~~promulgated ~~their~~by ~~duty~~the ofSEC ~~care~~and toalso ~~us,~~meets ~~our~~NASDAQ’s ~~directors must ensure~~financial ~~compliance~~sophistication ~~with our Certificate of Incorporation~~requirements.

~~Item~~Compensation ~~14.~~Committee ~~Principal Accountant Fees and Services.~~

~~PKF~~Our ~~California~~Compensation ~~was~~Committee ~~engaged~~is ascurrently ~~the~~composed ~~Company’s~~of ~~independent PCAOB~~five ~~registered~~members, ~~public~~Ms. ~~accounting~~Haoru ~~firm~~Tao, onMs. ~~January~~Ying 7,Wang ~~2011,~~ and ~~was engaged to examine the Company’s consolidated financial statements for the fiscal year ended December 31, 2010~~Mr. AsJinrong ~~such~~Shen, noeach ~~fees~~of ~~were~~whom ~~paid to PKF through December 31, 2010.~~is ~~PKF~~“independent” HKwithin ~~was engaged to examine~~ the ~~Company’s~~meaning ~~consolidated~~of ~~financial statements for~~ the ~~fiscal~~NASDAQ ~~year~~Marketplace ~~ended~~Rules. ~~December~~Ms. ~~31,~~Wang serves ~~2009~~as ~~and~~Chair of the ~~three~~Compensation ~~quarters ended September 30, 2010 and 2009~~Committee.

~~Audit~~Our ~~Fees.~~Compensation ~~PKF~~Committee HKassists ~~was~~the ~~paid~~Board ~~aggregate~~in ~~fees~~reviewing ofand ~~approximately~~approving ~~$129,000~~the ~~and~~compensation $0structure ~~for~~of ~~the~~our ~~fiscal~~directors ~~years~~and ~~ended~~executive ~~December 31~~officers, including ~~2009~~all ~~and December~~forms ~~31,~~of ~~2010,~~compensation ~~respectively,~~to ~~for~~be ~~professional~~provided ~~services~~to ~~rendered~~our ~~for~~directors ~~the~~and ~~audit~~executive ofofficers. ~~our~~Our ~~annual~~Chief ~~financial~~Executive ~~statements~~Officer ~~and~~may ~~quarter~~not ~~review~~be ofpresent ~~condensed~~at any ~~consolidated~~committee ~~financial~~meeting ~~statements~~during which his compensation is deliberated.

~~Tax~~The ~~Fees.~~Compensation ~~There~~Committee ~~were~~is noresponsible ~~tax fees paid~~ for, ~~the~~among ~~fiscal~~other ~~year~~things: ~~ended December 31, 2010 and 2009.~~

~~All~~approving ~~Other~~and ~~Fees~~overseeing .the ~~PKF~~compensation HKpackage ~~was paid no other fees~~ for ~~professional~~our ~~services during the fiscal years ended December 31, 2010~~executive ~~and 2009.~~ officers;
reviewing and making recommendations to the Board ofwith ~~Directors~~respect ~~Pre-Approval~~to ~~Policies~~the compensation ~~and~~of our directors; ~~Procedures~~
~~Our~~reviewing ~~Board~~and approving corporate goals and objectives relevant to the compensation of ~~Directors~~our ~~has~~chief ~~adopted~~executive officer, evaluating the ~~policy~~performance toof ~~pre-approve~~our ~~audit~~ chief executive officer in light of those goals and ~~permissible~~objectives, ~~non-audit~~and ~~services~~setting the ~~provided~~compensation bylevel of our ~~independent~~chief executive officer based on this ~~auditors.~~ evaluation; and
~~PART~~reviewing IVperiodically and making recommendations to the Board regarding any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

Item 15. Exhibits, Financial Statement and Schedules
(a)	The following documents are filed as part of this Report:
(1)	Financial Statements are set forth beginning on page F-1 of this Report
	Section 1. Report of Independent Registered Public Accounting Firm	F-2
	Section 2. Consolidated Balance Sheets	F-4
	Section 3. Consolidated Statements of Income and Comprehensive Income	F-5
	Section 4. Consolidated Statements of Changes in Stockholders' Equity	F-6
	Section 5. Consolidated Statements of Cash Flows	F-7
	Section 6. Notes to Consolidated Statements	F-8 - F-28

Governance and Nominating Committee

(2)	Financial Statement Schedules: All Schedules are omitted because the information called for is not applicable, is not required, or because the financial information is set forth in the financial statements or notes thereto.
(3)	Exhibits

Our Governance and Nominating Committee is currently composed of five members, Ms. Haoru Tao, Ms. Ying Wang and Mr. Jinrong Shen, each of whom is “independent” within the meaning of the NASDAQ Marketplace Rules. Mr. Shen serves as Chair of the Governance and Nominating Committee.

41The Governance and Nominating Committee assists the Board in identifying individuals qualified to become our directors and in determining the composition of the Board and its committees.

~~Exhibits~~The ~~(Including~~Governance ~~Those~~and ~~Incorporated~~Nominating ByCommittee ~~Reference).~~is responsible for, ~~Exhibit~~among ~~Index~~other things:

Exhibit No.		Description
2.1*		Share Exchange Agreement, dated June 9, 2010, among the Company, Best Green BVI and its sole shareholder.
3.1		Certificate of Incorporation of the Company [Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed on December 23, 2008].
3.2		Bylaws of the Company [Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed on December 23, 2008].
4.1		Cancellation Agreement, dated June 9, 2010, by and between the Company and Haifeng Lu (incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K filed on June 11, 2010).
10.1		Loan (Credit) Contract of Maximum Amount (English Translation), dated December 10, 2008, by and between Jiangsu Best Electrical Appliances Co., Ltd. and Jiangsu Wujin Rural Commercial Bank (incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K filed on June 11, 2010).
10.2		Mortgage Contract of Maximum Amount (English Translation), dated December 10, 2008, by and between Jiangsu Best Electrical Appliances Co., Ltd. and Jiangsu Wujin Rural Commercial Bank (incorporated herein by reference to Exhibit 10.2 to Current Report on Form 8-K filed on June 11, 2010).
10.3		Loan Contract with Guaranty (English Translation), dated January 20, 2010,by and among Changzhou Wunjin Suochuan Mechanical & Electrical Co., Ltd., Changzhou City Wujin Best Electronic Cables Co., Ltd., Wang Yuxing, and Jiangsu Jiangnan Rural Commercial Bank (incorporated herein by reference to Exhibit 10.3 to Current Report on Form 8-K filed on June 11, 2010).
10.4		Guaranty Obligations Pre-maturity Covenants between the Parties Dispute Resolution Validity Acknowledgments by the Guarantors Summary of Guaranty Contract (English Translation), dated March 19, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Wang Kai and Jiangsu Wujin Rural Commercial Bank Company limited by Shares (incorporated herein by reference to Exhibit 10.4 to Current Report on Form 8-K filed on June 11, 2010).
10.5		Guaranty Obligations Pre-maturity Covenants between the Parties Dispute Resolution Validity Acknowledgments by the Guarantors Summary of Guaranty Contract (English Translation), dated April 6, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd., Wang Kai and Yao Qing and Jiangsu Wujin Rural Commercial Bank Company limited by Shares (incorporated herein by reference to Exhibit 10.5 to Current Report on Form 8-K filed on June 11, 2010).
10.6		Guaranty Obligations Pre-maturity Covenants between the Parties Dispute Resolution Validity Acknowledgments by the Guarantors Summary of Guaranty Contract (English Translation), dated April 27, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Xia Jianfei and Jiangsu Wujin Rural Commercial Bank Company limited by Shares (incorporated herein by reference to Exhibit 10.6 to Current Report on Form 8-K filed on June 11, 2010).
10.7		Guaranty Contract of Maximum Amount (English Translation), dated May 8, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd., Jianhua Shi, Jun Shi, Meifang, Shi and Wujin Branch, Agricultural Bank of China (incorporated herein by reference to Exhibit 10.7 to Current Report on Form 8-K filed on June 11, 2010).
10.8		Guaranty Obligations Pre-maturity Covenants between the Parties Dispute Resolution Validity Acknowledgments by the Guarantors Summary of Guaranty Contract (English Translation), dated May 18, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd., Wang Kai and Yao Qing and Jiangsu Wujin Rural Commercial Bank Company limited by Shares (incorporated herein by reference to Exhibit 10.8 to Current Report on Form 8-K filed on June 11, 2010).
10.9		Guaranty Contract of Maximum Amount (English Translation), dated May 22, 2009, by and between Changzhou City Wujin Best Electronic Cables Co., Ltd. and Jiangsu Wujin Rural Commercial Bank (incorporated herein by reference to Exhibit 10.9 to Current Report on Form 8-K filed on June 11, 2010).
10.10		Guaranty Contract of Maximum Amount (English Translation), dated June 20, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Wujin Branch, Agricultural Bank of China (incorporated herein by reference to Exhibit 10.10 to Current Report on Form 8-K filed on June 11, 2010).
10.11		Guaranty Obligations Pre-maturity Covenants between the Parties Dispute Resolution Validity Acknowledgments by the Guarantors Summary of Guaranty Contract (English Translation), dated July 2, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd., Wang Kai and Yao Qing and Jiangsu Wujin Rural Commercial Bank Company limited by Shares (incorporated herein by reference to Exhibit 10.11 to Current Report on Form 8-K filed on June 11, 2010).

identifying and recommending to the Board nominees for election or re-election to the Board, or for appointment to fill any vacancy;
42reviewing annually with the Board the current composition of the Board in light of the characteristics of independence, age, skills, experience and availability of service to us; and

10.12		Loan (Credit) Contract of Maximum Amount (English Translation), dated August 14, 2009, by and between Changzhou City Wujin Best Electronic Cables Co., Ltd. and Jiangsu Wujin Rural Commercial Bank (incorporated herein by reference to Exhibit 10.12 to Current Report on Form 8-K filed on June 11, 2010).
10.13		Mortgage Contract of Maximum Amount (English Translation), dated August 14, 2009, by and between Changzhou City Wujin Best Electronic Cables Co., Ltd. and Jiangsu Wujin Rural Commercial Bank (incorporated herein by reference to Exhibit 10.13 to Current Report on Form 8-K filed on June 11, 2010).
10.14		Working Capital Loan Contract (English Translation), dated September 8, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Changzhou Wunjin Branch, Industrial and Commercial Bank of China (incorporated herein by reference to Exhibit 10.14 to Current Report on Form 8-K filed on June 11, 2010).
10.15		Guaranty Obligations Pre-maturity Covenants between the Parties Dispute Resolution Validity Acknowledgments by the Guarantors Summary of Guaranty Contract (English Translation), dated September 18, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd., Wang Kai and Yao Qing and Jiangsu Wujin Rural Commercial Bank Company limited by Shares (incorporated herein by reference to Exhibit 10.15 to Current Report on Form 8-K filed on June 11, 2010).
10.16		Loan Contract (English Translation), dated October 15, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Changzhou Wunjin Branch, Agricultural Bank of China (incorporated herein by reference to Exhibit 10.16 to Current Report on Form 8-K filed on June 11, 2010).
10.17		Guaranty Contract (English Translation), dated October 22, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Wang Quanxin and Jiangsu Wujin Rural Commercial Bank Company limited by Shares (incorporated herein by reference to Exhibit 10.17 to Current Report on Form 8-K filed on June 11, 2010).
10.18		Guaranty Obligations Pre-maturity Covenants between the Parties Dispute Resolution Validity Acknowledgments by the Guarantors Summary of Guaranty Contract (English Translation), dated November 13, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd., Wang Kai, and Yao Qing and Jiangsu Wujin Rural Commercial Bank Company limited by Shares (incorporated herein by reference to Exhibit 10.18 to Current Report on Form 8-K filed on June 11, 2010).
10.19		Working Capital Loan Contract (English Translation), dated November 20, 2009, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Changzhou Wunjin Branch, Industrial and Commercial Bank of China (incorporated herein by reference to Exhibit 10.19 to Current Report on Form 8-K filed on June 11, 2010).
10.20		Guaranty Contract of Maximum Amount (English Translation), dated January 4, 2010, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Changzhou Wunjin Branch, Industrial and Commercial Bank of China (incorporated herein by reference to Exhibit 10.20 to Current Report on Form 8-K filed on June 11, 2010).
10.21		Working Capital Loan Contract (English Translation), dated January 2, 2010, by and among Changzhou City Wujin Best Electronic Cables Co., Ltd. and Changzhou Wunjin Branch, Industrial and Commercial Bank of China (incorporated herein by reference to Exhibit 10.21 to Current Report on Form 8-K filed on June 11, 2010).
10.22		Independent Director’s Contract, dated as of January 6, 2011, by and between China Green Energy Industries, Inc. and Jinrong Shen (incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 6, 2011).
10.23		Independent Director’s Contract, dated as of January 6, 2011, by and between China Green Energy Industries, Inc. and Haoru Tao (incorporated herein by reference to Exhibit 10.2 to Current Report on Form 8-K filed on January 6, 2011).
10.24		Independent Director’s Contract, dated as of January 6, 2011, by and between China Green Energy Industries, Inc. and Ying Wang (incorporated herein by reference to Exhibit 10.3 to Current Report on Form 8-K filed on January 6, 2011).
21		Subsidiaries of the Company (incorporated herein by reference to Exhibit 21 to Current Report on Form 8-K filed on June 11, 2010).
31.1*		Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1		China Green Energy Industries, Inc. Audit Committee Charter (incorporated herein by reference to Exhibit 99.1 to Current Report on Form 8-K filed on January 6, 2011).
99.2		China Green Energy Industries, Inc. Compensation Committee Charter (incorporated herein by reference to Exhibit 99.2 to Current Report on Form 8-K filed on January 6, 2011).
99.3		China Green Energy Industries, Inc. Governance and Nominating Committee Charter (incorporated herein by reference to Exhibit 99.3 to Current Report on Form 8-K filed on January 6, 2011).

identifying and recommending to the Board the directors to serve as members of the Board’s committees,

43Material Changes to Director Nomination Procedures

There have been no material changes to the procedures by which stockholders may recommend nominees to our Board of Directors since such ~~SIGNATURES~~procedures were last disclosed.

~~Pursuant~~ITEM to11. ~~the~~EXECUTIVE ~~requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized~~COMPENSATION.

	CHINA GREEN ENERGY
	INDUSTRIES, INC.
March 30, 2011	By :/s/ Jianliang Shi
(Date Signed)	Jianliang Shi, President

Summary Compensation Table — Fiscal Years Ended December 31, 2011 and 2010

~~Pursuant~~The tofollowing ~~the~~table ~~requirements~~sets offorth ~~the~~information ~~Securities~~concerning ~~Exchange~~all ~~Act of~~cash ~~1934,~~and ~~this~~non-cash ~~report~~compensation ~~has~~awarded ~~been~~to, ~~signed~~earned ~~below~~ by ~~the~~or ~~following~~paid ~~persons~~to onthe ~~behalf~~named ofpersons for ~~the~~services ~~Company~~rendered in ~~the~~all capacities during the noted periods. No other executive officer received total annual salary and onbonus ~~the~~compensation ~~dates~~in ~~indicated~~excess of $100,000.

~~Each~~46 person whose signature appears below hereby authorizes Jianliang Shi and Jianfeng Xu as attorney-in-fact to sign on his behalf, individually, and in each capacity stated below, and to file all amendments and/or supplements to this annual report on Form 10-K.

Signature		Capacity		Date
Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	All Other Compensation ($)	Total ($)
/s/ Jianliang Shi		President, Director and Chief Executive Officer (Principal Executive Officer)		March 30, 2011
Jianliang Shi, Chief Executive Officer	2011	23,000	-	-	-	-	23,000
Jianliang Shi
	2010	8,000	-	-	-	-	8,000
/s/ Jianfeng Xu		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)		March 30, 2011
Jianfeng Xu
/s/ Haoru Tao		Director		March 30, 2011
Haoru Tao
/s/ Ying Wang		Director		March 30, 2011
Ying Wang
/s/ Zhengxing Shangguan		Director and Executive Vice President		March 30, 2011
Zhengxing Shangguan
/s/ Jinrong Shen		Director		March 30, 2011
Jinrong Shen

44 Employment Agreements

~~China~~We ~~Green~~have ~~Energy~~entered ~~Industries,~~into ~~Inc.~~employment agreements with most of our ~~(Formerly~~officers, ~~TradeOn~~managers and employees other than our CEO, ~~Inc~~for which we currently have no agreement with.)

~~Consolidated~~We ~~financial~~have ~~statements~~not ~~For~~provided ~~years~~retirement ~~ended~~benefits (other than a state ~~December~~pension ~~31,~~scheme ~~2010~~in ~~and~~which ~~2009~~all of our employees in China participate) or severance or change of control benefits to our named executive officer

~~INDEX~~Outstanding TOEquity ~~CONSOLIDATED~~Awards ~~FINANCIAL~~at ~~STATEMENTS~~Fiscal Year End

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-4
Consolidated Statements of Income and Other Comprehensive Income	F-5
Consolidated Statements of Changes in Stockholders' Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8 - F-28

For the year ended December 31, 2011, no director or executive officer has received compensation from us pursuant to any compensatory or benefit plan. There is no plan or understanding, express or implied, to pay any compensation to any director or executive officer pursuant to any compensatory or benefit plan.

~~REPORT~~Compensation OFof ~~INDEPENDENT~~Directors ~~REGISTERED PUBLIC ACCOUNTING FIRM~~

~~Board~~The offollowing ~~Directors~~table ~~and~~sets ~~Stockholders~~forth ~~China~~the ~~Green~~total ~~Energy~~compensation earned by ~~Industries,~~our ~~Inc.~~directors ~~Changzhou~~for ~~City,~~their ~~Jiansgsu~~services ~~Province~~as directors during fiscal year ended December 31, ~~PRC~~2011:

We have audited the accompanying consolidated balance sheet of China Green Energy Industries, Inc. (a Nevada Corporation) as of December 31, 2010 and the related consolidated statements of income and comprehensive income (loss), stockholders' equity, and cash flow for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

Name	Fees earned or paid in cash ($)	All other compensation ($)	Total ($)
Jianliang Shi	-	-	-
Zhengxing Shangguan	-	-	-
Haoru Tao	30,000	-	30,000
Ying Wang	10,000	-	10,000
Jinrong Shen	10,000	-	10,000

We have ~~conducted~~entered ~~our~~into ~~audit~~separate inindependent ~~accordance~~director contracts with ~~the~~our ~~standards~~independent ~~of the~~directors, ~~Public~~Ms. ~~Company~~Haoru ~~Accounting~~Tao, ~~Oversight Board (United States)~~Ms. ~~Those~~Ying ~~standards require~~Wang ~~that we plan~~ and ~~perform~~Mr. ~~the audit to obtain reasonable assurance about~~Jinrong ~~whether~~Shen. Under the ~~consolidated~~terms ~~financial statements are free~~ of ~~material~~the ~~misstatement. The~~independent ~~Company~~director’s ~~is not required to have~~contracts, ~~nor were~~ we ~~engaged~~agreed to ~~perform, an audit of~~pay ~~its internal controls over financial reporting~~Ms. ~~Our~~Tao ~~audit~~an ~~included~~annual ~~consideration~~ fee of ~~internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstance~~$30,000, ~~but~~and ~~not~~Ms. ~~for~~Wang ~~the~~and ~~purpose~~Mr. ~~of expressing~~Shen an ~~opinion~~annual onfee ~~the effectiveness~~ of ~~the Company's internal control~~ ~~over financial reporting. Accordingly~~$10,000 ~~we express no such opinion. An audit includes examining~~each, onas acompensation ~~test~~for ~~basis, evidence supporting~~ the ~~amounts~~services ~~and disclosures~~to inbe ~~the~~provided ~~consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made~~ by ~~management,~~ asthem ~~well~~ as ~~evaluating the overall financial statement presentation.~~ Weindependent ~~believe that our audit provides a reasonable basis for our opinion~~directors.

InMr. ~~our~~Jianliang ~~opinion,~~Shi ~~the~~and ~~consolidated~~Mr. ~~financial~~Zhengxing ~~statements~~Shangguan ~~referred to~~are ~~above~~paid ~~present fairly,~~ in ~~all material respects, the consolidated financial~~their ~~position~~capacity ofas ~~China~~executive ~~Green~~officers ~~Energy Industries, Inc. as~~ of ~~December 31, 2010 and~~ the ~~results~~ ofCompany ~~its consolidated operations~~ and ~~cash~~they ~~flows~~do ~~for~~not ~~the~~receive ~~year then ended in~~any ~~conformity~~additional ~~with~~compensation ~~accounting~~for ~~principles~~their ~~generally~~service ~~accepted~~as ~~in the United States of America~~directors.

	/s/ PKF
March 30, 2011	PKF
San Diego California	Certified Public Accountants
	A Professional Corporation

It is our practice to reimburse our directors for reasonable travel expenses related to attendance at Board and Committee meetings.

~~F-2~~ ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

~~REPORT~~Security OFOwnership ~~INDEPENDENT~~of ~~REGISTERED~~Certain ~~PUBLIC~~Beneficial ~~ACCOUNTING~~Owners ~~FIRM~~and Management

The following table sets forth information regarding beneficial Toownership ~~the~~of ~~Directors~~our common stock as of April 13, 2012 (i) by each person who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our officers and ~~Stockholders~~directors; and (iii) by all of our officers and directors as a group. Unless otherwise specified, the address of each of the persons set forth below is in care of the Company, Jiangsu ~~Best~~Wujin ~~Electrical~~Lijia ~~Appliances~~Industrial ~~Co.~~Park, Lijia ~~Ltd~~Town, ~~and~~Wujin District, Changzhou City, ~~Wujin~~Jiangsu ~~Best~~Province, ~~Electronic~~213176, ~~Cables~~People’s Republic ~~Co.,~~of ~~Ltd~~China.

We47 have audited the accompanying combined balance sheet of Jiangsu Best Electrical Appliances Co., Ltd and Changzhou City Wujin Best Electronic Cables Co., Ltd. (collectively, the “Companies”) as of December 31, 2009 and the related combined statements of income and comprehensive income, stockholders’ equity (deficit) and cash flows for the year ended December 31, 2009. These financial statements are the responsibility of the Companies’ management. Our responsibility is to express an opinion on these combined financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

Name and Address of Beneficial Owner	Office, If Any	Title of Class	Amount and Nature of Beneficial Ownership⁽¹⁾	Percent of Class⁽²⁾
Officers and Directors
Jianliang Shi	Chairman, CEO and President	Common Stock	20,734,531⁽³⁾	87.8%
Zhengxing Shangguan	Director and Executive VP	Common Stock	0	*
Jianfeng Xu	Chief Financial Officer	Common Stock	0	*
Haoru Tao	Director	Common Stock	0	*
Ying Wang	Director	Common Stock	0	*
Jinrong Shen	Director	Common Stock	0	*
All officers and directors as a group (6 persons named above)		Common Stock	20,734,531⁽³⁾	87.8%
5% Security Holders
Best Green Investments Limited ⁽³⁾			20,734,531⁽³⁾	87.8%

In* ~~our~~Less ~~opinion,~~than ~~the~~1% combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Companies as of December 31, 2009, and the combined results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ PKF Certified Public Accountants Hong Kong, China June 7, 2010

(1)	Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to the shares of our common stock.

(2)	A total of 23,625,911 shares of our common stock are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) as of April 13, 2012. For each beneficial owner above, any options exercisable within 60 days have been included in the denominator.

(3)	Includes 20,734,531 shares held by Best Green Investments Limited. Best Green Investments Limited is owned and controlled by our CEO, Mr. Jianliang Shi, and his wife, Ms. Xueqin Wang. Mr. Shi and Ms. Wang own 51% and 49% equity interest of Best Green Investments, respectively.

~~F-3~~ Changes in Control

~~China~~We ~~Green~~are ~~Energy~~not ~~Industries,~~aware ~~Inc.~~of ~~(Formerly~~any ~~TradeOn,~~arrangements ~~Inc.)~~which ~~Consolidated~~if ~~Balance~~consummated ~~Sheets~~may result Asin a change of ~~December~~control ~~31,~~of ~~2010~~our ~~and~~Company. ~~2009~~

		As of December 31,
		2010		2009
ASSETS
Current assets
Cash and cash equivalents	$	1,080,787	$	757,742
Restricted cash - Note 3		3,408,750		3,656,468
Trade accounts receivables, net - Note 4		11,537,053		2,691,560
Other receivables, prepayments and deposits - Note 5		638,553		931,662
Inventories, net - Note 6		2,733,369		1,966,989
Loans to third parties - Note 7		3,333,000		2,734,428
Loans to a related party - Note 8		3,159,388		-
Amounts due from related parties - Note 9		1,461,156		784,690
Deferred tax asset		113,002		70,664
Total current assets		27,465,058		13,594,203
Long-term equity investment - Note 10		165,640		159,909
Property, plant and equipment, net - Note 11		6,875,566		4,222,825
Land use rights - Note 12		1,037,606		1,023,258
Deferred tax asset		123,462		57,143
TOTAL ASSETS	$	35,667,332	$	19,057,338
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities
Trade accounts payable	$	9,152,372	$	3,701,489
Bills payable - Note 3		6,817,500		6,552,390
Other payables and accrued charges - Note 13		2,857,780		940,960
Income tax payable		2,241,102		685,076
Short-term bank loans - Note 14		8,926,380		5,575,382
Amount due to a related party - Note 9		-		234,525
Total current liabilities		29,995,134		17,689,822
TOTAL LIABILITIES		29,995,134		17,689,822
COMMITMENTS AND CONTINGENCIES - Note 19
STOCKHOLDERS’ EQUITY
Preferred stock : par value $0.01 per share Authorized 50,000,000 shares; none issued and outstanding		-		-
Common stock : par value $0.0001 per share Authorized 100,000,000 shares; issued and outstanding 23,529,411 and 20,734,531 shares, respectively		2,352		2,073
Additional paid-in capital		1,309,175		1,301,731
Accumulated other comprehensive income		220,954		60,470
Retained earnings		4,139,717		3,242
TOTAL STOCKHOLDERS’ EQUITY		5,672,198		1,367,516
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	35,667,332	$	19,057,338

Securities Authorized for Issuance Under Equity Compensation Plans

~~See~~We ~~the~~do ~~accompanying~~not ~~notes~~have toany ~~the~~compensation ~~consolidated~~plans ~~financial~~in effect under which our ~~statements~~equity securities are authorized for issuance.

~~F-4~~ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

~~China~~Transactions ~~Green~~with ~~Energy~~Related ~~Industries,~~Persons ~~Inc. (Formerly TradeOn, Inc.) Consolidated Statements of Income and Comprehensive Income For the years ended December 31, 2010 and 2009~~

		Year ended December 31,
		2010			2009
Revenues	$	28,589,395		$	12,092,837
Cost of revenues		(20,398,286	)		(8,550,998	)
Gross profit		8,191,109			3,541,839
Operating expenses:
General and administrative expenses		(2,031,956	)		(902,136	)
Selling expenses		(649,198	)		(303,965	)
		(2,681,154	)		(1,206,101	)
Income from operations		5,509,955			2,335,738
Interest income		345,745			65,506
Other income - Note 15		183,722			88,980
Finance costs - Note 16		(472,307	)		(331,785	)
Income before income taxes		5,567,115			2,158,439
Income taxes - Note 17		(1,430,640	)		(539,610	)
Net income	$	4,136,475		$	1,618,829
Other comprehensive income (loss)
Foreign currency translation adjustments		160,484			(2,784	)
Total comprehensive income	$	4,296,959		$	1,616,045
Earnings per share
- Basic	$	0.19		$	0.08
- Diluted	$	0.19		$	0.08
Weighted average number of shares outstanding
- Basic		22,311,915			20,734,531
- Diluted		22,311,915			20,734,531

The following includes a summary of transactions since the beginning of the 2010 fiscal year, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under Item 11 “Executive Compensation”). We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm's-length transactions.

~~See~~48 ~~the accompanying notes to consolidated financial statements~~

~~F-5~~On June 9, 2010, we entered into a cancellation agreement with Mr. Haifeng Lu, whereby Mr. Lu agreed to the cancellation of 4,000,000 shares of our common stock owned by him. At the time he entered into the cancellation agreement, Mr. Lu was our sole director and officer.
~~China~~On ~~Green~~September ~~Energy Industries~~15, ~~Inc. (Formerly TradeOn~~2011, ~~Inc~~Ms.) ~~Consolidated~~Xueqin ~~Statements~~Wang ofloaned ~~Changes~~RMB5,000,000 in(approximately $785,500) ~~Stockholders’~~as ~~Equity~~operating ~~For~~funds to the ~~years~~Company. ~~ended December 31, 2010 and 2009~~

	Common Stock
	Shares		Amount		Additional paid-in capital		Accumulated other comprehensive income			(Accumulated deficit) retained earnings			Total
Balance at January 1, 2009	20,734,531	$	2,073	$	1,301,731	$	63,254		$	(1,615,587	)	$	(248,529	)
Net income	-		-		-		-			1,618,829			1,618,829
Foreign currency translation adjustment	-		-		-		(2,784	)		-			(2,784	)
Balance at December 31, 2009	20,734,531		2,073		1,301,731		60,470			3,242			1,367,516
Common stock assumed in reverse merger	2,794,384		279		7,444		-			-			7,723
Net income	-		-		-		-			4,136,475			4,136,475
Foreign currency translation adjustment	-		-		-		160,484			-			160,484
Balance at December 31, 2010	23,529,411	$	2,352	$	1,309,175	$	220,954		$	4,139,717		$	5,672,198

Except as set forth in our discussion above, none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

~~F-6~~Director Independence

~~China~~Each ~~Green~~of ~~Energy~~Ms. ~~Industries~~Haoru Tao, ~~Inc~~Ms. ~~(Formerly~~Ying ~~TradeOn,~~Wang ~~Inc~~and Mr.) ~~Consolidated~~Jinrong ~~Statements~~Shen serves ofon ~~Cash~~our ~~Flows~~board ~~For~~as ~~the~~an ~~years~~“independent” ~~ended~~director ~~December~~as ~~31,~~defined ~~2010~~by the applicable rules of the SEC and ~~2009~~NASDAQ.

		Years ended December 31,
		2010			2009
Cash flows from operating activities
Net income	$	4,136,475		$	1,618,829
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		513,700			363,064
Provision for doubtful accounts		178,023			-
Allowance for obsolete inventories		-			95,103
Deferred taxes		(101,397	)		(41,414	)
Changes in operating assets and liabilities:
Trade accounts receivables		(8,657,559	)		(1,372,819	)
Other receivables, prepayments and deposits		273,810			(545,104	)
Inventories		(677,977	)		(680,932	)
Amounts due from related parties		(631,655	)		1,149,545
Trade accounts payables		5,181,332			1,550,987
Other payables and accrued charges		1,834,663			67,080
Income tax payable		1,491,904			562,788
Amount due to a related party		(236,676	)		(434,783	)
Net cash flows from operating activities		3,304,643			2,332,344
Cash flows from investing activities
Payments to acquire property, plant and equipment		(2,928,975	)		(1,324,915	)
Loans to third parties		(487,696	)		(2,732,957	)
Loans to a related party		(3,078,057	)		-
Decrease (increase) in restricted cash		369,000			(1,724,924	)
Cash received from the RTO		9,796			-
Net cash flows used in investing activities		(6,115,932	)		(5,782,796	)
Cash flows from financing activities
Net proceeds from short-term bank loans		3,070,080			862,462
Increase in bills payable		29,521			2,689,712
Net cash flows from financing activities		3,099,601			3,552,174
Effect of foreign currency translation on cash and cash equivalents		34,733			1,632
Net increase in cash and cash equivalents		323,045			103,354
Cash and cash equivalents - beginning of year		757,742			654,388
Cash and cash equivalents - end of year	$	1,080,787		$	757,742
Supplemental disclosures for cash flow information
Interest paid	$	472,307		$	331,785
Income taxes paid	$	68,183		$	18,236

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

~~See~~Independent ~~the~~Auditors’ ~~accompanying~~Fees ~~notes to consolidated financial statements~~

F-PKF, Certified Public Accounts, California (“PKF California”) was engaged as the Company’s independent registered public accounting firm on January 7, 2011. Prior to this, PKF, Certified Public Accounts, Hong Kong (“PKF Hong Kong”) was the Company’s auditor. The fees for the year ended December 31, 2010 were billed by PKF Hong Kong and the fees for the year ended December 31, 2011 were billed by PKF California.

~~China~~The ~~Green~~following ~~Energy~~is ~~Industries,~~a ~~Inc.~~summary ~~(Formerly~~of ~~TradeOn,~~the ~~Inc.)~~fees ~~Notes~~billed to ~~Consolidated~~the ~~Financial~~Company for ~~Statements~~professional ~~For~~services rendered for the fiscal years ended December 31, ~~2010~~ 2011 and ~~2009~~2010:

1. Corporation information

		Year Ended December 31,
		2011		2010
Audit Fees	$	120,300	$	129,000
Audit-Related Fees		-		-
Tax Fees		-		-
All Other Fees		-		-
TOTAL	$	120,300	$	129,000

~~China~~“Audit ~~Green~~Fees” ~~Energy~~consisted ~~Industries,~~of ~~Inc.~~fees billed for professional services ~~(the~~rendered ~~“Company”)~~by ~~was~~the ~~incorporated~~principal inaccountant for the ~~State~~audit of ~~Nevada~~our onannual ~~December~~financial statements 7,and ~~2007 under~~review of the ~~name~~financial ofstatements ~~TradeOn,~~included ~~Inc.~~in ~~for~~our ~~the~~Form ~~purpose~~10-K ofand 10-Q ~~pursuing~~or aservices ~~business~~that are normally provided by the accountant in connection with ~~combination~~statutory ~~through~~and aregulatory ~~Reverse~~filings ~~Takeover~~or ~~(“RTO”)~~engagements.

~~On June 9, 2010, the Company entered into and closed a share exchange agreement (the~~ “~~Share~~Audit-Related ~~Exchange Agreement~~Fees”) ~~with Best~~consisted ~~Green~~of ~~Energy~~fees ~~Industries~~billed ~~Limited~~for ~~(“Best~~assurance ~~Green BVI”), a British Virgin~~and ~~Islands~~related ~~company~~services ~~incorporated~~by onthe ~~March~~principal ~~31,~~accountant ~~2010,~~that ~~and~~were ~~its~~reasonably ~~sole~~related ~~shareholder, Best Green Investments Limited (“Best Green Investments”), pursuant~~ to ~~which~~ the ~~Company~~performance ~~acquired 100%~~ of the ~~issued~~audit ~~and~~or ~~outstanding~~review ~~capital stock~~ of ~~Best~~our ~~Green BVI~~financial instatements exchange for 20,734,531 shares of the Company’s common stock, par value $0.0001, issued to Best Green Investments which after giving effect to the Cancellation Agreement disclosed below, constituted 88.1% of the Company’s issued and ~~outstanding~~are ~~capital stock on a fully-diluted basis as of and~~not ~~immediately~~reported ~~after~~under the ~~consummation~~paragraph ofcaptioned ~~the~~“Audit ~~transactions~~Fees” ~~contemplated by the Share Exchange Agreement~~above.

~~As a condition precedent to the consummation of the Share Exchange Agreement, on June 9, 2010, the Company entered into a cancellation agreement, (the~~ “~~Cancellation~~Tax ~~Agreement~~Fees”), ~~with~~consisted ~~Mr. Haifeng Lu, who was the major stockholder~~ of ~~the~~fees ~~Company~~billed ~~immediately~~for ~~before~~professional ~~the~~services ~~Share~~rendered ~~Exchange Agreement, whereby Mr. Lu agreed to the cancellation of 4,000,000 shares of the Company’s common stock owned~~ by ~~him of~~ the ~~then~~principal ~~6,794,384~~accountant ~~shares outstanding.~~for ~~Mr.~~tax ~~Haifeng~~returns ~~Lu served as the Company’s sole director and officer from May 10, 2010 until June 9, 2010 when he was replaced by Mr~~preparation. Jianliang Shi (“Mr. Shi”), a founder of Jiangsu Best Electrical Appliances Co., Ltd. (“Best Appliances”) and Changzhou City Wujin Best Electronic Cables Co., Ltd. (“Best Cables”). Mr. Shi and his spouse, Ms. Xueqin Wang (“Mrs. Shi”), together own the entire interests in Best Appliances and Best Cables respectively.

~~Mr.~~“All ~~Shi~~Other ~~was~~Fees” ~~appointed~~consisted asof ~~the~~fees ~~Company’s director~~billed ~~and~~for ~~chief~~products ~~executive~~and services ~~officer~~provided ~~effective~~by ~~upon~~ the ~~closing~~principal ofaccountant, ~~the~~other ~~above share~~than ~~exchange. In addition,~~ the ~~Company’s~~services ~~executive officers were replaced by~~reported ~~the~~above ~~executive~~under ~~officers~~other ofcaptions ~~Best Appliances and Best Cables upon the closing~~ of ~~the~~ ~~share~~this ~~exchange~~Item 14.

AsPre-Approval aPolicies ~~result of the share exchange, the Company now owns all of the issued~~ and ~~outstanding~~Procedures capital stock of Best Green BVI, which in turn owns 100% of the outstanding capital stock of Best Green Energy (Changzhou) Co., Ltd. (“Best Green Changzhou”), a wholly-foreign-owned enterprise incorporated in the People’s Republic of China (the “PRC”) on May 6, 2010.

~~PRC~~Under ~~law places certain restrictions on roundtrip investments through~~ the ~~acquisition~~Sarbanes-Oxley Act of ~~a PRC entity by PRC residents. To comply with these restrictions~~2002, inall ~~conjunction~~audit ~~with the RTO, the Company, via Best Green Changzhou, entered into~~ and ~~consummated certain contractual~~non-audit ~~arrangements with Best Appliances, Best Cables, and Mr. and Mrs. Shi pursuant to which the Company provides Best Appliances and Best Cables with technical, business and management consulting~~ services ~~and~~performed ~~appoints~~by ~~their~~our ~~senior~~auditors ~~executives and~~must ~~approves~~be ~~all~~approved ~~matters~~in ~~requiring~~advance ~~shareholders’~~by ~~approval.~~our Asboard ~~a result~~ of ~~these~~ ~~contractual~~directors ~~arrangements,~~to ~~which~~assure ~~obligates~~that ~~Best~~such ~~Green~~services ~~Changzhou~~do tonot ~~absorb~~impair ~~a majority of~~ the ~~risk~~auditors’ ~~of loss~~ independence from ~~the~~us. ~~activities~~In ofaccordance ~~Best~~with ~~Appliances~~its ~~and~~policies ~~Best Cables~~ and ~~enables~~procedures, ~~Best~~our ~~Green~~board ~~Changzhou to receive a majority~~ of ~~their expected~~directors ~~residual~~pre-approved ~~returns,~~ the ~~Company~~audit ~~accounts~~service ~~for~~performed ~~the~~by ~~two~~PKF ~~entities~~Certified asPublic ~~variable~~Accountants ~~interest~~for ~~entities~~our ~~(“VIE”)~~financial ~~pursuant~~statements toas ~~ASC~~of ~~810 (the “VIE Arrangement”). The VIE Arrangements are set out in note 2. Best Appliances~~ and ~~Best~~for ~~Cables~~the ~~are collectively~~year ~~referred~~ended toDecember as31, ~~the “VIEs” thereafter~~2011.

~~F-8~~49

~~China~~PART ~~Green~~IV ~~Energy Industries, Inc. (Formerly TradeOn, Inc.) Notes to Consolidated Financial Statements For the years ended December 31, 2010 and 2009~~

1.	Corporate information (cont’d)
	Before the closing of the share exchange, on April 24, 2010, Mr. and Mrs. Shi entered into an option agreement (the “Option Agreement”) with Mr. Marsel Gilyazov, the sole shareholder and director of Best Green Investments, pursuant to which Mr. and Mrs. Shi were granted options, exercisable 60 days after the date on which a current report on Form 8-K is filed with the Securities and Exchange Commission (the “SEC”) in respect of the Share Exchange Agreement, to acquire 51% and 49% equity interest of Best Green Investments, and ending on the fifth annual anniversary of that date. After Mr. and Mrs. Shi have exercised these options, they will be the Company’s controlling stockholders holding 88.1% equity interest. On October 20, 2010, Mr. and Mrs. Shi exercised their options to purchase the equity interest of Best Green Investments. As a result, Mr. and Mrs. Shi own an aggregate of 88.1% of the total outstanding shares of the Company’s capital stock and 88.1% total voting power of all of the Company’s outstanding voting securities.
	The acquisition of Best Green BVI was accounted for as a recapitalization effected by a share exchange, wherein Best Green BVI is considered the acquirer for accounting and financial reporting purposes. The Company’s assets and liabilities have been brought forward at their book value and no goodwill has been recognized. In addition, the reverse takeover accounting was used to account for the VIE Arrangement as the VIEs were under common control of Mr. and Mrs. Shi before and after the RTO (by virtue of the Option Agreement) and the VIE Arrangement. These financial statements, issued under the name of the Company, represent the continuation of the combined financial statements of the VIEs.
	Following the RTO and the VIE Arrangement, the Company, through the VIEs, is primarily engaged in the manufacture and distribution of clean technology-based consumer products, which consist of light electrical vehicles, cryogen-free refrigerators, and network and HDMI cables. The Company operates manufacturing and distribution primarily in the PRC and sells some of their products under their own brand name of “BEST”.
	In connection with the RTO, the Company’s Board of Directors on July 30, 2010 approved a change in the Company’s fiscal year end from October 31 to December 31 to be consistent with the fiscal year end of Best Green BVI. On September 1, 2010, the Company changed its name to China Green Energy Industries, Inc.
2.	Summary of significant accounting policies
	Basis of presentation
	The accompanying consolidated financial statements of the Company, its subsidiaries and the VIEs have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
	The financial statements of Best Appliances and Best Cables for the year ended December 31, 2009 have been combined and presented in these consolidated financial statements on the basis that the entities are under the common control and management of Mr. and Mrs. Shi.

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

~~F-9~~Financial Statements and Schedules

~~China~~The ~~Green~~following ~~Energy~~documents ~~Industries,~~are ~~Inc.~~filed ~~(Formerly~~as ~~TradeOn,~~part ~~Inc.)~~of ~~Notes~~this ~~to Consolidated Financial Statements For the years ended December 31, 2010 and 2009~~Report:

2. Summary of significant accounting policies (cont’d)

(1)	Financial Statements are set forth beginning on page F-1 of this Report
	Report of Independent Registered Public Accounting Firm	F-2
	Consolidated Balance Sheets	F-3
	Consolidated Statements of Operations and Comprehensive Income (loss)	F-4
	Consolidated Statements of Changes in Stockholders' Equity	F-5
	Consolidated Statements of Cash Flows	F-6
	Notes to Consolidated Statements	F-7 - F-29

~~Principles~~(2) ofFinancial ~~consolidation~~Statement Schedules: All Schedules are omitted because the information called for is not applicable, is not required, or because the financial information is set forth in the financial statements or notes thereto.

~~The~~Exhibit ~~consolidated~~List ~~financial statements include the accounts of the Company, its subsidiaries and the VIEs. All significant inter-company accounts and transactions have been eliminated in consolidation.~~

~~Variable~~The ~~interest~~list ~~entities~~of exhibits in the Exhibit Index to this Report is incorporated herein by reference.

~~Each~~50 ~~of the VIEs and Mr. and Mrs. Shi entered into the following agreements with Best Green Changzhou, pursuant to which the VIEs became the VIE of Best Green Changzhou.~~

~~Consulting~~SIGNATURES ~~Agreement~~

~~Under~~Pursuant to the ~~Consulting~~requirements ~~Agreement,~~of ~~Best Green~~section ~~Changzhou~~13 ~~provides~~or ~~exclusive~~15(d) ~~technical,~~of ~~business~~the Securities ~~and~~Exchange ~~management~~Act ~~consulting services~~of to1934, the ~~VIEs~~registrant inhas ~~exchange~~duly ~~for~~caused ~~service~~this ~~fees~~report ~~equal~~ to be ~~100%~~signed ofon ~~the~~its ~~total annual~~behalf ~~net~~by ~~profits~~the ofundersigned, ~~the~~thereunto ~~VIEs~~duly authorized.

~~Business~~Date: ~~Operation~~April ~~Agreement~~ 16, 2012

~~The~~CHINA ~~Business~~GREEN ~~Operation~~ENERGY ~~Agreement imposes restriction on the operations of the VIEs. Under the Business Operation Agreement~~INDUSTRIES, ~~the VIEs are prohibited from engaging in any transaction which may materially affect its assets, obligations, rights or business operation without prior consent from Best Green Changzhou~~INC. ~~The~~By: ~~VIEs~~/s/ ~~are~~Jianliang ~~also~~Shi ~~required~~Jianliang toShi ~~accept policies~~Chief ~~and~~Executive ~~suggestions~~Officer ~~provided~~By: by/s/ ~~Best~~Jianfeng ~~Green~~Xu ~~Changzhou~~Jianfeng ~~from~~Xu ~~time~~Chief toFinancial time with respect to employment or dismissal of employees, corporate management and financial management systems. The VIEs are also required to appoint the directors and members of senior management that Best Green Changzhou designates. Officer

~~Equity~~Pursuant ~~Interest~~to ~~Pledge~~the ~~Agreement~~requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Mr. and Mrs. Shi have pledged their entire equity interests in the VIEs to Best Green Changzhou pursuant to the Equity Interest Pledge Agreement. The equity interests are pledged as collateral security for the obligations of the VIEs under the Consulting Agreement and the Business Operation Agreement.

Signature	Title	Date

/s/ Jianliang Shi	Chairman and Chief Executive Officer	April 16, 2012
Jianliang Shi	(Principal Executive Officer)

/s/ Jianfeng Xu	Chief Financial Officer	April 16, 2012
Jianfeng Xu	(Principal Financial and Accounting Officer)

/s/ Zhengxing Shangguan	Director	April 16, 2012
Zhengxing Shangguan

/s/ Haoru Tao	Director	April 16, 2012
Haoru Tao

/s/ Ying Wang	Director	April 16, 2012
Ying Wang

/s/ Jinrong Shen	Director	April 16, 2012
Jinrong Shen

~~Proxy~~51 ~~Agreement~~

~~The~~PART ~~Proxy~~I Agreement among Best Green Changzhou and Mr. and Mrs. Shi requires Mr. and Mrs. Shi to vote all of the equity interests in the VIEs at any shareholders’ meeting or other time when shareholders of the VIEs vote in accordance with Best Green Changzhou’s instructions.

~~Use~~FINANCIAL ~~of estimates~~ INFORMATION

InITEM ~~preparing financial statements in conformity with U~~1.S. ~~GAAP,~~FINANCIAL 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 periodsSTATEMENTS. These accounts and estimates include, but are not limited to, the valuation of trade and other receivables, inventories, deferred income taxes and the estimation on useful lives and residual values of property, plant and equipment. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates.

~~F-10~~CHINA GREEN ENERGY INDUSTRIES, INC. AND SUBSIDIARIES

~~China~~CONSOLIDATED ~~Green~~ANNUAL ~~Energy~~FINANCIAL ~~Industries,~~STATEMENTS ~~Inc. (Formerly TradeOn, Inc.) Notes to Consolidated Financial Statements For the years ended December 31, 2010 and 2009~~

2.December ~~Summary~~31, of2011 ~~significant~~AND ~~accounting~~2010 ~~policies (cont’d)~~

Concentrations of credit risk

	Page(s)
Financial Statements
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations and Comprehensive Income (Loss)	F-4
Consolidated Statements of Changes in Stockholders' Equity	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7-F-31

~~Financial~~F-1 instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade accounts receivables and other receivables. As of December 31, 2010 and 2009, the Company’s cash and cash equivalents and restricted cash were held by major financial institutions located in the PRC, which management believes are of high credit quality. With respect to trade accounts receivables, the Company extends credit based on an evaluation of the customer’s financial condition. The Company generally does not require collateral for trade accounts receivables.

~~During~~REPORT ~~the~~OF ~~reporting~~INDEPENDENT ~~periods,~~REGISTERED ~~customers representing~~PUBLIC ~~10%~~ACCOUNTING ~~or more of the Company’s revenues are as follows :~~ FIRM

		Years ended December 31,
		2010		2009
Customer A	$	12,868,677	$	2,482,703
Customer B		-		1,999,043
	$	12,868,677	$	4,481,746

Board of Directors and Stockholders
China Green Energy Industries, Inc.
Changzhou City, Jiansgsu Province, PRC

~~Details~~We ofhave ~~customers~~audited ~~representing~~the ~~10% or~~accompanying ~~more~~consolidated balance sheets of China ~~the~~Green ~~Company’s~~Energy ~~trade~~Industries, ~~accounts~~Inc. ~~receivables~~(the “Company”) as of December 31, 2011 and 2010 and the related consolidated statements of operations and comprehensive ~~2009~~income (loss), ~~respectively~~stockholders' equity, and cash flows for the years then ended. These consolidated financial statements are asthe ~~follows~~responsibility :-of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

		As of December 31,
		2010		2009
Customer A	$	6,721,013	$	1,147,421
Customer B		1,445,171		731,158
Customer C		-		110,523
Customer D		-		188,401
	$	8,166,184	$	2,177,503

We have conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. Our audit included consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstance, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

~~Cash~~In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of China Green Energy Industries, Inc. as of December 31, 2011 and 2010, and the results of its operations and cash ~~equivalents~~flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

~~Cash~~The ~~and~~accompanying ~~cash~~consolidated ~~equivalents~~financial ~~include~~statements ~~all~~have been ~~cash,~~prepared ~~deposits~~assuming inthat ~~banks~~the ~~and~~Company ~~other~~will ~~highly~~continue ~~liquid~~as ~~investments~~a ~~with~~going ~~initial maturities~~concern. ofAs ~~three~~more fully ~~months~~described orin ~~less.~~Note As1 ofto ~~December~~the ~~31,~~consolidated ~~2010~~financial ~~and 2009~~statements, ~~most of~~ the Company’s has ~~cash~~experienced ~~and~~negative cash ~~equivalents~~flows ~~were~~from ~~denominated~~operations ~~in Renminbi (“RMB”)~~ and ~~were~~ ~~placed~~is ~~with~~dependent ~~banks~~upon future financing in ~~the~~order ~~PRC.~~to ~~They~~meet ~~are~~its ~~not~~planned ~~freely~~operating ~~convertible~~activities. ~~into~~These ~~foreign~~conditions ~~currencies~~raise ~~and~~substantial ~~the~~doubt ~~remittance~~about ofthe ~~these~~Company’s ~~funds~~ability ~~out~~to ofcontinue ~~the~~as ~~PRC~~a isgoing concern. ~~subject~~Management’s ~~to exchange~~plans ~~control~~regarding ~~restrictions~~these ~~imposed~~matters byare ~~the~~also ~~PRC~~described ~~government~~in Note 1. The ~~remaining balances~~consolidated offinancial ~~cash~~statements ~~and~~do ~~cash~~not ~~equivalents~~include ~~were~~any ~~denominated~~adjustments inthat might ~~Hong~~result ~~Kong~~from ~~dollars (“HKD”)~~the outcome of this uncertainty.

F-11

	/s/ PFK
April 16, 2012	PKF
San Diego California	Certified Public Accountants
	A Professional Corporation

~~China Green Energy Industries, Inc. (Formerly TradeOn, Inc.) Notes to Consolidated Financial Statements For the years ended December 31, 2010 and 2009~~F-2

2China Green Energy Industries, Inc. ~~Summary~~Consolidated Balance Sheets As of ~~significant~~December ~~accounting~~31, ~~policies~~2011 and ~~(cont’d)~~December 31, 2010

Trade and other accounts receivables

		As of		As of
		December 31,		December 31,
		2011		2010

ASSETS
Current assets
Cash and cash equivalents	$	1,013,733	$	1,080,787
Restricted cash - Note 3		10,597,967		3,408,750
Accounts receivable, net - Note 4		9,701,036		11,537,053
Prepayments and other current assets - Note 5		5,156,586		638,553
Inventories, net - Note 6		4,682,271		2,733,369
Loans to third parties, net - Note 7		3,352,514		3,333,000
Loans to a related party, net - Note 8		3,177,885		3,159,388
Amounts due from related parties, net - Note 9		393,390		1,461,156
Deferred tax asset- Note 16		166,378		113,002

Total current assets		38,241,760		27,465,058
Long-term equity investment - Note 10		171,763		165,640
Property, plant and equipment, net - Note 11		7,596,807		6,875,566
Intangible assets, net– Note 12		2,984,900		-
Land use rights, net - Note 13		1,052,814		1,037,606
Deferred tax asset- Note 16		78,826		123,462

TOTAL ASSETS	$	50,126,870	$	35,667,332

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Current liabilities
Accounts payable	$	9,676,706	$	9,152,372
Bills payable – Note 3		20,022,395		6,817,500
Accrued liabilities and other payables - Note 14		2,435,993		2,857,780
Income tax payable		2,246,718		2,241,102
Amounts due to related parties - Note 9		846,039		-
Short-term bank loans - Note 15		11,174,523		8,926,380

Total current liabilities		46,402,374		29,995,134

TOTAL LIABILITIES		46,402,374		29,995,134

COMMITMENTS AND CONTINGENCIES - Note 18

STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value
50,000,000 shares authorized; none issued and outstanding		-		-
Common stock, $0.0001 par value
100,000,000 shares authorized; 23,625,911 shares issued and
outstanding at December 31, 2011, 23,529,411 shares issued and
outstanding at December 31, 2010		2,362		2,352
Additional paid-in capital		1,502,165		1,309,175
Accumulated other comprehensive income		391,073		220,954
Retained earnings		1,828,896		4,139,717

TOTAL STOCKHOLDERS’ EQUITY		3,724,496		5,672,198

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	50,126,870	$	35,667,332

~~Trade~~See ~~and other accounts receivables are recorded at~~ the ~~sales~~accompanying ~~value,~~Notes ~~net~~to ofConsolidated ~~allowances~~Financial ~~for doubtful accounts and~~Statements sales returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing trade and other accounts receivables. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Changes in allowance for doubtful accounts are included in the general and administrative expenses.

~~Outstanding~~F-3 accounts balances are reviewed individually for collectibility. Accounts balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, the Company has not charged off any balances as they have yet to exhaust all means of collection.

~~Loans~~China Green Energy Industries, Inc. Consolidated Statements of Operations and ~~Investments~~Comprehensive inIncome ~~Privately~~(Loss) For the ~~Held~~Years ~~Entities~~ended December 31, 2011 and 2010

From time-to-time, the Company makes investments in and/or loans to privately-held companies. The Company determines whether the fair values of any investments in privately held entities have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considers any such decline to be other than temporary (based on various factors, including historical financial results, and the overall health of the investee’s industry), a write-down to estimated fair value is recorded. On a quarterly basis, the Company reviews outstanding loans receivable to determine if a provision for doubtful loans is necessary. These reviews include discussions with senior management of the investee, and evaluations of, among other things, the investee’s progress against its business plan, its product development activities and customer base, industry market conditions, historical and projected financial performance, expected cash needs and recent funding events.

		Years ended December 31,
		2011			2010

Revenues	$	24,905,073		$	28,589,395
Cost of revenues		(21,074,523	)		(20,398,286	)
Gross profit		3,830,550			8,191,109

Operating expenses:
General and administrative expenses		(4,115,014	)		(2,031,956	)
Selling expenses		(1,218,754	)		(649,198	)
		(5,333,768	)		(2,681,154	)
Income/(loss) from operations		(1,503,218	)		5,509,955

Interest income		33,446			345,745
Interest expenses		(765,452	)		(472,307	)
Other income (loss), net		(75,597	)		183,722

Income/(loss) before income taxes		(2,310,821	)		5,567,115
Income taxes-Note 16		-			(1,430,640	)
Net income/(loss)		(2,310,821	)		4,136,475
Other comprehensive income
Foreign currency translation adjustments		170,119			160,484

Total comprehensive income/(loss)	$	(2,140,702	)	$	4,296,959
Earnings (loss) per share
- Basic	$	(0.10	)	$	0.19
- Diluted	$	(0.10	)	$	0.19

Weighted average number of shares outstanding
- Basic		23,582,552			22,311,915
- Diluted		23,582,552			22,311,915

~~Inventories~~See the accompanying Notes to Consolidated Financial Statements

~~Inventories~~F-4 are stated at the lower of cost and market. The cost of inventories is determined using weighted average cost method, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of finished goods and work in progress, cost includes materials, labor and an appropriate share of production overhead based on normal operating capacity.

~~The~~China ~~Company~~Green ~~regularly~~Energy ~~reviews the cost~~Industries, ofInc. ~~inventories~~Consolidated ~~against~~Statements ~~their~~of Changes ~~estimated~~in ~~fair~~Stockholders’ ~~market~~Equity ~~value~~For ~~and may record a~~the ~~write-down~~Years ~~for~~ended ~~inventories~~December ~~that~~31, ~~have~~2011 ~~cost~~and in2010 ~~excess of estimated market value.~~

Property, plant and equipment

							Accumulated
							other
	Common Stock				Additional		comprehensive		Retained
	Shares		Amount		paid-in capital		income		earnings			Total

Balance at January 1, 2010	20,734,531	$	2,073	$	1,301,731	$	60,470	$	3,242		$	1,367,516
Common stock assumed in reverse merger	2,794,880		279		7,444		-		-			7,723
Net income	-		-		-		-		4,136,475			4,136,475
Foreign currency translation adjustment	-		-		-		160,484		-			160,484
Balance at December 31, 2010	23,529,411		2,352		1,309,175		220,954		4,139,717			5,672,198
Common stock issued for services	96,500		10		192,990		-		-			193,000
Net loss	-		-		-		-		(2,310,821	)		(2,310,821	)
Foreign currency translation adjustment	-		-		-		170,119		-			170,119
Balance at December 31, 2011	23,625,911	$	2,362	$	1,502,165	$	391,073	$	1,828,896		$	3,724,496

~~Property,~~See ~~plant and equipment are stated at cost less accumulated depreciation. Cost represents~~ the ~~purchase~~accompanying ~~price of~~Notes ~~the asset and other costs incurred~~ to ~~bring~~Consolidated ~~the asset into its existing use.~~Financial Depreciation is provided on the straight-line basis (after taking into account the respective estimated residual values) over the estimated useful lives of property, plant and equipment. The principal useful lives and residual value are as follows: Statements

	Estimated useful lives	Residual value
Buildings	20 years	5%
Plant and machinery	10 years	5%
Motor vehicles	5 -10 years	5%
Office equipment	5 -10 years	0% to 5%

F-5

~~F-12~~China Green Energy Industries, Inc. Consolidated Statements of Cash Flows For the Years ended December 31, 2011 and 2010

China Green Energy Industries, Inc. (Formerly TradeOn, Inc.) Notes to Consolidated Financial Statements For the years ended December 31, 2010 and 2009

		Years ended
		December 31,
		2011			2010

Cash flows from operating activities
Net income/(loss)	$	(2,310,821	)	$	4,136,475
Adjustments to reconcile net income/(loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		845,973			513,700
Change in allowance for doubtful accounts		1,044,393			178,023
Change in allowance for loans		209,930			-
Provision for guaranty loans		251,038			-
Change in allowance for inventory reserve		103,207			-
Deferred tax		-			(101,397	)
Services paid with common stock		193,000			-
Changes in operating assets and liabilities:
Accounts receivable		1,157,808			(8,657,559	)
Prepayments and other current assets		(4,392,707	)		273,810
Inventories		(1,916,963	)		(677,977	)
Amounts due from related parties		1,089,127			(631,655	)
Accounts payables		(701,335	)		5,181,332
Accrued liabilities and other payables		(768,390	)		1,834,664
Income tax payable		(75,797	)		1,491,903
Amount due to related parties		830,422			(236,676	)

Net cash flows provided by (used in) operating activities		(4,441,115	)		3,304,643

Cash flows from investing activities
Payments to acquire property, plant and equipment		(1,281,725	)		(2,928,975	)
Payments to acquire intangible assets		(2,045,870	)		-
Increase in restricted cash		(6,932,833	)		369,000
Loans to a related party		-			(3,078,057	)
Loans to third parties		-			(487,696	)
Cash acquired from the RTO		-			9,796

Net cash flows used in investing activities		(10,260,428	)		(6,115,932	)

Cash flows from financing activities
Proceeds from short-term bank loans		18,184,806			9,700,272
Repayment of short-term bank loans		(16,302,024	)		(6,630,192	)
Increase in bills payable		12,713,790			29,521

Net cash flows provided by financing activities		14,596,572			3,099,601

Effect of foreign currency translation on cash and cash equivalents		37,917			34,733

Net increase (decrease) in cash and cash equivalents		(67,054	)		323,045

Cash and cash equivalents - beginning of year		1,080,787			757,742

Cash and cash equivalents - end of year	$	1,013,733		$	1,080,787

Supplemental disclosures for cash flow information

Interest paid	$	749,299		$	472,307
Income taxes paid	$	29,880		$	68,183

2.See ~~Summary~~the ofaccompanying ~~significant~~Notes ~~accounting~~to ~~policies~~Consolidated ~~(cont’d)~~Financial Statements

~~Maintenance~~F-6 or repairs are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

~~Construction in progress mainly~~ ~~represents~~China ~~expenditures~~Green inEnergy ~~respect~~Industries, ofInc. ~~the~~ Notes ~~Company’s~~to ~~offices~~Consolidated ~~and~~Financial ~~factories~~Statements ~~under~~ ~~construction.~~For ~~All direct costs relating to~~ the ~~acquisition~~Years orended ~~construction~~December ~~of the~~31, ~~Company’s~~2011 ~~offices~~ and ~~factories~~2010 ~~are capitalized as construction in progress.~~ ~~No depreciation is provided in respect of construction in progress.~~

F-13

1.	Corporation information

	China Green Energy Industries, Inc. (the “Company”) was incorporated in the State of Nevada on December 7, 2007 under the name of TradeOn, Inc. for the purpose of pursuing a business combination through a Reverse Takeover (“RTO”).

	On June 9, 2010, the Company entered into and closed a share exchange agreement (the “Share Exchange Agreement”) with Best Green Energy Industries Limited (“Best Green BVI”), a British Virgin Islands company incorporated on March 31, 2010, and its sole shareholder, Best Green Investments Limited (“Best Green Investments”), pursuant to which the Company acquired 100% of the issued and outstanding capital stock of Best Green BVI in exchange for 20,734,531 shares of the Company’s common stock, par value $0.0001, issued to Best Green Investments which after giving effect to the Cancellation Agreement disclosed below, constituted 88.1% of the Company’s issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement.

	As a condition precedent to the consummation of the Share Exchange Agreement, on June 9, 2010, the Company entered into a cancellation agreement, (the “Cancellation Agreement”), with Mr. Haifeng Lu, who was the major stockholder of the Company immediately before the Share Exchange Agreement, whereby Mr. Lu agreed to the cancellation of 4,000,000 shares of the Company’s common stock owned by him of the then 6,794,384 shares outstanding. The Company assumed the remaining 2,794,384 shares along with certain cash balances of TradeOn, Inc. as part of the RTO. Mr. Haifeng Lu served as the Company’s sole director and officer from May 10, 2010 until June 9, 2010 when he was replaced by Mr. Jianliang Shi (“Mr. Shi”), a founder of Jiangsu Best Electrical Appliances Co., Ltd. (“Best Appliances”) and Changzhou City Wujin Best Electronic Cables Co., Ltd. (“Best Cables”). Mr. Shi and his spouse, Ms. Xueqin Wang (“Mrs. Shi”), together own the entire interests in Best Appliances and Best Cables, respectively.

	Mr. Shi was appointed as the Company’s director and chief executive officer effective upon the closing of the above share exchange. In addition, the Company’s executive officers were replaced by the executive officers of Best Appliances and Best Cables upon the closing of the share exchange.

	As a result of the share exchange, the Company now owns all of the issued and outstanding capital stock of Best Green BVI, which in turn owns 100% of the outstanding capital stock of Best Green Energy (Changzhou) Co., Ltd. (“Best Green Changzhou”), a wholly-foreign-owned enterprise incorporated in the People’s Republic of China (the “PRC”) on May 6, 2010.

	PRC law places certain restrictions on roundtrip investments through the acquisition of a PRC entity by PRC residents. To comply with these restrictions, in conjunction with the RTO, the Company, via Best Green Changzhou, entered into and consummated certain contractual arrangements with Best Appliances, Best Cables, and Mr. and Mrs. Shi pursuant to which the Company provides Best Appliances and Best Cables with technical, business and management consulting services and appoints their senior executives and approves all matters requiring shareholders’ approval. As a result of these contractual arrangements, which obligates Best Green Changzhou to absorb a majority of the risk of loss from the activities of Best Appliances and Best Cables and enables Best Green Changzhou to receive a majority of their expected residual returns, the Company accounts for the two entities as variable interest entities (“VIE”) pursuant to Accounting Standards Codification (“ASC”) 810 (the “VIE Arrangement”). The VIE Arrangements are set out in note 2. Best Appliances and Best Cables are collectively referred to as the “VIEs” herein after and are consolidated with the Company which has been deemed the primary beneficiary of both VIEs.

~~China~~ F-7 ~~Green Energy Industries, Inc. (Formerly TradeOn, Inc.) Notes to Consolidated Financial Statements For the years ended December 31, 2010 and 2009~~

2 China Green Energy Industries, Inc. ~~Summary~~ Notes ofto ~~significant~~Consolidated ~~accounting~~Financial ~~policies~~Statements ~~(cont’d)~~ For the Years ended December 31, 2011 and 2010

Land use rights

1.	Corporate information (cont’d)

	Before the closing of the share exchange, on April 24, 2010, Mr. and Mrs. Shi entered into an option agreement (the “Option Agreement”) with Mr. Marsel Gilyazov, the sole shareholder and director of Best Green Investments, pursuant to which Mr. and Mrs. Shi were granted options, exercisable 60 days after the date on which a current report on Form 8-K is filed with the Securities and Exchange Commission (the “SEC”) in respect of the Share Exchange Agreement, to acquire 51% and 49% equity interest of Best Green Investments, and ending on the fifth annual anniversary of that date. After Mr. and Mrs. Shi have exercised these options, they will be the Company’s controlling stockholders. On October 20, 2010, Mr. and Mrs. Shi exercised their options to purchase the equity interest of Best Green Investments. As a result, Mr. and Mrs. Shi own an aggregate of 20,734,531 of the total outstanding shares of the Company’s capital stock and 88% total voting power of all of the Company’s outstanding voting securities.

	The acquisition of Best Green BVI was accounted for as a recapitalization effected by a share exchange, wherein Best Green BVI is considered the acquirer for accounting and financial reporting purposes. The Company’s assets and liabilities have been brought forward at their book value and no goodwill has been recognized. In addition, the reverse takeover accounting was used to account for the VIE Arrangement as the VIEs were under common control of Mr. and Mrs. Shi before and after the RTO (by virtue of the Option Agreement) and the VIE Arrangement. These financial statements, issued under the name of the Company, represent the continuation of the consolidated financial statements of the VIEs.

	Following the RTO and the VIE Arrangement, the Company, through the VIEs, is primarily engaged in the manufacture and distribution of clean technology-based consumer products, which consist of light electrical vehicles (“LEV”), cryogen-free refrigerators, and network and HDMI cables. The Company operates manufacturing and distribution primarily in the PRC and sells some of their products under their own brand name of “BEST”. In 2010, the Company acquired the Niconia brand for which it sells certain LEV’s under.

	In connection with the RTO, the Company’s Board of Directors on July 30, 2010 approved a change in the Company’s fiscal year end from October 31 to December 31 to be consistent with the fiscal year end of Best Green BVI. On September 1, 2010, the Company changed its name to China Green Energy Industries, Inc.

	Going concern

	The Company has reported a net loss of $2,310,821 and negative cash flow from operations of $4,441,115 for the year ended December 31, 2011. To date, the Company has financed its operations primarily through cash flows from operations, augmented by short-term bank loans and equity contributions by stockholders. Management believes that cash on hand and cash flow from operations will meet a portion of the Company’s present cash needs and will require additional cash resources, including equity investment, to meet expected capital expenditures and working capital requirements for the next 12 months. The Company may, however, in the future, require additional cash resources due to changed business conditions, implementation of management’s strategy to expand our marketing efforts and increase brand awareness, or acquisitions the Company may decide to pursue. If the Company’s own financial resources are insufficient to satisfy capital requirements, the Company may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require the Company to agree to operating and financial covenants that would restrict operations. Financing may not be available in amounts or on terms acceptable to the Company, if at all. Any failure by management to raise additional funds on terms favorable to the Company, or at all, could limit the Company’s ability to expand business operations and could harm overall business prospects. Management intends to re-finance the short-term debts with the existing lenders. However, the Company currently does not have any agreements to extend or re-finance the debt beyond the one year terms. As a result of these factors, there is substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Land use rights are stated at cost less~~ ~~accumulated amortization. Amortization is provided using the straight~~F-~~line method~~8 ~~over the terms of the lease of 50 years obtained from the relevant PRC land authority.~~

~~Impairment~~ China ofGreen ~~long-lived~~Energy ~~assets~~Industries, Inc. Notes to Consolidated Financial Statements For the Years ended December 31, 2011 and 2010

Long-lived assets are tested for impairment in accordance with Accounting Standards Codification (“ASC”) 360-10-45 “Impairment or Disposal of Long-Lived Assets”. The Company periodically evaluates potential impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the net book values of such assets exceed the future undiscounted cash flows attributable to such assets. During the reporting periods, the Company did not identify any indicators that would require testing for impairment.

2.	Summary of significant accounting policies

	Basis of presentation

	The accompanying consolidated financial statements of the Company, its subsidiaries and the VIEs have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

	The financial statements of Best Appliances and Best Cables for the years ended December 31, 2011 and 2010 have been combined and presented in these consolidated financial statements on the basis that the entities are under the common control and management of Mr. and Mrs. Shi.

	Principles of consolidation

	The consolidated financial statements include the accounts of the Company, its subsidiaries and the VIEs. All significant inter-company accounts and transactions have been eliminated in consolidation.

	Variable interest entities

	Each of the VIEs and Mr. and Mrs. Shi entered into the following agreements with Best Green Changzhou, pursuant to which the VIEs became the VIEs of Best Green Changzhou.

	Consulting Agreement

	Under the Consulting Agreement, Best Green Changzhou provides exclusive technical, business and management consulting services to the VIEs in exchange for service fees equal to 100% of the total annual net profits of the VIEs. Best Green Changzhou is obligated to absorb a majority of the risk of loss from the activities of the VIEs.

	Business Operation Agreement

	The Business Operation Agreement imposes restriction on the operations of the VIEs. Under the Business Operation Agreement, the VIEs are prohibited from engaging in any transaction which may materially affect its assets, obligations, rights or business operation without prior consent from Best Green Changzhou. The VIEs are also required to accept policies and suggestions provided by Best Green Changzhou from time to time with respect to employment or dismissal of employees, corporate management and financial management systems. The VIEs are also required to appoint the directors and members of senior management that Best Green Changzhou designates.

	Equity Interest Pledge Agreement

	Mr. and Mrs. Shi have pledged their entire equity interests in the VIEs to Best Green Changzhou pursuant to the Equity Interest Pledge Agreement. The equity interests are pledged as collateral security for the obligations of the VIEs under the Consulting Agreement and the Business Operation Agreement.

~~Revenue~~ F-9 ~~recognition~~

~~The~~China ~~Company~~Green ~~recognizes~~Energy ~~revenues in accordance with ASC 605-10-S99~~Industries, ~~“Revenue~~Inc. ~~Recognition”~~Notes ~~when the significant risks~~to ~~and~~Consolidated ~~rewards~~Financial ofStatements ~~ownership~~For ~~have been transferred to~~ the ~~customer~~Years ~~pursuant~~ended ~~to applicable~~December ~~laws and regulations. Accordingly~~31, ~~all of the following criteria must~~ be2011 ~~met~~and in2010 ~~order for the Company to recognize revenue:~~

1. Persuasive evidence of an arrangement exists; 2. Delivery has occurred or services have been rendered; 3. The seller's price to the buyer is fixed or determinable; and 4. Collectibility is reasonably assured.

2.	Summary of significant accounting policies (cont’d)

	Proxy Agreement

	The Proxy Agreement among Best Green Changzhou and Mr. and Mrs. Shi requires Mr. and Mrs. Shi to vote all of the equity interests in the VIEs at any shareholders’ meeting or other time when shareholders of the VIEs vote in accordance with Best Green Changzhou’s instructions.

	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 periods. These accounts and estimates include, but are not limited to, the valuation of trade and other receivables, inventories, valuation of potential impairment for guaranteed loans, valuation of potential impairment on loans to related parties and third parties, intangibles, deferred income taxes and the estimation on useful lives and residual values of property, plant and equipment. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates.

	Concentrations of credit risk

	Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade accounts receivables and other receivables. As of December 31, 2011 and December 31, 2010, the Company’s cash and cash equivalents and restricted cash were held by major financial institutions located in the PRC, which management believes are of high credit quality. With respect to trade accounts receivables, the Company extends credit based on an evaluation of the customer’s financial condition. The Company generally does not require collateral for trade accounts receivables.

	During the reporting periods, customers representing 10% or more of the Company’s revenues are as follows:

Net sales of products represent the value of goods, net of value added taxes (“VAT”), sales returns, trade discounts and allowances. The Company is subject to VAT which is levied on majority of their products at the rate of 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. Provision for sales returns are recorded as a reduction of revenue in the same period that revenue is recognized. The provision for sales returns, which is based on historical sales returns data, is the Company’s best estimate of the amounts of goods that will be returned from their customers. During the reporting periods, there were no sales returns and the Company did not recognize any provision for sales returns.

		Years ended
		December 31,
		2011		2010

Company A	$	4,138,084	$	12,868,677

~~F-14~~Details of customers representing 10% or more of the Company’s trade accounts receivables as of December 31, 2011 and 2010, are as follows:

China Green Energy Industries, Inc. (Formerly TradeOn, Inc.) Notes to Consolidated Financial Statements For the years ended December 31, 2010 and 2009

		2011		2010
Company A	$	3,062,304	$	6,721,013
	$	3,062,304	$	6,721,013

2.F-10 ~~Summary of significant accounting policies (cont’d)~~

~~Government~~China ~~grants~~Green Energy Industries, Inc. Notes to Consolidated Financial Statements For the Years ended December 31, 2011 and 2010

~~During~~2. ~~the~~Summary ~~years~~of ~~ended~~significant ~~December~~accounting ~~31, 2010~~policies ~~and~~(cont’d) ~~2009,~~During the ~~Company~~reporting ~~received government grants of $101~~periods,~~540~~ ~~and~~suppliers ~~$60,212, respectively.~~representing ~~The~~10% ~~grants~~or ~~were~~more ~~subsidies which were unconditional, non-refundable and without any restrictions on usage at the time~~ of ~~grant to and receipt by~~ the Company.’s ~~Such~~purchase ~~grants~~are ~~were recognized~~ as ~~income in the years received.~~ follows:

Cost of revenues

		Years ended
		December 31,
		2011		2010

Wuxi Lingfeng Copper	$	5,277,117	$	745,378

~~Cost~~Cash ~~of revenues consists primarily of materials costs, wages, employee compensation, depreciation~~ and ~~related~~cash ~~costs, which~~equivalents ~~are directly attributable to the production of products. Write-down of inventories to lower of cost or market is also recorded in cost of revenues.~~

~~General~~Cash and ~~administrative~~cash equivalents include all ~~expenses~~cash, deposits in banks and other highly liquid investments with initial maturities of three months or less. As of December 31, 2011 and December 31, 2010, most of the Company’s cash and cash equivalents were denominated in Renminbi (“RMB”) and were placed with banks in the PRC. They are not freely convertible into foreign currencies and the remittance of these funds out of the PRC is subject to exchange control restrictions imposed by the PRC government. The remaining balances of cash and cash equivalents were denominated in USD dollars (“USD”).

~~General~~Trade and ~~administrative~~other ~~expenses~~accounts ~~consist~~receivables primarily of office expenses, entertainment, traveling expenses, staff welfare, consumables, labor protection and salaries and wages which are incurred at the administrative level and foreign exchange differences.

~~Selling~~Trade and other accounts receivables are recorded at the sales value, net of allowances for doubtful accounts and sales returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing trade and other accounts receivables. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Changes in allowance for doubtful accounts are included in the general and administrative expenses.

~~Selling~~Outstanding ~~expenses~~account ~~consist~~balances ~~primarily~~are reviewed ofindividually for collectability. Account balances are charged off ~~advertising,~~against ~~salaries~~the allowance after all means of collection have been exhausted and ~~transportation~~the potential ~~costs~~for ~~incurred~~recovery ~~during~~is considered remote. To date, the ~~selling~~Company has not ~~activities.~~charged off any balances as they have yet to exhaust all means of collection.

~~Advertising~~Loans and ~~transportation~~investments in privately held entities

~~Advertising~~From time-to-time, the Company makes investments in and/or ~~transportation~~loans ~~are~~to privately-held companies. The Company determines ~~charged~~whether the fair values of any investments in privately held entities have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considers any such decline to ~~expense~~be asother ~~incurred~~than temporary (based on various factors, including historical financial results, and the overall health of the investee’s industry), a write-down to estimated fair value is recorded. On a quarterly basis, the Company reviews outstanding loans receivable to determine if a provision for doubtful loans is necessary. These reviews include discussions with senior management of the investee, and evaluations of, among other things, the investee’s progress against its business plan, its product development activities and customer base, industry market conditions, historical and projected financial performance, expected cash needs and recent funding events. The Company has assessed the loans for potential impairment and has recorded a loan reserve.

~~Advertising~~Inventories ~~expenses amounting to $87,687 and $14,179 for the years ended December 31, 2010 and 2009, respectively, are included in selling expenses.~~

~~Transportation~~Inventories ~~expenses~~are ~~amounting~~stated toat the lower of ~~$274~~cost or market. The cost of inventories is determined using weighted average cost method,~~581~~ and ~~$215,123~~includes ~~for~~expenditure incurred in acquiring the ~~years~~inventories ~~ended~~and bringing ~~December~~them ~~31,~~to ~~2010~~their existing location and ~~2009,~~condition. In the case of finished ~~respectively,~~goods ~~are~~and ~~included~~work in ~~selling~~progress, ~~expenses~~cost includes materials, labor and an appropriate share of production overhead based on normal operating capacity.

~~Income~~The ~~taxes~~Company regularly reviews the cost of inventories against their estimated fair market value and may record a write-down for inventories that have cost in excess of estimated fair market value. Also for the obsolete inventories, the Company has assessed its inventories and has recorded a provision.

~~The~~F-11 Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes” (previously SFAS No. 109). Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

~~The~~China ~~Company~~Green ~~accounts~~Energy ~~for~~Industries, ~~income tax uncertainties using a more-likely-than-not recognition threshold based on the technical merits of the tax position taken~~Inc. ~~Tax~~Notes ~~positions that meet the more-likely-than-not recognition threshold are measured in order~~ to ~~determine~~ ~~the~~Consolidated ~~tax~~Financial ~~benefit~~Statements toFor ~~be recognized in~~ the ~~financial~~Years ~~statements.~~ended ~~The~~December ~~Company~~31, ~~expenses~~2011 ~~any penalties or interest associated with tax obligations as general~~ and ~~administrative expenses and interest expense, respectively. As of December 31,~~ 2010 ~~and 2009, the Company has no accrued interest or penalties related to uncertain tax positions.~~

F-15

2.	Summary of significant accounting policies (cont’d)

	Property, plant and equipment

	Property, plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Depreciation is provided on the straight-line basis (after taking into account the respective estimated residual values) over the estimated useful lives of property, plant and equipment. The principal useful lives and residual value are as follows:

China Green Energy Industries, Inc. (Formerly TradeOn, Inc.) Notes to Consolidated Financial Statements For the years ended December 31, 2010 and 2009

	Estimated useful lives	Residual value

Buildings	20 years	5%
Plant and machinery	10 years	5%
Motor vehicles	5 -10 years	5%
Office equipment	5 -10 years	0% to 5%

2Maintenance or repairs are charged to expense as incurred. ~~Summary~~Upon sale or disposition, the applicable amounts of ~~significant~~asset cost ~~accounting~~and ~~policies~~accumulated ~~(cont’d)~~depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

~~Comprehensive~~Construction ~~income~~in progress mainly represents expenditures for the Company’s offices and factories under construction. All direct costs relating to the acquisition or construction of the Company’s offices and factories are capitalized as construction in progress. No depreciation is provided for on construction in progress.

~~The~~Land ~~Company~~use ~~has~~rights adopted ASC 220 “Comprehensive Income”, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Components of comprehensive income include net income and foreign currency translation adjustments.

~~Foreign~~Land ~~currency~~use ~~translation~~rights are stated at cost less accumulated amortization. Amortization is provided using the straight-line method over the terms of the lease of 50 years obtained from the relevant PRC land authority.

~~The~~Intangible ~~functional currency of the Company is RMB. The Company maintains their financial statements in the functional currency. Monetary~~ assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

~~For~~The ~~financial~~determination ~~reporting~~of ~~purposes~~fair value requires significant judgment and estimates, and the ~~financial~~ ~~statements~~ultimate allocation of purchase ~~the~~price ~~Company~~may ~~prepared~~change. ~~using~~Acquired ~~the~~intangibles ~~functional~~with ~~currency~~definite ~~has~~lives will be ~~been~~amortized ~~translated~~on ~~into~~a USstraight-line ~~Dollars~~basis ~~(“USD”).~~over ~~Assets~~the ~~and~~remaining ~~liabilities~~estimated ~~are~~economic ~~translated~~useful atlife of the ~~exchange~~underlying ~~rates~~assets. atIntangible ~~the~~assets ~~balance~~with ~~sheet~~indefinite ~~dates~~lives ~~and~~are ~~revenue~~not amortized. The Company reviews its indefinite and ~~expenses~~definite-lived ~~are~~intangible ~~translated~~assets atfor impairment whenever events or changes in circumstances indicate that the ~~average~~carrying ~~exchange~~amount ~~rates~~of ~~and~~a ~~stockholders’~~long-lived ~~equity~~asset ~~(deficit)~~may not be recoverable. Recoverability of an asset group is measured by comparison of its carrying amount to the ~~translated~~expected atfuture ~~historical~~undiscounted ~~exchange~~cash ~~rates.~~flows ~~Any~~that ~~translation~~the ~~adjustments~~asset ~~resulting~~group is expected to ~~are~~generate. ~~not~~If ~~included~~it inis ~~determining~~determined ~~net~~that ~~income~~an ~~but~~asset ~~are~~group ~~included~~is innot ~~accumulated~~recoverable, ~~other~~an ~~comprehensive~~impairment ~~income,~~loss ais ~~component~~recorded in the amount by which the carrying amount of ~~stockholders’~~the asset ~~equity~~group exceeds its fair value. ~~There~~The ~~was~~Company noconducts an impairment analysis ~~significant~~annually ~~fluctuation~~and as necessary if changes in ~~exchange~~facts ~~rate~~and ~~for~~circumstances indicate that the ~~conversion~~fair value of ~~RMB~~the toCompany’s ~~USD~~purchased ~~after~~intangible assets may be less than its ~~the~~carrying ~~balance~~amount. ~~sheet~~The ~~date~~Company assesses its long-lived assets for impairment and identified no such impairment loss as of December 31, 2011 and 2010.

~~For~~The ~~the~~amortization ~~year~~is ~~ended~~provided ~~December~~on ~~31, 2010~~the ~~and~~straight-line ~~2009,~~basis over the ~~foreign~~estimated ~~exchange~~useful ~~loss~~life ~~was~~of ~~$159,973~~intangible ~~and~~asset. ~~$6,652,~~The estimated ~~respectively~~useful life of the brand name is 20 years.

~~Fair~~F-12 ~~value of financial instruments~~

~~The~~China ~~Company~~Green ~~considers~~Energy ~~the~~Industries, ~~carrying values~~Inc. ~~reported~~Notes ~~in the consolidated balance sheets for assets and liabilities~~to ~~qualifying~~Consolidated asFinancial ~~financial~~Statements ~~instruments~~For ~~approximate their fair values due to~~ the ~~short-term~~ ~~maturities~~Years orended ~~the~~December ~~applicable interest rates approximate the current~~31, ~~market~~2011 ~~rates.~~and 2010

Stock-based compensation

2.	Summary of significant accounting policies (cont’d)

	Impairment of long-lived assets

	Long-lived assets are tested for impairment in accordance with Accounting Standards Codification (“ASC”) 360-10-45 “Impairment or Disposal of Long-Lived Assets”. The Company periodically evaluates potential impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the net book values of such assets exceed the future undiscounted cash flows attributable to such assets. During the reporting periods, the Company did not identify any indicators that would require testing for impairment as of December 31, 2011 and December 31, 2010.

	Revenue recognition

	The Company recognizes revenues in accordance with ASC 605-10-S99, “Revenue Recognition” when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations. Accordingly, all of the following criteria must be met in order for the Company to recognize revenue:

~~During~~1. ~~the~~Persuasive ~~reporting~~evidence ~~periods,~~of an arrangement exists; 2. Delivery has occurred or services have been rendered; 3. The seller's price to the ~~Company~~ ~~did~~buyer ~~not~~is ~~issue~~fixed ~~any~~or ~~stock-based~~determinable; ~~compensation~~and ~~awards~~4. Collectibility is reasonably assured.

Net ~~Dividends~~sales of products represent the value of goods, net of value added taxes (“VAT”), sales returns, trade discounts and allowances. The Company is subject to VAT which is levied on majority of their products at the rate of 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. Provision for sales returns are recorded as a reduction of revenue in the same period that revenue is recognized. The provision for sales returns, which is based on historical sales returns data, is the Company’s best estimate of the amounts of goods that will be returned from their customers. During the reporting periods, there were no sales returns and the Company did not recognize any provision for sales returns.

~~During~~F-13 ~~the reporting periods, the Company did not declare any dividends.~~

~~Reclassifications~~ China Green Energy Industries, Inc. Notes to Consolidated Financial Statements For the Years ended December 31, 2011 and 2010

Certain prior year balances have been reclassified to adhere to the current year presentation.

2.	Summary of significant accounting policies (cont’d)

	Cost of revenues

	Cost of revenues consists primarily of materials costs, wages, employee compensation, depreciation and amortization and related costs, which are directly attributable to the production of products. Write-down of inventories to the lower of cost or market is also recorded in cost of revenues.

	General and administrative expenses

	General and administrative expenses consist primarily of bad debt expenses, loan provision, guaranty obligation provision, professional service fees, office expenses, entertainment, traveling expenses, staff welfare, consumables, labor protection and salaries and wages which are incurred at the administrative level and foreign exchange differences.

	Selling expenses

	Selling expenses consist primarily of shipping, advertising, sampling salaries, and traveling costs incurred during the selling activities.

	Advertising and shipping

	Advertising and shipping are charged to expense as incurred.

	Advertising expenses amounting to $384,415 and $159,327 for the years ended December 31, 2011 and 2010, respectively, are included in selling expenses.

	Shipping expenses amounting to $343,617 and $274,581 for the years ended December 31, 2011 and 2010, respectively, are included in selling expenses.

	Income taxes

	The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

	The Company accounts for income tax uncertainties using a more-likely-than-not recognition threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured in order to determine the tax benefit to be recognized in the financial statements. The Company expenses any penalties or interest associated with tax obligations as non-operating expenses. As of December 31, 2011 and 2010, the Company has no accrued interest or penalties related to uncertain tax positions.

F-1614

China Green Energy Industries, Inc. ~~(Formerly TradeOn, Inc.)~~ Notes to Consolidated Financial Statements For the ~~years~~Years ended December 31, ~~2010~~2011 and ~~2009~~2010

2. Summary of significant accounting policies (cont’d)

2.	Summary of significant accounting policies (cont’d)

	Comprehensive income (loss)

	The Company has adopted ASC 220 “Comprehensive Income”, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Components of comprehensive income include net income (loss) and foreign currency translation adjustments.

	Foreign currency translation

	The functional currency of the Company is RMB. The Company maintains their financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods.

	For financial reporting purposes, the financial statements of the Company prepared using the functional currency has been translated into US Dollars (“USD”). Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity (deficit) is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income (loss) but are included in accumulated other comprehensive income, a component of stockholders’ equity. There was no significant fluctuation in exchange rate for the conversion of RMB to USD after the balance sheet date.

	For the year ended December 31, 2011 and 2010, the Company recorded foreign currency translation losses of $76,394 and $159,973, respectively. The losses were primarily due to the weakening of the US dollar. Foreign currency translation losses were recognized and recorded as non-operating expense as incurred.

	Fair value of financial instruments

	Fair value refers to the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the market in which the reporting entity transacts such sales or transfers based on the assumptions market participants would use when pricing an asset or liability. Assumptions are developed based on prioritizing information within a fair value hierarchy that gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data, such as the reporting entity's own data (Level 3). A description of each category in the fair value hierarchy is as follows:

~~Basic~~Level ~~and~~1 ~~diluted~~– ~~earnings~~inputs ~~per share~~to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets which the Company can participate.
~~Basic~~Level ~~earnings~~2 ~~per~~– ~~share~~inputs isto ~~computed using~~ the ~~weighted~~valuation ~~average~~methodology ~~number~~include ofquoted ~~shares~~prices ~~outstanding~~for ~~during~~similar ~~the~~assets ~~periods presented.~~and ~~The~~liabilities ~~weighted~~in ~~average~~active ~~number~~markets, ofand ~~shares~~inputs ofthat ~~the~~are ~~Company~~observable ~~represents~~for the ~~average~~ ~~number~~asset ofor ~~common~~liability, ~~stock~~either ~~outstanding~~directly ~~during~~or indirectly, for substantially the ~~reporting~~full ~~periods.~~term of the financial instrument.
~~Diluted~~Level ~~earnings~~3 ~~per~~– ~~share~~inputs isto ~~computed using~~ the ~~sum~~valuation ofmethodology ~~weighted~~are ~~average~~

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