UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q



[ X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2009



            [   ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d)

                             OF THE EXCHANGE ACT


Commission file number   333-147225


MAXRAY OPTICAL TECHNOLOGY CO., LTD.

(Exact name of small business issuer as specified in its charter)


              

                       Delaware                                                                N/A


   (State or other jurisdiction of                                       (IRS Employer Identification No.)

    incorporation or organization)


5618 Tenth Line West, Unit 9

Mississauga, Ontario, Canada L5M 7L9

(Address of principal executive offices)


(905) 824-5306

(Issuer’s telephone number)



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company.   


Large Accelerated Filer [  ]   Accelerated Filer  [  ]   Smaller reporting company  [X]


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

Yes [  ]   No [X]



1



TABLE OF CONTENTS



PAGE


PART 1

FINANCIAL INFORMATION



Item 1.

Condensed Financial Statements

4


Item 2.

Management's Discussion and Analysis of Financial Condition and

Results of Operations

13


Item 3.

Quantitative and Qualitative Disclosures about Market Risk

16


Item 4.

Controls and Procedures

16






PART 11

OTHER INFORMATION


Item 1.

Legal Proceedings

16


Items 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 16


Items 3. Defaults Upon Senior Securities

 

 17


Item 4.

Submissions of Matters to a Vote of Security Holders

 17


Item 5.

Other Information

 17


Item 6.

Exhibits

 17



2




PART I - FINANCIAL INFORMATION

    

Statements in this Form 10-Q Quarterly Report may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Form 10-Q Quarterly Report, under “Management’s Discussion and Analysis of Financial Condition or Plan of Operation” and in other documents which we file with the Securities and Exchange Commission.

In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q Quarterly Report, except as required by law.




ITEM 1.             CONDENSED FINANCIAL STATEMENTS                    PAGE



Condensed Consolidated Balance Sheets                                                                  4


Condensed Consolidated Statements of Operations    (Three Month Periods)         5

 

Condensed Consolidated Statements of Operations    (Six Month Periods)

           6


Condensed Consolidated Statements of Cash Flows   (Six Month Periods)

           7


Notes to Condensed Consolidated Financial Statements                                          8




3




Maxray Optical Technology Co., Ltd.

 

 

 

 

 

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

DECEMBER 31,

JUNE 30,

 

 

 

 

 

 

 

 2009

 2009

 

 

 

 

 

 

 

 (UNAUDITED)

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 $                   3,563,885

 $              2,150,605

Restricted cash

 

 

 

 

 

                      1,494,628

                 1,374,416

Accounts receivable

 

 

 

 

 

                    12,301,464

                 4,458,722

Prepayments

 

 

 

 

 

                         120,962

                 1,236,387

Inventory

 

 

 

 

 

 

                      6,940,759

                 3,058,348

Other current assets

 

 

 

 

 

                         350,404

                    126,219

Total current assets

 

 

 

 

 

                    24,772,102

               12,404,697

Property, plant and equipment, net

 

 

 

 

                    17,524,850

               17,268,282

Land use right, net

 

 

 

 

 

                         925,968

                    933,983

Intangible assets, net

 

 

 

 

 

                           17,521

                      20,298

Licence rights

 

 

 

 

 

                         603,750

                             -   

Deferred assets

 

 

 

 

 

                      1,110,002

                    489,344

Total assets

 

 

 

 

 

 $                 44,954,193

 $            31,116,604

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Short term loans

 

 

 

 

 

 $                 12,980,706

 $              5,157,418

Notes payable

 

 

 

 

 

                      2,998,989

                 3,077,721

Accounts payable

 

 

 

 

 

                      3,717,121

                 3,759,036

Advances from customers

 

 

 

 

 

                                  -   

                      56,476

Other payables

 

 

 

 

 

                         900,541

                 1,528,456

Long-term debt - current portion

 

 

 

 

                      1,096,940

                    729,927

Total current liabilities

 

 

 

 

 

                    21,694,297

               14,309,034

Non-current liabilities:

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

                      3,290,822

                 3,649,635

Due to related parties

 

 

 

 

 

                      4,855,913

                 1,211,665

Total liabilities

 

 

 

 

 

                    29,841,032

               19,170,334

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

Common stock, $0.001 par value, 50 million authorized

 

 

 

 

-issued and outstanding, 31,728,850(December 31, 2009 - 8,000,000)

 

                           31,729

                        8,000

Paid-in capital

 

 

 

 

 

                    13,134,731

               11,158,708

Legal reserve

 

 

 

 

 

                             9,821

                             -   

Retained earnings

 

 

 

 

 

                      1,064,639

                        6,013

Accumulated other comprehensive income

 

 

 

                         872,241

                    773,549



4






Total stockholders' equity

 

 

 

 

                    15,113,161

               11,946,270

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

 

 

 $                 44,954,193

 $            31,116,604

 

 

 

 

 

 

 

 

 


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




5




Maxray Optical Technology Co., Ltd.

 

 

 

 

 

Consolidated Statements of Operations and Comprehensive Income

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 FOR THE THREE MONTHS ENDED

 

 

 

 

 

 

 

 DECEMBER 31,

 

 

 

 

 

 

 

 2009

 2008

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 $                 13,867,882

 $              2,660,482

Cost of sales

 

 

 

 

 

 

                    12,566,946

                 1,594,737

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

                      1,300,936

                 1,065,745

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

                           18,517

                      10,027

General and administrative expenses

 

 

 

 

                         498,271

                    159,578

Financial expenses

 

 

 

 

 

                         215,538

                    (91,228)

Other operating income

 

 

 

 

 

                         (18,733)

                             -   

Total expenses

 

 

 

 

 

                         713,593

                      78,377

Total operating income

 

 

 

 

 

                         587,343

                    987,368

Subsidy income

 

 

 

 

 

                           11,848

                             -   

Non-operating expenses - net

 

 

 

 

                         (13,408)

                         (755)

Income before income taxes

 

 

 

 

                         585,783

                    986,613

Income taxes

 

 

 

 

 

                                  -   

                             -   

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

 

 $                      585,783

 $                 986,613

Other comprehensive income

 

 

 

 

                           78,654

                      18,150

 

 

 

 

 

 

 

 

 

Comprehensive Income

 

 

 

 

 

 $                      664,437

 $              1,004,763

 

 

 

 

 

 

 

 

 

Earnings per share - basic and diluted

 

 

 

 $                            0.05

 $                       0.12

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

                    11,954,808

                 8,000,000

 

 

 

 

 

 

 

 

 



6




Maxray Optical Technology Co., Ltd.

 

 

 

 

 

Consolidated Statements of Operations and Comprehensive Income

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 FOR THE SIX MONTHS ENDED

 

 

 

 

 

 

 

 DECEMBER 31,

 

 

 

 

 

 

 

 2009

 2008

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 $                 27,551,774

 $              4,160,004

Cost of sales

 

 

 

 

 

 

                    25,074,531

                 3,442,704

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

                      2,477,243

                    717,300

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

                           60,166

                      18,279

General and administrative expenses

 

 

 

 

                      1,003,626

                    294,898

Financial expenses

 

 

 

 

 

                         282,973

                    (76,601)

Other operating income

 

 

 

 

 

                         (27,972)

                    (26,396)

Total expenses

 

 

 

 

 

                      1,318,793

                    210,180

Total operating income

 

 

 

 

 

                      1,158,450

                    507,120

Subsidy income

 

 

 

 

 

                           21,490

                             -   

Non-operating expenses - net

 

 

 

 

                       (121,315)

                         (755)

Income before income taxes

 

 

 

 

                      1,058,625

                    506,365

Income taxes

 

 

 

 

 

                                  -   

                             -   

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

 

 $                   1,058,625

 $                 506,365

Other comprehensive income

 

 

 

 

                           98,692

                      18,150

 

 

 

 

 

 

 

 

 

Comprehensive Income

 

 

 

 

 

 $                   1,157,317

 $                 524,515

 

 

 

 

 

 

 

 

 

Earnings per share - basic and diluted

 

 

 

 $                            0.11

 $                       0.06

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

                      9,977,404

                 8,000,000

 

 

 

 

 

 

 

 

 




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




7




Maxray Optical Technology Co., Ltd.

 

 

 

 

 

Consolidated Statements of Cash Flow

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 FOR THE SIX MONTHS ENDED

 

 

 

 

 

 

 

 DECEMBER 31,

 

 

 

 

 

 

 

 2009

 2008

 

 

 

 

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

 

Net income

 

 

 

 

 

 

 $                   1,058,625

 $                 506,365

Adjustments to reconcile net income to net cash provided

 

 

 

 

  by operating activities:

 

 

 

 

 

 

 

  Depreciation and amortization

 

 

 

 

                         622,611

                    313,428

  Imputed interest expense

 

 

 

 

 

                         144,587

                  (145,048)

  Changes in operating assets and liabilities

 

 

 

 

 

      Accounts receivable

 

 

 

 

 

                    (7,842,742)

                  (465,769)

      Inventory

 

 

 

 

 

                    (3,882,411)

                 1,428,856

      Prepayments

 

 

 

 

 

                      1,115,425

                 1,323,056

      Other current assets

 

 

 

 

 

                       (201,547)

                      21,563

      Notes payable

 

 

 

 

 

                         (78,732)

                 1,875,676

      Accounts payable

 

 

 

 

 

                       (237,279)

                 2,317,597

      Advances from customers

 

 

 

 

                         (56,476)

               (1,334,878)

      Other payables

 

 

 

 

 

                       (627,915)

                      19,156

      Deferred assets

 

 

 

 

 

                       (712,562)

                             -   

Net Cash Provided by(Used in) Operating Activities

 

 

                  (10,698,416)

                 5,860,002

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

Changes in restricted cash

 

 

 

 

 

                       (120,212)

                  (953,881)

Acquisition of property, plant and equipment

 

 

 

                       (552,682)

               (6,479,460)

Purchase of intangible assets

 

 

 

 

                                  -   

                      (4,450)

Net Cash Used in Investing Activities

 

 

 

                       (672,894)

               (7,437,791)

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

Increase in short-loans

 

 

 

 

 

                      7,831,487

                 1,718,239

Share issuances

 

 

 

 

 

                      1,312,856

                 3,742,428

Due to related parties

 

 

 

 

 

                      3,644,248

               (3,391,110)

Net Cash Provided by Investing Activities

 

 

 

                    12,788,591

                 2,069,557

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

 

 

                      1,417,281

                    491,768

 

 

 

 

 

 

 

 

 

Effect of exchange rate

 

 

 

 

 

                           (4,001)

                             -   

 

 

 

 

 

 

 

 

 



8






Cash and cash equivalents, beginning of period

 

 

 

                      2,150,605

                    396,352

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

 

 

 $                   3,563,885

 $                 888,120

 

 

 

 

 

 

 

 

 

Supplementary Cash Flow Disclosures

 

 

 

 

 

   Interest paid

 

 

 

 

 

 $                               -   

 $                          -   

   Income taxes paid

 

 

 

 

 

 $                               -   

 $                          -   





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




9




MAXRAY OPTICAL TECHNOLOGY C., LTD.

NOTES TO FINANCIAL STATEMENTS

(unaudited)


1.

ORGANIZATION AND PRINCIPAL ACTIVITIES

MAXRAY OPTICAL TECHNOLOGY CO., LTD. (the “Company”) was established in Photoelectric Park, Rongqiao Economic and Technological Development Zone Fuqing, Fujian, China on March 8th, 2007. The registered capital is USD 12.3 million.

The Company is mainly engaged to develop, design, produce on new flat panel display devices, liquid crystal display products, including modules and parts. The Company has won recognition from world leading manufactures on LCM assembly services including backlight module assembling for LCD TV and monitors, and its related parts.

Their major customers such as JIELIAN Electronics Co., Ltd,, HUAYING Video Co., Ltd, and HENGSHENG electric Co., Ltd, whose parent are publicly listed companies in Hong Kong or Taiwan.

The Company filed an 8-K report on December 15, 2009 detailing the completion of the exchange of common stock with Max Great Technology Co. Ltd. (“Max Great”).  The agreement became effective as of September 1, 2009 in which the Company intended to transfer to Max Great 6,000,000 Common Shares of Maxray Optical Technology Co. Ltd. for the shares of Maxray Optical Technology (Fujian) Co. Ltd. located in Fuqing City, Fujian Province, China.  Effective as of December 15, 2009, the ownership of the 6,000,000 restricted common shares is transferred to the individual shareholders of MaxGreat as follows: Chien-Chen Ming (3,000,000 restricted shares), Huang-Wei Hsiung (1,500,000 restricted shares), Chen Pai Ling (1,500,000 restricted shares). There was no material relationship, other than in respect of the above transaction, between MaxGreat Technology Co. Ltd., and the named individual shareholders of MaxGreat Technology Co. Ltd. and the registrant or any of its affiliates, or any director or officer of the registrant, or any associate of any such director or officer.


2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company is responsible for the unaudited condensed financial statements included in this document, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. The Company prepared these statements following the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, the Company condensed or omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements. These statements should be read in combination with the financial statements for the fiscal years ended June 30, 2009 and 2008.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim unaudited condensed consolidated financial statements may not be the same as those for the full year.



10




3.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company adopted, as of July 1, 2009, the Financial Accounting Standards Board’s (“FASB’s”) Accounting Standards Codification (“ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied to nongovernmental entities in the preparation of financial statements in conformity with GAAP. The ASC does not change authoritative guidance. Accordingly, implementing the ASC did not change any of the Company’s accounting, and therefore, did not have an impact on the consolidated results of the Company. References to authoritative GAAP literature have been updated accordingly.

In May 2009, the FASB issued ASC 855-10 (Prior authoritative literature: SFAS 165, "Subsequent Events"). ASC 855-10 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, ASC 855-10 provides (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date ASC 855-10 is effective for interim or annual financial periods ending after June 15, 2009 and shall be applied prospectively. As such, the Company is required to adopt this standard in the current period. Adoption of ASC 855-10 did not have a significant effect on the Company’s financial statements.

In June 2009, the FASB issued ASC 105-10 (Prior authoritative literature: SFAS 168, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”). ASC 105-10 establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company is currently evaluating the impact of ASC 105-10 on its financial statements but does not expect it to have a material effect.


4.

INVENTORIES

The Company’s inventories as at December 31, 2009 are summarized as follows:

 

 

 

 

 

 December 31,

 June 30,

 

 

 

 

 

 2009

 2009

 

 

 

 

 

 

 

Raw materials

 

 

 

 $        6,800,366

 $        2,895,283

Work in progress

 

 

 

               17,037

                     -   

Finished goods

 

 

 

             123,356

             163,065

 

 

 

 

 

 

 

Total Inventories

 

 

 

 $     6,940,759

 $     3,058,348

 

 

 

 

 

 

 



11




 

 

 

 

 

 

 

5.

DUE FROM (TO) RELATED PARTIES AND RELATED PARTY TRANSACTIONS

a.    Due to related parties

 

 

 

 

 

 

 

 

 

 December 31,

 June 30,

 

 

 

 

 

 2009

 2009

 

 

 

 

 

 

 

Max Great Technology Co., Ltd.

 

 

 $                472,099

 $                  67,851

Shareholders

 

 

 

                4,064,113

                   824,710

Maxchanle Limited

 

 

 

                   319,701

                   319,104

 

 

 

 

 

 

 

Total Due to Related Parties

 

 

 $           4,855,913

 $           1,211,665

b.   Purchases from related parties

 

 

 

 

 

 

 

 

 

 

 

The Company's purchases from related parties included whey protein powders from Max Great Technology Co.,

Ltd. as below for the six month periods ended December 31, 2009 and 2008, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 December 31,

 June 30,

 

 

 

 

 

 2009

 2009

 

 

 

 

 

 

 

Max Great Technology Co., Ltd.

 

 

 $             567,614

 $             197,908

 

 

 

 

 

 

 

Purchases from Related Parties

 

 

 $            567,614

 $             197,908

 

 

 

 

 

 

 

 

6.

COMMITMENTS AND CONTINGENCIES

None.


7.    SUBSEQUENT EVENTS

    Subsequent events were evaluated through February 22, 2010, the date the financial statements were issued



12




ITEM  2.   

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FORWARD-LOOKING STATEMENTS


To the extent that the information presented in this Quarterly Report on Form 10-Q for the three months ended December 31, 2009, discusses financial projections, information or expectations about our products or markets, or otherwise makes statements about future events, such statements are forward looking.  We are making these forward-looking statements in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.  These risks and uncertainties are described, among other places in this Quarterly Report, in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.


Results of Operations

The following represents condensed consolidated pro forma revenue and earnings information for the three months and six months ended December 31, 2009 and December 31, 2008, as if the recapitalization had occurred on the first day of each of the years.

 

 

 

 

Unaudited

 Unaudited

 

 

 

 

Three Months Ended

Six Months Ended

 

 

 

 

December 31,

December 31,

December 31,

December 31,

 

 

 

 

2009

2008

2009

2008

 

 

 

 

 

 

 

 

Revenues

 

 

 

 $         13,867,882

 $           2,660,482

 $        27,551,774

 $           4,186,264

 

 

 

 

 

 

 

 

Net Income

 

 

 

 $              590,783

 $              984,113

 $              844,179

 $              496,568

 

 

 

 

 

 

 

 

Earnings per share

 

 

 $                    0.02

 $                    0.04

 $                    0.03

 $                    0.02

 

 

 

 

 

 

 

 

Weighted average shares

 

 

 

 

 

 

   outstanding

 

 

            26,728,850

            25,728,850

            26,228,850

            25,728,850

 

 

 

 

 

 

 

 


Acquisition and Recapitalization

The Company filed an 8-K report on December 15, 2009 detailing the completion of the exchange of common stock with Max Great Technology Co. Ltd. (“Max Great”).  The agreement became effective as of September 1, 2009 in which the Company intended to transfer to Max Great 6,000,000 Common Shares of Maxray Optical Technology Co. Ltd. for the shares of Maxray Optical Technology (Fujian) Co. Ltd. located in Fuqing City, Fujian Province, China.  Effective as of December 15, 2009, the ownership of the 6,000,000 restricted common shares is transferred to the individual shareholders


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of MaxGreat as follows: Chien-Chen Ming (3,000,000 restricted shares), Huang-Wei Hsiung (1,500,000 restricted shares), Chen Pai Ling (1,500,000 restricted shares). There was no material relationship, other than in respect of the above transaction, between MaxGreat Technology Co. Ltd., and the named individual shareholders of MaxGreat Technology Co. Ltd. and the registrant or any of its affiliates, or any director or officer of the registrant, or any associate of any such director or officer.


THREE MONTH PERIOD ENDED DECEMBER 31, 2009 COMPARED TO THE SAME PERIOD ENDED DECEMBER 31, 2008

Revenues

During the three months ended December 31, 2009 the Company generated revenues of $13,867,882 compared to $2,660,482 in the period ended December 31, 2008. The increase is driven primarily by increased demand for the products manufactured and made ready for sale driven by significant technological improvements in quality and design.

Cost of Revenues

The Company incurred cost of revenues of $12,566,946 for the three month period ended December 31, 2009 and for the period December 31, 2008 was $1,594,737 which resulted in an increase of $10,972,209. The increase is comprised primarily by significant increase in demand for products due to market expansion and the write-off of research and development costs.

Operating

Total sales operating expenses for the three months ended December 31, 2009 was $18,517 compared to $10,027 for the same period in 2008.  The additional costs resulted in an increase in sales directly related to the expansion of our marketing campaign.  


General and Administrative

In the three month period ended December 31, 2009, general and administrative expenses increased by $338,693 to $498,271 versus $159,578 incurred over the same period in 2008. The increase is driven primarily due to expansion of operations and build-up of administration and finance departments.   


Financial

Our financial expenses for the three month period ended December 31, 2009, increased over the same period in 2008 by $306,767.  The increase is driven primarily due to our recent expansion and expanded marketing efforts.


Other Income/Expenses

In the three months ended December 31, 2009, the Company expensed $18,517 in operating expenses resulting in an increase of $8,490 in operating expense over the same period in 2008.  Our other operating income increased by $18,733 over the same period in 2008.


Income Taxes

During the three month period ended December 31, 2009, we incurred no tax benefit nor had to record a provision for income taxes as the Company has significant loss carryforwards available to offset current net income results.  


Net Income

The Company recorded a net income for the three month period ended December 31, 2009 of $585,783. The net income decreased by $400,830 compared to the same period in 2008.  It is anticipated that this trend will not


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continue into the next quarter due to the initiatives invested in production for our product lines and our commitment to aggressive sales and marketing activities.  


Results of Operations

SIX MONTH PERIOD ENDED DECEMBER 31, 2009 COMPARED TO THE SAME PERIOD ENDED DECEMBER 31, 2008

 Revenues

During the six months period ended December 31, 2009 the Company generated revenues of $27,551,774 compared to $4,160,004 in the period ended December 31, 2008. The increase is driven primarily by increased demand for those products incorporating significant technological improvements in quality and design.


Cost of Revenues

The Company incurred cost of revenues of $25,074,531 for the six month period ended December 31, 2009 compared to $3,442,704 for the same period ended December 31, 2008 which resulted in an increase of $21,631,827. The increase is comprised primarily by significant increase in demand for products due to market expansion and the write-off of research and development costs.

Operating

Total operating expenses for the six months ended December 31, 2009 was $60,166 compared to $$18,279 for the same period in 2008.  The additional costs resulted in an increase in sales directly related to the expansion of our marketing campaign.  


General and Administrative

In the six month period ended December 31, 2009, general and administrative expenses increased by $708,729 to $1,003,626 versus $294,897 incurred over the same period in 2008. The increase is driven primarily due to expansion of operations and build-up of administration and finance departments.   


Financial

Our financial expenses for the six months ended December 31, 2009, increased by $359,573 over the same period in 2008. The increase was due primarily to increase in funding current assets such as inventory, from the Company’s increased lines of credit.  


Income Taxes

During the six month period ended December 31, 2009, we incurred no tax benefit nor had to record a provision for income taxes as the Company has significant loss carry forwards available to offset current net income results.  


Net Income

The Company recorded a net income for the six month period ended December 31, 2009 of $1,058,625 resulting in an increase of $552,260 when compared to the same period in 2008.  It is anticipated that this trend will continue into the next quarter due to the initiatives invested in production for our product lines and our commitment to aggressive sales and marketing activities.  


Liquidity and Capital Resources

At December 31, 2009, the Company has cash and cash equivalents of $3,563,885, an increase of $1,413,280 over the same period in 2008.   


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Our ability to continue as a going concern is dependent on the Company’s ability to obtain additional funding from an expansion of our bank facility, an equity injection, and increased sales revenue.


The Company anticipates that its cash needs over the next 12 months will be met by primarily from a combination of profits, and investment banking.


If the Company is unable to obtain additional funding, or an injection of equity capital, then the failure could have a material adverse effect on the Company’s business and this may force the Company to reorganize, or to reduce the cost of all operations to a lower level of expenditure which may have the effect of reducing the Company’s expected revenues and net income for the fiscal year 2010.


ITEM 3.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not Applicable


ITEM 4.


CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures.  Our President and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) as of the end of the period ended December 31, 2009.  Based on this evaluation, our President and Chief Financial Officer have concluded that our controls and procedures are effective in providing reasonable assurance that the information required to be disclosed in this report is accurate and complete and has been recorded, processed, summarized and reported within the time period required for the filing of this report.


(b)   Changes in internal controls.  There was no change in our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II – OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS


None.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF

PROCEEDS.


None.



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ITEM 3.  DEFAULTS UPON SENIOR SECURITIES


None.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


None.


ITEM 5.  OTHER INFORMATION


The Company filed an 8-K report on December 15, 2009 detailing the completion of the exchange of common stock with Max Great Technology Co. Ltd. (“Max Great”).  The agreement became effective as of September 1, 2009 in which the Company intended to transfer to Max Great 6,000,000 Common Shares of Maxray Optical Technology Co. Ltd. for the shares of Maxray Optical Technology (Fujian) Co. Ltd. located in Fuqing City, Fujian Province, China.  Effective as of December 15, 2009, the ownership of the 6,000,000 restricted common shares is transferred to the individual shareholders of MaxGreat as follows: Chien-Chen Ming (3,000,000 restricted shares), Huang-Wei Hsiung (1,500,000 restricted shares), Chen Pai Ling (1,500,000 restricted shares). There was no material relationship, other than in respect of the above transaction, between MaxGreat Technology Co. Ltd., and the named individual shareholders of MaxGreat Technology Co. Ltd. and the registrant or any of its affiliates, or any director or officer of the registrant, or any associate of any such director or officer.


ITEM 6.  EXHIBITS


The following exhibits are filed as a part of this report on Form 10-Q:


Exhibit No.                                  Description

31.1

31.1                             Rule 13(a)-14(a)/15(d)-14(a) Certification of President

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

32.2                             Section 1350 Certification of President

32.3                             Section 1350 Certification of Chief Financial Officer






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SIGNATURES



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


Dated:  February 22, 2010


                                                                                 MAXRAY OPTICAL TECHNOLOGY CO. LTD.


                                                                                                By:           /s/  

                                                                                                          John Campana

                                                                                                          President





















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Exhibit 31.1


CERTIFICATIONS


I, JOHN CAMPANA, President, certify that:


1.   I have reviewed this quarterly report on Form 10-Q of MAXRAY OPTICAL TECHNOLOGY CO. LTD.

2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.

4.   The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have;

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this quarterly report (the registrant’s first fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions);

All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:  February 22, 2010                                                                               /s/

John Campana

President




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Exhibit 31.2


CERTIFICATIONS


I, GEORGE PARSELIAS, Chief Financial Officer, certify that:


1.   I have reviewed this quarterly report on Form 10-Q of MAXRAY OPTICAL TECHNOLOGY CO. LTD.

2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.

4.   The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have;

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this quarterly report (the registrant’s first fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions);

All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:  February 22, 2010                                                                               /s/

George Parselias

Chief Financial Officer




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Exhibit 32.1



CERTIFICATE PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of MAXRAY OPTICAL TECHNOLOGY CO. LTD., (the “Company”) on Form 10Q for the three month period ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Campana, President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that;


1.   The Report fully complies with the requirement of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


                    

                     /s/

Name:  John Campana

Title:   President


Date:    February 22, 2010















 








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Exhibit 32.2


CERTIFICATE PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of MAXRAY OPTICAL TECHNOLOGY CO. LTD., (the “Company”) on Form 10Q for the three month period ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George Parselias, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that;


1.

The Report fully complies with the requirement of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




                       /s/

Name:  George Parselias

Title:    Chief Financial Officer


Date:     February 22, 2010




















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