Chisen Electric Corp - FORM S-1/A

Attached files

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EX-5.1 - Chisen Electric Corp	v217937_ex5-1.htm
EX-23.1 - Chisen Electric Corp	v217937_ex23-1.htm

As Filed with the Securities and Exchange Commission on April 8, 2011

Registration No. 333- 169850

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 6

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Chisen Electric Corporation

(Name of Registrant As Specified in its Charter)

Nevada	3690	20-2190950
(State or Other Jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer Identification No.)
Incorporation	Classification Code Number)
or Organization)

Jingyi Road, Changxing Economic Development Zone, Changxing County, Zhejiang Province,

The People’s Republic of China

(86) 572-6267666

(Address and Telephone Number of Principal Executive Offices)

Vcorp Services, LLC

1811 Silverside Road

Wilmington, DE 19810

(888) 528-2677

(Name, Address and Telephone Number of Agent for Service)

Copies to:

Clayton E. Parker, Esq.	Richard I. Anslow, Esq.
Matthew Ogurick, Esq.	Anslow + Jaclin LLP
K&L Gates LLP	195 Route 9 South
200 South Biscayne Boulevard, Suite 3900	Manalapan, NJ 07726
Miami, Florida 33131-2399	Telephone: (732) 409-1212
Telephone: (305) 539-3306	Facsimile: (732) 577-1188
Facsimile: (305) 358-7095

Approximate Date of Proposed Sale to the Public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement the same offering. ¨

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

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨

(Do not check if a smaller reporting

company)

Smaller reporting company x

CALCULATION OF REGISTRATION FEE

			Proposed			Proposed
			Maximum			Maximum
			Offering			Aggregate			Amount of
Title of Each Class of	Amount To Be		Price			Offering			Registration
Securities To Be Registered	Registered		Per Share			Price			Fee
Common Stock, US$0.001 par value per share		(1)	$		(1)	$	5,000,000	(1)	$	356.50
Underwriters’ Warrants to Purchase Common Stock		(2)		N/A			N/A		$	N/A	(3)
Common Stock Underlying Underwriters’ Warrants, US$0.001 par value per share		(4)				$	577,500	(5)	$	67.05	(5)
Total Registration Fee				N/A					$	423.55	(6)

(1)

The registration fee for securities to be offered by the Registrant is based on an estimate of the Proposed Maximum Aggregate Offering Price of the securities, and such estimate is solely for the purpose of calculating the registration fee pursuant to Rule 457(o). Includes shares that the Underwriters have the option to purchase from the Registrant to cover over-allotments, if any.

(2)

Represents the maximum number of warrants, each of which will be exercisable at a percentage of the per share offering price, to purchase the Registrant’s common stock to be issued to the Underwriters in connection with the public offering.

(3)

In accordance with Rule 457(g) under the Securities Act, because the shares of the Registrant’s common stock underlying the Underwriters’ warrants are registered hereby, no separate registration fee is required with respect to the warrants registered hereby.

(4)

Represents the maximum number of shares of the Registrant’s common stock issuable upon exercise of the Underwriters’ warrants.

(5)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act. The Registrant shall issue a warrant to the Underwriter covering a number of shares equal to 7% of the total number of shares of common stock being sold in this offering, and the Registrant estimates the aggregate offering price of 7% of the total number of shares of common stock being sold in this offering to be US$350,000. Therefore, since the warrants shall be exercisable at 165% of the public offering price, the Registrant estimates that the aggregate offering price of the underlying common stock to be US$577,500.

(6)

Previously paid.

The Registrant amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall hereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.


PRELIMINARY PROSPECTUS	SUBJECT TO COMPLETION	APRIL 8, 2011

Shares of Common Stock

Chisen Electric Corporation

This is a public offering of our common stock. We are a reporting company under Section 13 of the Securities Exchange Act of 1934, as amended. Our shares of common stock are not currently listed or quoted for trading on any national securities exchange. However our common stock is traded under the symbol “CIEC” on the OTCQB. We have commenced the application process for the listing of our common stock on the NYSE Amex under the symbol “CIEC”. There is no assurance that such application will be approved.

We are offering all of the shares of our common stock offered by this prospectus. We expect that the public offering price of our common stock will be between US$ to US$ per share.

Investing in our common stock involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our common stock in “Risk Factors” beginning on page 13 of this prospectus.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of anyone’s investment in these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Share	Total
Public offering price	$	$
Underwriting discounts and commissions (1)	$	$
Proceeds, before expenses, to Chisen Electric Corporation	$	$

(1) The underwriters will receive compensation in addition to the discounts and commissions as set forth under “Underwriting”.

The Underwriters have a 45-day option to purchase up to additional shares of common stock at the public offering price solely to cover over-allotments, if any (the “Over-allotment Shares”). If the Underwriters exercise this option in full, the total underwriting discounts and commissions will be US$ , and total proceeds to us, before expenses, from the over-allotment option exercise will be US$ .

The Underwriters are offering the common stock as set forth under “Underwriting.” Delivery of the shares will be made on or about , 2011.

Newbridge Securities Corporation

The Date of this Prospectus is , 2011

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TABLE OF CONTENTS

PROSPECTUS SUMMARY		4
SUMMARY FINANCIAL DATA		10
RISK FACTORS		12
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		32
USE OF PROCEEDS		33
DIVIDEND POLICY		34
CAPITALIZATION		35
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS		35
DILUTION		37
SELECTED CONSOLIDATED FINANCIAL DATA		38
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		40
DESCRIPTION OF BUSINESS		61
MANAGEMENT		85
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		94
BENEFICIAL OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		98
DESCRIPTION OF SECURITIES		100
SHARES ELIGIBLE FOR FUTURE SALE		102
UNDERWRITING		103
LEGAL MATTERS		111
EXPERTS		111
ADDITIONAL INFORMATION		111
INDEX TO FINANCIAL STATEMENTS		112
PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS		114
SIGNATURES		125

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Please read this prospectus carefully. It describes our business, our financial condition and results of operations. We have prepared this prospectus so that you will have the information necessary to make an informed investment decision.

You should rely only on information contained in this prospectus or any free writing prospectus. We have not, and the Underwriters have not, authorized any other person to provide you with different information. This prospectus is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted. The information in this prospectus or any free writing prospectus is complete and accurate as of the date on the front cover, but the information may have changed since that date.

PROSPECTUS SUMMARY

Because this is only a summary, it does not contain all of the information that may be important to you. You should carefully read the more detailed information contained in this prospectus, including our financial statements and related notes. Our business involves significant risks. You should carefully consider the information under the heading “Risk Factors” beginning on page 13.

As used in this prospectus, unless otherwise indicated, the terms “we,” “our,” “us,” “Company,” the “Registrant” and “Chisen” refer to Chisen Electric Corporation, a Nevada corporation. We conduct our business through our subsidiaries, which include our wholly-owned subsidiary, Fast More Limited, a Hong Kong investment holding company (“Fast More”), its 100% owned and chief operating subsidiary, Zhejiang Chisen Electric Co., Ltd., a wholly foreign owned entity (“WFOE”) organized under the laws of the PRC (f/k/a Changxing Chisen Electric Co., Ltd. and hereinafter referred to as “CCEC”) and CCEC’s subsidiary, Chisen Electric Jiangsu Co., Ltd. (“CEJC”).

“China” or “PRC” refers to the People’s Republic of China. “RMB” or “Renminbi” refers to the legal currency of China and “$”, “US$” or “U.S. Dollars” refers to the legal currency of the United States.

Company Overview

We are one of the leading producers of sealed lead-acid motive batteries, also known as valve regulated lead-acid motive batteries, in China's personal transportation device market by ranking as one of the top three manufacturers in China in terms of production. Our motive battery products, sold under our own brand name “Chisen”, are predominantly used in electric bicycles and are distributed and sold in China. Among all types of batteries for electric bicycles, the lead-acid motive battery is the preferred choice of electric bicycle manufacturers in China, accounting for 95% of the market share because of its cost efficiency. Currently, we manufacture over 14,480,000 sealed lead-acid motive batteries each year, have more than 2,500 employees and are one of China's largest manufacturers of sealed lead-acid motive batteries for electric-powered bicycles (LABEBs). For each of our fiscal years ended March 31, 2010 and 2009, sales revenues were US$177,192,000 and US$109,020,000, respectively, and our net income during the same periods amounted to US$9,500,000 and US$8,880,000, respectively. For the nine months ended December 31, 2010, our sales revenue and net income were US$194,712,000 and US$9,496,000 respectively.

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China Battery Industry

Competitive Business Conditions and Market Trends

We believe that in the next several years, due to intensifying global environmental concerns, there will be increased development of the electric bicycle. At the 2009 United Nations Climate Change Conference, the Chinese Government announced that in 2020, greenhouse gas emissions will be reduced approximately 40% to 45% from 2005 levels. Due to the fact that electric bicycle usage is very much in line with the energy-saving and environmental protection policy initiated by the Chinese government, the further development of electric bicycles has garnered government support. The electric bicycle, as an environment-friendly and convenient personal transportation vehicle, bears the advantages of convenience, non-pollution, safety and lower energy consumption. In accordance with the measured data of the electric bicycle market demand in China as reported in a recent online article at www.chinanews.com.cn/cj/cj-cyzh/news/2010/03-31/2201616.shtml, a copy of which was also filed as Exhibit 99.5 to the Registration Statement of which this prospectus is made a part, it was estimated that 25,000,000 electric bicycles will have been sold in China by the end of 2010.

With respect to new product trends in the market, Europe, the United States and Japan now use primarily a lithium-ion battery. This reflects a trend not only in the electric bicycle industry, but also in the electric automobile and telecommunications industries. In contrast, 95% of all electric bicycles produced in 2009 in China were powered by lead-acid motive batteries, and less than 5% of electric bicycles produced in 2009 were powered by lithium-ion batteries. Governments in the United States, Japan, Europe and China are encouraging the development of motive battery products that are more environmentally friendly with increased power output and less weight. Although we expect the development of lithium-ion batteries to accelerate over the next few years, we do not believe that the lithium-ion battery will replace the usage of the lead-acid motive battery in the electric bicycle industry in the next 3 to 5 years unless there is significant improvement with the safety and cost of production of lithium-ion batteries.

The Company has been issued certificates from top electric bicycle manufacturers in China which evidence that the Company’s products are the preferred brand of such manufacturers, including Aima and Xinri, whereby we provide to such manufacturers our best pricing and payment terms in exchange for receiving higher priority over our competitors in terms of supplying batteries to such manufacturers. For example, it is general practice that our preferred customers generally pay 8% to 10% lower for our batteries compared with the price our other customers pay and such preferred customers are also entitled to extend the payment term for up to 2 months longer than our other customers and in return, we receive first position on such customers’ supplier lists which enables us to obtain purchase orders prior to our competitors as well as to sell larger quantities of our batteries to such customers as compared with our competitors. Xinri’s electric bicycle was utilized at the Beijing 2008 Olympic Games and at the Paralympics Games, which we believe is a great honor in China. We were also chosen as the only manufacturer to supply lead-acid motive batteries to Xinri for its electric bicycle used at the Beijing 2008 Olympic Games and Paralympics Games. We are also an alternative power source sponsor at the 2010 Shanghai World Expo, providing eco-friendly solutions to power road signage at select Expo Park locations. Based on this, in the next several years, we will strive to create an international first-class brand and become the leader in providing “green” energy in the electric bicycle marketplace. Simultaneously, through constant research and development of new chemical energy technologies, we believe the Company will provide energy-savings and highly-effective energy solutions to our customers for the purpose of improving the quality of human life and a sustainable ecological environment.

Our Market Share

According to the China Battery Industry Association (the “Association”), we are one of the top three manufacturers of LABEBs in China in terms of production as of December 31, 2009. The China Battery Industry Association is an official organization established by the PRC government comprised of members representing approximately 475 battery manufacturers in China including Mr. Xu Kecheng, our President, Chief Executive Officer and Chairman of the Board, on behalf of the Company. Mr. Xu Kecheng does not sit on the board of the China Battery Industry Association and has no influence on the operations of the Association, including, without limitation, participation in the research activities of the Association.

Our Competitive Strengths

We believe the following strengths contribute to our competitive advantages and differentiate us from our competitors:

Production capacity

Established brand awareness

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Market position

Well-established distribution channels

Our cooperative partnership with clients

Research and development

Development Strategy of the Company

We strive to create an international first-class brand and become one of the leaders in providing “green” energy in the global electric bicycle market. Our goal is to become the largest battery developer and producer with a first-class sales and service network in China. The top five lead-acid motive battery manufacturers as of March 31, 2010 accounted for over 50% of the total market share in terms of production in China. The Company was ranked third in terms of production in the industry according to data generated by the China Battery Industry Association. In order to maintain the position as one of the leaders in the industry, we actively search for acquisition targets to expand our market share and to develop our production capacity; however as of the date of this prospectus, we do not have any agreements with any targets and are not currently in any negotiations with any target companies. In addition, our development strategy is committed to the following:

Expansion of our production capacity

Expand offering of highly efficient battery products

Expand sales network and distribution channels

Build partnerships with new and existing clients

Corporate Background and Information

Prior Operations of World Trophy

Our predecessor, World Trophy Outfitters, Inc. (this prospectus uses the term “World Trophy” when we discuss the operations of the Registrant prior to November 12, 2008), was formed as a Nevada corporation on January 13, 2005, and was in the business of selling big game hunting packages to high end clients who sought to hunt with the top tier big game outfitters. During the year ended March 31, 2008, World Trophy sold its entire inventory of big game hunts, was unsuccessful in developing a profitable business and ceased its operations effective April 1, 2008. Prior to the Exchange (as defined and discussed below), World Trophy focused its efforts on seeking a business opportunity and had been in the process of locating and negotiating with business entities for the merger of a target company into World Trophy.

Reverse Merger Transaction and Our Subsidiaries

On November 12, 2008, World Trophy entered into a Share Exchange Agreement (the “Exchange”) with Fast More, Cheer Gold Development Limited, a company organized under the laws of Samoa (“Cheer Gold”) and Floster Investment Limited, a company organized under the laws of Samoa (“Floster” and together with Cheer Gold, the “Stockholders”). Immediately prior to the Exchange, World Trophy was a shell company with US$51,039 in assets and a net loss of US$27,977 for the three months ended September 30, 2008. Upon the closing of the Exchange, the Company did not have any liabilities. As a result of the Exchange, World Trophy acquired all of the issued and outstanding securities of Fast More from the Stockholders in exchange for 35,000,000 newly-issued shares of World Trophy’s common stock. Upon the closing of the Exchange, the Stockholders collectively beneficially own 70% of the voting capital stock of the Company, 65.8% of which is owned by Cheer Gold and 4.2% of which is owned by Floster. As a result of the Exchange, Fast More became a wholly-owned subsidiary of World Trophy. Effective February 2, 2009, we amended our Articles of Incorporation to change our name from “World Trophy Outfitters, Inc.” to “Chisen Electric Corporation”.

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Fast More is an investment holding company incorporated in Hong Kong on December 17, 2007 with limited liability. CCEC was founded in Huzhou, Zhejiang Province in China on February 25, 2002. On February 16, 2008, Fast More acquired the 51%, 9% and 40% equity interests in CCEC from Mr. Xu Kecheng, Mr. Xu Keyong and BEME International Co., Ltd., respectively. Upon the completion of these acquisition transactions, CCEC became the wholly-owned and chief operating subsidiary of Fast More.

On May 18, 2009, the Registrant incorporated Chisen Technology Holdings Corporation in Nevada as its wholly-owned subsidiary with the intention of potentially conducting business in the United States. Chisen Technology Holdings Corporation is authorized to do business in the State of Washington and as of the date of this prospectus, has no operations. The Company intends to dissolve this entity.

Corporate Information

Our offices are located in the Changxing Economic Development Zone at the bank of the Taihu Lake in the County of Changxing in Zhejiang Province, in close proximity to major national transportation systems, including National Highways 104 and 318, the Shanghai – Jiangsu – Zhejiang – Anhui – Hangzhou – Nanjing Expressway, the Changxing – Huzhou – Shanghai Channel, the Xuancheng – Hangzhou Railway and the Xinyi – Changxing Railway. Our corporate offices are located at Jingyi Road, Changxing Economic Development Zone, Changxing, Zhejiang Province, The People’s Republic of China. Our telephone number is (86) 572-6267666 and our corporate website in English is located at www.chisenelectric.com .

We are a reporting company under Section 13 of the Securities Exchange Act of 1934, as amended. Our shares of common stock are not currently listed or quoted for trading on any national securities exchange however our common stock currently trades under the symbol “CIEC” on the OTCQB. We have commenced the application process for the listing of our common stock on the NYSE Amex under the symbol “CIEC”.

Corporate Structure

Our corporate structure is illustrated as follows:

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Our Challenges

Our ability to achieve our objectives and execute our strategies is subject to risks and uncertainties. We believe the following are the major risks and uncertainties that may materially affect us:

We have depended on a small number of customers for the vast majority of our sales. A reduction in business from any of these customers could cause a significant decline in our sales and profitability.

A substantial portion of our assets has been comprised of trade receivables representing amounts owed by a small number of customers. If any of these customers fails to timely pay us amounts owed, we could suffer a significant decline in cash flow and liquidity which, in turn, could cause us to be unable to pay our liabilities and purchase an adequate amount of inventory to sustain or expand our sales volume.

Risk of fluctuations in the prices of raw materials could adversely affect our business.

We choose to rely on a limited number of suppliers for our raw materials and have short term supply agreements with such suppliers, and any unanticipated disruptions or slowdowns by such suppliers, shipping companies and our distribution centers could adversely affect our ability to deliver our products and services to our customers which could materially and adversely affect our relationships with our customers and our revenues.

We currently rely on short term bank loans and non-interest bearing credits granted by banks for the issuance of notes payable, however we expect that we will need additional capital to implement our current business strategy of expansion of our production facilities in Changxing County and Jiangsu Province, and we will need to find new sources of financing, which may not be available to us.

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We face a risk of non-compliance with the terms of our notes payable, bill financing and short-term bank loans, which are secured by a significant amount of our assets and could have an adverse affect on our business.

In light of recent trends in Europe and the U.S., lead-acid motive battery products may be substituted by other battery products which could have an adverse effect on our business.

Lead pollution in China is subject to more attention from the government, which may cause the Chinese government to increase the environmental compliance standards for lead-acid batteries production. As a result, our costs of environmental compliance may increase in order to meet any heightened standards.

We may be affected by changes in the policies adopted by the PRC government in relation to the electric bicycle industry and the use of electric bicycles.

Our actual losses resulting from our relocation of our production facilities in Changxing County may significantly exceed the estimated amount provided for in our relocation agreement with the Administrative Committee of Changxing Economic Development Zone, which could have an adverse effect on our business.

If the land use rights of our landlord are revoked, we would be forced to relocate operations, which could have an adverse affect on our financial condition and results of operations.

Please see "Risk Factors" and other information included in this prospectus for a detailed discussion of these risks and uncertainties.

The Offering

Common stock we are offering		shares (1)

Common stock included in the Underwriter’s option to purchase shares from us to cover over-allotments, if any		shares

Common stock outstanding after the offering		shares (2)

Offering price		US$ to US$ per share (estimate)

Use of Proceeds		We intend to use the net proceeds from this offering to construct a new production plant in Changxing County (Zhejiang Province) for the development and production of a new product, lithium-ion batteries. See “Use of Proceeds” on page 35 or more information on the use of proceeds.

Risk factors		Investing in these securities involves a high degree of risk. As an investor you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the “Risk Factors” section beginning on page 13.

NYSE Amex proposed ticker symbol		We have commenced the application process for the listing of our common stock on the NYSE Amex under the symbol “CIEC”.

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Underwriter’s Warrants		Upon the closing of this offering, we will issue to Newbridge Securities Corporation common stock purchase warrants covering a number of shares of our common stock equal to 7% of the total number of shares of common stock being sold in this offering, including the Over-allotment Shares. The Underwriter’s Warrants will be non-exercisable for 6 months after the date of the closing of this offering and will expire 5 years after such date. The Underwriter’s Warrants will be exercisable at a price equal to 165% of the public offering price, and the Underwriter’s Warrants will not be redeemable. We are registering the Underwriter’s Warrants and the shares of common stock underlying such Underwriter’s Warrants hereunder in this offering. The Underwriter’s Warrants may not be transferred, assigned, or hypothecated for a period of 6 months following the closing of this offering, except that they may be assigned, in whole or in part, to any successor, officer, manager or member of Newbridge Securities Corporation (or to officers, managers or members of any such successor or member) and to members of the underwriting syndicate or selling group. The Underwriter’s Warrants may be exercised as to all or a lesser number of underlying shares of common stock and will provide for cashless exercise and will for a period of 5 years after the closing of this offering contain provisions for one demand registration of the sale of the underlying shares of common stock at our expense, an additional demand registration at the warrant holders’ expense and unlimited “piggyback” registration rights for a period of 5 years following the closing of this offering at our expense. See “Description of Securities” on page 107 for more information.

Advisory Agreement		Upon the closing of this offering, we will enter into a corporate advisory engagement with Newbridge Securities Corporation for a period of 12 months whereby we shall pay to Newbridge Securities Corporation a monthly retainer payment as well as other customary terms to be mutually agreed upon. See “Underwriting.”

(1)	Excludes (i) up to shares of common stock underlying warrants to be received by the Underwriter in this offering and (ii) the shares of our common stock that we may issue upon the Underwriter’s over-allotment option exercise.

(2)

Based on 50,000,000 shares of common stock issued and outstanding as of the date of this prospectus and shares of common stock to be issued in the public offering, which (i) excludes the Underwriter’s warrants to purchase shares of our common stock, (ii) excludes shares of common stock underlying warrants that are exercisable at US$ per share and (iii) excludes shares of our common stock that we may issue upon the Underwriter’s over-allotment option exercise.

SUMMARY FINANCIAL DATA

The following summary financial information contains consolidated statements of income data for the nine months ended December 31, 2010 and 2009 and each of the fiscal years ended March 31, 2010 and 2009, and the consolidated balance sheet data as of December 31, 2010, March 31, 2010 and 2009. The consolidated statements of income data and balance sheet data were derived from the audited consolidated financial statements, except for data for the nine months ended December 31, 2010 and 2009. Such financial data should be read in conjunction with the consolidated financial statements and the notes to the consolidated financial statements starting on page F-1 and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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	Nine months ended December 31,				Fiscal year ended March 31,
	2010		2009		2010		2009
	US$'000		US$'000		US$'000		US$'000

Revenues		194,712		127,104		177,192		109,020
Cost of sales		170,460		107,764		153,708		88,945
Gross profit		24,252		19,340		23,484		20,075
Sales, marketing and distribution		8,111		6,630		8,696		5,459
General and administrative expenses		2,628		2,236		3,647		3,763
Operating profit		13,513		10,474		11,141		10,853
Other income, net		889		1,189		1,671		758
Loss on disposal of scrap inventories		2,307		-		-		-
Interest income		315		56		343		362
Incomes before interest and income tax expenses		12,410		11,719		13,155		11,973
Interest expenses		2,231		1,147		2,068		1,232
Income before income tax expenses		10,179		10,572		11,087		10,741
Income tax expenses		2,421		1,439		1,587		1,861
Income before extraordinary item		7,758		9,133		9,500		8,880
Extraordinary item (less applicable income tax of US$0)		1,738		-		-		-
Net income		9,496		9,133		9,500		8,880
Other comprehensive income		1,115		24		106		278
Comprehensive income		10,611		9,157		9,606		9,158
Earnings per share before extraordinary item (basic and diluted)		0.16		0.18		0.19		0.22
Earnings per share after extraordinary item (basic and diluted)		0.19		0.18		0.19		0.22

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	Period
	ended December 31,		Fiscal year ended March 31,
	2010		2010		2009
	US$'000		US$'000		US$'000
Current Assets
Cash and cash equivalents		6,237		6,019		2,620
Restricted bank balances		26,468		21,420		13,878
Other financial assets		5,950		7,438		1,314
Trade receivables, net		69,811		50,440		35,023
Other receivables		8,791		800		842
Prepayments		7,120		4,933		862
Due from related parties		4		8		474
Inventories		26,502		30,038		17,135
Assets classified as held for sale		2,558		-		-
Total Current Assets		153,441		121,096		72,148

Non-Current Assets
Available-for-sale financial assets		2,735		882		878
Long-term land lease prepayments, net		150		749		608
Property, plant and equipment, net		10,945		10,474		5,315
Deposit for acquisition of land and buildings		798		-		-
Total Assets		168,069		133,201		78,949

Current Liabilities
Trade payables		15,118		14,923		11,176
Notes payable		49,155		35,504		23,343
Accrued expenses and other accrued liabilities		6,294		5,087		3,769
Due to related parties		5,004		2,532		639
Income taxes payable		1,111		148		264
Short-term bank borrowings		50,969		46,141		20,451
Liabilities directly associated with assets classified as held for sale		886		-		-
Total Current Liabilities		128,537		104,335		59,642

Non-Current Liabilities
Government subsidies		106		139		186
Deferred tax liabilities		460		460		460
Total Non-Current Liabilities		566		599		646

Total Liabilities		129,103		104,934		60,288

Shareholders’ Equity		50		50		50
Capital reserves		144		144		144
Statutory reserves		3,430		2,239		1,103
Accumulated other comprehensive income		2,169		1,054		948
Retained earnings		33,085		24,780		16,416
Total CIEC Shareholders’ Equity		38,878		28,267		18,661

Non-controlling interests		88		-		-

Total stockholders’ equity		38,966		28,267		18,661
Total Liabilities and Shareholders’ Equity		168,069		133,201		78,949

RISK FACTORS

Any investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below and all of the information contained in this prospectus before deciding whether to purchase our common stock. Our business, financial condition or results of operations could be materially adversely affected by these risks if any of them actually occur. Our shares of common stock are not currently listed or quoted for trading on any national securities exchange, however it is currently traded under the symbol “CIEC” on the OTCQB. If and when our common stock is traded, the trading price could decline due to any of these risks, and an investor may lose all or part of his or her investment. Some of these factors have affected our financial condition and operating results in the past or are currently affecting our company. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this prospectus.

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RISKS RELATED TO OUR OPERATIONS

The vast majority of our sales are generated from a small number of customers. During the nine months ended December 31, 2010 and the years ended March 31, 2010 and 2009, we had three, two and one customers that each generated revenues of at least 10% of our total revenues, respectively, with our largest customer accounting for 37%, 21% and 47% of our revenues for each respective period. A total of approximately 64%, 40% and 47% of our revenues for the nine months ended December 31, 2010 and the years ended March 31, 2010 and 2009, respectively, were attributable to customers that each individually accounted for at least 10% of our sales. We believe that we may depend upon a small number of customers for a significant majority of our sales in the future, and the loss or reduction in business from any of these customers, including, without limitation, any material disruption of slowdown suffered by such customers, could cause a significant decline in our sales and profitability.

Our trade receivables represented approximately 45%, 42% and 49% of our total current assets as of December 31, 2010, March 31, 2010 and March 31, 2009, respectively. As of December 31, 2010, 87% of our trade receivables represented amounts owed by three customers, who represented over 10% of the total amount of our accounts receivable. As of March 31, 2010, 80% of our trade receivables were owed to us by two customers, each of which represented over 10% of the total amount of our trade receivables. As a result of the substantial amount and concentration of our trade receivables, if any of our major customers fails to timely pay us amounts owed, we could suffer a significant decline in cash flow and liquidity which could adversely affect our ability to pay our liabilities and to purchase inventory to sustain or expand our current sales volume.

Furthermore, working capital management, including prompt and diligent billing and collection, is an important factor in our results of operations and liquidity. In general, our average accounts settlement period is 102 days from the time we sell our products to the time we receive payment from our customers. The credit periods for some of our business partners can be longer after an evaluation of the risk of collection. We cannot assure you that system problems, industry trends or other issues will not extend our collection period and adversely impact our working capital.

In addition, we typically need to place certain deposits and advances with our suppliers on a portion of the purchase price in advance and for some suppliers we must maintain a deposit for future orders. Because our payment cycle is shorter than our receivable cycle, we may experience working capital shortages.

Risk of fluctuations in the prices of raw materials could adversely affect our business.

The raw material for our battery products consist primarily of electrolytic lead. Our success significantly depends on our ability to secure sufficient and constant supply of electrolytic lead for our production at acceptable price levels. Electrolytic lead represents our largest cost item in our lead-acid motive battery production. During each of the two fiscal years ended March 31, 2010 and March 31, 2009, the average selling price of electrolytic lead by our suppliers was approximately US$2,200 and approximately US$2,200 per ton, respectively. There were slight fluctuations on the average selling price of electrolytic lead for the fiscal year ended March 31, 2010 and the average selling price of electrolytic lead decreased by approximately 1.5% as compared to the fiscal year ended March 31, 2009. For each of the two financial years ended March 31, 2010 and March 31, 2009, costs of lead-related material accounted for approximately 80% and 80% of our total cost of sales, respectively. We do not have long-term contracts with any of our electrolytic lead suppliers, nor have we entered into any arrangement to mitigate the effect of price fluctuations of electrolytic lead. Therefore, any significant increase in the cost of electrolytic lead in the future could adversely affect our results if we cannot transfer the price increment to our customers.

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We choose to rely on a limited number of suppliers for our raw materials and have short term supply agreements with such suppliers, and any unanticipated loss, disruptions or slowdowns by such suppliers, shipping companies and our distribution centers could adversely affect our ability to deliver our products and services to our customers which could materially and adversely affect our relationships with our customers and our revenues.

Our ability to provide high quality customer service, to process and fulfill orders and to manage inventory depends on the timely and uninterrupted performance of our suppliers and shipping companies and the efficient and uninterrupted operation of our distribution centers. During the nine months ended December 31, 2010 and for the fiscal years ended March 31, 2010 and 2009, we had one, four, and four suppliers each of which accounted for at least 10% of our total raw material purchases, respectively, with our largest supplier accounting for approximately 24%, 24% and 19% of our raw material purchases for each respective period. A total of approximately 24%, 64% and 60% of our raw material purchases for the nine months ended December 31, 2010 and the years ended March 31, 2010 and 2009, respectively, were attributable to suppliers that each individually accounted for at least 10% of our raw material purchases. We choose to rely on a small number of suppliers in order to stabilize the quality of the raw materials we purchase, and we believe that we may continue to depend upon a small number of suppliers for our raw materials in the future, and the loss or reduction in business from any of these suppliers could have an adverse effect on our business. We also generally have supply agreements that are no longer than one year and we cannot guarantee that such suppliers will continue to do business with us. In the event that our suppliers stop doing business with us, or if our suppliers suffer any material disruption or slowdown including, without limitation, being forced to shut down operations as a result of a material lead pollution event, we would be forced to find replacement suppliers with comparable quality of raw materials, which could take time to locate and secure. Any material disruption or slowdown in the operations of our suppliers, or any material disruption or slowdown at our distribution centers, manufacturing facilities or with our management information systems could cause delays in our ability to receive, process and fulfill customer orders and may cause orders to be cancelled, lost or delivered late, goods to be returned or receipt of goods to be refused. As a result, our revenues and operating results could be materially and adversely affected.

We will need new sources of financing and additional capital in order to implement our current business strategy of expansion of our production facilities in Changxing County (Zhejiang Province) and in Jiangsu Province. Also the Company has short term bank loans and non-interest bearing credits granted by banks for the issuance of notes payable at our disposal, most of such short term loans and notes payable expire in the next three months, and there is no assurance that we will obtain any new loans or notes payable, or that such short term loans and notes payable will be renewed or that the terms of any renewals of such short term loans or notes payable will be on terms that are as favorable as our current instruments. As of the date of this prospectus, we had an aggregate of $108,783,000 of short-term loans outstanding. Furthermore, in January 2010, the Chinese government took steps to tighten the availability of credit including ordering banks to increase the amount of reserves they hold and to reduce or limit their lending. Such governmental actions in the PRC may make it more difficult for us to obtain additional loans from other banking institutions if we need such additional capital, in which case we will be forced to seek other sources of funding.

Assuming our sale of shares of common stock at an assumed public offering price of US$ per share of common stock, which is the mid-point of the estimated initial offering price range set forth on the cover of this prospectus, we currently intend this offering to be in an amount equal to approximately US$ . Our ability to obtain additional financing will be, however, subject to a number of factors, including market conditions, our operating performance and investor sentiment. These factors may make the timing, amount, terms and conditions of additional financing unattractive to us. We cannot assure you that we will be able to obtain any additional financing. Also, if we raise additional capital after this offering, it may dilute your ownership in us. If we are unable to obtain the financing needed to implement our business strategy, our ability to increase revenues will be impaired and we may not be able to sustain profitability.

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We have notes payable and short-term bank loans and bill financing which are collateralized by a significant amount of our assets, including 100% of our restricted bank balances, certain land lease prepayments and our buildings. Specifically, our notes payable are secured by US$26,468,000 of our restricted bank balances as of December 31, 2010, and such notes payable and our short-term bank loans are collateralized by certain land lease prepayments and buildings classified as held for sale with carrying values of US$609,000 and US$1,949,000 at December 31, 2010, respectively. Such financial instruments contain customary events of default, and upon the occurrence and during the continuation of an event of default, amounts due under such financial instruments may be accelerated by our creditors. If we are unable to comply with the terms of such financial instruments, events of default could occur. Upon the occurrence and during the continuance of an event of default under such financial instruments, our creditors have available a range of remedies customary in these circumstances, including declaring all outstanding debt, together with any accrued and unpaid interest thereon, to be due and payable, foreclosing on the aforementioned assets securing the financial instruments and/or ceasing to provide additional loans, which could have a material adverse effect on our business.

In light of recent trends in Europe and the U.S., lead-acid motive battery products may be substituted by other battery products which could have an adverse effect on our business.

It is a general market trend to develop motive battery products which are more environmentally friendly with increased power output and less weight. It is also a new product trend in Europe, the United States and Japan to use primarily a lithium-ion battery. There can be no assurance that manufacturers of electric bicycles will continue to use lead-acid motive battery products as the principal source of motive power for electric bicycles. In the event that the market prefers to use other forms of battery product and if we are not able to develop new motive battery products to meet the future demand, our business could be adversely affected.

Recently one of our former lead plate suppliers, Anqing Borui Power Co., Ltd., was found to be involved in a material lead pollution event, where more than 20 children affected by lead pollution were reported having blood lead above normal standards, and has been required to close its operations by the local government. Accordingly, blood lead pollution in China is now subject to greater scrutiny from both the press and the government. In the event that the Chinese government increases the environmental compliance standards for lead-acid batteries production as a result of these events, our costs of environmental compliance may increase in order to meet the heightened standards.

We may be affected by changes in the policies adopted by the PRC government in relation to the electric bicycle industry and the use of electric bicycles.

Our operations and financial results could be adversely affected by changes in the political, economic and social conditions in China or the relevant policies of the PRC government in respect of the use of electric bicycles. The “Law of People’s Republic of China on Road Traffic Safety” categorizes the electric bicycle as a non-motor vehicle. However, certain local governments in China may prohibit the use of electric bicycles. In the event that there is any unfavorable policy on the electric bicycle industry and the use of electric bicycles, sales of electric bicycles may decrease, and this could have a significant adverse impact on our business.

On August 20, 2010, CCEC entered into a Compensation Agreement of Corporate Relocation Acquisition with the Administrative Committee of Changxing Economic Development Zone, Zhejiang, pursuant to which CCEC agreed to transfer to the Committee the land-use rights to, and structures on, the property previously used by CCEC for office and its manufacturing facilities, and agreed to relocate the office and manufacturing facilities to a new location. The Committee requested the relocation pursuant to a general policy of the Government of Changxing County to relocate “secondary industries” from urban areas to countryside. The term “secondary industries” is defined as all manufacturing entities pursuant to National Bureau of Statistics of PRC’s classification of industries. Pursuant to the “Withdraw from Secondary Industry and Progressing to Tertiary Industry” policy of Changxing County, all entities that are classified as participants in “secondary industries” shall be relocated from the Westside of Jing’er Road to the Eastside of Jing‘er Road. The Government of Changxing’s policy is to negotiate with each entity with respect to the specific terms of relocation, including, without limitation, relevant compensation to be paid after assessment. The Company’s business has been deemed to be a “secondary industry” by the Government of Changxing. Pursuant to an assessment of the property and the compensation of the losses stated as follows, the Committee agreed to pay to CCEC RMB117,202,100 (approximately US$17,265,000) in total for the relocation. In addition to the compensation for the property, this amount also includes compensation for the value of losses associated with removing CCEC’s equipment at RMB6,939,900 (approximately US$1,022,000) and the value of losses to CCEC with respect to the suspension of its operations for two months at RMB11,748,000 (approximately US$1,731,000). However, there is no assurance that suspension of our operations will resume after two months, or that our actual losses for the suspension of our operations will not exceed RMB11,748,000 (approximately US$1,731,000). If our suspension of operations exceeds the estimated time frame or if our actual losses for such suspension significantly exceed the estimated amount, this could have an adverse effect on our business.

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Furthermore, CCEC agreed to vacate the site within one year of the signing of the Relocation Agreement and the Committee agreed to pay the RMB117,202,100 (approximately US$17,265,000) as follows: 5% of such amount to be paid within one month after the execution of the Relocation Agreement, 20% to be paid within one month of CCEC delivering appropriate land-use rights certificates and proof of cancellation of encumbrances, 25% to be paid after the commencement of the removal of CCEC’s operations from the site, and the remaining 50% to be paid upon completion of the relocation.

Competition in the motive battery industry in China could have an adverse effect on our business.

As of the date of this prospectus, we only conduct our business in one segment of the battery industry, the manufacture and sale of lead-acid motive batteries. We face competition from the domestic and foreign producers in China, which move into the motive battery industry in view of the growth potential. New entrants will continue to emerge. Any intensification in competition could dilute our market share and may lead to price reductions and increased expenses in marketing and product development. Any of these events could have an adverse impact on our profitability.

Our sales are dominated by sales in China, which could have an adverse effect on our business.

For each of the two financial years ended March 31, 2010 and 2009, and for the nine months ended December 31, 2010, all of our sales were derived from customers in China. We expect that the domestic market in China will continue to be our major market. Our business is therefore heavily dependent on the demand for motive battery products in China and the domestic market prices of these products. In the event that there is any material adverse change in the level of the demand for motive battery products in China or if there are a significant price fluctuations in China, our performance could be adversely affected.

We do not carry any business interruption insurance, products liability insurance or any other insurance policy except for property insurance. As a result, we may incur uninsured losses, increasing the possibility that you would lose your entire investment in our company.

We could be exposed to liabilities or other claims for which we would have no insurance protection. We do not currently maintain any business interruption insurance, products liability insurance, or any other comprehensive insurance policy except for property insurance policies with limited coverage. As a result, we may incur uninsured liabilities and losses as a result of the conduct of our business. There can be no guarantee that we will be able to obtain additional insurance coverage in the future, and even if we are able to obtain additional coverage, we may not carry sufficient insurance coverage to satisfy potential claims. Should uninsured losses occur, any purchasers of our common stock could lose their entire investment.

Because we do not carry products liability insurance, a failure of any of the products marketed by us may subject us to the risk of product liability claims and litigation arising from injuries allegedly caused by the improper functioning or design of our products. We cannot assure that we will have enough funds to defend or pay for liabilities arising out of a products liability claim. To the extent we incur any product liability or other litigation losses, our expenses could materially increase substantially. There can be no assurance that we will have sufficient funds to pay for such expenses, which could end our operations and you would lose your entire investment.

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If CEJC fails to commence construction and is delayed more than seven days under the Project Investment Contract and Supplemental Agreement to Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee, the Committee could reclaim the land which could have a materially adverse effect on the Company’s business and plan of development.

On September 6, 2010, CEJC entered into a Project Investment Contract and a Supplemental Agreement to the Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee pursuant to which CEJC shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park to manufacture valve regulated lead-acid and lithium-ion batteries and other related products (“Plant D”) at Jing Yuan Road in the Jiangsu Xuyi Economic Development Zone. In the first stage CEJC shall invest approximately RMB422,000,000 (approximately US$62,000,000), including approximately RMB150,000,000 (approximately US$22,000,000) in fixed assets for the production of VRLA batteries only. The Company does not plan to construct lithium-ion batteries production facilities in Jiangsu Xuyi until 18 months after the date that we commence production of the first stage. CEJC shall commence construction upon the obtainment by CEJC of construction plan approval, however in the event that CEJC fails to commence construction and is delayed more than 7 days, the Committee has the right to terminate the Agreement and reclaim the land. Additionally, if the Company commences construction on the land and fails to follow the construction schedule, the Committee has the right to reclaim the land, which could also result in a loss to the Company in terms of labor and other resources spent on such construction up until the time of such reclamation. In light of the fact that construction delays are not unusual occurrences and that any delay could be attributable to a force beyond the Company’s control, the Company could face a situation where the Committee enforces its rights under the Agreement and reclaims the land, even if in the case where construction and/or improvements on the land have already commenced by the Company. Any such reclamation action could significantly delay our plan of development and the Company could be forced to renegotiate with the Committee or the Company could be forced to negotiate with new parties for alternative parcels of land on terms that are not as favorable as the terms currently in place with the Committee, and any losses associated therewith could have a material adverse effect on our business and plan of development.

Our future performance is dependent on researching and developing new products, the inability to do so could have an adverse effect on our business.

Our performance in the future is dependent on our ability to develop and launch new products. Changes in technologies may render our products obsolete and our performance in the future is thus significantly dependent on our ability to develop and launch new products. There can be no assurance that our research and development efforts will be successful or completed within the anticipated timeframe and results. Moreover, there can be no assurance that any research and development project undertaken by us will result in commercially viable products. Unsuccessful development and release of new products could adversely affect our performance and our ability to compete.

We intend to make significant investments in research and development and new products that may not be profitable.

Companies in our industry are under pressure to develop new designs and product innovations to support changing consumer tastes and regulatory requirements. We have engaged in research and development activities and we believe that substantial additional research and development activities are necessary to allow us to offer technologically-advanced products. We expect that our research and development budget will increase significantly as we attempt to create new products. However, research and development and investments in new technology are inherently speculative and commercial success depends on many factors including technological innovation, novelty, service and support, and effective sales and marketing. We may not achieve significant revenue from new product investments for a number of years, if at all. Moreover, new products and services may not be profitable, and even if they are profitable, operating margins for new products and businesses may be minimal.

Our failure to effectively manage growth could harm our business.

We have expanded the number and types of products we sell, and we will endeavor to further expand our product portfolio. We must continually introduce new products and technologies, enhance existing products, and effectively stimulate customer demand for new products and upgraded versions of our existing products in order to remain competitive.

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This expansion of our products places a significant strain on our management, operations and engineering resources. Specifically, the areas that are strained most by our growth include the following:

• New Battery Product Launch: With the growth of our product portfolio, we experience increased complexity in coordinating product development, manufacturing and shipping. As this complexity increases, it places a strain on our ability to accurately coordinate the commercial launch of our products for distribution into the marketplace with adequate supply to meet anticipated customer demand and effective marketing to stimulate demand and market acceptance. If we are unable to scale and improve our product launch coordination, we could frustrate our customers and lose retail shelf space and product sales;

• Forecasting, Planning and Supply Chain Logistics: With the growth of our product portfolio, we also experience increased complexity in forecasting customer demand, planning for production, and transportation and logistics management. If we are unable to scale and improve our forecasting, planning and logistics management, we could frustrate our customers, lose product sales or accumulate excess inventory; and

• Support Processes: To manage the growth of our operations, we will need to continue to improve our transaction processing, operational and financial systems, and procedures and controls to effectively manage the increased complexity. If we are unable to scale and improve these areas, the consequences could include delays in shipment of products, degradation in levels of customer support, lost sales, decreased cash flows, and increased inventory. These difficulties could harm or limit our ability to expand.

Our products could contain defects or they may be installed or operated incorrectly, which could result in claims against us or reduce sales of those products.

Despite quality control testing by us, errors have been found and may be found in the future in our existing or future products. This could result in, among other things, a delay in the recognition or loss of revenue, loss of market share or failure to achieve market acceptance. These defects could cause us to incur significant warranty, support and repair costs, divert the attention of our personnel from our product development efforts and harm our relationship with our customers. The occurrence of these problems could result in the delay or loss of market acceptance of our battery products and would likely harm our business. Defects, integration issues or other performance problems in our battery products could result in personal injury or financial or other damages to end-users or could damage market acceptance of our products. Our customers and end-users could also seek damages from us for their losses. A product liability claim brought against us, even if unsuccessful, would likely be time-consuming and costly to defend.

Environmental claims brought against us in connection with the production of battery products could adversely affect our business.

Solid waste, sewage and fumes are generated during the production process of battery products. We are required to comply with the environmental laws, rules and regulations promulgated by the PRC government. These laws, rules and regulations govern, among other things, the level of fees payable to the government entities providing environmental services and setting out the requirements in relation to the installation of ventilation equipment to ensure the appropriate treatment of lead dust and particles generated during production of lead-acid motive battery products. They also prescribe the standards for the discharge of solid waste, sewage and fumes. In addition, these laws, rules, and regulations empower the local PRC governments to impose sanctions on enterprises failing to comply with such laws, rules and regulations. We are also required by the laws and regulations governing health and safety at work in China to provide our employees exposed to lead dust or particles with protective clothing and accessories, such as gloves, goggles and masks. We also arrange all our employees engaging in the lead-related production process to receive medical checks at least twice a year.

Although we have adopted these preventive measures, inherent risks involved in our production activities cannot be completely eliminated. As our production may cause pollution to the environment and may affect the health of our employees and the residents nearby, we may be subject to civil claims for compensation or administrative sanctions such as fines or discontinuation of production activities. If there is any legal action initiated against us on any alleged violation of environmental protection laws and regulations, or that our production discharge results in any harmful impact on any person, our business could be materially and adversely affected. There can be no assurance that the relevant governmental authorities and other people would not take actions against us for our past, present and future business operations. We have not maintained any insurance coverage for these possible claims due to environmental related matters, as our Directors are not aware of such type of insurance to be available in China. Any environmental actions taken against us could adversely affect our business.

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If we are unable to maintain our Zhejiang Province Pollution Discharge Certificate, we may lose our ability to continue conducting our manufacturing operations.

We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, discharge and disposal of hazardous substances in the ordinary course of our manufacturing process. The manufacturing facilities in which we operate are subject to the PRC’s environmental laws and requirements. We are required to have and do have a valid Zhejiang Province Pollution Discharge Certificate issued by the Environment Protection Bureau of Changxing County and we are responsible for the disposal of the waste in accordance with applicable environmental regulations. If we fail to comply with the provisions of the permit and environmental laws, we could be subject to sanctions by regulators, including the suspension or termination of our Certificate, which would result in the suspension or termination of our manufacturing operations, which would have a material adverse effect on our results of operations.

We believe that mandatory and voluntary certification and compliance issues are critical to adoption of our battery product systems and for the retention of our customers, and failure to obtain such certification or compliance would harm our business.

We are required to comply with certain legal requirements governing the materials in our products. Although we are not aware of any efforts to amend any existing legal requirements or implement new legal requirements in a manner with which we cannot comply, our revenue might be materially harmed if such an amendment or implementation were to occur.

Moreover, although we are not legally required to do so, we strive to obtain a broad range of certifications (such as ISO 9001, ISO 14001 and ISO 18001) for substantially all our products which the Company believes helps make our products more saleable and which contributes to the retention of existing customers and the obtainment of future customers. The failure to obtain voluntary certifications for our products could result in a loss of current customers or could impair the marketability of our products which could result in the failure for us to obtain new customers, which could have a materially adverse effect on our business.

We may adopt an equity incentive plan under which we may grant securities to compensate employees and other services providers, which would result in increased share-based compensation expenses and, therefore, reduce net income.

We may adopt an equity incentive plan under which we may grant shares or options to qualified employees. Under current accounting rules, we would be required to recognize share-based compensation as compensation expense in our statement of income, based on the fair value of equity awards on the date of the grant, and recognize the compensation expense over the period in which the recipient is required to provide service in exchange for the equity award. We have not made any such grants in the past, and accordingly our results of operations have not contained any share-based compensation charges. The additional expenses associated with share-based compensation may reduce the attractiveness of issuing stock options under an equity incentive plan that we may adopt in the future. If we grant equity compensation to attract and retain key personnel, the expenses associated with share-based compensation may adversely affect our net income. However, if we do not grant equity compensation, we may not be able to attract and retain key personnel or be forced to expend cash or other compensation instead. Furthermore, the issuance of equity awards would dilute the shareholders’ ownership interests in our company.

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Our business may be adversely affected by the global economic downturn, in addition to the continuing uncertainties in the financial markets which could impair our ability and the ability of our customers to access capital in the current economic climate and therefore could have an adverse effect on our business.

The global economy is currently in a pronounced economic downturn. Global financial markets are continuing to experience disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. Given these uncertainties, there is no assurance that there will not be further deterioration in the global economy, the global financial markets and consumer confidence. If economic conditions deteriorate further, our business and results of operations could be materially and adversely affected.

Additionally, the inability of our customers and suppliers to access capital efficiently, or at all, may have other adverse effects on our financial condition. For example, financial difficulties experienced by our customers or suppliers could result in product delays; increase trade receivables defaults; and increase our inventory exposure. The impact of tightening credit conditions may impair our customers’ ability to effectively access capital markets. The inability of our customers to borrow money to fund construction of electric bicycles reduces the demand for our products and services and may adversely affect our results from operations and cash flow. These risks may increase if our customers and suppliers do not adequately manage their business or do not properly disclose their financial condition to us.

Although we believe we have adequate liquidity and capital resources to fund our operations internally, in light of current market conditions, our inability to access the capital markets on favorable terms, or at all, may adversely affect our financial performance. The inability to obtain adequate financing from debt or capital sources could force us to self-fund strategic initiatives or even forego certain opportunities, which in turn could potentially harm our performance.

We may not be able to effectively recruit and retain skilled employees, particularly scientific, technical and management professionals.

Our ability to compete effectively depends largely on our ability to attract and retain certain key personnel, including scientific, technical and management professionals. We anticipate that we will need to hire additional skilled personnel in all areas of our business. Industry demand for such employees, however, exceeds the number of personnel available, and the competition for attracting and retaining these employees is intense. Because of this intense competition for skilled employees, we may be unable to retain our existing personnel or attract additional qualified employees to keep up with future business needs. If this should happen, our business, operating results and financial condition could be adversely affected.

Our labor costs are likely to increase as a result of changes in Chinese labor laws.

We expect to experience an increase in our cost of labor due to recent changes in Chinese labor laws which are likely to increase costs further and impose restrictions on our relationship with our employees. In June 2007, the National People’s Congress of the PRC enacted new labor law legislation called the Labor Contract Law and more strictly enforced existing labor laws. The new law, which became effective on January 1, 2008, amended and formalized workers’ rights concerning overtime hours, pensions, layoffs, employment contracts and the role of labor unions. As a result of the new law, we have had to increase the salaries of our employees, provide additional benefits to our employees, and revise certain other of our labor practices. The increase in labor costs has increased our operating costs, which increase we have not always been able to pass through to our customers. In addition, under the new law, employees who either have worked for us for 10 years or more or who have had two consecutive fixed-term contracts must be given an “open-ended employment contract” that, in effect, constitutes a lifetime, permanent contract, which is terminable only in the event the employee materially breaches our rules and regulations or is in serious dereliction of his or her duties. Such non-cancelable employment contracts will substantially increase our employment related risks and limit our ability to downsize our workforce in the event of an economic downturn. No assurance can be given that we will not in the future be subject to labor strikes or that we will not have to make other payments to resolve future labor issues caused by the new laws. Furthermore, there can be no assurance that the labor laws will not change further or that their interpretation and implementation will vary, which may have a negative effect upon our business and results of operations.

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Our business could be materially adversely affected if we cannot protect our intellectual property rights or if we infringe on the intellectual property rights of others.

Our ability to compete effectively will depend on our ability to maintain and protect our proprietary rights, including patents that we use in our business and our brand name. Third parties may seek to challenge, invalidate, circumvent or render unenforceable any proprietary rights owned by or licensed to us. Our inability to protect our proprietary rights could materially adversely affect the ability to sell our products. Litigation may be necessary to:

•

enforce our intellectual property rights;

•

protect our trade secrets; and

•

determine the scope and validity of such intellectual property rights.

Any such litigation, whether or not successful, could result in substantial costs and diversion of resources and management’s attention from the operation of our business.

We may receive notice of claims of infringement of other parties’ proprietary rights. Such actions could result in litigation and we could incur significant costs and diversion of resources in defending such claims. The party making such claims could secure a judgment awarding substantial damages, as well as injunctive or other equitable relief. Such relief could effectively block our ability to make, use, sell, distribute or market our products and services in certain jurisdictions. We may also be required to seek licenses to such intellectual property. We cannot predict, however, whether such licenses would be available or, if available, could be obtained on terms that are commercially reasonable and acceptable to us. The failure to obtain the necessary licenses or other rights could delay or preclude the sale, manufacture or distribution of our products and could result in increased costs to us.

We may pursue future growth through strategic acquisitions and alliances which may not yield anticipated benefits and may adversely affect our operating results, financial condition and existing business.

We may seek to grow in the future through strategic acquisitions in order to complement and expand our business. The success of our acquisition strategy will depend on, among other things:

the availability of suitable candidates;

competition from other companies for the purchase of available candidates;

our ability to value those candidates accurately and negotiate favorable terms for those acquisitions;

the availability of funds to finance acquisitions;

the ability to establish new informational, operational and financial systems to meet the needs of our business;

the ability to achieve anticipated synergies, including with respect to complementary products or services; and

the availability of management resources to oversee the integration and operation of the acquired businesses.

If we are not successful in integrating acquired businesses and completing acquisitions in the future, we may be required to reevaluate our acquisition strategy. We also may incur substantial expenses and devote significant management time and resources in seeking to complete acquisitions. Acquired businesses may fail to meet our performance expectations. If we do not achieve the anticipated benefits of an acquisition as rapidly as expected, or at all, investors or analysts may not perceive the same benefits of the acquisition as we do. If these risks materialize, our stock price could be materially adversely affected.

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RISKS RELATED TO US DOING BUSINESS IN CHINA

If the land use rights of our landlord are revoked, we would be forced to relocate operations, which could have an adverse affect on our financial condition and results of operations.

Under Chinese law land is owned by the state or rural collective economic organizations. The state issues to the land users a land use right certificate. Land use rights shall not be revoked before the expiration of the period thereof. However, under special circumstances, land use rights can be revoked and land users forced to vacate when redevelopment of the land is in the public interest, provided that corresponding compensation is given to the land users. The public interest rationale is interpreted quite broadly and the process of land appropriation may be less than transparent. With the exception of our property at Jingyi Road, we do not have any land use rights and our manufacturing facilities rely on land use rights of our landlord, and the loss of such rights would require us to identify and relocate new manufacturing and other facilities, which could be time consuming have a material adverse effect on our financial condition and results of operations.

Substantially all of our assets are located in the PRC and a substantial portion of our revenues are derived from our operations in China, and changes in the political and economic policies of the PRC government could have a significant impact upon the business we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.

Our business operations may be adversely affected by the current and future political environment in the PRC. The Chinese government exerts substantial influence and control over the manner in which we must conduct our business activities. Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, property and other matters. Under the current government leadership, the government of the PRC has been pursuing economic reform policies that encourage private economic activity and greater economic decentralization. There is no assurance, however, that the government of the PRC will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice.

Our operations are subject to PRC laws and regulations that are sometimes vague and uncertain. Any changes in such PRC laws and regulations, or the interpretations thereof, may have a material and adverse effect on our business.

The PRC’s legal system is a civil law system based on written statutes. Unlike the common law system prevalent in the United States, decided legal cases have little value as precedent in China. There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including but not limited to, governmental approvals required for conducting business and investments, laws and regulations governing the battery industry and battery product safety, national security-related laws and regulations, as well as commercial, antitrust, patent, product liability, environmental laws and regulations, consumer protection, and financial and business taxation laws and regulations.

The Chinese government has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters. However, because these laws and regulations are relatively new, and because of the limited volume of published cases and judicial interpretation and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties.

Our principal operating subsidiary, CCEC, is considered a foreign invested enterprise under PRC laws, and as a result is required to comply with PRC laws and regulations, including laws and regulations specifically governing the activities and conduct of foreign invested enterprises. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our businesses. If the relevant authorities find us in violation of PRC laws or regulations, they would deal with such a violation in accordance with PRC laws and regulations, including, without limitation:

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levying fines;

revoking our business license, or other licenses;

requiring that we restructure our operations; and

requiring that we discontinue any portion or all of our business.

Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.

Most of our current operations, including the manufacturing and distribution of our products, are conducted in China. Moreover, all of our directors and officers are nationals and residents of China. All or substantially all of the assets of these persons are located outside the United States and in the PRC. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon these persons. In addition, uncertainty exists as to whether the courts of China would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in China against us or such persons predicated upon the securities laws of the United States or any state thereof.

The scope of our business license in China is limited, and we may not expand or continue our business without government approval and renewal, respectively.

Our principal operating subsidiary, CCEC, is a wholly foreign-owned enterprise, commonly known as a WFOE. A WFOE can only conduct business within its approved business scope, which ultimately appears on its business license. Our license permits us to produce lighting appliances, glass products for daily use, sanitary glass bath equipment, valve regulated lead-acid batteries and to sell such products, and other than production and sales of valve regulated lead-acid batteries, we have not engaged in any other business activity since the date of CCEC’s incorporation. Any amendment to the scope of our business requires further application and government approval. In order for us to expand our business beyond the scope of our license, we will be required to enter into a negotiation with the PRC authorities for the approval to expand the scope of our business. We cannot assure investors that CCEC will be able to obtain the necessary government approval for any change or expansion of its business. If we are unable to obtain the approval from the government to amend our business license to include lithium-ion batteries, this could have a materially adverse effect on our business.

We are subject to a variety of environmental laws and regulations related to our manufacturing operations. Our failure to comply with environmental laws and regulations may have a material adverse effect on our business and results of operations.

We are subject to various environmental laws and regulations in China. We cannot assure you that at all times we will be in compliance with the environmental laws and regulations or that we will not be required to expend significant funds to comply with, or discharge liabilities arising under, environmental laws and regulations. Additionally, these regulations may change in a manner that could have a material adverse effect on our business, results of operations and financial condition. We have made and will continue to make capital and other expenditures to comply with environmental requirements.

Furthermore, our failure to comply with applicable environmental laws and regulations worldwide could harm our business and results of operations. The manufacturing, assembling and testing of our products require the use of hazardous materials that are subject to a broad array of environmental, health and safety laws and regulations. Our failure to comply with any of these applicable laws or regulations could result in:

regulatory penalties, fines and legal liabilities;

suspension of production;

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alteration of our fabrication, assembly and test processes; and

curtailment of our operations or sales.

In addition, our failure to manage the use, transportation, emission, discharge, storage, recycling or disposal of hazardous materials could subject us to increased costs or future liabilities. Existing and future environmental laws and regulations could also require us to acquire pollution abatement or remediation equipment, modify our product designs or incur other expenses associated with such laws and regulations. Many new materials that we are evaluating for use in our operations may be subject to regulation under existing or future environmental laws and regulations that may restrict our use of one or more of such materials in our manufacturing, assembly and test processes or products. Any of these restrictions could harm our business and results of operations by increasing our expenses or requiring us to alter our manufacturing processes.

Contract drafting, interpretation and enforcement in China involve significant uncertainty.

We have entered into numerous contracts governed by PRC law, which are material to our business. As compared with contracts in the United States, contracts governed by PRC law tend to contain less detail and are not as comprehensive in defining contracting parties’ rights and obligations. As a result, contracts in China are more vulnerable to disputes and legal challenges. In addition, contract interpretation and enforcement in China is not as developed as in the United States, and the result of any contract dispute is subject to significant uncertainties. Therefore, we cannot assure you that we will not be subject to disputes under our material contracts, and if such disputes arise, we cannot assure you that we will prevail.

We could be liable for damages for defects in our products pursuant to the Tort Liability Law of the PRC.

The Tort Liability Law of the People’s Republic of China, which was passed during the 12th Session of the Standing Committee of the 11th National People’s Congress on December 26, 2009, states that manufacturers are liable for damages caused by defects in their products and sellers are liable for damages attributable to their fault. If the defects are caused by the fault of third parties such as the transporter or storekeeper, manufacturers and sellers are entitled to claim for compensation from these third parties after paying the compensation amount.

Recent PRC regulations relating to acquisitions of PRC companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate. Our failure to obtain the prior approval of the China Securities Regulatory Commission, or the CSRC, for this offering and the listing and trading of our common stock could have a material adverse effect on our business, operating results, reputation and trading price of our common stock.

The PRC State Administration of Foreign Exchange, or “SAFE” issued a public notice effective as of November 1, 2005 known as Circular 75, concerning the use of offshore holding companies in mergers and acquisitions in China. The public notice provides that if an offshore company controlled by PRC residents intends to acquire a PRC company, such acquisition will be subject to registration with the relevant foreign exchange authorities. The public notice also suggests that registration with the relevant foreign exchange authorities is required for any sale or transfer by the PRC residents of shares in an offshore holding company that owns an onshore company. The PRC residents must each submit a registration form to the local SAFE branch with respect to their ownership interests in the offshore company, and must also file an amendment to such registration if the offshore company experiences material events, such as changes in the share capital, share transfer, mergers and acquisitions, spin-off transactions or use of assets in China to guarantee offshore obligations. If any PRC resident stockholder of an offshore holding company fails to make the required SAFE registration and amended registration, the onshore PRC subsidiaries of that offshore company may be prohibited from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the offshore entity. Failure to comply with the SAFE registration and amendment requirements described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.

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We cannot provide any assurances that our stockholders who are resident in the PRC 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, CCEC’s ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with the SAFE notice by our PRC resident beneficial holders.

In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 75. We also have little control over either our present or prospective direct or indirect stockholders or the outcome of such registration procedures. Failure by our PRC resident beneficial holders could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit CCEC’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

On August 8, 2006, the PRC Ministry of Commerce (“MOFCOM”), joined by the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission (“CSRC”) and SAFE, released a substantially amended version of the Provisions for Foreign Investors to Merge with or Acquire Domestic Enterprises (the “Revised M&A Regulations”), which took effect September 8, 2006. These new rules significantly revised China’s regulatory framework governing onshore-to-offshore restructurings and foreign acquisitions of domestic enterprises. These new rules signify greater PRC government attention to cross-border merger, acquisition and other investment activities, by confirming MOFCOM as a key regulator for issues related to mergers and acquisitions in China and requiring MOFCOM approval of a broad range of merger, acquisition and investment transactions. Further, the new rules establish reporting requirements for acquisition of control by foreigners of companies in key industries, and reinforce the ability of the Chinese government to monitor and prohibit foreign control transactions in key industries.

Among other things, the revised M&A Regulations include new provisions that purport to require that an offshore special purpose vehicle, or SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals must obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings. However, the application of this PRC regulation remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement.

If the CSRC or another PRC regulatory agency subsequently determines that CSRC approval was required, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our proposed public offering into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our common stock. The CSRC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt our proposed public offering before settlement and delivery of the common stock offered thereby. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur.

Also, if later the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect on the trading price of our common stock.

It is uncertain how our business operations or future strategy will be affected by the interpretations and implementation of Circular 75 and the Revised M&A Regulations. It is anticipated that application of the new rules will be subject to significant administrative interpretation, and we will need to closely monitor how MOFCOM and other ministries apply the rules to ensure that our domestic and offshore activities continue to comply with PRC law. Given the uncertainties regarding interpretation and application of the new rules, we may need to expend significant time and resources to maintain compliance.

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We face uncertainty from China’s Circular on Strengthening the Administration of Enterprise Income Tax on Non-Resident Enterprises’ Share Transfer (“Circular 698”) that was released in December 2009 with retroactive effect from January 1, 2008.

The Chinese State Administration of Taxation (“SAT”) released a circular (Guoshuihan No. 698 – Circular 698) on December 10, 2009 that addresses the transfer of shares by nonresident companies. Circular 698, which is 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 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 execution of the transfer contract. 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.

The foreign currency exchange rate between the U.S. Dollar and Renminbi could adversely affect our financial condition.

To the extent that we need to convert U.S. Dollars into Renminbi for our operational needs, our financial position and the price of our common stock may be adversely affected should the Renminbi appreciate against the U.S. Dollar at that time. Conversely, if we decide to convert our Renminbi into U.S. Dollars for our operational needs or paying dividends on our common stock, the dollar equivalent of our earnings from our subsidiaries in China would be reduced should the dollar appreciate against the Renminbi. We currently do not hedge our exposure to fluctuations in currency exchange rates.

Until 1994, the Renminbi experienced a gradual but significant devaluation against most major currencies, including dollars, and there was a significant devaluation of the Renminbi on January 1, 1994 in connection with the replacement of the dual exchange rate system with a unified managed floating rate foreign exchange system. Since 1994, the value of the Renminbi relative to the U.S. Dollar has remained stable and has appreciated slightly against the U.S. Dollar. Countries, including the United States, have argued that the Renminbi is artificially undervalued due to China’s current monetary policies and have pressured China to allow the Renminbi to float freely in world markets. In July 2005, the PRC government changed its policy of pegging the value of the Renminbi to the dollar. Under the new policy the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of designated foreign currencies. While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in further and more significant appreciation of the Renminbi against the dollar.

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Inflation in the PRC could negatively affect our profitability and growth.

While the PRC economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. According to the National Bureau of Statistics of China, the change in China’s Consumer Price Index increased to 8.5% in April 2008. If prices for our products and services rise at a rate that is insufficient to compensate for the rise in the costs of supplies such as raw materials, it may have an adverse effect on our profitability.

Furthermore, in order to control inflation in the past, the PRC government has imposed controls on bank credits, limits on loans for fixed assets and restrictions on state bank lending. In January 2010, the Chinese government took steps to tighten the availability of credit including ordering banks to increase the amount of reserves they hold and to reduce or limit their lending. The implementation of such policies may impede economic growth. In October 2004, The People’s Bank of China, the PRC’s central bank, raised interest rates for the first time in nearly a decade and indicated in a statement that the measure was prompted by inflationary concerns in the Chinese economy. In April 2006, the People’s Bank of China raised the interest rate again. Repeated rises in interest rates by the central bank would likely slow economic activity in China which could, in turn, materially increase our costs and also reduce demand for our products and services.

Because our funds are held in banks which do not provide insurance, the failure of any bank in which we deposit our funds could affect our ability to continue in business.

Banks and other financial institutions in the PRC do not provide insurance for funds held on deposit. A significant portion of our assets are in the form of cash deposited with banks in the PRC, including, without limitation, our restricted bank balances which secure certain notes payable and bill financing and in the event of a bank failure, we may not have access to our funds on deposit. Depending upon the amount of money we maintain in a bank that fails, our inability to have access to our cash could impair our operations, and, if we are not able to access funds to pay our suppliers, employees and other creditors, we may be unable to continue in business.

Failure to comply with the United States Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.

As our ultimate holding company is a Nevada corporation, we are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including some that may compete with us, are not subject to these prohibitions. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices may occur from time-to-time in the PRC. We can make no assurance, however, that our employees or other agents will not engage in such conduct for which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

If we make equity compensation grants to persons who are PRC citizens, they may be required to register with the State Administration of Foreign Exchange of the PRC, or SAFE. We may also face regulatory uncertainties that could restrict our ability to adopt an equity compensation plan for our directors and employees and other parties under PRC law.

On April 6, 2007, SAFE issued the “Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Ownership Plan or Stock Option Plan of An Overseas Listed Company, also known as “Circular 78.” It is not clear whether Circular 78 covers all forms of equity compensation plans or only those which provide for the granting of stock options. For any plans which are so covered and are adopted by a non-PRC listed company after April 6, 2007, Circular 78 requires all participants who are PRC citizens to register with and obtain approvals from SAFE prior to their participation in the plan. In addition, Circular 78 also requires PRC citizens to register with SAFE and make the necessary applications and filings if they participated in an overseas listed company’s covered equity compensation plan prior to April 6, 2007. We intend to adopt an equity compensation plan in the future and make option grants to our officers and directors, most of whom are PRC citizens. Circular 78 may require our officers and directors who receive option grants and are PRC citizens to register with SAFE. We believe that the registration and approval requirements contemplated in Circular 78 will be burdensome and time consuming. If it is determined that any of our equity compensation plans are subject to Circular 78, failure to comply with such provisions may subject us and participants of our equity incentive plan who are PRC citizens to fines and legal sanctions and prevent us from being able to grant equity compensation to our PRC employees. In that case, our ability to compensate our employees and directors through equity compensation would be hindered and our business operations may be adversely affected.

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Our operating subsidiary, CCEC, has enjoyed certain preferential tax concessions and the loss of these preferential tax concessions may cause our tax liabilities to increase and our profitability to decline.

Under the tax laws of the PRC, CCEC has had tax advantages granted by local government for enterprise income taxes commencing from 2006. CCEC has been entitled to be exempt from enterprise income tax for two years commencing from the first profitable year in 2006, followed by a 50% reduction for the next 3 years. On March 16, 2007, the National People’s Congress of China enacted a new PRC Enterprise Income Tax Law, under which foreign invested enterprises and domestic companies will be subject to enterprise income tax at a uniform rate of 25%. The new law became effective on January 1, 2008. CCEC’s income tax rate for the fiscal years ended December 31, 2008 and 2009 was 12.5%, and CCEC’s income tax rate for the current fiscal year ending December 31, 2010 is 12.5%. However, commencing on January 1, 2011, the income tax rate will increase to 25%. The expiration of the preferential tax treatment will increase our tax liabilities and reduce our profitability.

Under the New Enterprise Income Tax Law, we and Fast More may be classified as “resident enterprises” of China for tax purposes, which may subject us and Fast More to PRC income tax on taxable global income.

Under the new PRC Enterprise Income Tax Law (the “New EIT Law”) and its implementing rules, both of which became effective on January 1, 2008. Under the New EIT Law, enterprises are classified as resident enterprises and non-resident enterprises. An enterprise established outside of China with its “de facto management bodies” located within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese domestic enterprise for enterprise income tax purposes. The implementing rules of the New EIT Law define de facto management body as a managing body that in practice exercises “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. Due to the short history of the New EIT law and lack of applicable legal precedents, it remains unclear how the PRC tax authorities will determine the PRC tax resident treatment of a foreign company such as us and Fast More. Both our and Fast More’s members of management are located in China. If the PRC tax authorities determine that we or Fast More is a “resident enterprise” for PRC enterprise income tax purposes, a number of PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income, including interest income on the proceeds from this offering, as well as PRC enterprise income tax reporting obligations. Second, the New EIT Law provides that dividend paid between “qualified resident enterprises” is exempted from enterprise income tax. A recent circular issued by the State Administration of Taxation regarding the standards used to classify certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese group enterprises and established outside of China as “resident enterprises” clarified that dividends and other income paid by such “resident enterprises” will be considered to be PRC source income, subject to PRC withholding tax, currently at a rate of 10%, when recognized by non-PRC shareholders. It is unclear whether the dividends that we or Fast More receives from CCEC will constitute dividends between “qualified resident enterprises” and would therefore qualify for tax exemption, because the definition of qualified resident enterprises is unclear and the relevant PRC government authorities have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. We are actively monitoring the possibility of “resident enterprise” treatment for the applicable tax years and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible. As a result of the New EIT Law, our historical operating results will not be indicative of our operating results for future periods and the value of our common stock may be adversely affected.

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Downturn in the economy of the PRC may slow our growth and profitability.

All of our revenues are generated from sales in China. The growth of the Chinese economy has been uneven across geographic regions and economic sectors, in large part due to the recent downturn in the global economy, which resulted in slow growth of the China economy. While the Chinese economy has recently begun to show signs of improvement, there can be no assurance that growth of the Chinese economy will be steady or that there will not be further deterioration in the global economy as a whole or the Chinese economy in particular. If economic conditions deteriorate further, our business and results of operations could be materially and adversely affected, especially if such conditions result in a decreased use of our products or in pressure on us to lower our prices.

Because our business is located in the PRC, we currently lack sufficient in-house expertise in U.S. GAAP reporting and we may have difficulty establishing adequate management, legal and financial controls, which we are required to do in order to comply with U.S. GAAP and securities laws, and which could cause a materially adverse impact on our financial statements, the trading of our common stock and our business.

PRC companies have historically not adopted a Western style of management and financial reporting concepts and practices, which includes strong corporate governance, internal controls and, computer, financial and other control systems. Currently, we do not have sufficient in-house expertise in U.S. GAAP reporting. Instead, we rely on the expertise and knowledge of external consultants and advisors in U.S. GAAP conversion. These external consultants assist us in the preparation and review of our consolidated financial statements. In fact, most of our middle and top management staff are not educated and trained in the Western system, and we may continue to have difficulty hiring and retaining qualified employees in the PRC with experience and expertise relating to U.S. GAAP and U.S. public-company reporting requirements. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards. Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002. This may result in significant deficiencies or material weaknesses in our internal controls which could impact the reliability of our financial statements and prevent us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002. Any such deficiencies, material weaknesses or lack of compliance could result in restatements of our historical financial information, cause investors to lose confidence in our reported financial information, have an adverse impact on the trading price of our common stock, adversely affect our ability to access the capital markets and our ability to recruit personnel, lead to the delisting of our securities from the stock exchange on which they are traded, lead to litigation claims, thereby diverting management’s attention and resources, and which may lead to the payment of damages to the extent such claims are not resolved in our favor, lead to regulatory proceedings, which may result in sanctions, monetary or otherwise, and have a materially adverse effect on our reputation and business.

RISKS RELATED TO YOUR OWNERSHIP OF OUR COMMON STOCK AND THIS OFFERING

There is a limited trading market for our common stock, and there is no assurance of an established public trading market upon the completion of the offering which would adversely affect the ability of our investors to sell their securities in the public market.

Our shares of common stock are currently quoted for trading on the OTCQB under the symbol “CIEC” and we have commenced the application process for the listing of our common stock on the NYSE Amex under the symbol “CIEC”. There currently is a limited trading market for our common stock on the OTCQB and there is no guarantee that the NYSE Amex, or any other national securities exchange or quotation system, will permit our shares to be listed and traded. If we fail to obtain a listing on the NYSE Amex, we may not complete this offering. Even if such listing is approved, there can be no assurance that any broker will be interested in trading our stock. Furthermore, our underwriter, Newbridge Securities Corporation, is not obligated to make a market and has indicated that it will not make a market in our securities.

The market price and trading volume of shares of our common stock may be volatile.

When and if a market develops for our securities, the market price of our common stock could fluctuate significantly for many reasons, including for reasons unrelated to our specific performance, such as reports by industry analysts, investor perceptions, or negative announcements by customers, competitors or suppliers regarding their own performance, as well as general economic and industry conditions. For example, to the extent that other large companies within our industry experience declines in their share price, our share price may decline as well. In addition, when the market price of a company’s shares drops significantly, shareholders could institute securities class action lawsuits against the company. A lawsuit against us could cause us to incur substantial costs and could divert the time and attention of our management and other resources.

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If you purchase securities in this offering, you will suffer immediate dilution of your investment.

Assuming our sale of shares of common stock at an assumed public offering price of US$ per share of common stock, which is the mid-point of the estimated initial offering price range set forth on the cover of this prospectus, and after deducting the underwriting discount and commissions and estimated offering expenses, our as-adjusted net tangible book value as of December 31, 2010 (unaudited) would be approximately US$ , or US$ per share of common stock outstanding. The sale of shares of common stock in this offering represents an immediate increase in net tangible book value of US$ per share of common stock to our existing stockholders and an immediate dilution of US$ per share of common stock to the new investors purchasing common stock in this offering. In addition, purchasers of common stock in this offering will have contributed approximately % of the aggregate price paid by all owners of our common stock but will own only approximately % of our common stock outstanding after this offering.

One of our Stockholders, Which is 100% Controlled By our President, Chief Executive Officer and Chairman of the Board, Exercises Significant Control Over Matters Requiring Stockholder Approval.

One of our stockholders (Cheer Gold) has voting power equal to 65.8% of our voting securities. Moreover, such stockholder is 100% controlled by Xu Kecheng, our President, Chief Executive Officer and Chairman of the Board. As a result, Xu Kecheng, through such stock ownership, can exercise control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership in Cheer Gold may also have the effect of delaying or preventing a change in control of us that may be otherwise viewed as beneficial by our other stockholders.

With the exception of our Chairman/CEO, Xu Kecheng, the members of our senior management do not directly or indirectly own shares of Common Stock and thus their interests may not be aligned with the interests of the Company's stockholders, which could be a detriment to the Company's stockholders.

While the members of our senior management have significant influence over our business, including decisions regarding operations, pursuing mergers and acquisitions, the disposition of the Company's assets, and other significant corporate actions, none of them, with the exception of Xu Kecheng, directly or indirectly own shares of Common Stock. Since they are not personally exposed to the same risk of investment loss with respect to ownership of Common Stock that the Company's shareholders face, these individuals may not share a common perspective with our shareholders regarding the benefits (or detriments) of contemplated corporate actions and they may not analyze potential corporate actions and opportunities in the same manner that they would if they were shareholders. To the extent that the Company's senior management may lack "shareholder perspective" in its decision making process, management may make decisions that ultimately do not benefit the Company's shareholders.

Our management may not use the proceeds from this offering effectively which could have a material adverse effect on our business.

We intend to use the net proceeds from this offering to construct a new production plant in Changxing County (Zhejiang Province) for the development and production of a new product, lithium-ion batteries. Our management will have discretion in the application of the net proceeds for such construction and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our securities. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business and cause the price of our securities to decline. For a further description of our intended use of the proceeds of this offering, see the “Use of Proceeds” section of this prospectus.

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If we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.

We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds. Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting, and the standards that must be met for management to assess the internal control over financial reporting as effective are new and complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. If we cannot assess our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.

In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of our internal controls over financial reporting, or disclosure of our public accounting firm’s report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.

Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses and will divert time and attention away from revenue generating activities.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. For example, on January 30, 2009, the SEC adopted rules requiring companies to provide their financial statements in interactive data format using the eXtensible Business Reporting Language, or XBRL. We will have to comply with these rules by June 15, 2011. Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities which could have an adverse effect on our business.

Our common stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.

Our common stock, which currently trades on the OTCQB, may be considered to be a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Securities Exchange Act for 1934, as amended (the “Exchange Act”). Our common stock may be a “penny stock” if it meets one or more of the following conditions (i) the stock trades at a price less than US$5.00 per share; (ii) it is NOT traded on a “recognized” national exchange; (iii) it is NOT quoted on the NYSE Amex, or even if so, has a price less than US$5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than US$5 million.

The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

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If securities or industry analysts do not publish research or reports or publish unfavorable research about our business, the price and trading volume of our common stock could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of us the trading price for our common stock and other securities would be negatively affected. In the event we obtain securities or industry analyst coverage, if one or more of the analysts who covers us downgrades our securities, the price of our securities would likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline.

We do not foresee paying cash dividends in the foreseeable future and, as a result, our investors’ sole source of gain, if any, will depend on capital appreciation, if any.

We do not plan to declare or pay any cash dividends on our shares of common stock in the foreseeable future and currently intend to retain any future earnings for funding growth. As a result, investors should not rely on an investment in our securities if they require the investment to produce dividend income. Capital appreciation, if any, of our shares may be investors’ sole source of gain for the foreseeable future. Moreover, investors may not be able to resell their shares of our common stock at or above the price they paid for them.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The information contained in this prospectus, including in the documents incorporated by reference into this prospectus, includes some statements that are not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our company’s and our management’s expectations, hopes, beliefs, intentions or strategies regarding the future, including our financial condition, results of operations. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this prospectus are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction. There can be no assurance that future developments actually affecting us will be those anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the parties’ control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, statements regarding future developments with respect to the following:

The ability to collect future trade receivables which may be due to us by our factory customers and distributors;

Our ability to develop and market our lithium-ion, electric motive power batteries, power storage batteries dedicated for solar and wind power and other future products in the future;

Our ability to raise additional capital to fund our expansion to produce lithium-ion batteries and other future products;

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Our ability to accurately forecast amounts of lead, lead plates and other raw materials needed to meet future customer demand of our existing products and future products;

Any developments in the market acceptance of our existing or future products;

Exposure to product liability and defect claims with respect to our battery products in the future;

Future developments regarding fluctuations in the availability of lead, lead plates and other raw materials and components needed for our products;

Future developments with respect to the protection of our trademarks, patents, domain names and other intellectual property rights;

Any changes in the laws of the PRC that may affect our operations;

Inflation and fluctuations in foreign currency exchange rates;

Our on-going ability to obtain all mandatory and voluntary government and other industry certifications, approvals, and/or licenses to conduct our business;

Continued development of a public trading market for our securities; and

The costs we may incur in the future from complying with current and future governmental regulations and the impact of any changes in the regulations on our operations.

The risks included above are not exhaustive. Other sections of this prospectus may include additional factors that could adversely impact our business and operating results. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assume responsibility for the accuracy and completeness of the forward-looking statements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

You should read this prospectus, and the documents that we reference in this prospectus and have filed as exhibits to this prospectus with the U.S. Securities and Exchange Commission, completely and with the understanding that our actual future results, levels of activity, performance and achievements may materially differ from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

USE OF PROCEEDS

Based on a per share offering price of US$ , which is the midpoint of our estimated offering price range, we estimate that the net proceeds from the sale of the shares of our common stock in the offering will be approximately US$5 million after deducting the estimated underwriting discounts and commissions of 8% and estimated offering expenses of approximately US$ .

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To be in line with the global trend of the development of lithium-ion batteries and to obtain a competitive advantage over our competitors in China, we intend to use 100% of the net proceeds from this offering, including over-allotment proceeds, if any, to construct a production plant on Jingsi Road in Changxing County (Zhejiang Province) for the development and production of one of our future products, the lithium-ion battery. Total investment costs at Jingsi Road will be approximately RMB300,000,000 (US$44,116,000), in which we estimate the total construction costs of such facility to be approximately RMB126,600,000 (US$19,214,000). Our target market is manufacturers of electric bicycles in China, and we estimate that our lithium-ion batteries will be launched and distributed into the marketplace within two years from the date of this prospectus. Until these products are formally launched and distributed into the marketplace, their effects on our business are uncertain (see “Description of Business – Our Products – Future Products” at pages 75 and 76).

The Underwriter has a 45-day option to purchase up to additional shares of our common stock at the public offering price solely to cover over-allotments, if any, if the Underwriter sells more than shares of common stock in this offering.

DIVIDEND POLICY

We do not expect to declare or pay any cash dividends on our common stock in the foreseeable future, and we currently intend to retain future earnings, if any, to finance the expansion of our business. The decision whether to pay cash dividends on our common stock will be made by our board of directors, in its discretion, and will depend on our financial condition, operating results, capital requirements and other factors that the board of directors considers significant. With the exception of a dividend payment made by CCEC to its immediate holding company, Fast More, on October 16, 2010 of RMB70,000,000 (US$10,530,000) which Fast More reinvested back into CCEC in accordance with PRC regulations regarding the ratio of investment amount and registered capital of WFOEs, we did not pay cash dividends during the nine months ended December 31, 2010 or for the years ended March 31, 2010, 2009 and 2008.

Under applicable PRC regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, a foreign-invested enterprise in China is required to set aside at least 10.0% of its after-tax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reaches 50% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a foreign-invested enterprise has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.

Furthermore, the ability of our Chinese operating subsidiaries to pay dividends may be restricted due to the foreign exchange control policies and availability of cash balance of the Chinese operating subsidiaries. Because substantially all of our operations are conducted in the PRC and a substantial majority of our revenues are generated in the PRC, a majority of our revenue being earned and currency received are denominated in RMB. RMB is subject to the exchange control regulation in the PRC, and, as a result, we may unable to distribute any dividends outside of the PRC due to PRC exchange control regulations that restrict our ability to convert RMB into US Dollars.

Our inability to receive dividends or other payments from our Chinese operating subsidiary could adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. CCEC’s funds may not be readily available to us to satisfy obligations which have been incurred outside the PRC, which could adversely affect our business and prospects or our ability to meet our cash obligations. Accordingly, if we do not receive dividends from our Chinese operating subsidiary, our liquidity, financial condition and ability to make dividend distributions to our stockholders will be materially and adversely affected.

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CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2010 (unaudited) on:

an actual basis , and

an as adjusted to give effect to reflect our receipt of estimated net proceeds of US$5 million from the sale of shares of common stock in this offering at an assumed public offering price of US$ , which is the mid-point of the estimated range of the per share offering price, and after deducting estimated underwriting discounts of 8% and commissions and estimated offering expenses of approximately US$ million.

You should read this table in conjunction with “Use of Proceeds,” “Summary Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	December 31, 2010
	Actual		As-Adjusted
	US$’000		US$’000
Stockholders’ equity:
Preferred stock, US$0.001 par value, 10,000,000 shares authorized, none issued and outstanding		-		-
Common stock, US$0.001 par value, 100,000,000 shares authorized, 50,000,000 shares issued and outstanding on an actual basis, and issued and outstanding on an as-adjusted basis (1)		50
Additional paid-in capital		-
Accumulated other comprehensive income		2,169
Statutory reserves		3,430
Capital reserves		144
Retained earnings (unrestricted)		33,085
Total shareholders’ equity		38,878
Non-Controlling interest		88
Total capitalization		38,966

(1)

The number of our shares of common stock shown above to be outstanding after this offering is based on (i) 50,000,000 shares of common stock issued and outstanding as of December 31, 2010 and (ii) shares of common stock issued in this public offering. The number (i) excludes the shares of our common stock that we may issue upon the Underwriters’ over-allotment option exercise and (ii) excludes the shares of common stock that will be issued upon the exercise of outstanding warrants exercisable at US$ per share.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market for Common Equity

Prior to the Exchange, the Company’s common stock traded on the OTCBB under the symbol “WTRY” from October 15, 2007 to April 29, 2009 and subsequent to the Exchange, our common stock has traded on the OTCBB and then recently on the OTCQB under the symbol “CIEC”. There has been an extremely limited public market for our common stock. We have commenced the application process for the listing of our common stock on the NYSE Amex.

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When the trading price of our common stock is below US$5.00 per share, it may be considered to be a “penny stock” that may be subject to rules promulgated by the SEC (Rule 15-1 through 15g-9) under the Exchange Act. These rules impose significant requirements on brokers under these circumstances, including: (a) delivering to customers the SEC’s standardized risk disclosure document; (b) providing customers with current bid and ask prices; (c) disclosing to customers the brokers-dealer’s and sales representatives compensation; and (d) providing to customers monthly account statements. See “Risk Factors – Risks Related To Our Ownership Of Our Common Stock And This Offering – Our Common Stock May Be Considered “Penny Stock”, And Thereby Be Subject To Additional Sale And Trading Regulations That May Make It More Difficult To Sell”.

The following table sets forth on a per share basis for the periods shown, the high and low closing bid prices of the Company’s common stock. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Closing Bid Prices	High (US$)		Low (US$)

Calendar Year Ending December 31, 2010

4 th Quarter		5.30		4.51

3 rd Quarter		5.50		5.10

2 nd Quarter		6.45		6.10

1 st Quarter		7.75		6.24

Calendar Year Ended December 31, 2009

4 th Quarter		7.51		4.10

3 rd Quarter		4.15		1.50

2 nd Quarter		4.00		1.50

1 st Quarter		1.70		0.93

Calendar Year Ended December 31, 2008

4 th Quarter		3.30		1.05

4 th Quarter (prior to 3 for 1 split)		0.10		0.10

3 rd Quarter:		0.10		0.10

2 nd Quarter:		0.10		0.10

1 st Quarter:		0.10		0.10

The high and low bid quotations for our common stock prior to December 31, 2010 were US$7.75 and US$0.10, respectively. The market quotations represent prices between dealers, do not include retail markup, markdown, or commissions and may not represent actual transactions.

Holders of Common Equity

As of March 9, 2011, we have issued Fifty Million (50,000,000) shares of our common stock to approximately 76 holders of record. The Company believes that it has more stockholders since many of its shares are held in "street" name. See also “Beneficial Ownership of Certain Beneficial Owners and Management” which sets forth each person known by us to be the beneficial owner of five (5%) percent or more of the Company’s common stock, all directors individually and all directors and officers as a group as of March 9, 2011.

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Securities Authorized for Issuance under Equity Compensation Plans

As of the date hereof, we have no compensation plans (including individual compensation arrangements) under which the Company’s equity securities are authorized for issuance.

Transfer Agent and Registrar

Interwest Transfer Company, Inc., 1981 East Murray Holladay Road, Suite 100, P.O. Box 17136, Salt Lake City, Utah 84117, telephone (801) 272-9294, facsimile (801) 277-3147, currently serves as our transfer agent and registrar.

DILUTION

If you invest in our shares of common stock, you will incur immediate, substantial dilution based on the difference between the public offering price per share you will pay in this offering and the net tangible book value per share of common stock immediately after this offering.

Our net tangible book value as of December 31, 2010 (unaudited) was approximately US$38,966,000 or US$0.78 per share, based on 50,000,000 shares of common stock outstanding on December 31, 2010. Based on the mid-range point of the per share offering price of US$ , investors will incur further dilution from the sale by us of shares of our common stock offered in this offering, and after deducting the estimated underwriting discount and commissions of 8% and estimated offering expenses of US$ , our as adjusted net tangible book value as of December 31, 2010 would have been US$ , or US$ per share, based on shares outstanding after this offering. This represents an immediate increase in net tangible book value of US$ per share to our existing stockholders and an immediate dilution of US$ per share to the new investors purchasing shares of our common stock in this offering.

The following table illustrates this per share dilution:

Assumed public offering price per share (mid-range price)			$
Per share net tangible book value per share as of December 31, 2010	$	0.78
Increase per share attributable to new public investors	$

Net tangible book value per share after this offering			$

Dilution per share to new public investors			$

The following table sets forth on an as adjusted basis as of December 31, 2010, the difference between the number of shares of our common stock purchased from us, the total cash consideration paid, the average price per share paid by our existing shareholders and the average price to be paid by new investors in this public offering before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, using an assumed public offering price of US$ per share of common stock. The shares outstanding as of December 31, 2010 on an actual basis includes:

Shares Purchased

Total Cash Consideration

Number

Percent

Amount

Percent

Average Price

Per Share

Shares issued to Floster pursuant to the Exchange

Shares issued to Cheer Gold pursuant to the Exchange

New investors in this offering

Total

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The total consideration amount for shares of our common stock held by our existing stockholders includes total cash paid for our outstanding shares of common stock, including imputed interest allocated for interest free loans that we have received from related parties, as of December 31, 2010 and excludes the value of securities that we have issued for services.

The existing shareholders which consist of Cheer Gold and Floster, both of which acquired our shares in connection with the Exchange, will account for shares of our common stock, or % of our outstanding shares after this offering. If the Underwriter’s over-allotment option of shares of common stock is exercised in full, the percentage of shares held by existing stockholders will be reduced to % of the total number of shares that will be outstanding after this offering, and the percentage of shares held by the new investors in this offering will be increased to % of the total number of shares of common stock outstanding after this offering.

The number of our shares outstanding after this offering as shown above excludes shares of our common stock that we may issue upon the Underwriter’s over-allotment option exercise. We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

SELECTED CONSOLIDATED FINANCIAL DATA

	Nine months ended December 31,				Fiscal year ended March 31,
	2010		2009		2010		2009
	US$'000		US$'000		US$'000		US$'000

Revenues		194,712		127,104		177,192		109,020
Cost of sales		170,460		107,764		153,708		88,945
Gross profit		24,252		19,340		23,484		20,075
Sales, marketing and distribution		8,111		6,630		8,696		5,459
General and administrative expenses		2,628		2,236		3,647		3,763
Operating profit		13,513		10,474		11,141		10,853
Other income, net		889		1,189		1,671		758
Loss on disposal of scrap inventories		2,307		-		-		-
Interest income		315		56		343		362
Incomes before interest and income tax expenses		12,410		11,719		13,155		11,973
Interest expenses		2,231		1,147		2,068		1,232
Income before income tax expenses		10,179		10,572		11,087		10,741
Income tax expenses		2,421		1,439		1,587		1,861
Income before extraordinary item		7,758		9,133		-		-
Extraordinary item (less applicable income taxes of US$0)		1,738		-		-		-
Net income		9,496		9,133		9,500		8,880
Other comprehensive income		1,115		24		106		278
Comprehensive income		10,611		9,157		9,606		9,158
Earnings per share before extraordinary item (basic and diluted)		0.16		0.18		0.19		0.22
Earnings per share after extraordinary item (basic and diluted)		0.19		0.18		0.19		0.22

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	Period ended December 31,		Fiscal year ended March 31,
	2010		2010		2009
	US$'000		US$'000		US$'000
Current Assets
Cash and cash equivalents		6,237		6,019		2,620
Restricted bank balances		26,468		21,420		13,878
Other financial assets		5,950		7,438		1,314
Trade receivables, net		69,811		50,440		35,023
Other receivables		8,791		800		842
Prepayments		7,120		4,933		862
Due from related parties		4		8		474
Inventories		26,502		30,038		17,135
Assets classified as held for sale		2,558		-		-
Total Current Assets		153,441		121,096		72,148

Non-Current Assets
Available-for-sale financial assets		2,735		882		878
Long-term land lease prepayments, net		150		749		608
Property, plant and equipment, net		10,945		10,474		5,315
Deposit for acquisition of land and buildings		798		-		-
Total Assets		168,069		133,201		78,949

Current Liabilities
Trade payables		15,118		14,923		11,176
Notes payable		49,155		35,504		23,343
Accrued expenses and other accrued liabilities		6,294		5,087		3,769
Due to related parties		5,004		2,532		639
Income taxes payable		1,111		148		264
Short-term bank borrowings		50,969		46,141		20,451
Liabilities directly associated with assets classified as held for sale		886		-		-
Total Current Liabilities		128,537		104,335		59,642

Non-Current Liabilities
Government subsidies		106		139		186
Deferred tax liabilities		460		460		460
Total Non-Current Liabilities		566		599		646

Total Liabilities		129,103		104,934		60,288

Shareholders’ Equity		50		50		50
Capital reserves		144		144		144
Statutory reserves		3,430		2,239		1,103
Accumulated other comprehensive income		2,169		1,054		948
Retained earnings		33,085		24,780		16,416
Total CIEC Shareholders’ Equity		38,878		28,267		18,661

Non-controlling interests		88		-		-

Total stockholders’ equity		38,966		28,267		18,661
Total Liabilities and Shareholders’ Equity		168,069		133,201		78,949

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and the other financial information included in this prospectus.

This prospectus contains forward-looking statements. The words “anticipated,” “believe,” “expect, “plan,” “intend,” “seek,” “estimate,” “project,” “could,” “may” and similar expressions are intended to identify forward-looking statements. These statements include, among others, information regarding future operations, future capital expenditures, and future net cash flow. Such statements reflect our management’s current views with respect to future events and financial performance and involve risks and uncertainties, including, without limitation, the current economic downturn adversely affecting demand for the our products; our reliance on our major customers for a large portion of our net sales; our ability to develop and market new products; our ability to raise additional capital to fund our operations; our ability to accurately forecast amounts of supplies needed to meet customer demand; market acceptance of our products; exposure to product liability and defect claims; fluctuations in the availability of raw materials and components needed for our products; protection of our intellectual property rights; changes in the laws of the PRC that affect our operations; inflation and fluctuations in foreign currency rates and various other matters, many of which are beyond our control. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove to be incorrect, actual results may vary materially and adversely from those anticipated, believed, estimated or otherwise indicated. Consequently, all of the forward-looking statements made in this prospectus are qualified by these cautionary statements and there can be no assurance of the actual results or developments.

Company Overview and Plan of Development

We are one of the leading producers of sealed lead-acid motive batteries in China's personal transportation device market by ranking as one of the top three manufacturers in China in terms of production. Our motive battery products, sold under our own brand name “Chisen”, are predominantly used in electric bicycles and are distributed and sold in China. Among all types of batteries for electric bicycles, the lead-acid motive battery is the preferred choice of electric bicycle manufacturers in China, accounting for 95% of the market share because of its cost efficiency. Currently, we manufacture over 14,480,000 sealed lead-acid motive batteries each year, have more than 2,500 employees and are one of China's largest manufacturers of sealed lead-acid motive batteries for electric-powered bicycles (LABEBs). For each of our fiscal years ended March 31, 2010 and 2009, sales revenues were US$177,192,000 and US$109,020,000, respectively, and our net income during the same periods amounted to US$9,500,000 and US$8,880,000, respectively. For the nine months ended December 31, 2010, our sales revenue and net income were US$194,712,000 and US$9,496,000, respectively. Our development strategy is committed to the following:

Relocation and Expansion of New Production Facilities

On August 20, 2010, CCEC entered into an Investment Agreement with the Administrative Committee of Changxing Economic Development Zone whereby CCEC agreed to participate in “Land Tender, Auction and Listing” activities organized by the Changxing County Land and Resources Bureau with respect to a pre-identified parcel of land to which CCEC agreed to relocate its business from Jingyi Road to Jingsi Road. The size of the new facility (“Plant C”) at Jingsi Road in Changxing County will be approximately 50% larger than the current facility (“Plant A”) at Jingyi Road in Changxing County, at which we will commence the development and production of one of our future products, lithium-ion batteries. To be in line with the global trend of the development of lithium-ion batteries and to obtain a competitive advantage over our competitors in China, we intend to use 100% of the net proceeds from this offering to construct Plant C to begin the development and production of lithium-ion batteries (see “Description of Business – Our Products – Future Products” at pages 75 and 76). Our target market for such future product is manufacturers of electric bicycles in China, and we estimate that our lithium-ion batteries will be launched and distributed into the marketplace within two years from the date of this prospectus.

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We plan to commence our relocation procedures after obtaining the land use right from the government, which we expect to obtain in next two months, after which we anticipate that it will take us no longer than two months to fully relocate such facilities. We do not anticipate any distruption of our business since our production capacity of Lead-Acid Batteries in Plant A will be wholly absorbed by our Plant at Jing’er Road ("Plant B") in Changxing County without significant investment.

Furthermore, on September 6, 2010, CEJC entered into a Project Investment Contract and a Supplemental Agreement to the Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee, pursuant to which CEJC shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park (“Plant D”) to manufacture valve regulated lead-acid batteries, as well as one of the Company’s future products, lithium-ion batteries, and other related products in the Jiangsu Xuyi Economic Development Zone. In the first stage CEJC shall invest approximately RMB422,000,000 ($62,000,000), including approximately RMB150,000,000 ($22,000,000) in fixed assets for the production of VRLA batteries only. The Company does not plan to construct lithium-ion battery production facilities in Plant D until 18 months after the date that we commence production of the first stage. CEJC expects to complete all construction related to the first stage on or before December 31, 2011. We believe after the completion of the project our production capacity will be further increased.

Expand offering of highly efficient battery products

For future market development, we intend to focus on the lithium-ion battery, electric vehicle power batteries and energy storage batteries dedicated for solar and wind power. We are currently committed to investing in and constructing Plant C in Changxing County (Zhejiang Province) and Plant D in Jiangsu Province to produce such new battery products, however 100% of the net proceeds of this offering will go to constructing Plant C in Changxing County for the development and production of lithium-ion batteries (see “Use of Proceeds” at page 35). We also intend to invest more resources and effort on the research and development in these areas in order to expand our market share by offering highly efficient battery products.

Expand sales network and distribution channels

We intend to expend more resources to expand our sales and distribution networks by: (1) adding new distributors in key sales regions in the Northeast and Middle regions of China; (2) developing new marketing strategies in different channels; (3) improving communication between sales teams and distributors; and (4) improving our brand awareness and promotion efforts.

Build partnerships with new and existing clients

We intend to continue to build a close, mutually beneficial and harmonious partnership with our existing factory customers, and we aim to establish a win-win long-term partnership with all of our new customers. We intend to continue to utilize our customer relationship management to provide tailor-made management policies that focus on the needs of different customers.

Augment marketing and promotion efforts to increase brand awareness

Our corporate mission is to establish a positive image of being a responsible citizen, and we are committed to providing social welfare services to the local communities. To that end, the Company has worked and continues to work with leading national brand designing companies to establish a complete plan for scientific branding, which use cartoon image endorsements to promote its corporate image, products and brand awareness, through television and printed advertisements.

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Critical Accounting Policies, Estimates and Assumptions

The SEC defines critical accounting policies as those that are, in management’s view, most important to the portrayal of our financial condition and results of operations and those that require significant judgments and estimates.

The discussion and analysis of our financial condition and results of operations is based upon our financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities. On an on-going basis, we evaluate our estimates including the allowance for doubtful accounts, the salability and recoverability of inventory, income taxes and contingencies. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary.

Accounting Principles

The consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

Basis of Consolidation

The consolidated financial statements include the financial information of the Registrant and its subsidiaries. All significant inter-company accounts and transactions have been eliminated upon consolidation.

Revenue recognition

Operating revenue represents sale of goods at invoiced value to customers, net of returns, discounts, rebates and value-added tax (“VAT”), and is recognized when the significant risks and rewards of ownership of goods have been transferred to customers, the sales price to the customers is fixed or determinable and the collectability of consideration is reasonably assured.

The Company recognizes revenue when goods are delivered to customers. The Company assesses whether the selling price is fixed or determinable based on the contract and/or customer purchase order and payment terms associated with the transaction and whether the sale price is subject to refund or adjustment. The Company assesses collectability based primarily on the creditworthiness of the customer as determined by the credit analysis, as well as the customer’s payment history.

Volume-based rebates are made at the time of sales of goods and are recognized as a reduction of sales. Costs related to shipping and handling are included in selling, marketing and distribution expenses.

Retirement Plan Costs

Contributions to defined contribution retirement schemes are charged to cost of sales, sales, marketing and distribution costs and general and administrative expenses in the consolidated statements of operations and other comprehensive income as and when the related employee services are provided. Retirement plan costs were US$502,000 and US$130,000 for the years ended March 31, 2010 and 2009, respectively.

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Income Taxes

The Company provides for income taxes using the liability method. Under the liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current period.

A deferred income tax asset or liability is computed for the expected future impact of differences between the financial reporting and tax bases of assets and liabilities and for the expected future tax benefit to be derived from tax credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Tax rate changes are reflected in the computation of the income tax provision during the period such changes are enacted.

Under the provision of ASC 740 Income Taxes, tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% of being realized on examination by the tax authority. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

Property, Plant and Equipment (“PPE”) and Long-Term Land Lease Prepayments

PPE are stated at cost less accumulated depreciation, and include expenditure that substantially increases the useful lives of existing assets.

The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditures incurred after the assets have been put into operation, such as repairs and maintenance, overhaul and minor renewals and betterments, are normally charged to operating expenses in the period in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the assets, the expenditure is capitalized.

Depreciation is provided, on a straight-line basis, to write off the cost less accumulated depreciation of each PPE item at rates based on their estimated useful lives from the date on which they become fully operational and after taking into account their estimated residual values as follows:

Buildings	20 years
Leasehold improvements	Over the unexpired term of lease
Furniture, fixtures and office equipment	10 years
Motor vehicles	5 years
Plant and machinery	10 years

When assets are sold or retired, their costs and accumulated depreciation are eliminated from the consolidated financial statements and any gain or loss resulting from their disposal is recognized in the period of disposition as an element of other income.

Construction-in-progress consists of factories and office buildings under construction and machinery pending installation and includes the costs of construction, machinery and equipment, and any interest charges arising from borrowings used to finance these assets during the period of construction or installation. No provision for depreciation is made on construction-in-progress until such time the relevant assets are completed and ready for their intended use.

Long-term land lease prepayments are amortized on a straight-line basis over the term of lease.

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Inventories

Inventories are stated at the lower of cost and net realizable value. Cost, which comprises all costs of purchase and, where applicable, costs of conversion and other costs that have been incurred in bringing the inventories to their present location and condition, is calculated using the weighted average costing method. The Company estimates the market price of its inventories with reference to the net realizable value based upon current market conditions and historical experience. Estimated losses on inventories represent reserves for obsolescence, excess quantities, irregulars and slow moving inventory, and which are charged to cost of sales.

Trade Receivables and Allowance for Doubtful Accounts

The allowance for the risk of non-collection of trade receivables takes into account credit-risk concentration. Collective debt risk is assessed based on average historical losses and specific circumstances such as serious adverse economic conditions. The Company’s estimate is based on a variety of factors, including historical collection experience, existing economic conditions and a review of the current status of the receivables. Trade receivables are presented net of an allowance for doubtful accounts of US$6,000 and US$6,000 as of March 31, 2010 and 2009, respectively.

Cash and Cash Equivalents

Cash represents cash on hand and deposits with financial institutions which are repayable on demand. Cash equivalents represent short-term, highly liquid investments purchased with an original maturity of three months or less, which are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Foreign Currency Translation

Items included in the financial statements of the Company’s subsidiary are measured RMB, the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in United States Dollars, which is the Company’s presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.

On consolidation, the results and financial position of all the group entities that have a functional currency different from the presentation currency are translated as follows:

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

income and expenses for each statement of operations are translated at average exchange rates; and

all resulting exchange differences are recognized as a separate component of equity.

Fair Value of Financial Instruments

The ASC Topic 825, “Disclosures about Fair Value of Financial Instruments”, requires that the Company discloses estimated fair value of financial instruments. The carrying amounts reported in the balance sheets for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.

The Company adopted ASC Topic 820 – Fair Value Measurements and Disclosures (“ASC 820”). The adoption of ASC 820 did not have a material impact on our consolidated financial statements. ASC 820 establishes a three-tier fair value hierarchy to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are defined as follows:

Level 1: Observable inputs, such as unadjusted quoted market prices in active markets for the identical asset or liabilities.

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Level 2: Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3: Unobservable inputs reflecting the entity’s own assumptions in measuring the asset or liability at fair value.

The Company’s financial instruments consist principally of cash and cash equivalents, restricted bank balances, other financial assets, trade receivables and payables, deposits, prepayment and other receivables, notes payable, accrued expenses and other liabilities, amount due from/to related parties and short-term borrowings which are carried at amounts that generally approximate their fair values because of the short-term maturity of these instruments.

Warranty

Estimated warranty costs are recognized at the time when the Company sells its products and are included in sale, marketing and distribution expenses. The Company uses historical failure rates and costs to repair product defects during the warranty period to estimate warranty costs, which are reviewed periodically in light of actual experience. The reconciliation of the changes in the warranty obligation is as follows:

	Years ended March 31,
	2010			2009
	$’000			$’000

Balance as of April 1,		121			413
Exchange realignment		1			9
Accrual for warranties issued during the year		188			91
Settlement made during the year		(84	)		(392

Balance as of March 31,		226			121

Government Subsidies

Government subsidies are recognized as income over the periods necessary to match them with the related costs. Subsidies related to expense items are recognized in the same period as those expenses are charged in the consolidated statements of operations and other comprehensive income and are reported separately as other income.

Use of Estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reported periods. The management evaluates these estimates and judgments on an ongoing basis and bases their estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that they believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies.

Actual amounts could differ from those estimates. Estimates are used for, but not limited to, the accounting for certain items such as allowance for doubtful accounts, depreciation and amortization, inventory allowance, taxes and contingencies.

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Related Parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.

Recently Issued Accounting Pronouncements

On May 2009, FASB issued ASC 855, Subsequent Events, which establishes general standards for the evaluation, recognition and disclosure of events and transactions that occur after the balance sheet date. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing standards. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material effect on the Company’s consolidated financial statements.

In June 2009, the FASB issued ASC Topic 860, Accounting for Transfers of Financial Assets – an amendment of FASB Statement No.140. ASC Topic 860 requires entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets. The statement eliminates the concept of a qualifying special-purpose entity, changes the requirements for the de-recognition of financial assets, and calls upon sellers of the assets to make additional disclosures about them. ASC Topic 860 is effective as for an entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of ASC Topic 860 will have a material impact on the Company’s consolidated financial statements.

In June 2009, the FASB issued ASC Topic 810, Amendments to FASB Interpretation No. 46(R). ASC Topic 810 amends Interpretation No.46(R) to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. ASC Topic 810 is effective for an entity’s first fiscal period that begins after November 15, 2009. The Company does not expect the adoption of ASC Topic 810 will have a material impact on the Company’s consolidated financial statements.

In June 2009, the FASB issued ASC Topic 105, “the FASB Accounting Standards Codification” (“ASC”). ASC would become the source of authoritative US GAAP recognized by the FASB to be applied by nongovernmental entities. Once the ASC is in effect, all of its content would carry the same level of authority. The ASC becomes effective for interim and annual periods ending on or after September 15, 2009. The Company adopted the ASC in the second quarter of fiscal 2010. The adoption of the ASC did not have an effect on the Company’s financial position and results of operations. However, because the ASC completely replaces existing standards, it affects the way US GAAP is referenced within the consolidated financial statements.

In August 2009, the FASB issued Accounting Standards Updates (“ASU”) 2009-05, Fair Value Measurements and Disclosures (ASC Topic 820): Measuring Liabilities at Fair Value, effective for the first reporting period after issuance. This Update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using the quoted price of the identical liability or similar liabilities when traded as an asset or another valuation technique that is consistent with the principles of ASC Topic 820. The adoption of Update 2009-05 did not have any effect on the Company’s consolidated financial statements.

In January 2010, FASB issued ASU No. 2010-02 regarding accounting and reporting for decreases in ownership of a subsidiary. Under this guidance, an entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary. Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value. In contrast, an entity is required to account for a decrease in its ownership interest of a subsidiary that does not result in a change of control of the subsidiary as an equity transaction. This ASU clarifies the scope of the decrease in ownership provisions, and expands the disclosures about the deconsolidation of a subsidiary or de-recognition of a group of assets. This ASU is effective for the first interim or annual reporting period ending on or after December 31, 2009. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

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In January 2010, FASB issued ASU No. 2010-02 – Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification. The amendments in this Update affect accounting and reporting by an entity that experiences a decrease in ownership in a subsidiary that is a business or nonprofit activity. The amendments also affect accounting and reporting by an entity that exchanges a group of assets that constitutes a business or nonprofit activity for an equity interest in another entity. The amendments in this update are effective beginning in the period that an entity adopts SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements – An Amendment of ARB No. 51.” If an entity has previously adopted SFAS No. 160 as of the date the amendments in this update are included in the Accounting Standards Codification, the amendments in this update are effective beginning in the first interim or annual reporting period ending on or after December 15, 2009. The amendments in this update should be applied retrospectively to the first period that an entity adopted SFAS No. 160. The Company does not expect the adoption of Update 2010-02 to have a material impact on its consolidated financial statements.

In January 2010, FASB issued ASU No. 2010-06 – Improving Disclosures about Fair Value Measurements . This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarify existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company is currently evaluating the impact of Update 2010-06 will have on its consolidated financial statements.

ASC Topic 855, “Subsequent Events,” was amended in February 2010. Under the amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and the Company adopted these new requirements for the year ended March 31, 2010.

In December 2010, FASB issued ASU No. 2010-29, Business Combinations (Topic 805) “Disclosure of supplementary Pro Forma Information for business combinations”, which specify that if a public entity presents comparative financial statements, the entity should disclosure revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year has occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. These amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company does not expect the adoption of this ASU will have a material impact on the Company’s consolidated financial statements.

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Results of Operations

Results of Operations for the Fiscal Year Ended March 31, 2010 Compared To the Fiscal Year Ended March 31, 2009

The following table sets forth a summary of certain key components of our results of operations for years indicated, in dollars and as a percentage of revenues.

	For The Years Ended March 31,
	2010		2009		2010			2009
	$ ’000		$’000
Revenues		177,192		109,020		100.00	%		100.00	%
Cost of sales		153,708		88,945		86.75	%		81.59	%
Gross profit		23,484		20,075		13.25	%		18.41	%
Sales, marketing and distribution		8,696		5,459		4.91	%		5.01	%
General and administrative expenses		3,647		3,763		2.06	%		3.45	%
Operating income		11,141		10,853		6.29	%		9.96	%
Other income, net		1,671		758		0.94	%		0.70	%
Interest Income		343		362		0.19	%		0.33	%
Incomes before interest and income tax expenses		13,155		11,973		7.42	%		10.98	%
Interest expenses		2,068		1,232		1.17	%		1.13	%
Income before income tax expenses		11,087		10,741		6.26	%		9.85	%
Income tax expenses		1,587		1,861		0.90	%		1.71	%
Net income		9,500		8,880		5.36	%		8.15	%
Other comprehensive income		106		278		0.06	%		0.25	%
Comprehensive income		9,606		9,158		5.42	%		8.40	%

Revenues and Cost of Sales

Revenues increased by 62.53% to US$177,192,000 for the year ended March 31, 2010 compared with US$109,020,000 for the year ended March 31, 2009. This increase was driven primarily by the combined effect of increase in sales volume by 85.64% to 14,480,000 units for the year ended March 31, 2010 compared with 7,800,000 units for the year ended March 31, 2009, and the decrease in the average net selling price. The increase in sales volume was mainly attributable to the increase in the Company’s sales to existing and new electric bicycle manufacturers following the continued rapid growth in the electric bicycle market in the PRC. During the year ended March 31, 2010, there was increase in sales of approximately 434% to a major electric bicycle manufacturer, Taimei. The Company also expanded its production facilities during the year ended March 31, 2010 in response to the significant increase in demand of the Company’s battery products. However, the Company reduced the average selling price by approximately 11% in order to maintain the market competitiveness against other competitors in China.

Cost of sales for the year ended March 31, 2010 and 2009 were US$153,708,000 and US$88,945,000, respectively. The increase in cost of sales of 72.81% was mainly due to increase in sales volume by 85.64%. The impact of increase in sales volume to cost of sales was partially offset by the decrease in unit of major material cost. Electric plates are the major raw material for our batteries, which are substantially made up of lead and which accounted for approximately 80% of our total production cost. The average cost of electric plates decreased by 10% as a result of decrease in average market lead price for the year.

The cost rate for the year ended March 31, 2010 increased by approximately 5.16% from 81.59% for the year ended March 31, 2009 to 86.75% for the year ended March 31, 2010. The increase in cost rate was mainly due to the impact on decrease in average selling price outweighed the effect of decrease in average major material cost. In addition, the Company adopted several promotion activities during the year under which it offered sales discounts and rebates to the certain customers. This resulted in the reduction of total turnover and gross margin by approximately US$2,917,000 and 1.41%, respectively.

Depreciation and Amortization

Depreciation and amortization expenses were US$646,000 and US$451,000 for the fiscal years ended March 31, 2010 and 2009, respectively. This increase of US$195,000, or 42.03%, was mainly attributable to the Company’s acquisition of new equipment and machinery during the year ended March 31, 2010 as a result of the Company’s business expansion.

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General and Administrative Expenses

General and administrative expense was US$3,647,000 and US$3,763,000 for the years ended March 31, 2010 and 2009, respectively, and mainly consisted of staff salaries and benefits, depreciation expenses, travel expenses, legal and professional fees, other taxes, entertainment expenses and vehicle expenses. This decrease of US$116,000, or 3.08%, was mainly caused by the increase of social insurance and research and development expenses of approximately US$304,000, offset by the decrease of travel, rental, entertainment and other expenses of approximately US$392,000.

Sales, Marketing and Distribution

Sales, marketing and distribution expenses were US$8,696,000 and US$5,459,000 for the years ended March 31, 2010 and 2009, respectively. This increase of US$3,237,000, or 59.30% was mainly due to the increase in transportation expenses and sales commissions related to the Company’s increased sales activities.

Other Income, Net

Net other income was US$1,671,000 and US$758,000 for the years ended March 31, 2010 and 2009, respectively. Due to economies of scale, we can purchase raw lead at a reasonable price. As a result, we purchase and then sell lead to our suppliers. Since this is not our core business, we consider this to be other income. This increase of US$913,000, or 120.45%, was mainly attributable to the net sales of lead to suppliers, which generated net other income of approximately US$1,204,000.

Incomes before Interest and Income Tax Expenses

Incomes before interest and income tax expenses increased from US$11,973,000 for the year ended March 31, 2009 to US$13,155,000 for the year ended March 31, 2010. This increase of US$1,182,000, or approximately 9.87%, was mainly driven by the Company’s increased selling activities and the Company’s sales of raw materials during the year ended March 31, 2010.

Interest Expense

Interest expense was US$2,068,000 and US$1,232,000 for the years ended March 31, 2010 and 2009, respectively. Interest expense increased by US$836,000, or 67.86%, due to the increase in average short-term bank borrowing balances for the year ended March 31, 2010 compared to the year ended March 31, 2009.

Net Income

Net Income was US$9,500,000 and US$8,880,000 for the years ended March 31, 2010 and 2009, respectively. The increase of net income was mainly driven by the continued increase in the sales of the Company’s battery products and the Company’s sales of its raw materials during the year ended March 31, 2010.

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Results of Operations for the Nine Months Ended December 31, 2010 as Compared with the Nine Months Ended December 31, 2009

The following table sets forth a summary of certain key components of our results of operations for periods indicated, in dollars and as a percentage of revenues.

	For The Nine Months Ended December 31 (Unaudited)
	2010		2009		2010			2009
	US$ ’000		US $ ’000
Revenues	$	194,712	$	127,104		100	%		100	%
Cost of sales	$	170,460	$	107,764		87.54	%		84.78	%
Gross profit	$	24,252	$	19,340		12.46	%		15.22	%
Sales, marketing and distribution expenses	$	8,111	$	6,630		4.17	%		5.22	%
General and administrative expenses	$	2,628	$	2,236		1.35	%		1.76	%
Operating income	$	13,513	$	10,474		6.94	%		8.24	%
Other income, net	$	889	$	1,189		0.46	%		0.94	%
Loss on disposal of scrap inventories	$	2,307	$	-		1.18	%		-	%
Interest income	$	315	$	56		0.16	%		0.04	%
Incomes before interest and income tax expenses	$	12,410	$	11,719		6.37	%		9.22	%
Interest expense	$	2,231	$	1,147		1.15	%		0.9	%
Income before income tax expenses	$	10,179	$	10,572		5.23	%		8.32	%
Income tax expenses	$	2,421	$	1,439		1.24	%		1.13	%
Income before extraordinary item	$	7,758	$	9,133		3.98	%		7.19	%
Extraordinary item	$	1,738	$	-		0.89	%		-	%
Net income	$	9,496	$	9,133		4.88	%		7.19	%
Other comprehensive income	$	1,115	$	24		0.57	%		0.02	%
Comprehensive income	$	10,611	$	9,157		5.45	%		7.20	%

Revenues

During the nine months ended December 31, 2010, we kept strong growth in our sales. We expanded our customer base and enhanced our relationships with existing customers. Revenues for the nine months ended December 31, 2010 and 2009 were US$194,712,000 and US$127,104,000, respectively. The increase in revenues of US$67,608,000, or 53%, was mainly attributable to the continuing strong sales of our battery products to existing and new customers, which resulted in an increase in sales volume of 36% to 14,442,000 battery units for the nine months ended December 31, 2010 compared with 10,600,000 battery units for the nine months ended December 31, 2009.

Strong sales were mainly attributable to the continued growth in the electric bicycle market in the PRC, together with the launch of promotion activities which resulted in a positive effect on sales. Sales to one of our existing major electric bicycle manufacturing customers increased by 90% for the current period comparing with the same period in 2009. The Company also entered into agreements with 108 new distributors during the nine months ended December 31, 2010, which directly increased our total sales to the distributors by 22%.

The increase of revenues was also caused by an average increase of 9% in our battery unit selling price in response to the increase in the average costs of our major raw materials.

Cost of Sales

Cost of sales for the nine months ended December 31, 2010 and 2009 was US$170,460,000 and US$107,764,000, respectively. The increase in cost of goods sold of US$62,696,000, or 58%, was mainly attributable to the increase in sales volume of 36%, as well as the increase in average purchase price of our major raw material, lead, by US$294 per ton, or 14%, for the nine months ended December 31, 2010 comparing with the same period in 2009.

Gross Profit

Gross profit for the nine months ended December 31, 2010 and 2009 was US$24,252,000 and US$19,340,000, respectively. The increase in gross profit of US$4,912,000, or 25%, was mainly attributable to the increase in revenues of US$67,608,000 compared to the same period in 2009.

Compared with the corresponding period in 2009, the decrease in gross profit margin by 3% was mainly attributable to the increase in cost rate. The average purchase price of our major raw materials for the nine months ended December 31, 2010 increased by US$294 per ton, or 14%, however the average selling price of our battery units only increased by 9% in order to maintain our competitiveness in the market as compared to the corresponding period in 2009.

- 50 -

Sales, Marketing and Distribution Expenses

Sales, marketing and distribution expenses were US$8,111,000 and US$6,630,000 for the nine months ended December 31, 2010 and 2009, respectively. The increase of US$1,481,000, or 22%, was mainly driven by the growth of sales volume, which caused the increase in transportation expenses, after-sale related expenses and provision for warranty cost by US$1,267,000, US$295,000 and US$665,000, respectively, offset by the decrease of sales commissions of US$1,057,000.

During the period ended December 31, 2010, the Company provided higher discount to the distributors in order to expand our market share in the secondary market and in order to maintain cost competitiveness in the market, we lowered the commission rate to our sales person in the secondary market. Therefore, the decrease of sales commission of US$1,057,000 was resulted.

General and Administrative Expenses

General and administrative expenses were US$2,628,000 and US$2,236,000 for the nine months ended December 31, 2010 and 2009, respectively and mainly consisted of staff salaries, staff welfare, social security contributions, depreciation expenses, research and development expenses, legal and professional fees, other taxes and advertising expenses. The increase of general and administrative expenses increased by US$392,000, or 18%, was mainly attributable to the increase of research and development expenses of US$449,000 for the development of new products.

Depreciation and Amortization

Depreciation expense was approximately US$807,000 and US$423,000 for the nine months ended December 31, 2010 and 2009, respectively. The increase in depreciation expense of US$384,000, or 91%, was mainly attributable to our acquisition of new machinery, equipment and dormitories during the twelve month period from January 1, 2010 to December 31, 2010 which had been made in connection with our business expansion efforts. During the current period, our factory relocation caused a portion of property, plant and equipment transfer to assets held for sale, which also partly offset the depreciation expense.

Other Income, Net

Net other income was US$889,000 and US$1,189,000 for the nine months ended December 31, 2010 and 2009, respectively. The decrease of US$300,000, or 25%, was mainly attributable to the decrease in net sales of lead to electric plate suppliers by US$550,000, offset by the addition of dividend income from available-for-sale financial assets of US$133,000 and an increase in government subsidy of US$136,000.

Loss on Disposal of Scrap Inventories

The loss on disposal of scrap inventories for the nine months ended December 31, 2010 and 2009 were US$2,307,000 and US$0, respectively. The disposal of scrap inventories was attributable to the write-off of damaged batteries which were caused by our relocation. Prior to relocation, CCEC arranged for a specific area in Plant B at our Jing'er Road facility for the storage of machinery and equipment which will be relocated from Plant A at our Jingyi Road facility. In the process, CCEC tidied up the warehouse by stacking the batteries. However, due to the weight of the batteries, the top layer of batteries damaged the bottom layer of batteries. Management engaged a qualified entity to handle the scrap inventories immediately in order to avoid any leakages of battery acid and to avoid any negative effects on the environment. Therefore, the scrap inventories were written off accordingly.

Income before Interest and Income Tax Expenses

Income before interest and income tax expense was US$12,410,000 and US$11,719,000, for the nine months ended December 31, 2010 and 2009, respectively. The increase of US$691,000, or 6%, was mainly attributable to the increase in gross profits of US$4,912,000, offset by the increase in loss on disposal of scrap inventories of US$2,307,000 and the increase in sales, marketing and distribution expenses of US$1,481,000 for the nine months ended December 31, 2010.

- 51 -

Interest Expense, Net

Net interest expense was US$1,916,000 and US$1,091,000 for the nine months ended December 31, 2010 and 2009, respectively. The increase of interest expense by US$825,000, or 76%, was mainly attributable to the increase of average short-term bank loans compared to the corresponding period in 2009. We sought an increase in average short-term bank loans to cope with the increasing demand for funds in connection with our business expansion.

Income Tax Expenses

Income tax expenses was US$2,421,000 and US$1,439,000 for the nine months ended December 31, 2010 and 2009, respectively. Such expenses increased by US$982,000, or 68%, as compared to the corresponding period of 2009. According to the investment agreement entered into with the Administrative Committee of Changxing Economic Development Zone, CCEC shall invest US$44,116,000 for the development at Jingsi Road. Pursuant to the regulation in PRC regarding the ratio of investment amount and registered capital of wholly foreign owned enterprises, CCEC must increase its registered capital from RMB50,000,000 (US$7,273,000) to RMB120,000,000 (US$17,803,000). During the period ended December 31, 2010, CCEC distributed a dividend of US$10,530,000 internally, which has been reinvested into CCEC’s registered capital. Pursuant to the PRC’s tax law, dividends distributed by a foreign invested enterprise in the PRC to its foreign investors in Hong Kong on the profit generated after January 1, 2008 are subject to a 10% withholding tax. The relevant withholding tax was US$938,000 for the nine months ended December 31, 2010.

Income Before Extraordinary Item

Income before extraordinary items was US$7,758,000 and US$9,133,000 for the nine months ended December 31, 2010, and 2009, respectively. The decrease of US$1,375,000, or 15%, as compared to the corresponding period of 2009 was mainly attributable to the increase in gross profits of US$4,912,000, offset by increase in sales, marketing and distribution expense, loss on disposal of scrap inventories, interest expenses and income tax expenses of US$6,251,000, in the aggregate.

Extraordinary Item

On December 12, 2010, CCEC ceased its production activities in the Plant A at Jingyi Road. Pursuant to the Compensation Agreement of Corporate Relocation Acquisition with the Administrative Committee of Changxing Economic Development Zone (ACC), ACC shall compensate the loss, amounting to RMB11,748,000 (US$1,738,000), when CCEC ceased its production in preparation for relocation.

The transaction of relocation was considered as involuntary conversion of a non-monetary asset into a monetary asset. According to ASC605-40-25, to the extent the cost of a nonmonetary asset differs from the amount of monetary assets received, the result of the realization of a gain from the transaction was recognized.

The relocation activity is abnormal and significantly different from the ordinary and typical activities of the Company and is not expected to recur in the foreseeable future. According to ASC225-20, the Company classified the gain as extraordinary item.

The Company considered the cost related to cessation of production of Plant A was US$0 or immaterial since the production capacity of Plant A at Jingyi Road (plant related to relocation) could be fully absorbed by Plant B at Jing’er Road without significant investment. For the period ended December 31, 2010, the Company recorded an extraordinary gain of US$1,738,000 in the consolidated statements of operations and other comprehensive income.

Pursuant to the Implementation Regulations to the EIT law of the PRC, only the portion of compensation income exceeds the reinvestment amount related to the relocation is taxable. All compensation income received by the Company would be reinvested into the fixed assets and long-term land lease prepayment of Plant C at Jingsi Road and therefore no income tax was applicable.

- 52 -

Net Income

Net income was US$9,496,000 and US$9,133,000 for the nine months ended December 31, 2010 and 2009, respectively. Our net income increased by US$363,000, or 4%, and such increase was mainly attributable to the increase in sales and extraordinary income arising from compensation of CCEC’s suspension of operations, which outweighed the unfavorable impact on the increase of cost rate per unit of sales, the increase in sales, marketing and distribution expense and the loss on disposal of scrap inventories.

Results of Operations for the Three Months Ended December 31, 2010 as Compared with the Three Months Ended December 31, 2009

The following table sets forth a summary of certain key components of our results of operations for periods indicated, in dollars and as a percentage of revenues.

	For The Three Months Ended December 31 (Unaudited)
	2010		2009		2010			2009
	US $ ’000		US$ ’000
Revenues	$	67,670	$	47,237		100	%		100	%
Cost of sales	$	59,200	$	41,398		87.48	%		87.64	%
Gross profit	$	8,470	$	5,839		12.52	%		12.36	%
Sales, marketing and distribution expenses	$	2,560	$	2,677		3.78	%		5.67	%
General and administrative expenses	$	987	$	702		1.46	%		1.49	%
Operating income	$	4,923	$	2,460		7.28	%		5.21	%
Other income, net	$	276	$	464		0.41	%		0.98	%
Loss on disposal of scrap inventories	$	2,307	$	-		3.41	%		-	%
Interest income	$	117	$	-		0.17	%		-	%
Income before interest and income tax expenses	$	3,009	$	2,924		4.45	%		6.19	%
Interest expense	$	940	$	399		1.39	%		0.84	%
Income before income tax expenses	$	2,069	$	2,525		3.06	%		5.35	%
Income tax expenses	$	1,260	$	314		1.86	%		0.66	%
Income before extraordinary item	$	809	$	2,211		1.2	%		4.68	%
Extraordinary item	$	1,738	$	-		2.57	%		-	%
Net income	$	2,547	$	2,211		3.76	%		4.68	%
Other comprehensive income	$	561	$	-		0.83	%		-	%
Comprehensive income	$	3,108	$	2,211		4.59	%		4.68	%

Revenues

During the three months ended December 31, 2010, we kept strong growth in our sales. The Company successfully expanded the customer base and also enhanced our existing customers’ relationship. Revenues for the three months ended December 31, 2010 and 2009 were US$67,670,000 and US$47,237,000, respectively. The increase in revenues of US$20,433,000, or 43%, was mainly attributable to the continuing strong sales of our battery products to existing and new customers, which resulted in an increase in sales volume of 25% to 4,755,000 battery units for the three months ended December 31, 2010 compared with 3,791,000 battery units for the three months ended December 31, 2009.

Strong sales were mainly attributable to the continued growth in the electric bicycle market in the PRC, together with the launch of promotion activities which resulted in a positive effect on sales. Sales to one of our existing major electric bicycle manufacturing customers increased by 34% for the current period comparing with the same period in 2009. The Company also entered into agreements with 11 new distributors during the three months ended December 31, 2010, which directly increased our total sales to the distributors by 10%.

- 53 -

The increase of revenues was also caused by an average increase of 11% in our battery unit selling price in response to the increase in the average costs of our major raw materials.

Cost of Sales

Cost of sales for the three months ended December 31, 2010 and 2009 was US$59,200,000 and US$41,398,000, respectively. The increase in cost of sales of US$17,802,000, or 43%, was mainly attributable to the increase in sales volume of 25%, as well as an increase in the average purchase price of our major raw material, lead, by US$282 per ton, or 12%.

Gross Profit

Gross profit for the three months ended December 31, 2010 and 2009 was US$8,470,000 and US$5,839,000, respectively. The increase in gross profit of US$2,631,000, or 45%, for the current period was mainly attributable to the increase in sales volume comparing with the same period in 2009.

Sales, Marketing and Distribution Expenses

Sales, marketing and distribution expenses were US$2,560,000 and US$2,677,000 for the three months ended December 31, 2010 and 2009, respectively, and mainly consisted of staff salaries, sales commission, transportation expenses, after-sale related expenses and provision for warranty cost. The decrease of US$117,000, or 4.4%, was mainly attributable to the adjustment of sales commission policies which decreased the sales commissions by US$637,000, offset by the increase in transportation expenses of US$357,000.

General and Administrative Expenses

General and administrative expenses were US$987,000 and US$702,000 for the three months ended December 31, 2010 and 2009, respectively, and mainly consisted of staff salaries, staff welfare, social security contributions, depreciation expenses, research and development expenses, legal and professional fees, other taxes and advertising expenses. The increase of general and administrative expenses of US$285,000, or 41%, was mainly attributable to an increase in research and development expenses of US$133,000.

Depreciation and Amortization

Depreciation expense was approximately US$267,000 and US$153,000 for the three months ended December 31, 2010 and 2009, respectively. The increase in depreciation expense was mainly attributable to our acquisition of new machinery, equipment and dormitories during the twelve month period from January 1, 2010 to December 31, 2010 which had been made in connection with our business expansion efforts. During the current period, our factory relocation caused a portion of property, plant and equipment transfer to assets held for disposal, which also partly offset the depreciation expense.

Other Income, Net

Net other income was US$276,000 and US$464,000 for the three months ended December 31, 2010 and 2009, respectively. The decrease of US$188,000, or 41%, was mainly attributable to the decrease of US$330,000 in net sales of lead to electric plate suppliers.

Loss on Disposal of Scrap Inventories

The loss on disposal of scrap inventories for the three months ended December 31, 2010 and 2009 were US$2,307,000 and US$0, respectively. The disposal of scrap inventories was attributable to the write-off of damaged batteries which were caused by our relocation. Prior to relocation, CCEC arranged for a specific area in Plant B at our Jing'er Road facility for the storage of machinery and equipment which will be relocated from Plant A at our Jingyi Road facility. In the process, CCEC tidied up the warehouse by stacking the batteries. However, due to the weight of the batteries, the top layer of batteries damaged the bottom layer of batteries. Management engaged a qualified entity to handle the scrap inventories immediately in order to avoid any leakages of battery acid and to avoid any negative effects on the environment. Therefore, the scrap inventories were written off accordingly.

- 54 -

Income Before Interest and Income Tax Expenses

Income before interest and income tax expense was US$3,009,000 and US$2,924,000 for the three months ended December 31, 2010 and 2009, respectively. The increase of US$85,000, or 3%, was mainly attributable to an increase in the gross income of US$2,631,000 for the three months ended December 31, 2010, offset by increase in loss on disposal of scrap inventories of US$2,307,000.

Interest Expense, Net

Net interest expense was US$823,000 and US$399,000 for the three months ended December 31, 2010 and 2009, respectively. The increase of interest expense by US$424,000, or 106%, was mainly attributable to the increase of average short-term bank loans compared to the same period in 2009. We sought an increase in average short-term bank loans to cope with the increasing demand for funds in connection with our business expansion.

Income Tax Expenses

Income tax expenses for the three months ended December 31, 2010 increased by US$946,000or 301%, as compared to the corresponding period of 2009. According to the investment agreement entered into with the Administrative Committee of Changxing Economic Development Zone, CCEC shall invest US$44,116,000 for the development at Jingsi Road. Pursuant to the regulation in PRC regarding the ratio of investment amount and registered capital of wholly foreign owned enterprises, CCEC must increase its registered capital from RMB50,000,000 (US$7,273,000) to RMB120,000,000 (US$17,803,000). During the period ended December 31, 2010, CCEC distributed a dividend of US$10,530,000 internally, which has been reinvested into CCEC’s registered capital. Pursuant to the PRC’s tax law, dividends distributed by a foreign invested enterprise in the PRC to its foreign investors in Hong Kong on the profit generated after January 1, 2008 are subject to a 10% withholding tax. The relevant withholding tax was US$938,000 for the three months ended December 31, 2010.

Income Before Extraordinary Item

Income before extraordinary items was US$809,000 and US$2,211,000 for the three months ended December 31, 2010 and 2009, respectively. The decreased of US$1,402,000, or 63%, as compared to the corresponding period of 2009 was mainly attributable to the increase of gross profits of US$2,631,000 offset by the increase in and the loss on disposal of scrap inventories, in interest expenses, and in income tax expenses of US$3,794,000, in the aggregate.

Extraordinary Item

- 55 -

Net Income

Net income was US$2,547,000 and US$2,211,000 for the three months ended December 31, 2010 and 2009, respectively. Our net income increased by US$336,000, or 15%, and such increase was mainly attributable to the increase in sales of our battery products and extraordinary income arising from compensation of CCEC’s suspension of operations.

Liquidity and Capital Resources

The Company generally finances its operations through profit generated from its operations and borrowings from banks. As of December 31, 2010, the Company had short-term secured bank loans outstanding to satisfy its financing needs. Such bank loans carry interest rates ranging from 5.31% to 5.89% and mature within one year from the date the loans were granted, as follows:

Due Date	Interest Rate			Amount as of December 31, 2010 US$		Status as of the date of this Prospectus
Jan 12, 2011		5.31	%		3,176,000	Paid off and has been renewed for same amount; due date is July 13, 2011, interest rate is 4.02%
Jan 12, 2011		5.31	%		3,025,000	Paid off
Jan 12, 2011		5.84	%		1,512,000	Paid off and has been renewed for same amount, due date is Jan 12, 2012, interest rate is 7.26%
Jan 19, 2011		5.84	%		1,664,000	Paid off
Jan 24, 2011		5.31	%		18,149,000	Paid off and has been partly renewed for $9,075,000, due date is July 7,2011, interest rate is 5.35%
Feb 9, 2011		5.58	%		1,512,000	Paid off and has been renewed for same amount, due date is Feb 17, 2012, interest rate is 6.06%
Feb 23, 2011		5.58	%		1,513,000	Paid off and has been renewed for same amount, due date is Feb 24, 2012, interest rate is 6.06%
Mar 1, 2011		5.58	%		1,513,000	Paid off and has been renewed for same amount, due date is Mar 6, 2012, interest rate is 6.06%
Mar 7, 2011		5.58	%		3,025,000	Paid off and has been renewed for same amount, due date is Nov 10, 2011, interest rate is 6.06%
Mar 11, 2011		5.58	%		1,512,000	Paid off and has been renewed for same amount, due date is March 21, 2012, interest rate is 2.25%
Apr 1, 2011		5.89	%		681,000	Paid off
Apr 1, 2011		5.89	%		2,798,000	Paid off
May16, 2011		5.54	%		3,025,000	Currently Outstanding
July 27, 2011		5.56	%		1,512,000	Paid off
Oct 8, 2011		5.89	%		2,571,000	Currently Outstanding
Nov 2,2011		5.84	%		3,781,000	Currently Outstanding
	Total:				50,969,000

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Such bank loans are also secured by guarantees provided by related parties Mr. Xu Kecheng, Changxing Chisen Glass Company Limited, and Changxing Chisen Xinguangyuan Company Limited as of December 31, 2010. As of December 31, 2010, the Company also had the following non-interest bearing credits granted by banks for the issuance of notes payable outstanding:

	Amount as of December 31, 2010
Due Date	US$		Status as of the date of this Prospectus
Jan 14, 2011		1,891,000	Paid off and has been renewed for same amount, due date is July 21, 2011
Jan 14, 2011		1,891,000	Paid off
Feb 3, 2011		3,025,000	Paid off and has been renewed for same amount, due date is July 24, 2011
Feb 23, 2011		756,000	Paid off
Feb 27, 2011		2,269,000	Paid off and has been renewed for same amount, due date is September 2, 2011
Mar 9, 2011		2,269,000	Paid off
Mar 10, 2011		2,269,000	Paid off
Mar 27, 2011		4,537,000	Paid off and has been renewed for same amount, due date is September 30, 2011
Apr 8, 2011		1,512,000	Paid off
Apr 9, 2011		4,537,000	Paid off
Apr 18, 2011		3,025,000	Currently Outstanding
Apr 21, 2011		3,781,000	Currently Outstanding
May 9, 2011		3,781,000	Currently Outstanding
May 10, 2011		4,537,000	Currently Outstanding
June 10, 2011		6,050,000	Currently Outstanding
June 15, 2011		3,025,000	Currently Outstanding
Total		49,155,000

As of the date of this prospectus, we have not experienced any difficulty in raising funds by bank loans, including the renewal of existing short term loans, and we have not experienced any liquidity problems in settling our payables in the normal course of business and repaying our bank loans when they fall due. However, we will need new sources of financing and additional capital in order to implement our current business strategy of expansion of our production facilities in Changxing County (Zhejiang Province) and in Jiangsu Province. Although we currently have the aforementioned short term loans and notes payable at our disposal, most of such short term loans and notes payable expire in the next three months, and there is no assurance that we will obtain any new loans or notes payable, or that such short term loans and notes payable set forth above will be renewed or that the terms of any renewals of such short term loans or notes payable will be on terms that are as favorable as our current instruments.

There has been no impact of the relocation expenses on the Company’s liquidity. Since the Company’s original production capacity of lead acid batteries will not be affected, the Company can use its operating cash flow to fund its relocation project.

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The following table sets forth the summary of our cash flows, in dollar, for the periods indicated:

	Nine Months Ended December 31 (Unaudited)
	2010			2009
	$’000			$’000
Net cash provided by operating activities	$	6,952		$	3,630
Net cash used in investing activities	$	(10,405	)	$	(14,375	)
Net cash provided by financing activities	$	3,491		$	12,140
Net increase in cash and cash equivalents	$	38		$	1,395
Effect of exchange rate changes on cash	$	180		$	22
Cash and cash equivalents at beginning of period	$	6,019		$	2,620
Cash and cash equivalents at end of period	$	6,237		$	4,037

Operating Activities

Net cash provided by operating activities was approximately US$6,952,000 for the nine months ended December 31, 2010, as compared to approximately US$3,630,000 for the nine months ended December 31, 2009. This increase of US$3,322,000, or 92%, was mainly attributable to the combined result of decrease in inventories, prepayments and other financial assets, offset by the increase in trade receivables and other receivables.

Investing Activities

Net cash used in investing activities were approximately US$10,405,000 for the nine months ended December 31, 2010 as compared to approximately US$14,375,000 for the nine months ended December 31, 2009. The decrease of US$3,970,000, or 28%, was mainly attributable to the decrease in investment in restricted bank balance, offset by the increase in acquisition of available-for-sale financial assets.

Financing Activities

Net cash provided by financing activities was approximately US$3,491,000 for the nine months ended December 31, 2010, as compared to net cash used in financing activities of approximately US$12,140,000 for the nine months ended December 31, 2009. The decrease of US$8,649,000, or 71%, was mainly attributable to the fact that the amount of bank borrowings and loans at the beginning of the year 2010 could meet the Company's operational demands, which resulted in the decrease in the net cash provided by financing activities for the nine months ended December 31, 2010.

Working Capital

Our working capital on December 31, 2010 increased by approximately US$8,143,000 to approximately US$24,904,000, or 49%, as compared to working capital of approximately US$16,761,000 as of March 31, 2010. This increase was primarily attributable to the increase in our trade receivables, and other receivables of approximately US$27,361,000 in the aggregate, offset by the increase in our notes payables and short-term bank borrowings of approximately US$18,479,000 in the aggregate. The increase in trade receivables was the result of the increase of sales volume. The increase in other receivables was the result of the compensation on suspension of CCEC’s operations at Jingyi Road receivable from the government. The increase in short-term bank loans and notes payable was the result of our entering into new financing arrangements.

Use of Proceeds of this Offering

To be in line with the global trend of the development of lithium-ion batteries and to obtain a competitive advantage over our competitors in China, we intend to use 100% of net proceeds from this offering to construct a new production plant in Changxing County (Zhejiang Province) for the development and production of one of our future products, lithium-ion batteries (see “Use of Proceeds” at page 35 and “Description of Business – Our Products – Future Products” at pages 75 and 76).

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Contractual Obligations

	Payments Due By Period
Contractual Obligations	Total		Less than 1 year		1-3 Years		3-5 years		More than 5 years
Bank Indebtedness	(SEE TABLE BELOW)
Other Indebtedness		0		0		0		0		0
Capital Lease Obligations		0		0		0		0		0
Operating Lease Obligations	(SEE TABLE BELOW)
Purchase Obligations	(SEE TABLE BELOW)
Other Long-Term Liabilities Reflected on the Company’s Balance Sheet under US GAAP		0		0		0		0		0
Total:		0		0		0		0		0

Bank indebtedness	December 31, 2010		March 31, 2010
	$’000		$’000
Short-term bank borrowings (within (1) year)	$	50,969	$	46,141
Notes payable (within (1) year)	$	49,155	$	35,504
Total	$	100,124	$	81,645

Purchase Obligations	December 31, 2010		March 31, 2010
Construction Projects and Purchase of Land and Machineries	$’000		$’000
Within 1 year	$	18,222	$	84
1-3 years	$	142,866	$	-
Total	$	161,088	$	84

Operating Lease Obligations	December 31, 2010		March 31, 2010
	$’000		$’000
Within one (1) year	$	641	$	599
1-3 years	$	1,283	$	1,291
3-5 years	$	183	$	604
Over five (5) years	$	4	$	0
Total	$	2,111	$	2,494

Seasonality

Our business is not seasonal in nature.

Quarterly Information

The table below presents selected results of operations for the quarters indicated.

	Quarter Ended
	December 31,		September 30,		June 30,
	2010		2010		2010		Total
	$’000		$’000		$’000		$’000
Revenues		67,670		76,613		50,429		194,712
Gross Profit		8,470		10,744		5,037		24,251
Net Income		2,547		5,442		1,506		9,495

	Quarter Ended
	March 31,		December 31,		September 30,		June 30,
	2010		2009		2009		2009		Total
	$’000		$’000		$’000		$’000		$’000
Revenues		50,088		47,237		50,392		29,475		177,192
Gross Profit		3,530		5,900		8,684		5,370		23,484
Net Income		367		2,211		4,917		2,005		9,500

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	Quarter Ended
	March 31,		December 31,		September 30,		June 30,
	2009		2008		2008		2008			Total
	$’000		$ ’000		$’000		$’000			$’000
Revenues		50,011		23,421		35,588		-			109,020
Gross Profit		8,707		4,423		7,067		-			20,197
Net Income		3,120		1,625		4,154		(19	)		8,880

Off-Balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions of foreign currency forward contracts. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

Quantitative and Qualitative Disclosure Regarding Market Risk

Interest Rates Risk

Our exposure to interest rate risk for changes in interest rates relates primarily to the interest-bearing bank loans and interest income generated by the bank deposits. We have not used any derivative financial instruments in our investment portfolio or for cash management purposes. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed nor do we anticipate being exposed to material risks attributable to changes in interest rates. Nevertheless, our future interest expense or interest income may expect to be decreased attributable to changes in interest rates in the PRC.

Foreign Exchange Rates Risk

We do not hold any derivative instruments and do not engage in any hedging activities. Because most of our purchases and sales are made in RMB, any exchange rate change affecting the value of the RMB relative to the U.S. dollar could have an effect on our financial results as reported in U.S. dollars. If the RMB were to depreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly reduced. If the RMB were to appreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly increased.

Country Risk

Substantially all of our assets and operations are located and conducted in China. While the PRC economy has experienced significant growth in the past twenty years, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall economy of China, but may also have a negative effect on us. For example, our operating results and financial condition may be adversely affected by government control over capital investments or changes in tax regulations applicable to us. If there are any changes in any policies by the Chinese government and our business is negatively affected as a result, then our financial results, including our ability to generate revenues and profits, will also be negatively affected.

Change in Auditors

Effective as of January 14, 2009, our Board dismissed Pritchett, Siler & Hardy, P.C. (“PS&H”) as our independent registered public accounting firm. PS&H’s report on our financial statements for the previous 2 fiscal years, as well as the subsequent interim period through January 14, 2009, did not contain an adverse opinion or a disclaimer of opinion, and was not qualified as to uncertainty, audit scope, or accounting principles; however, the report included an explanatory paragraph wherein PS&H expressed substantial doubt about our ability to continue as a going concern.

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The dismissal of PS&H was approved by our Board of Directors effective as of January 14, 2009. During the most recent 2 fiscal years from such dismissal, as well as the subsequent interim period through January 14, 2009, there were no disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with their opinion to the subject matter of the disagreement.

During our most recent 2 fiscal years from such dismissal, as well as the subsequent interim period through January 14, 2009, PS&H did not advise us of any of the matters identified in Item 304(a)(v)(A) - (D) of Regulation S-K.

PS&H furnished a letter addressed to the SEC stating that it agrees with the statements made by us above which may be found provided with the Company’s Current Report on Form 8-K as filed with the SEC on January 21, 2009.

Effective as of January 14, 2009, our Board of Directors approved the engagement of Mazars CPA Limited as our independent registered public accounting firm to audit our financial statements. We did not consult Mazars CPA Limited on any matters described in Item 304(a)(2) of Regulation S-K during our 2 most recent fiscal years or any subsequent interim period prior to engaging Mazars CPA Limited.

DESCRIPTION OF BUSINESS

Company Overview

Currently, we manufacture over 14,480,000 sealed lead-acid motive batteries each year, have more than 2,500 employees and are one of China's largest manufacturers of sealed lead-acid motive batteries for electric-powered bicycles (LABEBs). For each of our fiscal years ended March 31, 2010 and 2009, sales revenues were US$177,192,000 and US$109,020,000, respectively, and our net income during the same periods amounted to US$9,500,000 and US$8,880,000, respectively. For the nine months ended December 31, 2010, our sales revenue and net income were US$194,712,000 and US$9,496,000, respectively.

China Battery Industry

Competitive Business Conditions and Market Trends

We believe that in the next several years, due to intensifying global environmental concerns, there will be increased development of the electric bicycle. At the 2009 United Nations Climate Change Conference, the Chinese Government announced that in 2020, greenhouse gas emissions will be reduced approximately 40% to 45% from 2005 levels. Due to the fact that electric bicycle usage is very much in line with the energy-saving and environmental protection policy initiated by the Chinese government, the further development of electric bicycles has garnered government support. The electric bicycle, as an environment-friendly and convenient personal transportation device, bears the advantages of convenience, non-pollution, safety and lower energy consumption. In accordance with the measured data of the electric bicycle market demand in China as reported in a recent online article at www.chinanews.com.cn/cj/cj-cyzh/news/2010/03-31/2201616.shtml, a copy of which was also filed as Exhibit 99.5 to the Registration Statement of which this prospectus is made a part, it was estimated that 25,000,000 electric bicycles will have been sold in China by the end of 2010.

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To be in line with the global trend of the development of lithium-ion batteries and to obtain a competitive advantage over our competitors in China, we intend to use 100% of the net proceeds from this offering to construct a new production plant in Changxing County (Zhejiang Province) to begin the development and production of lithium-ion batteries (See “Use of Proceeds” at page 35). To that end, CCEC has expanded its business license which now permits the Company to produce and sell lithium-ion batteries.

The Company has been issued certificates from top electric bicycle manufacturers in China which evidence that the Company’s products are the preferred brand of such manufacturers, including Aima and Xinri, whereby we provide to such manufacturers our best pricing and payment terms in exchange for receiving higher priority over our competitors in terms of supplying batteries to such manufacturers. For example, it is common practice that our preferred customers generally pay 8% to 10% lower for our batteries compared with the price our other customers pay and such preferred customers are also entitled to extend the payment term for up to 2 months longer than our other customers an in return, we receive first position on such customers’ supplier lists which enables us to obtain purchase orders prior to our competitors as well as to sell larger quantities of our batteries to such customers as compared with our competitors. Xinri’s electric bicycle was utilized at the Beijing 2008 Olympic Games and at the Paralympics Games, which is a great honor in China. We were chosen as the only manufacturer to supply lead-acid motive batteries to Xinri for its electric bicycle used at the Beijing 2008 Olympic Games and Paralympics Games. We are also an alternative power source sponsor at the 2010 Shanghai World Expo, providing eco-friendly solutions to power road signage at select Expo Park locations. Based on this, in the next several years, we will strive to create an international first-class brand and become the leader in providing “green” energy in the electric bicycle marketplace. Simultaneously, through constant research and development of new chemical energy technologies, we believe the Company will provide energy-savings and highly-effective energy solutions to our customers for the purpose of improving the quality of human life and a sustainable ecological environment.

Our Market Share

According to the China Battery Industry Association, as of December 31, 2009, we are one of the top three manufacturers of LABEBs in China in terms of production. Revenues generated by the Company in China accounted for 100% of the Company’s revenues in the fiscal years ended March 31, 2010 and 2009. The Company’s battery production reached 14.48 million units and 7.8 million units, respectively for the fiscal years ended March 31, 2010 and 2009.

Our Competitive Strengths

We believe the following strengths contribute to our competitive advantages and differentiate us from our competitors:

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Production capacity

We currently produce different models of lead-acid batteries for the electric bicycle with a production capacity of 24 million units per year, utilizing roughly 80% of our existing capacity, at our production facilities of Plant A and Plant B in Changxing County. However, on August 20, 2010, CCEC entered into an Investment Agreement with the Administrative Committee of Changxing Economic Development Zone whereby CCEC agreed to participate in “Land Tender, Auction and Listing” activities organized by the Changxing County Land and Resources Bureau with respect to a pre-identified parcel of land to which CCEC agreed to relocate its business from Jingyi Road to Jingsi Road within Changxing County. The size of Plant C at Jingsi Road in Changxing County will be approximately 50% larger than Plant A at Jingyi Road in Changxing County (Zhejiang Province), at which we plan to develop and produce lithium-ion batteries. The Company intends to use 100% of the proceeds of this offering for the construction of Plant C at Jingsi Road in Changxing County for the development and production of lithium-ion batteries. Our target market for lithium-ion batteries is manufacturers of electric bicycles in China, and we believe that this product line will increase our revenues and increase our competitiveness (See “Description of Business – Our Products – Future Products” at pages 75 and 76). We estimate that our lithium-ion batteries will be launched and distributed into the marketplace within two years from the date of this prospectus.

We plan to commence our relocation procedures after obtaining the land use right from the local government, which we expect to obtain in the next two months, after which we anticipate that it will take us no longer than two months to fully relocate such facilities. We do not anticipate any disruption of our business since the production capacity of Plant A, which is subject to relocation, can be fully absorbed by Plant B without major investment.

Furthermore, on September 6, 2010, CEJC entered into a Project Investment Contract and a Supplemental Agreement to the Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee, pursuant to which CEJC shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park (“Plant D”) to manufacture valve regulated lead-acid batteries, as well as our newest product, lithium-ion batteries, and other related products in the Jiangsu Xuyi Economic Development Zone. In the first stage CEJC shall invest approximately RMB422,000,000 (approximately US$62,000,000), including approximately RMB150,000,000 (approximately US$22,000,000) in fixed assets for the production of VRLA batteries only. The Company does not plan to construct lithium-ion battery production facilities in Plant D until 18 months after the date that we commence production of the first stage. CEJC expects to complete all construction related to the first stage on or before December 31, 2011. We believe after the completion of the project our production capacity will be further increased.

Established brand awareness

We have established good brand awareness across China. In 2009, the “Chisen” brand was awarded the Most Trust and Worthy Brand of Consumer Electric Bicycle Batteries from CCTV, a major television station in China. Because of this awareness, CCEC obtained one of the providers contract for a dedicated project, namely “Introducing Electronic Appliance (Lead-Acid Motive Battery Project of Electric Bicycle) into Rural District” in Shandong Province. In order to stimulate the economy, the PRC government introduced this project whereby the government offers subsidies equal to 13% of the retail price of electric bicycles which are sold to people who hold rural identity cards in rural areas. Therefore, sales of electric bicycles are estimated to increase about 20% for the period ending December 31, 2010. Since our business partners are major electric bicycle manufacturers, our sales are estimated to increase accordingly.

We believe CCEC has established for itself a positive social image across China as the official batteries supplier for electric bicycles used in the Beijing Olympic and Paralympics Games in 2008 and the alternative power source sponsor of the 2010 Shanghai World Expo.

Market position

CCEC positions itself as the most preferred supplier of customers who are manufacturers of electric bicycles (i.e., our “factory customers”) and also directly to a growing retail market for replacement of battery products, i.e., our secondary market of distributors through our exclusive distributors.

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Well-established distribution channels

We primarily sell our battery products to manufacturers of electric bicycles and desire to develop our sales channels to sell our products directly to distributors through our regional sales teams of the Company. We have established business relationships with Xinri and Aima, both of which rank in the top five electric bicycle manufacturers in terms of popularity in China, and we have been selected as a most preferred supplier for Xinri and Aima whereby we receive from customers first priority on purchases in exchange for our best pricing (between 8-10% lower prices than to our other customers) and preferred sales terms (such customers are entitled to extend payment terms up to 2 months longer than our other customers). We believe such relationships will enable us to access such customers’ distribution channels to expand our sales in the end user customer market and also enable us to shares a significant portion of the factory customer sales market. For the end users market, CCEC has established relationships with approximately 372 distributors as of the date of this prospectus, covering most of the major districts in China. Red dots illustrated in the chart below represent the cities where we have established distribution channels, with each city containing several distributors.

Our cooperative partnership with clients

The Company’s products have been certified as the preferred brand of top electric bicycle manufacturers in China, including Xinri and Aima. The Company also establishes strategic cooperation partnerships with suppliers and vendors by means of supply chain integration to control procurement cost and quality. Moreover, a supplier’s assessment system is set up for ensuring the stability of the quality of our direct materials.

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Research and development

In April 2008, CCEC entered into a cooperation agreement with Xiamen University to establish the Zhejiang Changxing Chisen Physical-Chemical Power Supply Research and Development Center (“R&D Center”) at the College of Chemistry and Chemical Engineering at Xiamen University for researching and developing new products. Xiamen University is a first-class research university in China with 9 graduate schools, 120 research institutions and cooperative inter-university ties to over 100 institutions worldwide. Pursuant to the terms of the cooperation agreement, CCEC shall contribute RMB300,000 (approximately US$44,000) annually to fund operating costs for the R&D Center and provide additional funds for certain engaged research projects. Xiamen University shall contribute staff, laboratory usage and relevant equipment to the R&D Center. The R&D Center provides us with solid support on the research and development of new batteries technology. For example, we have developed the technology of producing lithium-ion batteries and lithium-ion iron phosphate anode materials through the cooperation with Xiamen University. Both parties shall be entitled to share equally in the benefits of any achievements from the R&D Center, and any such benefits or achievements realized shall not be transferrable to any third party without the consent of both parties. For example, CCEC will own jointly and equally with Xianmen University any intellectual property developed at or by individuals employed at the R&D Center.

Apart from the Research Center at Xiamen University, the Company is also running an on-site R&D center for the research and development of new manufacturing techniques for its lead acid batteries and new products. The Company has hundreds of automated testing equipment, including high-performance Universal Battery Tester (“UBT”), which is particularly designed for cycle life and capacity testing of automotive batteries. It can also be used for testing other types of batteries. The UBT performs charging and discharging in accordance with the programmed test schedule.

Development Strategy of the Company

We strive to create an international first-class brand and become the one of the leaders in providing “green” energy in the global electric bicycle market. Through our continuous researching and developing of new chemical energy technologies, we intend to provide energy-saving and highly-effective energy solutions to our customers for improving the quality of life while maintaining a sustainable ecological environment. Our goal is to become the largest battery developer and producer with a first-class sales and service network in China. With one of the leading positions in the LABEB battery product market in China, our expansion plans in Changxing County (Zhejiang Province) and Jiangsu Province, our product research and development capability and our cooperative partnerships with clients, we believe that we are well positioned to capture additional business opportunities in China's personal transportation device markets. In light of the prevailing economic trends for developing alternative transportation devices that reduce the reliance on oil and produce lesser emissions, we plan to explore the motive battery market for electric-powered motorcycles and electric cars. Leveraging our experience and expertise in producing lead-acid motive battery products for electric bicycles, our product mix will be expanded to include valve regulated lead-acid back-up batteries, the lithium-ion battery, lead-acid power storage batteries dedicated for solar and wind power and lead-acid motive batteries for electric cars.

The top five lead-acid motive battery manufacturers as of March 31, 2010 accounted for over 50% of the total market share in terms of production in China and the Company was ranked third in terms of production in the industry according to the China Battery Industry Association as of December 31, 2009. In order to maintain the position as one of the leaders in the industry, we actively search for acquisition targets to expand our market share and to develop our production capacity however as of the date of this prospectus, we do not have any agreements with any targets and are not currently in any negotiations with any target companies. In addition, our development strategy is committed to the following:

Production capacity

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Furthermore, on September 6, 2010, CEJC entered into a Project Investment Contract and a Supplemental Agreement to the Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee, pursuant to which CEJC shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park (“Plant D”) to manufacture VRLA batteries , as well as our newest product, lithium-ion batteries, and other related products in the Jiangsu Xuyi Economic Development Zone. In the first stage, CEJC will invest in the production of valve regulated lead acid batteries only and shall invest approximately RMB422,000,000 (approximately US$62,000,000), including approximately RMB150,000,000 (approximately US$22,000,000) in fixed assets for the production of VRLA batteries only. The Company does not plan to construct lithium-ion battery production facilities in Plant D until 18 months after the date that we commence production of the first stage. CEJC expects to complete all construction related to first stage on or before December 31, 2011. We believe after the completion of the project our production capacity will be further increased. The project will be operated primarily by the cash generated from our operating profit and short term bank loans.

Expand offering of highly efficient battery products

For future market development, we intend to focus on the lithium-ion battery, which is a new product trend in the European, US and Japanese markets, on electric vehicle power batteries and on energy storage batteries dedicated to solar and wind power. We are currently committed to investing in and constructing new production facilities in Changxing County (Zhejiang Province) and in Xuyi County (Jiangsu Province).100% of the net proceeds of this offering will go to the construction of a new production plant in Changxing County for the production and development of lithium-ion batteries (See “Use of Proceeds” at page 35). Since the Company is experienced in producing motive batteries for powering electric bicycles, the Company intends to bring the lithium-ion battery to market by focusing first on the market for lithium-ion batteries in electric bicycles. We estimate that our lithium-ion batteries will be launched and distributed into the marketplace within two years from the date of this prospectus. The Company intends to cooperate with manufacturers of electric bicycles and to deliver small lots of pre-launch lithium-ion batteries to them in order to explore the market, as well as to obtain feedback from electric bicycle customers to further improve our production technology of lithium-ion batteries. We are currently monitoring and studying the market development of lithium-ion batteries including, but not limited to, technology development, market demand and relevant supporting facilities. We will continue monitor the development of our lithium-ion project in Changxing County (Zhejiang Province), and to adjust our execution plan accordingly. Until these products are formally launched and distributed into the marketplace, their effects on our business are uncertain. We also intend to invest more resources and effort on the research and development in these areas in order to expand our market share by offering highly efficient battery products. We do not have any specific timetable for this strategy as we consider expanding our offering of highly efficient battery products to be part of our core business, and the amounts we decide to allocate to this strategy will be funded by our operating cash flows.

Augment marketing and promotion efforts to increase brand awareness

The Company works with leading national brand designing companies to establish a complete plan for scientific branding, which use cartoon image endorsements to promote its corporate image, products and brand awareness, through television and printed advertisements. Furthermore, we believe CCEC has established for us a positive social image across China as the official batteries supplier for electric bicycles used in the Beijing Olympic and Paralympics Games in 2008 and the alternative power source sponsor of the 2010 Shanghai World Expo. We do not have any specific timetable for this strategy as we consider augment marketing and promotional efforts to increase brand awareness to be part of our core business, and the amounts we decide to allocate to this strategy will be funded by our operating cash flows.

Expand sales network and distribution channels

We intend to put in more resources to expand our sales and distribution networks by: (1) adding new distributors in key sales regions in China; (2) developing new marketing strategies in different channels; (3) improving communication between sales teams and distributors; and (4) improving our brand awareness and promotion effort. We do not have any specific timetable for this strategy as we consider expanding our sales network and distribution channels to be part of our core business, and the amounts we decide to allocate to this strategy will be funded by our operating cash flows.

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Build partnerships with new and existing clients

We continue to build a close, mutually beneficial and harmonious partnership with our existing factory customers. We aim to establish a win-win long-term partnership with all of our new customers. We intend to continue to utilize our customer relationship management to provide tailor-made management policies that focus the needs of different customers. We do not have any specific timetable for this strategy as we consider building partnerships with new and existing clients to be part of our core business, and the amounts we decide to allocate to this strategy will be funded by our operating cash flows.

Our Products

Current Products

The key components of a lead-acid motive battery include electrode plates and fiberglass dividing plates. The electrode plates are coated with oxidized lead and alloy lead. Pairs of positively charged electrode plates and negatively charged electrode plates each separated by a fiberglass dividing plate are bound together by metal strip and installed into the plastic casing of a lead-acid motive battery. The battery is then filled with sulfuric acid and charged with electricity. The number and the size of electrode plates required to be installed in a lead-acid motive battery will depend on the required level of its storage capacity and the power output.

We produce and offer 10 models of lead-acid motive battery products for sale and are mainly engaged in the production of the following models of lead-acid motive battery products for electric bicycles:

Product	Dimensions (LxWxH)	Weight (kg)		Power Output (w)		Estimated Hours Required Per Charging (1)			Estimated Minutes of Use Per Charging (min)(2)		Estimated Travel Distance Per Charging (km)
6-DZM-10Ah	151×99×98		4.2		60		10	h		135-145		45-50

6-DZM-12Ah	151×99×102		4.3		72		10	h		120-130		45-50

6-DZM-16Ah	151×99×118		5.6		96		10	h		120-130		50-60

6-DZM-17Ah	181×76×166		6.3		102		10	h		120-130		50-60

6-DZM-20Ah	181×76×170		7.0		120		10	h		120-130		60-70

8-DZM-16Ah	200×100×118		7.4		128		10	h		120-130		60-70

8-DZM-18Ah	250×100×128		9.0		144		10	h		120-130		60-70

8-DZM-20Ah	250×100×128		9.05		160		10	h		120-130		60-70

6-DZM-24Ah	175×165×125		9.5		144		10	h		120-130		70-80

6-DZM-25Ah	250×78×118		8.85		150		10	h		120-130		70-80

(1) Estimated minutes required per charging refers to the estimated number of minutes required for charging the battery from nil to full storage capacity.

(2) Estimated hours of use per charging refer to the estimated maximum number of hours for which the battery is able to be used on each occasion when it is charged to its full storage capacity.

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Of the 10 models of lead-acid motive battery products set forth above, the 6-DZM-12Ah and 6-DZM-20Ah are our core products, which accounted for 40%, and 30% of our total revenues for the year ended March 31, 2010, respectively, and 38% and 16% of our total revenues for the nine months ended December 31, 2010, respectively.

All the lead-acid motive battery products produced by us are re-chargeable and can be recharged approximately 500 times. They are standardized and can be used in electric bicycles, electric motorcycles and electric cars produced by different manufacturers.

Pictures of Our Current Products



6-DZM-10AH		6-DZM-12AH



6-DZM-16AH		6-DZM-17AH



6-DZM-20AH		8-DZM-18AH/8-DZM-20AH



6-DZM-24AH		6-DZM-25AH

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8-DZM-16AH

Future Products

We are currently committed to investing in and constructing new facilities in Changxing County (Zhejiang Province) and Jiangsu Province to produce new battery products, however 100% of the net proceeds of this offering will go to the construction of Plant C in Changxing County for the development and production of lithium-ion batteries (see “Use of Proceeds” at page 35). For future market development, we intend to focus on the development of (a) the lithium-ion battery, (b) lead-acid power storage batteries dedicated for solar and wind power and (c) lead-acid electric cars motive power batteries. We also intend to invest more resources and effort on the research and development in these areas in order to expand our market share by offering more efficient battery products.

Lithium-ion Motive Batteries

With respect to lithium-ion batteries, we have designed and developed lithium-ion battery products for electric bicycles. Our intended target market is electric bicycle manufacturers in China. Since September 2010, we have commenced surveying the land and have designed of our Plant C. We will commence construction of our new plant after we obtain the land use right at Jingsi Road in Changxing County, Zhejiang Province from Changxing County Bureau of Land and Resources. We estimate that the land use right could be obtained by March 2011. We are planning to launch and distribute our lithium-ion batteries into the market within two years from the date of this prospectus. Prior to our mass production of lithium-ion batteries, we intend to beta test the product by distributing a small lot of lithium-ion battery products to our existing customers of electric bicycle manufacturers. The purpose of our beta testing is to study the market as well as to obtain product feedback from our customers in order to further improve our products and to enhance our production technology. Until our products are formally launched into to mass production and distributed into the market, their effects on our business are uncertain. A detailed timeframe of our product launch is as follows:

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Product Type		Survey of Land, Plant Design, Construction		Model Selection of Machinery and Equipment, Selection of Suppliers, Purchase of Machinery and Equipment, Installation and Testing		Trial Production, Beta Testing and Marketing Assessment		Launching and Distributing Product into the Market
Lithium-ion Motive Batteries used for Electric Bicycles		From September 2010 through October 2011		From July 2011 through November 2011		*From December 2011 to October 2012		November 2012

* We understand the market of motive batteries used to power electric bicycles, and therefore we estimate that the trial production and market assessment period will be 11 months.

Lead-Acid Power Storage Batteries Dedicated for Solar and Wind Power

With respect to power storage batteries dedicated for solar and wind power, we have designed and developed valve regulated lead-acid power storage batteries for storing power generated from solar and wind energy, and for providing power supply to non-industrial electric appliances, such as road lamps, road indicators and in-house lighting systems. We have utilized our existing production facilities and have produced a small lot of storage batteries for feasibility testing, and such testing has been completed. Our target market is manufacturers of non-industrial electrical appliances in China. We are currently beta testing such product and have distributed a small lot of batteries to manufacturers of non-industrial electrical appliances for product assessment. Since this product is a new segment of our business, we do not have specific criteria to select participants for beta testing and we mainly contact as many potential customers as we can and ask them whether they are interested in becoming beta test participants. We are currently evaluating the feedback from the use of our products by these participants. Until these products are formally launched into mass production and distributed into the market, their effects on our business are uncertain. We intend to launch and distribute such products in November 2011. A detailed timeframe of our production launch is as follows:

Product Type		Explore the Market and Assess The Product		Preparation of Mass Production and Launching Product into the Market
Lead-Acid Power Storage Batteries Dedicated for Solar and Wind Power		* From January 2010 through June 2011		From July 2011 through November 2011

* The lead-acid storage batteries dedicated for solar and wind power is a new business segment of our Company, and therefore the Company estimates that it will take 18 months to explore the product’s future customer base and to assess the feedback. We also intend to improve our production technology accordingly.

Lead-Acid Motive Power Batteries used for Low Speed Electric Automobile

We have designed and developed valve regulated lead-acid motive power batteries for low speed electric automobiles, also known as neighborhood electric cars (“NEC”). We have utilized our existing production facilities and have produced a small lot of these motive batteries for feasibility testing, and such testing has been completed. Our target market of valve regulated lead-acid motive power batteries is manufacturers of NECs in China. We had selected our existing customers of electric bicycle manufacturers, such as, Xinri and Aima, as participants of our beta testing since such manufacturers also manufacture NECs. We have distributed a small lot of batteries to such manufacturers and we are assessing their feedback. Until these products are formally launched into mass production and distributed into the market, their effects on our business are uncertain. We intend to launch and distribute them into the marketplace in March 2012. A detailed timeframe of our production launch is as follows:

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Product Type		Exploring the Market and Assessing Our Product		Preparation of Mass Production and Launching Product into the Market
Lead-Acid Motive Power Batteries used for NECs		* From March 2010 through August 2011		From September 2011 through March 2012

* The manufacturing and sale of NECs is an emerging market in China. Uncertain conditions exist with respect to the development of the market, including, but not limited to, the battery type selection to power such NECs. However, the Company estimates that this market has potential to develop in light of the Chinese government’s efforts to promote such market as evidenced by a press release issued by the PRC government regarding the policies on promoting new energy vehicles which may be found at http://www.gov.cn/wszb/zhibo413/content_1732001.htm, a copy of which was also filed as Exhibit 99.6 to the Registration Statement of which this prospectus is made a part. The Company estimates it will take 18 months to explore the product’s future customer base as well as to assess the feedback. We also intend to improve our production technology accordingly.

Distribution Methods

We sell our sealed lead-acid motive battery products principally to manufacturers of electric bicycles. However, with the growing retail market for replacement of battery products, i.e. our secondary market, we have also strengthened our efforts in the sales of battery products to exclusive distributors which are strategically located in 27 provinces, autonomous regions and directly-administered municipalities in China.

The Company currently has exclusive sales agreements with distributors at the provincial and county levels. Pursuant to such exclusive sales agreements, distributors shall cooperate with us to establish sales networks in a designated location and to distribute our products exclusively. The Company sells products directly to the distributors, and such distributors have no right to return the unsold products to the Company. Furthermore, the Company provides a discount to such distributors and employs sales teams in each province across China to help distributors further distribute products from counties to towns and villages. The distributor is obligated to develop the end-user market and sales activities and brand promotion activities and maintain the goodwill and product quality of the Company. On the other hand, the Company is obligated to provide technical support to the distributor in order to improve the sales capacity and market share of the distributor, and the Company is also obligated to provide manuals, samples, copies of any relevant information and information with respect to sales-related promotions to the distributor. The Company has not obligation, financial or otherwise, with respect to the establishment of the distribution centers of the distributors. Such agreements typically have terms of one to two years, and provisions which allow for us to terminate early in the event that the distributor fails to meet its sales targets within the prescribed time limits or if we suffer losses caused by the breach of the agreement by the distributor (for example, breaches of confidentiality and exclusivity by the distributor or for activities of the distributor which damage our image).

Our largest distributors are located in the cities of Yancheng and Haimen in Jiangsu Province and in the city of Fuoshan in Guangdong Province. We have established and maintained long-term relationships (over three years) with distributors who we believe have local business experience and established regional sales networks.

Sources and Availability of Raw Materials from Suppliers

Although we purchase raw materials used in the manufacturing of our products from a small number of sources in order to maintain the stability of the quality of the raw materials, we have the ability to purchase from numerous sources, primarily in Jiangsu and Anhui province in the PRC. We believe that all necessary raw materials for its products are readily available and will continue to be so in the foreseeable future. We have never had, nor do we anticipate experiencing, any shortages of such materials.

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The raw material for our battery products consist primarily of electrolytic lead. Our success significantly depends on our ability to secure sufficient and constant supply of electrolytic lead for our production at acceptable price levels. Electrolytic lead represents our largest cost item in our lead-acid motive battery production. During each of the two fiscal years ended March 31, 2010 and March 31, 2009, the average selling price of electrolytic lead by our suppliers was approximately RMB15,000 (approximately US$2,200) and RMB15,000 (approximately US$2,200) per ton, respectively. There were slight fluctuations on the average selling price of electrolytic lead for the fiscal year ended March 31, 2010 and the average selling price of electrolytic lead decreased by 1.57% as compared to the fiscal year ended March 31, 2009. For each of the two financial years ended March 31, 2010 and March 31, 2009, costs of lead-related material accounted for approximately 80% and 80% of our total cost of sales, respectively. We do not have long-term contracts with any of our electrolytic lead suppliers, nor have we entered into any arrangement to mitigate the effect of price fluctuations of electrolytic lead. Therefore, any significant increase in the cost of electrolytic lead in the future could adversely affect our results if we cannot transfer the price increment to our customers.

We believe the Company generally maintains sufficient quantities of inventories of its products to meet customer demand.

The Company has entered into written contracts with several suppliers and vendors. The Company has major suppliers who accounted for the following percentage of total purchases and total trade payables in the fiscal years ended March 31, 2010 and 2009:

	Purchases						Trade Payables
Major Suppliers	Fiscal year ended March 31, 2010			Fiscal year ended March 31, 2009			Fiscal year ended March 31, 2010		Fiscal year ended March 31, 2009
							$’000		$’000
Jiangsu XiangFa Power Supply Co., Ltd.		23.96	%		17.46	%	$	0	$	0

Si County Wei Feng Power Supply Co., Ltd.		15.71	%		6.12	%	$	1,061	$	394

Jieshou City Haineng Power Supply Co., Ltd.		12.69	%		19.44	%	$	1,971	$	1,539

Anqing Burui Power Supply Co., Ltd.		12.00	%		7.21	%	$	0	$	415

Anyang City Yubei Gold and Lead Co., Ltd.		9.46	%		0	%	$	0	$	0

Sales and Marketing

In order to promote the sales and reputation of our “Chisen” brand, we launch specific publicity campaigns and marketing based on the market needs. With reference to the conditions of regional markets and local wholesale market for electric vehicles, we promote our band through roadside billboard and launch promotional dealer sales in Anhui, Henan, Hebei and Jiangsu Provinces in China.

With reference to the need for increased sales in our secondary market, market-orientated regional distributor meetings were convened in the Provinces of Jiangsu, Henan, Shanxi and Jiangxi. We show them our image and services, thereby enhancing the confidence towards our distributors and sales office. This would also enhance the company’s visibility and reputation of our products, whereby ultimately boost our sales.

A small number of customers account for a very significant percentage of our revenue. Trade receivables related to the Company’s major customers for the years ended March 31, 2010 and 2009 comprised 80% and 85% of all trade receivables as of March 31, 2010 and 2009, respectively. Trade payables related to the Company’s major suppliers for the years ended March 31, 2010 and 2009 comprised 20% and 24% of all trade payables as of March 31, 2010 and 2009, respectively. The Company’s major customers for the fiscal years ended March 31, 2010 and 2009 accounted for the following percentages of total revenue and trade receivables:

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	Sales						Trade Receivables
Major Customers	Fiscal year ended March 31, 2010			Fiscal year ended March 31, 2009			Fiscal year ended March 31, 2010		Fiscal year ended March 31, 2009
							$’000		$’000
COMPANY X		21.08	%		47.40	%	$	26,283	$	29,598

COMPANY Y		19.08	%		6.34	%	$	14,005	$	1,609

COMPANY Z		6.77	%		0.47	%	$	2,747	$	109

The loss of any of our major customers could have a material adverse effect upon our revenue and net income.

Manufacturing

Our wholly owned subsidiary CCEC will merge its first production facility, built in 2002 (“Plant A”), into its second facility which has been in operation since 2008 (“Plant B”). Plant B is one and a half times the size of Plant A and is located within 1.5 kilometers of Plant A. Plant B has the capacity to meet the additional production requirements resulting from the closing of Plant A and exceed any increase in market demand for CCEC’s products. We do not expect that CCEC’s production costs or capacity will change as a result of the merger of Plant A into Plant B.

In the next two years we intend to construct a third plant in Changxing County, Zhejiang Province (“Plant C”), which size will be 50% larger than the size of Plant A and located within three kilometers of Plant A’s current location. Plant C will develop and produce CCEC’s newest products, including, without limitation, lithium-ion batteries.

Furthermore, on September 6, 2010, CEJC entered into a Project Investment Contract and a Supplemental Agreement to the Project Investment Contract with the Jiangsu Xuyi Economic Development Zone Administrative Committee, pursuant to which CEJC shall invest, in the aggregate, approximately RMB1,200,000,000 (approximately US$177,000,000) in three stages to build the Chisen Circular Economy Industry Park (“Plant D”) to manufacture valve regulated lead-acid batteries, as well as the Company’s newest product, lithium-ion batteries and related products, in the Jiangsu Xuyi Economic Development Zone. In the first stage CEJC shall invest approximately RMB422,000,000 (approximately US$62,000,000), including approximately RMB150,000,000 (approximately US$22,000,000) in fixed assets for the production of VRLA only. The Company does not plan to construct lithium-ion battery production facilities in Plant D until 18 months after the date that we commence production of the first stage. CEJC expects to complete all construction related to the first stage on or before December 31, 2011. We believe after the completion of the project our production capacity will be further increased.

Quality Control

We implement quality management control on our production line and producing quality products through advanced production technologies and testing methods, which has passed the ISO9001 Quality Management System Certification (which expired and is currently in the process of becoming renewed) ISO14001 Environmental Management System Certification, OHSAS (GB/T28001:2001) “Occupational Health and Safety Management System” certification, clean production certification and CE certification. Our measurement of quality objectives and processes were analyzed through planning, process, performance, recognition, execution and supervision, in order to produce products to meet requirements of customers and regulators.

With assistants from Taiwan’s Jian-Feng Institute of Management, we established and implemented a supplier evaluation system, which improve the quality of raw material supplies. We strengthened the production process by implementing the “3 Ns” principle: (1) No defective materials will be accepted; (2) No defective products will be produced and (3) No defective products will be distributed.

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Research and Development

During the fiscal year ended March 31, 2010, we doubled our company-sponsored research and development activities expenses to US$244,000 from US$117,000 for the fiscal year ended March 31, 2009 in order to further enhance the competitiveness of our products through the improvement of our production techniques and the release of new valve regulated lead-acid battery products. For the nine months ended December 31, 2010, we expended approximately US$676,000 in research and development. The Company plans to spend approximately an additional US$520,000 during fiscal year ending March 31, 2011, approximately US$1,200,000 during fiscal year ending March 31, 2012 and approximately US$1,700,000 during fiscal year ending March 31, 2013 on company-sponsored research and development activities.

In order to further enhance the competitiveness of our products, we have expended resources on R&D and technology innovation. We have been able to decrease our cost of production as a result of our R&D efforts focused on improving our manufacturing technology. For example, we now use less lead in the production of our batteries while preserving the same efficiency of such batteries. We desire to increase our competitiveness through continued improvement of valve regulated lead-acid battery production techniques and the development and production of new-model power batteries, including, without limitation, the lithium-ion battery.

On the development of new products lines, we have conducted research on ultra lead–acid motive batteries, wind and solar energy storage batteries, VRLA batteries applied for telecommunications and uninterruptible power supply (UPS) equipment, lithium-ion power batteries, lithium-ion ultra capacitors and anode material for lithium-ion batteries, which is a component of lithium-ion batteries. The ultra lead-acid motive battery, a product that we commenced sales of upon its release to the market in March 2009, is over 8% greater than other products of same type on performance indicators. In February 2009, the Company developed valve regulated lead-acid batteries for electric road vehicles.

With the release of the plan for the revitalization of China’s new energy and the vigorous promotion of the Chinese government to new energy motors, we believe such products will occupy a significant market share. Lithium-ion ultra capacitors and anode material for lithium-ion batteries have passed the trial production phase and both are deemed to be state-of-the-art techniques. The products have entered into the alpha test phase.

Backlog

We have historically shipped the majority of our products within one month of the time that the order confirmation occurs. Due to the short-cycle nature of our business, we do not sustain significant backlogs and had no backlog of unfilled orders as of December 31, 2010, March 31, 2010 and March 31, 2009.

Warranties and Return Policy

We provide 15 months of warranties and return policy for products. For any defective batteries sold and returned within the first 8 months of warranty period, the Company will exchange a new battery to the customers. For defective batteries sold and returned from 9 to 15 months of warranty period, the Company will replace a functional battery to the customers.

Product Liability and Insurance

We do not have any product liability insurance. Because of the nature of our products, we may be subject to product liability claims resulting from personal injuries and become involved in lawsuits that incidental to our business. As of today, we have not yet been involved in any products liability litigation. Product liability insurance is expensive, restrictive and difficult to purchase. Accordingly, there is no assurance that we will have sufficient capital to pay for any successful product liability claims that made against us in the future. Such claims could have a material adverse effect on our financial condition and results of operations.

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Competition

The Lead-acid motive battery has a dominant position in China, in which 95% of electric bicycles in China are powered by lead-acid motive battery. The core product competitor in the market is the lithium-ion battery. The major manufacturers of the lithium-ion motive battery in the market are BYD Company Limited (1211.HK) and China BAK Battery, Inc. (Nasdaq: CBAK). As compared to lead-acid motive batteries, the lithium-ion battery has advantages in terms of useful life, environmental friendliness, more compact size and lighter weight. However, lead-acid motive battery still has the advantage of greater stability in terms of performance and reliability, safety and lower price.

Our chief competitors that produce lead-acid motive batteries in China are Tianneng Power International Ltd. (Tianneng) and Zhejiang Chaowei Power Co., Ltd. (Chaowei). These companies are the first companies to enter the battery industry in China. For example, Chaowei and Tianneng are the leading companies in terms of production and sales volume. Chaowei has a lot of after-sales service stores and takes an advantage in the secondary market by its continued business expansion. Tiannneng and Chaowei’s capital stock are both listed on The Hong Kong Stock Exchange.

Although the Company entered into its battery industry later than some of its competitors, the Company’s products have been certified as the preferred brand of top electric bicycle manufacturers in China, including Xinri and Aima.

In order to maintain our competitive position, the Company intends to (1) increase scale of production through expansion of production capacity; (2) expand the distribution networks in the end user customer market and enhancing the business relationship with our factory customers; (3) invest more resources in the research and development of new products and new manufacturing technology in order to diversify our product range; (4) decrease the cost of production and improve quality control; (5) maintain adequate human resources, production resources, as well as the financing resources to support the growth of the Company; and (6) implant effective and efficient risk management.

Intellectual Property

We rely on trademark and patent rights to protect our intellectual property rights and to maintain and enhance our competitiveness in the battery industry. We intend to make strategic investments in intellectual property through self-development and acquisition. These initiatives are designed to enhance our technology, improve existing products, rapidly introduce new products to fill identified needs, and address new applications and markets. We believe our ability to successfully develop and produce new products will allow us to open market opportunities and enhance our market position.

Our success will depend in part on our ability to obtain patents and preserve other intellectual property rights covering the design and operation of our products. We intend to continue to seek patents on our inventions when we deem it commercially appropriate. The process of seeking patent protection can be lengthy and expensive, and there can be no assurance that patents will be issued for currently pending or future applications or that our existing patents or any new patents issued will be of sufficient scope or strength or provide meaningful protection or any commercial advantage to us. We may be subject to, or may initiate, litigation or patent office interference proceedings, which may require significant financial and management resources. The failure to obtain necessary licenses or other rights or the advent of litigation arising out of any such intellectual property claims could have a material adverse effect on our operations.

The Company submitted the trademark “

” to be registered in Class 6 in China in September 2007. The protection of which is granted by State Trademark Bureau from July 28, 2010 to July 27, 2020.

The Company submitted the trademark “

” to be registered in Class 12 in China in September 2007. The protection of which is granted by State Trademark Bureau from May 28, 2010 to May 27, 2020.

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The Company submitted the trademark “

” to be registered in China in Class 9, January 2008. The protection of which is granted by State Trademark Bureau from April 7, 2010 to April 6, 2020.

The Company submitted the trademark “

” to be registered in Class 9 in China, in April 2008. The protection of which is granted by State Trademark Bureau from May 28, 2010 to May 27, 2020.

The Company submitted the trademark “

” to be registered in Class 9 in China on May 4, 2008. The protection of which is granted by State Trademark Bureau from June 7, 2010 to June 6, 2020.

The Company submitted the trademark “

” to be registered in Class 9 in China, in May 2008. The protection of which is granted by State Trademark Bureau from June 7, 2010 to June 6, 2020.

The Company submitted the trademark “

” to be registered in China in Class 1 to Class 45 in May 2008. The protection of Class 1 is granted by State Trademark Bureau from May 14, 2010 to May 13, 2020. The protection of Class 2, 5, 43, 44 and 45 is granted by State Trademark Bureau from May 14, 2010 to May 13, 2020. The protection of Class 3, 6, 7, 10, 12, 17, 19, 33 and 34 is granted by State Trademark Bureau from March 28, 2010 to March 27, 2020. The protection of Class 4 is granted by State Trademark Bureau from May 7, 2010 to May 6, 2020. The protection of Class 14, 15, 16, 20, 21, 37, 38 and 40 is granted by State Trademark Bureau from April 14, 2010 to April 13, 2020. The protection of Class 8, 9, 11 and 13 is granted by State Trademark Bureau from June 7, 2010 to June 6, 2020. The protection of Class 22 to 27 is granted by State Trademark Bureau from August 7, 2010 to August 6, 2020. The protection of Class 31 is granted by State Trademark Bureau from March 21, 2010 to March 20, 2020. The protection of Class 32 is granted by State Trademark Bureau from April 7, 2010 to April 6, 2020. The protection of Class 39, 41 and 42 is granted by State Trademark Bureau from September 28, 2010 to September 27, 2020.

The Company submitted the trademark “

” to be registered in other 38 classes in China in June 2008. The protection of Class 2, 3, 4, 6, 7, 8, 10, 12, 13, 14, 15, 16, 17, 29, 30, 31, 34, 36, 37, 45 is granted by State Trademark Bureau from April 21, 2010 to April 20, 2020.

The Company submitted the trademark “

” to be registered in Class 9 in Cambodia in August 2008. The protection of which is granted by State Trademark Bureau from August 19, 2008 to August 19, 2018.

The Company submitted the trademark “

” to be registered in Class 9 in Malaysia in August 2008. The protection of which is granted by State Trademark Bureau from August 22, 2008 to August 22, 2018.

The Company submitted the trademark “

” to be registered in Class 9 in Indonesia in August 2008. The protection of which is granted by State Trademark Bureau from July 31, 2008 to July 30, 2018.

The Company submitted the trademark “

” to be registered in Class 9 in Thailand and India in August 2008. The registration was subsequently approved.

The Company submitted the trademark “

” to be registered in Class 9 in India in August 2008. The registration was subsequently approved.

The Company submitted the trademark “

”to be registered in Class 9 in China, in December 2009. The registration was subsequently approved.

The Company currently holds 28 patents in total, of which 17 expire in 2016, one expires in 2017, four expire in 2018, two in 2019 and three in 2020. Others are still pending.

The Company currently has two domain names, http://www.chisenelectric.com and http://www.chisenpower.com. These domain names are in good standing.

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Corporate Background and Information

Our predecessor, World Trophy Outfitters, Inc. (this prospectus uses the term “World Trophy” when we discuss the operations of the Registrant prior to November 12, 2008), was formed as a Nevada corporation on January 13, 2005, and was in the business of selling big game hunting packages to high end clients who sought to hunt with the top tier big game outfitters. Its main product sold was hunting trips, which included the hunting license and guide fees. During the year ended March 31, 2008, World Trophy sold its entire inventory of big game hunts, was unsuccessful in developing a profitable business and ceased its operations effective April 1, 2008. Prior to the Exchange (as defined and discussed below), World Trophy focused its efforts on seeking a business opportunity and had been in the process of locating and negotiating with business entities for the merger of a target company into World Trophy.

On November 12, 2008, World Trophy entered into a Share Exchange Agreement with Fast More, Cheer Gold and Floster. Immediately prior to the Exchange, World Trophy was a shell company with US$51,039 in assets and a net loss of US$(27,977) for the three months ended September 30, 2008. Upon the closing of the Exchange, the Company did not have any liabilities. Prior to the closing of the Exchange, World Trophy implemented a 3 for 1 forward stock split, resulting to the increase of the Registrant’s common stock issued and outstanding from 11,219,400 shares to 33,658,200 shares, immediately before the completion of the Exchange. As a result of the Exchange, World Trophy acquired all of the issued and outstanding securities of Fast More from the Stockholders in exchange for 35,000,000 newly-issued shares of World Trophy’s common stock, par value US$0.001 per share, of which 32,900,000 shares were issued to Cheer Gold and 2,100,000 shares were issued to Floster. Upon the closing of the Exchange, the Stockholders collectively beneficially own 70% of the voting capital stock of the Company, 65.8% of which is owned by Cheer Gold and 4.2% of which is owned by Floster. As a result of the Exchange, Fast More became a wholly-owned subsidiary of World Trophy. Effective February 2, 2009, we amended our Articles of Incorporation to change our name from “World Trophy Outfitters, Inc.” to “Chisen Electric Corporation.”

CCEC was incorporated in Huzhou, Zhejiang Province in China on February 25, 2002 and was founded by Mr. Xu Kecheng and Mr. Xu Keyong. CCEC engaged in production and sales of valve regulated lead acid battery since its incorporation. In September 2004, Mr. Xu Keyong transferred his 40% of the shares of the company to BEME International Co., Ltd. Fast More is an investment holding company incorporated in Hong Kong on December 17, 2007 with limited liability. On February 16, 2008, Fast More acquired the 51%, 9% and 40% equity interests in CCEC from Mr. Xu Kecheng Mr. Xu Keyong and BEME International Co., Ltd., respectively, for RMB6,502,500 (approximately US$926,000), RMB1,147,500 (approximately US$164,000) and RMB 5,100,000 (approximately US$726,000), respectively. Upon the completion of these acquisition transactions, CCEC became the wholly-owned and chief operating subsidiary of Fast More. Since the ultimate beneficial owner of Fast More was, at all times, the substantial stockholder of CCEC (Mr. Xu Kecheng), the ownership transfer transaction was accounted for as a transfer of entities under common control in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 805.

On August 23, 2010, CCEC, the chief operating subsidiary of the Registrant, formed a subsidiary in the PRC called Chisen Electric Jiangsu Co., Ltd. (CEJC) in Jiangsu Province, China. CEJC’s registered capital is RMB150,000,000, of which CCEC holds 98% (RMB147,000,000) and the Registrant’s CEO Mr. Xu Kecheng holds 2% (RMB 3,000,000). CEJC intends to produce valve regulated lead-acid batteries, battery plates, battery assembling systems, lithium-ion batteries, battery chargers, power management systems and related parts for manufacturing and sales in the Jiangsu Xuyi Economic Development Zone in Jiangsu Province, the PRC.

We are located at Changxing Economic Development Zone at the bank of the Taihu Lake in Zhejiang Province, in close proximity to major national transportation systems, including National Highways 104 and 318, the Shanghai – Jiangsu – Zhejiang – Anhui – Hangzhou – Nanjing Expressway, the Changxing – Huzhou – Shanghai Channel, the Xuancheng – Hangzhou Railway and the Xinyi – Changxing Railway. Our corporate offices are located at Jingyi Road, Changxing Economic Development Zone, Changxing, Zhejiang Province, The People’s Republic of China. Our telephone number is (86) 572-6267666 and our corporate website in English is located at www.chisenelectric.com.

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We are a reporting company under Section 13 of the Securities Exchange Act of 1934, as amended. Our shares of common stock are not currently listed or quoted for trading on any national securities exchange, however our common stock currently trades under the symbol “CIEC” on the OTCQB. We have commenced the application process for the listing of our common stock on the NYSE Amex under the symbol “CIEC”.

Corporate Structure

Our corporate structure is illustrated as follows:

Relocation and Expansion of New Production Facilities

On August 20, 2010, CCEC entered into a Compensation Agreement of Corporate Relocation Acquisition (the “Relocation Agreement”) with the Administrative Committee of Changxing Economic Development Zone, Zhejiang (the “Committee”). Pursuant to the Relocation Agreement, CCEC agreed to transfer to the Committee the land-use rights to, and structures on, the property previously used by CCEC for its office and manufacturing facilities, and agreed to relocate the office and manufacturing facilities to a new location. The Committee requested the relocation pursuant to a general policy of the Government of Changxing County to relocate “secondary industries” from urban areas to countryside. . All manufacturing entities, including our Company, have been classified to be a “secondary industry” by the National Bureau of Statistics of PRC. Pursuant to the “Withdraw from Secondary Industry and Progressing to Tertiary Industry” policy of Changxing County, all entities that are classified as participants in “secondary industries” shall be relocated from the Westside of Jing’er Road to the Eastside of Jing’er Road. The Government of Changxing’s policy is to negotiate with each entity with respect to the specific terms of relocation, including, without limitation, relevant compensation to be paid after assessment

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Pursuant to an assessment of the property and the compensation of the losses stated as follows, the Committee agreed to pay to CCEC RMB117,202,100 (approximately US$17,265,000) in total for the relocation. In addition to the compensation for the property, this amount also includes compensation for the value of losses associated with removing CCEC’s equipment at RMB6,939,900 (US$1,022,000) and the value of losses to CCEC with respect to the suspension of its operations for two months at RMB11,748,000 (approximately US$1,731,000). CCEC agreed to vacate the site within one year of the signing of the Relocation Agreement. The RMB117,202,100 (approximately US$17,265,000) will be paid on the following schedule: five percent (5%) of such amount to be paid within one month after the execution of the Relocation Agreement, twenty percent (20%) to be paid within one month of CCEC delivering appropriate land-use rights certificates and proof of cancellation of encumbrances, twenty-five percent (25%) to be paid after the commencement of the removal of CCEC’s operations from the site, and the remaining fifty percent (50%) to be paid upon completion of the relocation.

On August 20, 2010, CCEC and the Committee entered into an investment agreement (the “Investment Agreement”) whereby CCEC agreed to commence the relocation of its manufacturing facilities pursuant to the Relocation Agreement with the administrative and policy support of the Committee. According to the urban planning policies of Changxing County, the Changxing County Land and Resources Bureau pre-identifies, at its discretion, the parcel of land to be reclaimed as well as the affected parties specific to the land reclamation. The specific parties which are affected by such land reclamation are then invited to participate in the “Land Tender, Auction and Listing” activities. The compensation of relocation is determined by the result of the assessment made by the government based on the results provided by a professional valuation firm. The county indentifies the locations to which businesses are to be relocated by following the urban planning policies of Changxing County. CCEC agreed to participate in “Land Tender, Auction and Listing” activities organized by the Changxing County Land and Resources Bureau with respect to a pre-identified parcel of land to which CCEC agreed to relocate its business.

The delivery of the land-use rights to CCEC will be deemed as a public transfer and CCEC agreed to pay the land transfer amount, contract tax and other related fees at market price. The Committee agreed to provide for and maintain public works (sewage, electricity, roads) with respect to the property. CCEC will be subject to certain prepayment fees as set forth in the Investment Agreement, which if not paid, will allow the Committee to terminate the Investment Agreement and receive penalty payments in the amount of 0.3% per day. Pursuant to the terms of the Investment Agreement, the construction project must be completed within two years from the date of execution of the Investment Agreement and the project shall be put into production in 2012. Following execution of the Investment Agreement, also on August 20, 2010, CCEC and the Committee entered into a supplemental agreement to the Investment Agreement whereby the Committee agreed to compensate CCEC when CCEC’s conditions of payment and tax scale under the Investment Agreement are satisfied.

The Committee agreed to grant preferential tax policies on Value Add Tax and Enterprise Income Tax to CEJC in accordance with policies as issued by the local government. However these policies will be forfeited if taxes levied from the project are less than RMB30,000 (approximately US$4,400) per hectare on average (the Company will initially acquire a total area equal to 277.48 hectares in the first stage and an aggregate of 1,000 hectares for all three stages). The preferred policies include, but are not limited to, a 50% refund on the portion of value-added taxes which is legally retained by the local government for the first 5 years followed by a 25% refund in the following 5 years, and an exemption of the local portion of enterprise income tax which is legally retained by the local government for the first 6 years followed by a 50% reduction in the following 4 years. The policies shall commence upon the completion of the construction and the commencement of production.

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In exchange for CEJC’s investment, CEJC shall enjoy the lowest control standard for the price of land in Jiangsu Province (RMB19,000 (approximately US$2,200) per hectare), and the Committee shall assist CEJC in implementing the project, including but not limited to, the acquisition of land use rights, the obtainment of certificates for production plants and buildings, and the provision of infrastructure in the transferred land such as water supply, drainage, gas, electricity, cable TV, roads and telecommunications.

In the event that CEJC fails to commence construction and is delayed more than 7 days, the Committee has the right to terminate the Agreement and reclaim the land. In the event that CEJC fails to follow the construction schedule, the Committee has the right to reclaim the land. If the land remains unused for more than one year, the Committee has the right to levy a penalty equal to 20% of the land transfer amount per hectare. If the land remains unused for more than two years, in addition to collection of the aforementioned penalty, then the Committee has right to terminate the Agreement and reclaim the land. In the event that circumstances beyond our control cause us not to perform (i.e., force majeure), the Committee shall not have the right to bring an action against us for breach of contract.

Employees

As of December 31, 2010, the Company had approximately 2,535 full-time employees, including approximately 2,225 employees in production, approximately 20 employees in research and development, approximately 212 employees in sales and marketing and approximately 78 employees in administration . All of our employees are based inside China. Our employees are members of our company’s labor union and are organized under a collective bargaining agreement, but we have never experienced any work stoppage. We believe that our relationships with our employees are generally good.

PRC Government Regulations

Compliance with Environmental Regulations and Other Laws

We are subject to various national and local environmental laws and regulations in China, including those governing the use, discharge and disposal of hazardous substances and the discharge of waste water, exhaust fumes and solid waste in the ordinary course of our manufacturing process. The main pollutants generated by us are lead dust or particles and waste water which contain lead and sulfuric acid. During the operation of our production, we do not release any toxic element other than those that are permitted under the relevant laws and regulations.

Lead is the key raw material used in our production of lead-acid motive battery products. An excessive intake of lead dust or particles, whether through inhalation or skin contact, could have harmful effect on health. Lead poisoning may also result from occupations that involve close and frequent contact with or exposure to lead dust or particles. Lead dust and particles are generated during our production process. Our workers are exposed to electrode plates during different stages of our production process. Pursuant to the applicable environmental laws and regulations in China, we are obliged to install environmental protection equipment to ensure effective removal of lead dust and particles generated during our production process. We have installed such equipment at each of our production plants.

Our production process generates waste water containing lead and sulfuric acid. Such waste water will be neutralized and treated to remove lead contents in accordance with the applicable environmental standards in China. We have installed such waste water treatment facilities at all our production plants. Waste water generated at our production process, after the required treatment, will either be collected and reused for our production requirements or discharged to the municipal waste water collection systems for further treatment and discharge to the environment.

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We are also required by the laws and regulations governing health and safety at work in China to provide our employees exposed to lead dust or particles with protective clothing and accessories, such as gloves, goggles and masks. We also arrange all our employees engaging in the lead-related production process to receive medical checks at least once a year. The medical checks include measurement of blood lead level.

We believe that our current manufacturing operations comply in all material respects with applicable environmental laws and regulations. Although we believe that our current manufacturing operations comply in all material respects with applicable environmental laws and regulations, it is possible that future environmental legislation may be enacted or current environmental legislation may be interpreted to create environmental liability with respect to our other facilities, operations, or products.

The manufacturing facilities in which we operate are subject to the PRC’s environmental laws and requirements. Our landlord that leases the factory to us is required to and has obtained a Pollution Discharge Certificate issued by the Environment Protection Bureau of Changxing County and is responsible for the disposal of the waste in accordance with applicable environmental regulations. If our landlord fails to comply with the provisions of the permit and environmental laws, our landlord could be subject to sanctions by regulators, including the suspension or termination of its Certificate, which would result in the suspension or termination of our manufacturing operations.

Business Qualification and Licenses

According to certain corporate laws of the PRC, in order to be a lawfully established company in China, the relevant corporate registration authority shall issue a business license, the date of which shall be the date of the establishment of the company. The company business license shall state the name, domicile, registered capital, actually paid capital, business scope and the name of the legal representative of such company. If any of the items as stated in the business license is changed, the company shall modify the company’s registration, and the company registration authority shall issue a new business license.

CCEC obtained its business license on February 25, 2002, which such license was issued by the Huzhou Administration for Industry and Commerce. According to the Industrial Product Production License Control Regulation of the PRC, enterprises which manufacture valve regulated lead-acid batteries are permitted to engage in said production if the company obtains a production license.

On January 13, 2005, the Administration of Quality Supervision, Inspection and Quarantine of the PRC issued a Production License to CCEC (the license number XK06-044-00223) which expired on January 12, 2010. On August 17, 2007, due to the Company adding a new product line, an updated Production License with the same license number was reissued to CCEC, which expired on January 12, 2010. On February 10, 2010, a production license was issued (XK06-006-00627) which shall expire on February 9, 2015. On November 29, 2010, due to the Company adding a new product line, an updated Production License with the same license number (XK06-006-00627) was reissued to CCEC which shall expire on February 9, 2015.

Environmental Reports, Certifications and Licenses

According to certain environmental laws and regulations in China, the Department of Environmental Protection Administration under the State Council shall, in accordance with the national standards for environment quality and China’s economic and technological conditions, establish the national standards for the discharge of pollutants. The People’s Governments of Provinces, Autonomous Regions and Municipalities directly under the Central Government may establish their local standards for the discharge of pollutants for items not specified in the national standards. With regard to items already specified in the national standards, they may set local standards, which are more stringent than the national standards, and report the local ones to the Department of Environmental Protection Administration under the State Council for the record. Units that discharge pollutants in areas where the local standards for the discharge of pollutants have been established shall observe such local standards.

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On October 9, 2010, the China Quality Mark Certification Group and IQNet Association (the International Certification Network) jointly issued the ISO9001 Certificate to the Company (number 00210Q15168R0M) agreeing that the quality management system applied in the Company’s production and management activities. The certificate shall expire on October 8, 2013.

On October 9, 2010, the China Quality Mark Certification Group and IQNet Association (the International Certification Network) jointly issued the ISO14001 Certificate (number 00210E21312R0M) to the Company and signed-off on the environmental management system applied in the Company’s production and management activities. The certificate shall expire on October 8, 2013.

On September 5, 2008, the Changxing Environmental Protection Bureau issued the Notice of Examination Opinion approving the Company’s Environment Effect Report on its Relocation and Extension of the Company’s 1500 unit-per-year Lead-Acid Battery Production Project.

On September 20, 2008, the Changxing Environmental Protection Bureau issued the Pollutant Discharge License to the Company (license number HuChang080042). The License shall expire on September 19, 2012.

On June 22, 2010, the China Quality Mark Certification Group and IQNet Association (the International Certification Network) jointly issued OHSAS18001 Certificate (# 00210S10501R0M) to the Company after the Company passed its evaluation on Occupational Health and Safety Assessment Series. The Certificate shall expiry on June 21, 2013.

Employment laws

We are subject to laws and regulations governing our relationship with our employees, including: wage and hour requirements, working and safety conditions, citizenship requirements, work permits and travel restrictions. These include local labor laws and regulations, which may require substantial resources for compliance. China’s National Labor Law, which became effective on January 1, 1995, and China’s National Labor Contract Law, which became effective on January 1, 2008, permit workers in both state and private enterprises in China to bargain collectively. The National Labor Law and the National Labor Contract Law provide for collective contracts to be developed through collaboration between the labor union (or worker representatives in the absence of a union) and management that specify such matters as working conditions, wage scales, and hours of work. The laws also permit workers and employers in all types of enterprises to sign individual contracts, which are to be drawn up in accordance with the collective contract.

Patent Protection in China

The PRC’s intellectual property protection regime is consistent with those of other modern industrialized countries. The PRC has domestic laws for the protection of rights in copyrights, patents, trademarks and trade secrets.

The PRC is also signatory to most of the world’s major intellectual property conventions, including:

Convention establishing the World Intellectual Property Organization (WIPO Convention) (June 4, 1980);

Paris Convention for the Protection of Industrial Property (March 19, 1985);

Patent Cooperation Treaty (January 1, 1994); and

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) (November 11, 2001).

Patents in the PRC are governed by the China Patent Law and its Implementing Regulations, each of which went into effect in 1985. Amended versions of the China Patent Law and its Implementing Regulations came into effect in 2009 and 2010, respectively.

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The PRC is signatory to the Paris Convention for the Protection of Industrial Property, in accordance with which any person who has duly filed an application for a patent in one signatory country shall enjoy, for the purposes of filing in the other countries, a right of priority during the period fixed in the convention (12 months for inventions and utility models, and 6 months for industrial designs).

The Patent Law covers three kinds of patents—patents for inventions, utility models and designs. The Chinese patent system adopts the principle of first to file; therefore, where more than one person files a patent application for the same invention, a patent can only be granted to the person who first filed the application. Consistent with international practice, the PRC only allows the patenting of inventions or utility models that possess the characteristics of novelty, inventiveness and practical applicability. For a design to be patentable, it cannot be identical with or similar to any design which, before the date of filing, has been publicly disclosed in publications in the country or abroad or has been publicly used in the country, and should not be in conflict with any prior right of another.

PRC law provides that anyone wishing to exploit the patent of another must conclude a written licensing contract with the patent holder and pay the patent holder a fee. One broad exception to this rule, however, is that, where a party possesses the means to exploit a patent but cannot obtain a license from the patent holder on reasonable terms and in reasonable period of time, the PRC State Intellectual Property Office, or SIPO, is authorized to grant a compulsory license. A compulsory license can also be granted where a national emergency or any extraordinary state of affairs occurs or where the public interest so requires. SIPO, however, has not granted any compulsory license to date. The patent holder may appeal such decision within three months from receiving notification by filing a suit in a people’s court.

PRC law defines patent infringement as the exploitation of a patent without the authorization of the patent holder. Patent holders who believe their patent is being infringed may file a civil suit or file a complaint with a PRC local Intellectual Property Administrative Authority, which may order the infringer to stop the infringing acts. A preliminary injunction may be issued by the People’s Court upon the patentee’s or the interested parties’ request before instituting any legal proceedings or during the proceedings. Damages in the case of patent infringement is calculated as either the loss suffered by the patent holder arising from the infringement or the benefit gained by the infringer from the infringement. If it is difficult to ascertain damages in this manner, damages may be reasonably determined in an amount ranging from one or more times the license fee under a contractual license. If there is no unlawful income so earned, the infringing party may be fined from RMB10,000 to RMB1,000,000, or approximately US$1,000 to US$146,000.

Foreign Currency Exchange

Under the PRC foreign currency exchange regulations applicable to us, the Renminbi is convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions. Conversion of Renminbi for capital account items, such as direct investment, loan, security investment and repatriation of investment, however, is still subject to the approval of the PRC State Administration of Foreign Exchange, or SAFE. Foreign-invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from the SAFE. Capital investments by foreign-invested enterprises outside of China are also subject to limitations, which include approvals by the Ministry of Commerce, the SAFE and the State Reform and Development Commission. We currently do not hedge our exposure to fluctuations in currency exchange rates.

Mandatory Statutory Reserve and Dividend Distributions

Under applicable PRC regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, a foreign-invested enterprise in China is required to set aside at least 10.0% of its after-tax profit based on PRC accounting standards each year for its general reserves until the cumulative amount of such reserves reaches 50.0% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a foreign-invested enterprise has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.

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Properties

We do not own any real property. However, we maintain leases with our landlord Changxing Xiangyi Industrial Park Investment Co. for the purpose of the production of our battery products at Plant B, which is located at Xiangyi Industrial Park, Jing Second Road, Changxing Economic Development Zone, Changxing County, Zhejiang Province, the People’s Republic of China. Those leases, none of which are affected by our relocation, are described in the table below:

Building

Area

(Square meters)

Rental Amount

Per year ($)

Commencement

Date

Termination

Date

Notes

Factory Building No. 1

6,200

70,386

January 1, 2009

December 31, 2013

The annual rent will increase by 5% yearly from January 1, 2010

The North Part of Factory Building No. 2

3,100

35,193

February 8, 2009

February 7, 2014

The annual rent will increase by 5% yearly from February 8, 2010

The South Part of Factory Building No. 2

3,100

35,193

February 1, 2009

January 31, 2014

The annual rent will increase by 5% yearly from February 1, 2010

Factory Building No. 3

6,200

70,950

January 18, 2010

January 17, 2015

The annual rent will increase by 5% yearly from January 18, 2011

Factory Building No. 4

6,200

68,867

August 1, 2008

July 31, 2013

The annual rent will increase by 5% yearly from August 1, 2009

The North Part of Factory Building No. 5

3,100

35,475

October 16, 2009

October 15, 2014

The annual rent will increase by 5% yearly from October 16, 2010

The South Part of Factory Building No. 5

3,100

35,193

February 16, 2009

February 15, 2014

The annual rent will increase by 5% yearly from February 16, 2010

The North Part of Factory Building No. 6

3,100

34,434

August 1, 2008

July 31, 2013

The annual rent will increase by 5% yearly from August 1, 2009

The South Part of Factory Building No. 6

3,100

35,475

October 16, 2009

October 15, 2014

The annual rent will increase by 5% yearly from October 16, 2010

Factory Building No. 7

6,200

70,386

February 16, 2009

February 15, 2014

The annual rent will increase by 5% yearly from February 16, 2010

Factory Building No. 8

6,200

68,867

August 1, 2008

July 31, 2013

The annual rent will increase by 5% yearly from August 1, 2009

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In addition to the leases set forth above, the Company purchased a 50-year land use right in 2004 for RMB4,470,000 (approximately US$650,598) at Jingyi Road in Changxing County, Zhejiang Province, The People’s Republic of China. Our relocation affects only the property which is located at this location. The total area of the land is 53,974.42 square meters and provides in total 33,145.79 square meters in which 3,837.77 square meters is used for office space and 29,308.02 square meters is used for production and storage.

Legal Proceedings

We are not involved in any material legal proceedings.

MANAGEMENT

Executive Officers, Directors and Key Employees

The following individuals constitute our board of directors and executive management as of the date of this prospectus. Our last annual meeting was held on September 9, 2010 at the Changxing International Hotel, No. 1 Taihu Rd., Changxing, Zhejiang Province, PRC, whereby stockholders of record on August 11, 2010 approved the appointment of Xu Kecheng, Liu Chuanjie, Lou Shourong, Dong Quanfeng, Jiang Yanfu, Gong Xiaoyan and Yun Hon Man, to our Board.

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Name	Age	Position(s)
Xu Kecheng	48	Chairman of the Board, Chief Executive Officer & President
Liu Chuanjie	33	Chief Financial Officer, Treasurer, Director
Lou Shourong	46	Vice-President, Director
Fei Wenmei	48	Corporate Secretary
Zhu Zhongli	47	Vice-President of Sales
Dong Quanfeng	46	Independent Director
Jiang Yanfu	67	Independent Director
Gong Xiaoyan	64	Independent Director
Yun Hon Man	42	Independent Director
Gui Changqing	72	Significant Employee
Wang Huanxiang	34	Significant Employee

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our Bylaws. Our officers are appointed by the Board and hold office until removed by the Board.

Biographies of Officers and Directors

Xu Kecheng. Mr. Xu has served as President, Chief Executive Officer and a Director of the Company since November 12, 2008. Mr. Xu founded CCEC in 2002 and has served as CCEC’s President and Chairman of the Board since its inception. Besides successfully establishing and running CCEC, Mr. Xu also acquired Ai Ge Organism Products Co., Ltd., a biological & pharmaceutical company in China in November 2006 where he serves as Chairman of the Board and Executive Director. In 2002, Mr. Xu was involved in the formulation of coated tempered glass panel standards used for home gas kitchen ranges, which was put on the list of the National Building Materials Industry Standard. Mr. Xu graduated from Hangzhou University in 1997 with the major in economic management. In addition to serving as senior economist to the Company, Mr. Xu is a member of China Battery Industry Association, a member of Huzhou CPPCC, a member of the Standing Committee of Changxing People’s Congress and he has been honored with the title of “Integrity Entrepreneur” by the Changxing Government. Mr. Xu also finished a course of study at the class of advanced training at the Party School of the CPC Central Committee.

Liu Chuanjie. Mr. Liu has served as Chief Financial Officer of the Company since June 15, 2010, as Treasurer of the Company since November 12, 2008 and has served as a Director of the Company since November 24, 2008. Mr. Liu also serves as Controller, Director of Finance and as a Director of CCEC since May 2004. Mr. Liu has expertise in accounting systems and national accounting policies, fund raising and investing. Prior to joining CCEC, Mr. Liu served as the head of the financial department of Changxing Chisen Xinguangyuan Co., Ltd., a manufacturing company in China, from October 2000 to April 2004. Mr. Liu received his Degree in Economic and Administration Management at the Nanjing Institute of Political Studies in 2009.

Lou Shourong. Mr. Lou has served as a Vice President of the Company since November 12, 2008 and as a Director since September 9, 2010. From October 2007 to present, Mr. Lou has served as a Deputy General Manager of CCEC, a manufacturing company in China. From April 2006 to September 2007, Mr. Lou served as Executive Deputy General Manager for Changxing Nuo Wan Te Ke Co., Ltd., a manufacturing company in China. Prior to that, Mr. Lou served as the factory director and marketing manager in Changxing Chisen Glass Co., Ltd., a manufacturing company in China from June 1996 to March 2006. Mr. Lou has extensive experience in materials supply, procurement and production plan management.

Fei Wenmei. Ms. Fei has served as Corporate Secretary of the Company since November 12, 2008. In March 2005, Ms. Fei joined CCEC as Chief Administrative Manager in charge of corporate brand building, intellectual property and project application. Ms. Fei currently serves CCEC as an assistant economist and clean production management controller. From March 1991 to February 2005, Ms. Fei served as Chief Administrative Manager of the Huaneng Changxing Power Plant Industry & Trading Company and prior to that she served as Chief of Staff at the Changxing Land Administration Bureau from March 1987 to February 1991. Ms. Fei has been engaged in administrative management for many years and has vast experience in corporate administrative management. Ms. Fei graduated from Zhejiang Radio and Television University with a degree in Chinese Language.

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Zhu Zhongli. Mr. Zhu has served as Vice-President of Sales of the Company since June 3, 2009. Mr. Zhu is in charge of overall sales and marketing management. Mr. Zhu previously served as the Assistant General Manager of the Company since August 2006. Prior to joining the Company, Mr. Zhu served as the General Manager of Changxing Lida Wear-Resisting Material Co., Ltd., a manufacturing company in China, since March 1999. Mr. Zhu has extensive experience in the local Chinese market and has achieved outstanding success in sales of storage batteries in China.

Dong Quanfeng. Professor Dong has served as a Director of the Company since November 24, 2008. Professor Dong has served as a Chemistry professor and doctorial tutor at the Department of Chemistry of Xiamen University since March 2006. Professor Dong concurrently acts as a visiting research fellow at the National Hi-Tech Green Material Development Center, is a Member of the Editorial Board of the industry magazine “Battery” is a Member of the Chinese Institute of Electrics Chemical and Physical Power Committee, a Member of ISE, a Member of the American ECS and is the Vice Director of the Changxing Chisen Physical Chemistry Battery Research Center. Professor Dong is engaged in the research of new chemical electric power sources and related energy storage material and has finished several national and provincial-municipal scientific research projects. In 1997, Professor Dong won the provincial second prize of the Development of Science and Technology. In 1999, Professor Dong won the technology innovation prize of Hubei province. In 2004, Professor Dong won third prize of the Development of Science and Technology of Xiamen. In 2006, he won the title of “Technology Innovation Advanced Individual” by the National Information Industry. Professor Dong has issued over 80 papers on internationally significant academic journals and has applied for several patents. Prior to his employment as a full time professor at Xiamen University, Professor Dong served as an associate professor at Xiamen University since January 2001. Mr. Dong graduated from Wuhan University with a Ph D degree in Chemistry and performed postdoctoral research at Israel Technical Institute.

Jiang Yanfu. Professor Jiang has served as a Director of the Company since November 24, 2008. Professor Jiang has served as a professor and doctorial tutor of business administration at Tsinghua University since December 1993. Professor Jiang has served as Dean of the Entrepreneurial Research Center since April 2000 and has served as academic director-general and co-founded of Trinity Innovation since December 2003, a consulting company in China. Professor Jiang has expertise in entrepreneurial management, corporate governance and institutional economics. He has undertaken many important research programs such as the “Theoretical Study on Chinese Technology Innovation.” He served as a director of and as an advisor to many companies. Professor Jiang’s main research fields include risk investment and entrepreneurial management, corporate governance and cyber economy. The major courses he has instructed include Entrepreneurial Management, Technology and Institution Innovation, and Analysis of Institutional Economics.

Gong Xiaoyan. Ms. Gong has served as a Director of the Company since November 24, 2008. Ms. Gong currently serves as Chairman of Tianjin Bicycle Industrial Association, a non-governmental organization in China since June 2006. Prior to that, Ms. Gong served as Secretary-general of Tianjin Bicycle Industrial Association, a non-govermental organization in China since September 1998. She has been honored with the titles “China Top-Hundred Female Entrepreneurs,” “Most Influential Enterprises Leader of China” and “Tianjin Female Entrepreneur” issued by Tianjin Municipal Government.

Yun Hon Man. Mr. Yun has served as a director of the Company since November 24, 2008. Mr. Yun has served and continues to serve as a Corporate Consultant with Smart Pine Investment Limited since September 2007, a consulting firm organized under the laws of Hong Kong. Mr. Yun also serves as a Director of CH Lighting International Corporation (OTCBB: CHHN) since July 28, 2008 and as a Director of Xinde Technology Company (OTCBB: WTFS) since January 2010. Mr. Yun also served as Chief Operating Officer of China INSOnline Corp. (NASDAQ: CHIO) from January 2008 through April 2010. Prior to that, Mr. Yun served as Corporate Controller of Hi-Tech Wealth Inc. (n/k/a China Mobile Media Technology, Inc.)(OTCBB: CHMO) from January 2007 through August 2007. From January 2003 through December 2006, Mr Yun served as Corporate Controller of General Components, Inc. (n/k/a China Mobile Media Technology, Inc.)(OTCBB: CHMO). Mr. Yun is a Chartered Accountant having memberships with the Institute of Chartered Accountants in England and Wales. He is also a Fellow Member of the Chartered Association of Certified Accountants and a member of the Hong Kong Institute of Certified Public Accountants. He was a member of Association of International Accountants, the Society of Registered Financial Planners, the Institute of Financial Accountants and the Institute of Crisis and Risk Management. Mr. Yun received his MBA at the University of Western Sydney in 2007.

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Biographies of Significant Employees

Gui Changqing. Mr. Gui has served and continues to serve as Chief Scientist at the Zhejiang Changxing Chisen Physical-Chemical Power Supply Research and Development Center since June 2007 and as counselor of the 712 Institute since January 2005. Prior to that, Mr. Gui served as expert team member of the 712 Institute from January 2001 to December 2004. Early in his career Mr. Gui was engaged in the R&D of the powered lead-acid battery for the national military in China serving as General Engineer and Researcher. The product won a scientific and technical award from the State Commission of Science and Technology. Mr. Gui has published more than 100 papers of international significance and has trained 24 postgraduates. Mr. Gui is extremely well respected by his peers in the storage battery industry. In 1992, he won the special government allowance from the State Council, has served as Director of the Association of Chinese Chemical Physics Power Industry and as a Director of the Wuhan Power Supply Society. Mr. Gui earned his doctorate degree in electrochemistry from Shanghai Fudan University.

Wang Huanxiang. Mr. Wang has served as Technical Controller of CCEC since May 2008. Prior to that, Mr. Wang was a career researcher of the storage battery and served as Deputy General Manager of Zhejiang Chaowei Power Co., Ltd. from May 2004 to March 2008. Prior to that, Mr. Wang served as Chief of Technical Department of Zhejiang Wolong Technology Corp. from March 2001 to May 2004. He has several patents and has issued several papers, including “Research of S n SO 4 Applied to Electric Bicycles” and “Drying and Changing Technical Research for Long Cycle Life Lead-Acid Electrical Bicycle Battery” in various academic journals, including the International Battery. Mr. Wang is a graduate of Zhengzhou University with a degree in electrochemistry.

Code of Business Conduct and Ethics

The Company’s Board of Directors adopted a Code of Business Conduct and Ethics to help ensure compliance with legal requirements and our standards of business conduct. The Code of Business Conduct and Ethics applies to directors, officers and employees of Chisen. A copy of our Code of Business Conduct and Ethics is attached as Exhibit 14.1 to our Current Report on Form 8-K as filed with the SEC on February 4, 2009 which is accessible at the SEC’s website at www.sec.gov. The Code of Business Conduct and Ethics, and any amendments or waivers therefrom is also available in print, at no charge, to any stockholder who makes a written request to: Chief Financial Officer, Chisen Electric Corporation, Jingyi Road, Changxing Economic Development Zone, Changxing, Zhejiang Province, The People’s Republic of China.

Director Independence

Our Board of Directors has determined that 4 out of the 7 members of our Board of Directors are independent based on the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The following directors are independent: Dong Quanfeng, Jiang Yanfu, Gong Xiaoyan and Yun Hon Man. The following directors are not independent: Xu Kecheng, Liu Chuanjie and Lou Shourong.

Family Relationships

There are no family relationships by and between or among the members of the Board or other executives. None of our directors and officers are directors or executive officers of any company that files reports with the SEC except as set forth in the Biographies section above.

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Legal Proceedings Involving Officers and Directors

Unless otherwise indicated, to the knowledge of the Company after reasonable inquiry, no current director or executive officer of the Company during the past ten years, has (i) been convicted in a criminal proceeding (excluding traffic violations or other minor offenses), (ii) been a party to any judicial or administrative proceeding (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws, (iii) filed a petition under federal bankruptcy laws or any state insolvency laws or has had a receiver appointed for the person’s property or (iv) been subject to any judgment, decree or final order enjoining, suspending or otherwise limiting for more than 60 days, the person from engaging in any type of business practice , acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity or engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws, (v) been found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated, (vi) been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated, (vii) been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (a) any Federal or State securities or commodities law or regulation, (b) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or (c) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity, or (viii) been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

There are no material pending legal proceedings to which any of the individuals listed above is party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. There are no family relationships between directors and executive officers of the Company.

Committees of our Board of Directors

As of January 15, 2009, our Board of Directors has an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee established in accordance with the Exchange Act and NASDAQ rules. Prior to January 15, 2009, we did not have an Audit Committee, a Compensation Committee or a Corporate Governance and Nominating Committee. Since January 15, 2009, the Audit Committee met six (6) times, the Compensation Committee met two (2) times and the Corporate Governance and Nominating Committee met two (2) times. A brief description of each committee is set forth below.

Audit Committee – The purpose of the Audit Committee is to provide assistance to our Board of Directors in fulfilling their oversight responsibilities relating to our consolidated financial statements and financial reporting process and internal controls in consultation with our independent registered public accountants and internal auditors. The Audit Committee is also responsible for ensuring that the independent registered public accountants submit a formal written statement to us regarding relationships and services which may affect the auditor’s objectivity and independence. The Board appointed Yun Hon Man, Gong Xiaoyan, Dong Quanfeng and Jiang Yanfu to serve as members of the Audit Committee, with Yun Hon Man serving as Chairman, commencing on January 15, 2009. Our Audit Committee financial expert is Yun Hon Man, an independent director.

Compensation Committee – The purpose of the Compensation Committee is to review and make recommendations to our Board of Directors regarding all forms of compensation to be provided to our executive officers and directors, including stock compensation and loans, and all bonus and stock compensation to all employees. The Board appointed Jiang Yanfu, Dong Quanfeng, Yun Hon Man and Gong Xiaoyan to serve as members of the Compensation Committee, with Jiang Yanfu serving as Chairman, commencing on January 15, 2009.

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Corporate Governance and Nominating Committee – The purpose of the Nominating Committee is to review the composition and evaluate the performance of the Board, recommend persons for election to the Board and evaluate director compensation. The Nominating Committee is also responsible for reviewing the composition of committees of the Board and recommending persons to be members of such committees, and maintaining compliance of committee membership with applicable regulatory requirements. The Company does not have a formal diversity policy. Although the Board does not currently have formal specific minimum criteria for nominees, substantial relevant and diverse business and industry experience would generally be considered important qualifying criteria, as would the ability to attend and prepare for Board and shareholder meetings. We have not adopted procedures by which security holders may recommend nominees to our Board of Directors. The Board appointed Gong Xiaoyan, Dong Quanfeng, Yun Hon Man and Jiang Yanfu to serve as members of the Corporate Governance and Nominating Committee, with Gong Xiaoyan serving as Chairman, commencing on January 15, 2009.

Strategy and Steering Committee – Xu Kecheng and Wang Chunyan served as members of the Strategy and Steering Committee, with Xu Kecheng serving as Chairman, during the fiscal year ended March 31, 2010.

Executive Committee – The Board of Directors created an Executive Committee on June 15, 2010, with Xu Kecheng and Wang Chunyan served as members of the Strategy and Steering Committee, with Xu Kecheng serving as Chairman, during the fiscal year ended March 31, 2010.

Committee Charters

On January 15, 2009, the Board approved Charters for each of the Audit Committee, Compensation Committee and the Corporate Governance and Nominating Committee.

Director Qualifications and Experience

The following discussion sets forth the specific experience, qualifications, attributes and skills that the Company considered in making its decision to appoint and nominate directors to the Board.

Mr. Xu Kecheng was selected to serve on the Board based on his management and corporate governance experience having founded CCEC in 2002 and having served as Chairman of the Board and President of that company, President and Chief Executive Officer of the Registrant as well as serving as Chairman of the Board and Executive Director of Ai Ge Organism Products Co., Ltd., a biological and pharmaceutical company in China. Mr. Xu was also chosen to serve on the Board based on his professional standing in the industry as a member of the China Battery Industry Association, a member of Huzhou CPPCC, a member of the Standing Committee of Changxing People’s Congress and having been honored with the title of “Integrity Entrepreneur” by the Changxing Government. Lastly, Mr. Xu was selected based on his expertise in the industry and in management, having been involved in the formulation of coated tempered glass panel standing used for home gas kitchen ranges, which was put on the list of National Building Materials Industry Standard and having graduated from Hangzhou University with a major in economic management.

Mr. Liu Chuanjie was selected to serve on the Board based on his financial management experience having served as Controller, Director of Finance and as a Director of CCEC since 2004 and as head of the financial department of Changxing Chisen Xinguanyuan Co., Ltd., a manufacturing company in China from October 2000 to April 2004. Mr. Liu was also selected to serve on the Board based on his expertise in accounting systems and national accounting policies, fund raising and investing, and having graduated from Nanjing PLA Polytechnic University with a degree in economics and management.

Mr. Lou Shourong was selected to serve on the Board based on his management experience having served as Deputy General Manager of CCEC since October 2007 and Executive Deputy General Manager of Changxing Nuo Wan Te Ke Co., Ltd., a manufacturing company in China. Mr. Lou was also selected based on his extensive experience in materials supply, procurement and production plan management, having served as as the factory director and marketing manager in Changxing Chisen Glass Co., Ltd., a manufacturing company in China from June 1996 to March 2006.

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Professor Dong Quanfeng was selected to serve on the Board based on his professional standing and expertise in the industry, having served as a Chemistry professor and doctorial tutor at the Department of Chemistry of Xiamen University since March 2006, as a visiting research fellow at the National Hi-Tech Green Material Development Center in China, as a Member of the Editorial Board of the industry magazine “Battery”, as a Member of the Chinese Institute of Electrics Chemical and Physical Power Committee, as a Member of ISE, as a Member of the American ECS and as the Vice Director of the Changxing Chisen Physical Chemistry Battery Research Center. Professor Dong is engaged in the research of new chemical electric power sources and related energy storage material and has finished several national and provincial-municipal scientific research projects. In 1997, Professor Dong won the provincial second prize of the Development of Science and Technology. In 1999, Professor Dong won the technology innovation prize of Hubei province. In 2004, Professor Dong won third prize of the Development of Science and Technology of Xiamen. In 2006, he won the title of “Technology Innovation Advanced Individual” by the National Information Industry. Professor Dong has issued over 80 papers on internationally significant academic journals and has applied for several patents.

Professor Jiang Yanfu was selected to serve on the Board based on his professional standing and expertise in entrepreneurial management, corporate governance and institutional economics, having served as a professor and doctorial tutor of business administration at Tsinghua University since December 1993, as Dean of the Entrepreneurial Research Center since April 2000 and as academic director-general and co-founded of Trinity Innovation since December 2003, a consulting company in China. He has undertaken many important research programs such as the “Theoretical Study on Chinese Technology Innovation.” He served as a director of and as an advisor to many companies. Professor Jiang’s main research fields include risk investment and entrepreneurial management, corporate governance and cyber economy. The major courses he has instructed include Entrepreneurial Management, Technology and Institution Innovation, and Analysis of Institutional Economics.

Ms. Gong Xiaoyan was selected to serve on the Board based on her professional standing in the industry and her civic and community involvement, having served as Chairman of Tianjin Bicycle Industrial Association, a non-governmental organization in China since June 2006 and having been honored with the titles “China Top-Hundred Female Entrepreneurs,” “Most Influential Enterprises Leader of China” and “Tianjin Female Entrepreneur” issued by Tianjin Municipal Government.

Mr. Yun Hon Man was selected to serve on the Board based on his experience in finance and accounting as a “financial expert” as defined under the rules of the SEC and for his US public company experience as an officer, director and audit committee chairman, having served as a director of CH Lighting International Corporation (OTCBB: CHHN) since July 28, 2008, as a Director of Xinde Technology Company (OTCBB: WTFS) since January 2010 and having previously served as Chief Operating Officer of China INSOnline Corp. (NASDAQ: CHIO) from January 2008 through April 2010. Mr. Yun is a Chartered Accountant having memberships with the Institute of Chartered Accountants in England and Wales. He is also a Fellow Member of the Chartered Association of Certified Accountants and a member of the Hong Kong Institute of Certified Public Accountants. He was a member of Association of International Accountants, the Society of Registered Financial Planners, the Institute of Financial Accountants and the Institute of Crisis and Risk Management. Mr. Yun received his MBA at the University of Western Sydney in 2007.

Board Leadership Structure

The Board believes that the Company’s Chief Executive Officer is best situated to serve as Chairman of the Board because he is ultimately responsible for the day-to-day operation of the Company and is the director most familiar with the Company’s business and industry and most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. Independent directors and management have different perspectives and roles in strategy development. Our independent directors bring experience, oversight and expertise from outside the Company and industry, while the Chief Executive Officer brings company-specific experience and expertise. The Board believes that the combined role of Chairman and Chief Executive Officer promotes strategy development and execution, and facilitates information flow between management and the Board, which are essential to effective governance.

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One of the key responsibilities of the Board is to develop strategic direction and hold management accountable for the execution of strategy once it is developed. The Board believes the combined role of Chairman and Chief Executive Officer, together with the presence of four independent directors on the Board, is in the best interest of shareholders because it provides the appropriate balance between strategy development and independent oversight of management. The Board retains the authority to modify this structure to best address the Company’s unique circumstances, and so advance the best interests of all shareholders, as and when appropriate.

The Board’s Role in Risk Oversight

The Board oversees our shareholders’ interest in the long-term health and the overall success of the Company and its financial strengths. The full Board is actively involved in overseeing risk management for the Company. It does so in part through discussion and review of our business, financial and corporate governance practices and procedures. The Board, as a whole, reviews the risks confronted by the Company with respect to its operations and financial condition, establishes limits of risk tolerance with respect to the Company’s activities and ensures adequate property and liability insurance coverage.

Because of the role of the Board in the risk oversight of the Company, the Board believes that any leadership structure that it adopts must allow it to effectively oversee the management of the risks relating to the Company’s operations. The Board recognizes that there are different leadership structures that could allow it to effectively oversee the management of the risks relating to the Company’s operations, and while the Board believes its current leadership structure enables it to effectively manage such risks, it was not the primary reason the Board selected its current leadership structure over other potential alternatives. See the discussion under the heading “Board Leadership Structure” above for a discussion of why the Board has determined that its current leadership structure is appropriate.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth compensation information for services rendered by our named executive officers in all capacities during the last 3 completed fiscal years (ended March 31, 2011, 2010 and 2009). The following information includes the U.S. dollar value of base salaries, bonus awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred.

Name And Principal Function	Year	Salary		Bonus		Stock Awards		Option Awards		Non- Equity Incentive Plan Compensation		Non- qualified Deferred Compensation Earnings		All Other Compensation		Total
		($)		($)		($)		($)		($)		($)		($)		($)
(a)	(b)	I		(d)		(e)		(f)		(g)		(h)		(i)		(j)

Xu Kecheng, President &	2011		11,523		-0-		-0-		-0-		-0-		-0-		-0-		11,523
CEO (1)	2010		11,728		-0-		-0-		-0-		-0-		-0-		-0-		11,728
	2009		9,356		-0-		-0-		-0-		-0-		-0-		-0-		9,356

Liu Chuanjie, Chief Financial	2011		11,464		-0-		-0-		-0-		-0-		-0-		-0-		11,464
Officer and Treasurer (2)	2010		10,861		-0-		-0-		-0-		-0-		-0-		-0-		10,861
	2009		7,900		-0-		-0-		-0-		-0-		-0-		-0-		7,900

Lou Shourong, Vice-	2011		11,444		-0-		-0-		-0-		-0-		-0-		-0-		11,444
President (3)	2010		10,958		-0-		-0-		-0-		-0-		-0-		-0-		10,958
	2009		8,257		-0-		-0-		-0-		-0-		-0-		-0-		8,257

He Zhiwei, Former	2011		2,304		-0-		-0-		-0-		-0-		-0-		-0-		2,304
Chief Financial Officer (4)	2010		117,369		-0-		-0-		-0-		-0-		-0-		-0-		117,369
	2009		80,051		-0-		-0-		-0-		-0-		-0-		-0-		80,051

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(1)

Xu Kecheng has served as the Company’s Chief Executive Officer and President effective as of November 12, 2008. Mr. Xu also served (and continues to serve) as President of CCEC during the fiscal years ended March 31, 2010 and 2009. Mr. Xu’s compensation for the years ended March 31, 2011, 2010 and 2009 reflects his services as CEO and President of the Company and President of CCEC, combined.

(2)

Liu Chuanjie has served as the Company’s Treasurer effective as of November 12, 2008. Mr. Liu also served (and continues to serve) as Controller and Director of Finance of CCEC during the fiscal years ended March 31, 2011, 2010 and 2009. Mr. Liu’s compensation for the years ended March 31, 2011, 2010 and 2009 reflects his services as Treasurer of the Company and Controller and Director of CCEC, combined. Mr. Liu has served as Chief Financial Officer of the Company since June 15, 2010.

(3)

Lou Shourong has served as the Company’s Vice-President effective as of November 12, 2008 and served as director of the Company since September 9, 2010. Mr. Lou also served (and continues to serve) as a Deputy General Manager of CCEC during the fiscal years ended March 31, 2011, 2010 and 2009. Mr. Lou’s compensation for the years ended March 31, 2011, 2010 and 2009 reflects his services as Vice-President of the Company and Deputy General Manager of CCEC, combined.

(4)	He Zhiwei served as the Company’s Chief Financial Officer effective as of November 12, 2008 until June 15, 2010. Mr. He’s compensation for the years ended March 31, 2011, 2010 and 2009 reflects his services as CFO of the Company during such time periods.

As of March 31, 2011, the Company did not have any “Grants of Plan-Based Awards,” “Outstanding Equity Awards,” “Option Exercises and Stock Vested,” “Pension Benefits,” “Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans” or “Potential Payments Upon Termination or Change in Control” to report.

Furthermore, the Company does not have any bonuses, stock awards, option awards, non-executive incentive plan compensation or non-qualified deferred compensation earnings to report.

Narrative Disclosure to Summary Compensation Table

The Company has no other compensation plans other than basic salary and benefits.

Additional Narrative Disclosure

Employment Agreements

There are currently no employment agreements by and between the Registrant and its officers and employees. CCEC has a labor contract with each employee as required by law in the PRC. The labor contract mainly includes working content, contract period, working time, payment and other terms.

Benefit Plans

The Company has no stock option, retirement, pension or profit-sharing programs for the benefit of its directors, officers or other employees; however our Board may recommend the adoption of one or more such programs in the future.In accordance with Chinese law, CCEC offers a welfare program pursuant to which it pays pension, accident, medical, birth, job and house allowance payments for all contract employees of CCEC.

Director Compensation

We did not provide any compensation to our Directors during the fiscal years ended March 31, 2011 and 2010. We may establish certain compensation plans (e.g. options, cash for attending meetings, etc.) with respect to Directors in the future.

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Indemnification of Directors and Executive Officers and Limitations of Liability

Nevada law authorizes, and our Bylaws and Articles of Incorporation provide for, indemnification of our directors and officers against claims, liabilities, amounts paid in settlement and expenses in a variety of circumstances. Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, officers and controlling persons pursuant to the foregoing, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

We may enter into indemnification agreements with each of our directors and officers that are, in some cases, broader than the specific indemnification provisions permitted by Nevada law, and that may provide additional procedural protection. As of the date of this prospectus, we have not entered into any indemnification agreements with our directors or officers, but may choose to do so in the future. Such indemnification agreements may require us, among other things, to:

indemnify officers and directors against certain liabilities that may arise because of their status as officers or directors;

advance expenses, as incurred, to officers and directors in connection with a legal proceeding, subject to limited exceptions; or

obtain directors’ and officers’ insurance.

At present, there is no pending litigation or proceeding involving any of our directors, officers or employees in which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Party Transactions

During the fiscal year ended March 31, 2010, the Company owed US$2,859,000 and US$3,799,000 to Zhejiang Changxing Ruilang Electronic Company Limited (“Ruilang Electronic”), a company which is controlled by a close family member of Mr. Xu Kecheng, for the acquisition of land and buildings and the purchase of certain raw materials, respectively. As of March 31, 2010, the balance outstanding was US$2,102,000. During the nine months ended December 31, 2010, the Company borrowed an additional US$1,192,000 from Ruilang Electronic for the purchase of certain raw materials. As of December 31, 2010, the total balance outstanding to Ruilang Electronic was US$3,294,000.

During the fiscal year ended March 31, 2010, the Company owed US$106,000 to Zhejiang Chisen Glass Company Limited (“Chisen Glass”), a company which is controlled by a close family member of Mr. Xu Kecheng, for the purchase of certain raw materials. As of March 31, 2010, the balance outstanding was US$110,000. During the nine months ended December 31, 2010, the Company borrowed an additional US$1,270,000 from Chisen Glass for the purchase of certain raw materials. As of December 31, 2010, the total balance outstanding to Chisen Glass was US$1,380,000.

On April 20, 2007, the Company borrowed US$292,000 from Zhejiang Ai Ge Organism Products Company Limited (“AGO”), a company controlled by Mr. Xu Kecheng, to help the Company settle liquidity shortages. As of March 31, 2010, the amount outstanding was US$292,000. As of December 31, 2010, the total balance outstanding to AGO was US$301,000. These oral, unsecured advances are interest-free and repayable on demand.

On August 23, 2010, CCEC and Mr. Xu Kecheng formed Chisen Electric Jiangsu Co. Ltd. (CEJC) in Jiangsu Province, China. CEJC’s registered capital is RMB150,000,000, of which CCEC holds 98% (RMB147,000,000) and Mr. Xu Kecheng holds 2% (RMB 3,000,000). As of the date of this prospectus, CCEC has paid in RMB29,400,000 and Mr. Xu Kecheng has paid in RMB600,000, and the balance of RMB120,000,000 to be paid prior to July 31, 2012.

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Related Parties as Guarantors

Mr. Xu Kecheng was the guarantor under Contract of Guarantee No. 032 (“Agreement 10.35”) whereby he agreed to guarantee the payment by CCEC of up to RMB90,000,000 (US$13,204,000) to the Bank of China (Changxing Branch) under various credit business contracts by and between CCEC and the Bank of China (Changxing Branch) which could be entered into from July 1, 2008 through May 20, 2012. Agreement 10.35 was replaced by Contract of Guarantee No. 130 (“Agreement 10.41”) on October 25, 2010.

On October 25, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin, the spouse of Mr. Xu Kecheng, became guarantors under Agreement 10.41 whereby they agreed to guarantee the payment by CCEC to the Bank of China Ltd. (Changxing Sub-Branch) for debt incurred by CCEC from October 25, 2010 to October 25, 2011, in a maximum guarantee amount up to RMB250,000,000 (US$37,848,000). Mr. Xu Kecheng and Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.41.

On January 25, 2010, Mr. Xu Kecheng became a guarantor under Contract of Guarantee No. P2009M17SZJZH0001JF14-0081-1 (“Agreement 10.49”) whereby he agreed to guarantee the payment by CCEC up to RMB60,000,000 (US$9,084,000) to the CITIC Trust Co., Ltd. for debt incurred by CCEC under Trust Loan Contract No. P2009M17SZJZH0001JF14-0081-1. Mr. Xu Kecheng did not receive any consideration for entering into Agreement 10.49.

On January 25, 2010, Mr. Xu Kecheng became a guarantor under Contract of Guarantee No. P2009M17SZJZH0001JF14-0081-2 (“Agreement 10.50”) whereby he agreed to guarantee the payment by CCEC up to RMB60,000,000 (US$9,084,000) to the CITIC Trust Co., Ltd. for debt incurred by CCEC under Trust Loan Contract No. P2009M17SZJZH0001JF14-0081-2. Mr. Xu Kecheng did not receive any consideration for entering into Agreement 10.50.

Mr. Xu Kecheng is also the guarantor under Contract of Guarantee No. 3350012010AM00077301 (“Agreement 10.43”) whereby he agreed to guarantee the payment by CCEC of up to RMB69,000,000 (US$10,446,000) to the Bank of Communication (Huzhou Branch) under a series of credit extension contracts which have been or may be entered into by and between CCEC and such bank for one year commencing November 16, 2010. Mr. Xu Kecheng did not receive any consideration for entering into Agreement 10.43.

On January 13, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin became guarantors under a Guarantee Contract (“Agreement 10.39”) whereby they agreed to guarantee the payment by CCEC under RMB Loan Contract, No. 647200999201004 to China Construction Bank Corporation (Longxing Sub-Branch) for a term of two years, which may be extended to cover a two year period following the expiration of the loan. Mr. Xu Kecheng and Ms. Zho Fangqin have joint and several liabilities under Agreement 10.39 and neither of them have received any consideration for entering into Agreement 10.39.

On January 13, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin became guarantors under a Guarantee Contract (“Agreement 10.38”) whereby they agreed to guarantee the payment by CCEC under RMB Loan Contract, No. 6472009992010005 to China Construction Bank Corporation (Longxing Sub-Branch) for a term of two years, which may be extended to cover a two year period following the expiration of the loan. Mr. Xu Kecheng and Ms. Zho Fangqin have joint and several liability under Agreement 10.38 and neither of them have received any consideration for entering into Agreement 10.38.

On April 19, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin became guarantors under Guarantee Contract No. 64720012302010012 (“Agreement 10.45”) whereby they agreed to guarantee the payment by CCEC to the China Construction Bank Corporation (Changxing Sub-Branch) for debt incurred by CCEC under RMB Loan Contract No. 64720012302010012. Mr. Xu Kecheng and Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.45.

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On September 27, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin became guarantors under Guarantee Contract No. 64350099920102194 (“Agreement 10.44”) whereby they agreed to guarantee the payment by CCEC to the China Construction Bank Corporation (Changxing Sub-Branch) for debt incurred by CCEC under Bank Acceptance Agreement No. 64350092302010194. Mr. Xu Kecheng and Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.44.

On October 9, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin became guarantors under Guarantee Contract No. 647200123020100201 (“Agreement 10.46”) whereby they agreed to guarantee the payment by CCEC to the China Construction Bank Corporation (Changxing Sub-Branch) for debt incurred by CCEC under RMB Loan Contract No. 64720012302010020. Mr. Xu Kecheng and Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.46.

On October 18, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin became guarantors under Guarantee Contract No. 64720092302010036 (“Agreement 10.47”) whereby they agreed to guarantee the payment by CCEC to the China Construction Bank Corporation (Longxing Sub-Branch) for debt incurred by CCEC under Bank Acceptance Agreement No. 64720092302010036. Mr. Xu Kecheng and Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.47.

On November 10, 2010, Mr. Xu Kecheng and Ms. Zho Fangqin became guarantors under Guarantee Contract No. 647200923020100381 (“Agreement 10.48”) whereby they agreed to guarantee the payment by CCEC to the China Construction Bank Corporation (Longxing Sub-Branch) for debt incurred by CCEC under Bank Acceptance Agreement No.647200923002010038. Mr. Xu Kecheng and Ms. Zho Fangqin did not receive any consideration for entering into Agreement 10.48.

Chisen Glass was the guarantor under a guarantee contract (“Agreement 10.31”) whereby it agreed to guarantee the payment by CCEC of up to RMB76,000,000 (US$11,150,000) to the Agricultural Bank of China (Changxing County Branch) under a series of business contracts by and between CCEC and such bank for a period of two years commencing on February 10, 2010. Agreement 10.31 was replaced by Contract of Guarantee No. 33905201000030826 (“Agreement 10.40”) on August 27, 2010.

Chisen Glass is the guarantor under Agreement 10.40 whereby it agreed to guarantee the payment by CCEC of up to RMB110,000,000 (US$16,653,000) to the Agricultural Bank of China (Changxing County Sub-Branch) under a series of business contracts by and between CCEC and such bank for a period of two years commencing on August 27, 2010. Chisen Glass has joint and several liabilities under Agreement 10.40, and neither Chisen Glass nor Mr. Xu Kecheng’s family member who controls Chisen Glass have received any consideration for entering into Agreement 10.40.

Also, on April 2, 2010, Chisen Glass entered into Guarantee Contract No. 6472009992010011 (“Agreement 10.32”) whereby it agreed to guarantee the payment by CCEC of up to RMB65,000,000 (US$9,841,000) to China Construction Bank Corporation (Changxing Branch) under various loan contracts which may be entered into by and between CCEC and such bank for a period of two years. Chisen Glass has joint and several liabilities under Agreement 10.32, and neither Chisen Glass nor Mr. Xu Kecheng’s family member who controls Chisen Glass have received any consideration for entering into Agreement 10.32.

On January 12, 2010, Ruilang Electronic entered into Guarantee Contract No. 64720092502010004 (“Agreement 10.34”) whereby it pledged certain land use rights owned by Ruilang Electronic to secure the obligations of CCEC up to RMB44,000,000 (US$6,661,000) to China Construction Bank (Changxing Branch) under various loan contracts by and between CCEC and such bank, for a period of three years. Neither Ruilang Electric nor Mr. Xu Kecheng’s family member who controls Ruilang Electronic have received any consideration for entering into Agreement 10.34.

Xinguangyuan, a company which is controlled by a close family member of Mr. Xu Kecheng, is the guarantor under two separate guarantee agreements (“Agreement 10.36” and “Agreement 10.37”, respectively) with CITIC Trust Co., Ltd. whereby it agreed to guarantee the payment by CCEC of up to an aggregate RMB100,000,000 (US$15,139,000) to CITIC under two separate loan agreements by and between CCEC. Both guarantees have a term of two years. Xinguangyuan has joint and several liability under Agreement 10.36 and Agreement 10.37 and neither it nor the close family member of Mr. Xu Kecheng referenced above received any consideration for entering into such agreements.

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Xinguangyuan is also the guarantor under Contract of Guarantee No. ZB5201200900000013 (“Agreement 10.33”) whereby it agreed to guarantee the payment by CCEC of up to RMB26,000,000 ($3,936,000) to Shanghai Pudong Development Bank (Huzhou Branch) under a series of credit extension contracts which have been or may be entered into by and between CCEC and such bank for three years commencing April 14, 2009. The term of Agreement 10.33 is two years. Xinguangyuan has joint and several liability under Agreement 10.33 and neither it nor the close family member of Mr. Xu Kecheng who controls Xinguangyuan received any consideration for entering into Agreement 10.33.

Xinguangyuan is also the guarantor under Contract of Guarantee No. 3350012010AM00077300 (“Agreement 10.42”) whereby it agreed to guarantee the payment by CCEC of up to RMB69,000,000 (US$10,446,000) to the Bank of Communication (Huzhou Branch) under a series of credit extension contracts which have been or may be entered into by and between CCEC and such bank for one year commencing November 16, 2010. Neither Xinguangyuan nor the close family member of Mr. Xu Kecheng who controls Xinguangyuan received any consideration for entering into Agreement 10.42.

Xinguangyuan is also the guarantor under Contract of Guarantee No. 003 (“Agreement 10.51”) whereby it agreed to guarantee the payment by CCEC of up to RMB100,000,000 (US$15,247,000) to the Bank of China (Changxing County Sub-branch) under a series of credit extension contracts which have been or may be entered into by and between CCEC and such bank for one year commencing January 6, 2011. Neither Xinguangyuan nor the close family member of Mr. Xu Kecheng who controls Xinguangyuan received any consideration for entering into Agreement 10.51.

In connection with Agreement 10.36, Agreement 10.37, Agreement 10.42, Agreement 10.43, Agreement 10.49 and Agreement 10.50 described above (collectively, the “XuXing Guarantees”), Mr. Xu Kecheng and Xingguangyuan have provided guarantees securing indebtedness of CCEC in an aggregate amount up to US$27,224,000, as of December 31, 2010. As of April 8, 2011, the aggregate outstanding indebtedness of CCEC secured by the XuXing Guarantees was US$9,018,000. An aggregate of US$3,025,000 was paid by CCEC towards the principal amount of the loans secured by the XuXing Guarantees as of December 31, 2010. An aggregate of US$981,000 was paid by CCEC towards the interest on the loans secured by the XuXing Guarantees as of December 31, 2010.

In connection with Agreement 10.32, Agreement 10.44, Agreement 10.45, Agreement 10.47 and Agreement 10.48 described above (collectively, the “XZG Guarantees”), Mr. Xu Kecheng, Ms. Zhou Fangqin and Chisen Glass have provided guarantees securing indebtedness of CCEC in an aggregate amount up to US$9,529,000, as of December 31, 2010. As of April 8, 2011, the aggregate outstanding indebtedness of CCEC secured by the XZG Guarantees was US$6,013,000. An aggregate of US$2,798,000 was paid by CCEC towards the principal amount of the loans secured by the XZG Guarantees as of December 31, 2010. An aggregate of US$129,000 was paid by CCEC towards the interest on the loans secured by the XZG Guarantees as of December 31, 2010.

In connection with Agreement 10.40 described above (the “Glass Guarantees”), Chisen Glass has provided guarantees securing indebtedness of CCEC in an aggregate amount up to US$12,478,000, as of December 31, 2010. As of April 8, 2011, the aggregate outstanding indebtedness of CCEC secured by the Glass Guarantees was US$9,768,000. An aggregate of US$0 was paid by CCEC towards the principal amount of the loans secured by the Glass Guarantees as of December 31, 2010. An aggregate of US$271,000 was paid by CCEC towards the interest on the loans secured by the Glass Guarantees as of December 31, 2010.

In connection with Agreement 10.33 described above (the “Xing Guarantees”), Xinguangyuan has provided guarantees securing indebtedness of CCEC in an aggregate amount up to US$3,781,000, as of December 31, 2010. As of April 8, 2011, the aggregate outstanding indebtedness of CCEC secured by the Xing Guarantees was US$3,757,000. An aggregate of US$0 was paid by CCEC towards the principal amount of the loans secured by the Xing Guarantees as of December 31, 2010. An aggregate of US$0 was paid by CCEC towards the interest on the loans secured by the Xing Guarantees as of December 31, 2010.

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In connection with Agreement 10.34, Agreement 10.38, Agreement 10.39 and Agreement 10.46 described above (collectively, the “XZR Guarantees”), Mr. Xu Kecheng, Ms. Zhou Fangqin and Ruilang Electronic have provided a guarantee securing indebtedness of CCEC in an aggregate amount up to US$5,747,000 as of December 31, 2010. As of April 8, 2011, the aggregate outstanding indebtedness of CCEC secured by XZR guarantees was US$2,571,000. An aggregate of US$5,445,000 was paid by CCEC towards the principal amount of the loans secured by XZR guarantees as of December 31, 2010. An aggregate of US$339,000 was paid by CCEC towards the interest on the loans secured by XZR guarantees as of December 31, 2010.

In connection with Agreement 10.41 and Agreement 10.51 described above (collectively, the “XXZ Guarantees”), Mr. Xu Kecheng, Ms. Zhou Fangqin and Xingguangyuan provided guarantees to periodically secure the indebtedness of CCEC. As of December 31, 2010, the XXZ Guarantees were not utilized. However, during the first quarter of 2011, the XXZ Guarantees were utilized to secure the indebtedness of CCEC and as of April 8, 2011, the aggregate outstanding indebtedness of CCEC secured by the XXZ Guarantees was US$12,971,000.

Agreement 10.31, Agreement 10.32, Agreement 10.33, Agreement 10.34, Agreement 10.35, Agreement 10.36, Agreement 10.37, Agreement 10.38 and Agreement 10.39 have been filed as exhibits (with corresponding exhibit numbers) to the Company’s Amendment No. 2 to Form S-1 as filed with the SEC on December 22, 2010, the registration statement of which this prospectus is made a part.

Agreement 10.40, Agreement 10.41, Agreement 10.42, Agreement 10.43, Agreement 10.44, Agreement 10.45, Agreement 10.46, Agreement 10.47, Agreement 10.48, Agreement 10.49 and Agreement 10.50 have been filed as exhibits (with corresponding exhibit numbers) to the Company’s Amendment No. 4 to Form S-1 as filed with the SEC on February 16, 2011, the registration statement of which this prospectus is made a part. Agreement 10.51 was filed as Exhibit 10.51 to the Company’s Amendment No. 5 to Form S-1 as filed with the SEC on March 15, 2011.

Policies and Procedures for Related-Party Transactions

The Company does not have any formal written policies or procedures for related party transactions, however in practice, the Audit Committee reviews and approves all related party transactions and other matters pertaining to the integrity of management, including potential conflicts of interest, trading in our securities, or adherence to standards of business conduct.

Director Independence

The following directors are independent: Dong Quanfeng, Jiang Yanfu, Gong Xiaoyan and Yun Hon Man. The following directors are not independent: Xu Kecheng, Liu Chuanjie and Lou Shourong.

BENEFICIAL OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage of ownership of that person, shares of common stock subject to options and warrants held by that person that are currently exercisable or become exercisable within 60 days of the date of this prospectus are deemed outstanding even if they have not actually been exercised. Those shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

The following table sets forth certain information with respect to beneficial ownership of our common stock based on issued and outstanding shares of common stock before and after the offering, by:

Each person known to be the beneficial owner of 5% or more of our outstanding common stock;

Each executive officer;

Each director; and

All of the executive officers and directors as a group.

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The number of shares of our common stock outstanding as of the date of this prospectus excludes up to shares of our common stock to be offered by us in a firm commitment public offering concurrently herewith. Unless otherwise indicated, the persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite the stockholder’s name, subject to community property laws, where applicable. Unless otherwise indicated, the address of each beneficial owner listed in the table is c/o Chisen Electric Corporation, Jingyi Road, Changxing Economic Development Zone, Changxing, Zhejiang Province, The People’s Republic of China.

		Beneficial Ownership Before the Offering						Number of		Beneficial Ownership After the Offering
Name and Address of Beneficial Owner	Title(s)	Shares of Common Stock			Percent of Class (1)			Shares Being Offered		Shares of Common Stock			Percent of Class (2)

Directors and Executive Officers

Xu Kecheng	Chairman of the Board, Chief Executive Officer & President		32,900,000	(3)		65.8	%		-		32,900,000	(3)			%

Liu Chuanjie	Chief Financial Officer , Treasurer and Director		-			-			-		-			-

Fei Wenmei	Corporate Secretary		-			-			-		-			-

Zhu Zhongli	Vice-President of Sales		-			-			-		-			-

Lou Shourong	Vice President and Director		-			-			-		-			-

Dong Quanfeng	Director		-			-			-		-			-

Jiang Yanfu	Director		-			-			-		-			-

Gong Xiaoyan	Director		-			-			-		-			-

Yun Hon Man	Director		-			-			-		-			-

He Zhiwei	Former Director (5)		-			-			-		-			-

Officers and Directors as a Group (total of 10 persons)			32,900,000	(3)		65.8	%		-		32,900,000	(3)			%

5% or More Owners

Cheer Gold Development Limited Level 5 Development Bank of Samoa Building Beach Road, Apia, Samoa (4)			32,900,000			65.8	%		-		32,900,000				%

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(1)	Applicable percentage of ownership is based on 50,000,000 shares of our common stock outstanding as of March 9, 2011.

(2)

Based on shares of common stock, which consists of (i) 5,000,000 shares of common stock issued and outstanding as of March 9, 2011 and (ii) shares of common stock issued in the public offering. This amount (i) excludes the shares of our common stock that we may issue upon the Underwriters’ over-allotment option exercise.

(3)	Xu Kecheng may be considered to beneficially own 32,900,000 shares by virtue of his 100% ownership in Wisejoin Group Limited, which owns and controls 100% of Cheer Gold, which directly beneficially owns 32,900,000 shares of Common Stock.

(4)	Cheer Gold is wholly-owned and controlled by Wisejoin Group Limited, which is wholly-owned and controlled by Xu Kecheng, our Chairman of the Board, President and Chief Executive Officer.

(5)	Mr. He served as director of the Company until September 8, 2010.

DESCRIPTION OF SECURITIES

As of the date of this prospectus, our authorized capital stock currently consists of One Hundred Million (100,000,000) shares of common stock, par value US$0.001 per share, of which there are Fifty Million (50,000,000) issued and outstanding shares of Common Stock and Ten Million (10,000,000) shares preferred stock, par value US$0.001 per share, of which there are zero (0) shares issued or outstanding. The following statements set forth the material terms of our capital stock; however, reference is made to the more detailed provisions of, and these statements are qualified in their entirety by reference to our Articles of Incorporation and Bylaws, copies of which are referenced as Exhibits herein, and the provisions of Nevada General Corporation Law. Except as set forth below, there are no provisions in our Articles of Incorporation or Bylaws that would delay, defer or prevent a change in our control.

Common Stock

Immediately prior to this offering, we had 50,000,000 shares of our common stock issued and outstanding. Except as otherwise required by applicable law and subject to the preferential rights of the any outstanding preferred stock, all voting rights are vested in and exercised by the holders of common stock with each share of Common Stock being entitled to one (1) vote. In the event of liquidation, holders of Common Stock are entitled to share ratably in the distribution of assets remaining after payment of liabilities, if any. Holders of Common Stock have no cumulative voting rights. Holders of Common Stock have no preemptive or other rights to subscribe for shares. Holders of Common Stock are entitled to such dividends as may be declared by the Board out of funds legally available therefor.

Our common stock may be considered to be a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Securities Exchange Act for 1934, as amended (the “Exchange Act”). Our common stock may be a “penny stock” if it meets one or more of the following conditions (i) the stock trades at a price less than US$5.00 per share; (ii) it is NOT traded on a “recognized” national exchange; (iii) it is NOT quoted on the Nasdaq Capital Market or the NYSE Amex, or even if so, has a price less than US$5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than US$5 million.

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Blank Check Preferred Stock

Our Board is empowered, without further action by stockholders, to issue from time to time one or more series of preferred stock, with such designations, rights, preferences and limitations as the Board may determine by resolution. The rights, preferences and limitations of separate series of preferred stock may differ with respect to such matters among such series as may be determined by the Board, including, without limitation, the rate of dividends, method and nature of payment of dividends, terms of redemption, amounts payable on liquidation, sinking fund provisions (if any), conversion rights (if any) and voting rights. Certain issuances of preferred stock may have the effect of delaying or preventing a change in control of our company that some stockholders may believe is not in their interest.

Warrants

Immediately prior to this offering, there were no outstanding warrants to purchase our securities. However, we plan to issue warrants to the Underwriter as partial compensation for underwriting services in connection with this offering. Upon the closing of this offering, we will issue to Newbridge Securities Corporation common stock purchase warrants covering a number of shares of our common stock equal to 7% of the total number of shares of common stock being sold in this offering, including the Over-allotment Shares. The Underwriter’s Warrants will be non-exercisable for six (6) months after the date of the closing of this offering and will expire 5 years after such date. The Underwriter’s Warrants will be exercisable at a price equal to 165% of the public offering price and the Underwriter’s Warrants will not be redeemable. We are registering the Underwriter’s Warrants and the shares of common stock underlying such Underwriter’s Warrants hereunder in this offering.

The Underwriter’s Warrants may not be transferred, assigned, or hypothecated for a period of 6 months following the closing of this offering, except that they may be assigned, in whole or in part, to any successor, officer, manager or member of Newbridge Securities Corporation (or to officers, managers or members of any such successor or member) and to members of the underwriting syndicate or selling group. The Underwriter’s Warrants may be exercised as to all or a lesser number of underlying shares of common stock and will provide for cashless exercise and will for a period of 5 years after the closing of this offering contain provisions for one demand registration of the sale of the underlying shares of common stock at our expense, an additional demand registration at the warrant holders’ expense and unlimited “piggyback” registration rights for a period of 5 years following the closing of this offering at our expense.

Options

There are no options to purchase our securities outstanding. We may in the future establish an incentive stock option plan for our directors, employees and consultants.

Transfer Agent

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Nevada Anti-Takeover Law and Charter and Bylaws Provisions

Nevada revised statutes sections 78.378 to 78.3793 provide state regulation over the acquisition of a controlling interest in certain Nevada corporations unless the articles of incorporation or bylaws of the corporation provide that the provisions of these sections do not apply. Our articles of incorporation and bylaws do not state that these provisions do not apply. The statute creates a number of restrictions on the ability of a person or entity to acquire control of a Nevada company by setting down certain rules of conduct and voting restrictions in any acquisition attempt, among other things. The statute is limited to corporations that are organized in the state of Nevada and that have 200 or more stockholders, at least 100 of whom are stockholders of record and residents of the State of Nevada; and does business in the State of Nevada directly or through an affiliated corporation. Because of these conditions, the statute does not apply to our company.

Listing

We have commenced the application process for the listing of our common stock on the NYSE Amex under the symbol “CIEC”.

SHARES ELIGIBLE FOR FUTURE SALE

Our shares of common stock are currently quoted for trading on the OTCQB under the symbol “CIEC” and we have commenced the application process for the listing of our common stock on the NYSE Amex under the symbol “CIEC”. There currently is an extremely limited trading market for our common stock on the OTCQB and there is no guarantee that the NYSE Amex, or any other national securities exchange or quotation system, will permit our shares to be listed and traded. Future sales of substantial amounts of our common stock in the public market could adversely affect market prices. Upon completion of this offering, we will have outstanding an aggregate of shares of common stock, assuming no exercise of the Underwriters’ over-allotment option. The shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except that any shares purchased by our “affiliates,” as that term is defined in Rule 144 of the Securities Act, may generally only be sold in compliance with the limitations of Rule 144 described below.

All other outstanding shares not sold in this offering will be deemed “restricted securities” as defined under Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 promulgated under the Securities Act, which rules are summarized below. Subject to the lock-up agreements described below and the provisions of Rules 144, additional shares will be available for sale in the public market as follows (excluding shares of common stock that may underlie the Underwriter’s warrant).

Approximate Number of Shares Eligible for Future Sale		Date
		After the date of this prospectus, freely tradable shares sold in this offering, excluding the additional shares that the Underwriters have a 45-day option to purchase from us.

50,000,000		These shares, 35,000,000 of which were issued in connection with the share exchange transaction, may be sold under and subject to Rule 144. However, holders of of these shares have agreed with the Underwriters not to directly or indirectly sell, offer, contract or grant any option to sell, pledge, transfer (excluding intra-family transfers, transfers to a trust for estate planning purposes or to beneficiaries of officers, directors and shareholders upon their death), or otherwise dispose of or enter into any transaction which may result in the disposition of any shares of our common stock or securities convertible into, exchangeable or exercisable for any shares of our common stock, without the prior written consent of the Underwriters, for a period of days after the date of this prospectus.

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Rule 144

In general, under Rule 144 a person, or persons whose shares are aggregated, who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale and who has beneficially owned shares of our common stock for at least nine months, including the holding period of any prior owner, except if the prior owner was one of our affiliates, would be entitled to sell all of their shares, provided the availability of current public information about our company.

Sales under Rule 144 may also subject to manner of sale provisions and notice requirements and to the availability of current public information about our company. Any substantial sale of common stock pursuant to any resale registration statement or Rule 144 may have an adverse effect on the market price of our common stock by creating an excessive supply.

Lock-Up Agreements and Registration

Each of our executive officers and directors have agreed with the Underwriters not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any securities of the Company, including the issuance of shares of our common stock upon the exercise of currently outstanding options approved by the Underwriters, if any, without the prior written consent of the Underwriters, for a period of twelve months after the date of this prospectus.

We have been advised by the Underwriters that they have no present intention and there are no agreements or understandings, explicit or tacit, relating to the early release of any locked-up shares. The Underwriters may, however, consent to an early release from the lock-up period if, in its opinion, the market for the common stock would not be adversely impacted by sales. The release of any lock-up would be considered on a case-by-case basis. Factors that the Underwriters may consider in deciding whether to release shares from the lock-up restriction include the length of time before the lock-up expires, the number of shares involved, the reason for the requested release, market conditions, the trading price of our securities, historical trading volumes of our securities and whether the person seeking the release is an officer, director or affiliate of us.

UNDERWRITING

Subject to the terms and conditions in the underwriting agreement, dated , 2010, by and among us and Newbridge Securities Corporation, who is acting as the representative of the underwriters of this offering, each underwriter named below has severally agreed to purchase from us, on a firm commitment basis, the number of shares of common stock set forth opposite its name below, at the public offering price, less the underwriting discount set forth on the cover page of this prospectus:

		Number
Underwriter		of Shares
Newbridge Securities Corporation



Total

The underwriters have agreed to purchase all of the shares offered by this prospectus if they are purchased. Under the terms of the underwriting agreement, if an underwriter defaults in its commitment to purchase shares, the commitments of non-defaulting underwriters may be increased or the underwriting agreement may be terminated, depending on the circumstances. The underwriting agreement also provides that the obligations of the underwriters to pay for and accept delivery of the shares are subject to the passing upon of certain legal matters by counsel and certain conditions such as confirmation of the accuracy of representations and warranties by us about our financial condition and operations and other matters.

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The shares should be ready for delivery on or about , 2010 against payment in immediately available funds. The underwriters may reject all or part of any order.

Commissions and Discounts

The underwriters will initially offer the shares to be sold in this offering directly to the public at the initial public offering price set forth on the cover of this prospectus and to selected dealers at the initial public offering price less a selling concession not in excess of US$ per share. After the offering, the underwriters may change the offering price and other selling terms. No change in those terms will change the amount of proceeds to be received by us as set forth on the cover of this prospectus.

The following table shows the public offering price, underwriting fees and expenses to be paid by us to the underwriters and the proceeds of the public offering, before expenses, to us.

	Per Share	Aggregate Amount
Public offering price	$	$
Underwriting discount	$	$
Non-accountable expense allowance (1)
Proceeds before other expenses (2)	$	$

(1) The non-accountable expense allowance of % of the gross proceeds of the offering is not payable with respect to the common stock sold upon exercise of the underwriters’ over-allotment option.

(2) We estimate that the total expense of this offering excluding the underwriters’ discount and the non-accountable expense allowance will be approximately US$ . These expenses include, but are not limited to, SEC registration fees, Financial Industry Regulatory, Inc., or FINRA, filing fees, NYSE Amex filing fees, accounting fees and expenses, legal fees and expenses, printing and engraving expenses and transfer agent fees.

The distribution of our securities will end upon the underwriters’ cessation of selling efforts and stabilization activities.

Over-allotment Option

We have granted an option to the underwriters to purchase up to additional shares at the public offering price, less the underwriting discount. The underwriters may exercise this option for 45 days from the date of this prospectus solely to cover over-allotments. If this option is exercised in full, the total price to the public will be US$ million and the total proceeds to us will be US$ million. The underwriters have severally agreed that, to the extent the over-allotment option is exercised, they will each purchase a number of additional shares proportionate to the underwriter’s initial amount reflected in the table above.

Underwriter’s Warrant

We have also agreed to issue to Newbridge Securities Corporation a warrant to purchase a number of shares of our common stock equal to an aggregate of 7% of the common stock sold in the offering, including the over-allotment shares. The warrant will have an exercise price equal to 165% of the offering price of the shares sold in this offering. The warrants are exercisable for 5 years from the issue date. The warrant is not redeemable by us, and allows for “cashless” exercise. The warrant also provides for unlimited “piggyback” registration rights at our expense with respect to the underlying common stock during the five (5) year period.

Pursuant to the rules of the FINRA (formerly the NASD), and in particular Rule 5110, the warrant (and underlying shares) issued to Newbridge Securities Corporation may not be sold, transferred, assigned, pledged, or hypothecated, or the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective disposition of the securities by any person for a period of 180 days immediately following the date of delivery and payment for the shares offered; provided, however , that the warrant (and underlying shares) may be transferred to officers or partners of Newbridge Securities Corporation and members of the underwriting syndicate as long as the warrants (and underlying shares) remain subject to the lockup.

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Other Terms

The underwriting agreement provides for indemnification between us and the underwriters against specified liabilities, including liabilities under the Securities Act, and for contribution by us and the underwriters to payments that may be required to be made with respect to those liabilities. We have been advised that, in the opinion of the SEC, indemnification liabilities under the Securities Act is against public policy as expressed in the Securities Act, and is therefore, unenforceable.

Price Stabilization, Short Positions

Until the distribution of the common stock offered by this prospectus is completed, rules of the SEC may limit the ability of the underwriters to bid for and to purchase our common stock. As an exception to these rules, the underwriters may engage in transactions effected in accordance with Regulation M under the Exchange Act that are intended to stabilize, maintain or otherwise affect the price of our common stock. The underwriters may engage in over-allotment sales, syndicate covering transactions, stabilizing transactions and penalty bids in accordance with Regulation M.

Stabilizing Transactions . The underwriters may make bids or purchases for the purpose of pegging, fixing or maintaining the price of our securities, so long as stabilizing bids do not exceed the maximum price specified in Regulation M, which generally requires, among other things, that no stabilizing bid shall be initiated at or increased to a price higher than the lower of the offering price or the highest independent bid for the security on the principal trading market for the security.

Over-allotment Sales. The underwriters may exercise the over-allotment option which involves sales by the underwriters of common stock in excess of the number of shares of common stock the underwriters are obligated to purchase, which creates a short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares of common stock over-allotted by the underwriters is not greater than the number of shares of common stock that they may purchase in the over-allotment option. In a naked short position, the number of shares of common stock involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing our common stock in the open market.

Syndicate Coverage Transactions. The underwriters may create a short position in our securities by selling more of our securities than are set forth on the cover page of this prospectus. If the underwriters create a short position during the offering, the representatives may engage in syndicate covering transactions by purchasing our securities in the open market.

Penalty Bids . The representatives may reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

Stabilization, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market.

Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the prices of our common stock. These transactions may occur on the NYSE Amex or on any trading market. If any of these transactions are commenced, they may be discontinued without notice at any time.

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A prospectus in electronic format may be made available on a website maintained by the representatives of the underwriters and may also be made available on a website maintained by other underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives of the underwriters to underwriters that may make Internet distributions on the same basis as other allocations. In connection with the offering, the underwriters or syndicate members may distribute prospectuses electronically. No forms of prospectus other than printed prospectuses and electronically distributed prospectuses that are printable in Adobe PDF format will be used in connection with this offering.

The underwriters have informed us that they do not expect to confirm sales of shares of common stock offered by this prospectus to accounts over which they exercise discretionary authority without obtaining the specific approval of the account holder.

Foreign Regulatory Restrictions on Purchase of the Common Stock

No action may be taken in any jurisdiction other than the United States that would permit a public offering of the common stock or the possession, circulation or distribution of this prospectus in any jurisdiction where action for that purpose is required. Accordingly, the common stock may not be offered or sold, directly or indirectly, and neither the prospectus nor any other offering material or advertisements in connection with the common stock may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

In addition to the public offering of the shares in the United States, the underwriters may, subject to the applicable foreign laws, also offer the common shares to certain institutions or accredited persons in the following countries:

United Kingdom. No offer of shares of common stock has been made or will be made to the public in the United Kingdom within the meaning of Section 102B of the Financial Services and Markets Act 2000, as amended, or FSMA, except to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or otherwise in circumstances which do not require the publication by us of a prospectus pursuant to the Prospectus Rules of the Financial Services Authority, or FSA. Each underwriter: (i) has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which Section 21 of FSMA does not apply to us; and (ii) has complied with, and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

European Economic Area. In relation to each member state of the European Economic Area which has implemented the Prospectus Directive, which we refer to as a Relevant Member State, with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State, which we refer to as the Relevant Implementation Date, no offer of common stock has been made and or will be made to the public in that Relevant Member State prior to the publication of a prospectus in relation to the common stock which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that, with effect from and including the Relevant Implementation Date, an offer of common stock may be made to the public in that Relevant Member State at any time: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43,000,000 and (iii) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or (c) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an “offer of ordinary shares to the public” in relation to any common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the common stock to be offered so as to enable an investor to decide to purchase or subscribe the common stock, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/ EC and includes any relevant implementing measure in each Relevant Member State.

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Germany. Any offer or solicitation of common stock within Germany must be in full compliance with the German Securities Prospectus Act (Wertpapierprospektgesetz — WpPG). The offer and solicitation of securities to the public in Germany requires the approval of the prospectus by the German Federal Financial Services Supervisory Authority (Bundesanstalt fr Finanzdienstleistungsaufsicht — BaFin). This prospectus has not been and will not be submitted for approval to the BaFin. This prospectus does not constitute a public offer under the German Securities Prospectus Act (Wertpapierprospektgesetz). This prospectus and any other document relating to the common stock, as well as any information contained therein, must therefore not be supplied to the public in Germany or used in connection with any offer for subscription of the common stock to the public in Germany, any public marketing of the common stock or any public solicitation for offers to subscribe for or otherwise acquire the common stock. The prospectus and other offering materials relating to the offer of the common stock are strictly confidential and may not be distributed to any person or entity other than the designated recipients hereof.

Greece. This prospectus has not been approved by the Hellenic Capital Markets Commission or another EU equivalent authority and consequently is not addressed to or intended for use, in any way whatsoever, by Greek residents. The common stock have not been offered or sold and will not be offered, sold or delivered directly or indirectly in Greece, except to (i) “qualified investors” (as defined in article 2(f) of Greek Law 3401/2005) and/or to (ii) less than 100 individuals or legal entities, who are not qualified investors (article 3, paragraph 2(b) of Greek Law 3401/2005), or otherwise in circumstances which will not result in the offer of the new common stock being subject to the Greek Prospectus requirements of preparing a filing a prospectus (under articles 3 and 4 of Greek Law 3401/2005).

Italy. This offering of the common stock has not been cleared by Consob, the Italian Stock Exchanges regulatory agency of public companies, pursuant to Italian securities legislation and, accordingly, no common stock may be offered, sold or delivered, nor may copies of this prospectus or of any other document relating to the common stock be distributed in Italy, except (1) to professional investors (operatori qualificati); or (2) in circumstances which are exempted from the rules on solicitation of investments pursuant to Decree No. 58 and Article 33, first paragraph, of Consob Regulation No. 11971 of May 14, 1999, as amended. Any offer, sale or delivery of the common stock or distribution of copies of this prospectus or any other document relating to the common stock in Italy under (1) or (2) above must be (i) made by an investment firm, bank or financial intermediary permitted to conduct such activities in Italy in accordance with the Decree No. 58 and Legislative Decree No. 385 of September 1, 1993, or the Banking Act; and (ii) in compliance with Article 129 of the Banking Act and the implementing guidelines of the Bank of Italy, as amended from time to time, pursuant to which the issue or the offer of securities in Italy may need to be preceded and followed by an appropriate notice to be filed with the Bank of Italy depending, inter alia, on the aggregate value of the securities issued or offered in Italy and their characteristics; and (iii) in compliance with any other applicable laws and regulations.

Cyprus. Each of the Underwriters has agreed that (i) it will not be providing from or within Cyprus any “Investment Services”, “Investment Activities” and “Non-Core Services” (as such terms are defined in the Investment Firms Law 144(I) of 2007, (the “IFL”) in relation to the common stock, or will be otherwise providing Investment Services, Investment Activities and Non-Core Services to residents or persons domiciled in Cyprus. Each underwriter has agreed that it will not be concluding in Cyprus any transaction relating to such Investment Services, Investment Activities and Non-Core Services in contravention of the IFL and/or applicable regulations adopted pursuant thereto or in relation thereto; and (ii) it has not and will not offer any of the common stock other than in compliance with the provisions of the Public Offer and Prospectus Law, Law 114(I)/2005.

Switzerland. This document does not constitute a prospectus within the meaning of Art. 652a of the Swiss Code of Obligations. The common stock may not be sold directly or indirectly in or into Switzerland except in a manner which will not result in a public offering within the meaning of the Swiss Code of Obligations. Neither this document nor any other offering materials relating to the common stock may be distributed, published or otherwise made available in Switzerland except in a manner which will not constitute a public offer of the common stock of in Switzerland.

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Norway. This prospectus has not been approved or disapproved by, or registered with, the Oslo Stock Exchange, the Norwegian Financial Supervisory Authority (Kredittilsynet) nor the Norwegian Registry of Business Enterprises, and the common stock are marketed and sold in Norway on a private placement basis and under other applicable exceptions from the offering prospectus requirements as provided for pursuant to the Norwegian Securities Trading Act.

Botswana. The company hereby represents and warrants that it has not offered for sale or sold, and will not offer or sell, directly or indirectly the common stock to the public in the Republic of Botswana, and confirms that the offering will not be subject to any registration requirements as a prospectus pursuant to the requirements and/or provisions of the Companies Act, 2003 or the Listing Requirements of the Botswana Stock Exchange.

Hong Kong. The common stock may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the common stock may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to common stock which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Colombia. The common shares may not be offered or sold in the Republic of Colombia.

Costa Rica. The common shares described in this prospectus have not been registered with the Superintendencia General de Valores de Costa Rica, nor any other regulatory body of Costa Rica. This Prospectus is intended to be for your personal use only, and is not intended to be a Public Offering of Securities, as defined under Costa Rican law.

Panama. The common shares have not been registered with the National Securities Commission, nor has the offer, sale or transactions thereof been registered. The common shares are not under the supervision of the National Securities Commission.

Singapore. This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the common stock may not be circulated or distributed, nor may the common stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the common stock are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the common stock under Section 275 except: (i) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (ii) where no consideration is given for the transfer or (iii) by operation of law.

The People’s Republic of China. This prospectus has not been and will not be circulated or distributed in the PRC, and common stock may not be offered or sold, and will not be offered or sold to any person for re-offering or resale, directly or indirectly, to any resident of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph only, the PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

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Israel. This Prospectus does not constitute an offer to sell the common stock to the public in Israel or a prospectus under the Israeli Securities Law, 5728-1968 and the regulations promulgated thereunder, or the Israeli Securities Law, and has not been filed with or approved by the Israel Securities Authority. In Israel, pursuant to an exemption afforded under the Israeli Securities Law, this Prospectus may be distributed only to, and may be directed only at, investors listed in the first addendum to the Israeli Securities Law, or the Addendum, consisting primarily of certain mutual trust and provident funds, or management companies thereto, banks, as defined under the Banking (Licensing) Law, 5741-1981, except for joint service companies purchasing for their own account or for clients listed in the Addendum, insurers, as defined under the Supervision of Financial Services Law (Insurance), 5741-1981, portfolio managers purchasing for their own account or for clients listed in the Addendum, investment advisers purchasing for their own account, Tel Aviv Stock Exchange members purchasing for their own account or for clients listed in the Addendum, underwriters purchasing for their own account, venture capital funds, certain corporations which primarily engage in the capital market and fully-owned by investors listed in the Addendum and corporations whose equity exceeds NIS250 Million, collectively referred to as institutional investors. Institutional investors may be required to submit written confirmation that they fall within the scope of the Addendum.

United Arab Emirates. This document has not been reviewed, approved or licensed by the Central Bank of the United Arab Emirates (the “UAE”), Emirates Securities and Commodities Authority or any other relevant licensing authority in the UAE including any licensing authority incorporated under the laws and regulations of any of the free zones established and operating in the territory of the UAE, in particular the Dubai International Financial Services Authority (the “DFSA”), a regulatory authority of the Dubai International Financial Centre (the “DIFC”). The issue of common stock does not constitute a public offer of securities in the UAE, DIFC and/or any other free zone in accordance with the Commercial Companies Law, Federal Law No. 8 of 1984 (as amended), DFSA Offered Securities Rules and the Dubai International Financial Exchange Listing Rules, accordingly, or otherwise. The common stock may not be offered to the public in the UAE and/or any of the free zones including, in particular, the DIFC. The common stock may be offered and this document may be issued, only to a limited number of investors in the UAE or any of its free zones (including, in particular, the DIFC) who qualify as sophisticated investors under the relevant laws and regulations of the UAE or the free zone concerned. Management of the company, and the representatives represent and warrant that the common stock will not be offered, sold, transferred or delivered to the public in the UAE or any of its free zones including, in particular, the DIFC.

Oman. For the attention of the residents of Oman:

The information contained in this memorandum neither constitutes a public offer of securities in the Sultanate of Oman (“Oman”) as contemplated by the Commercial Companies Law of Oman (Sultani Decree 4/74) or the Capital Market Law of Oman (Sultani Decree 80/98), nor does it constitute an offer to sell, or the solicitation of any offer to buy non-Omani securities in Oman as contemplated by Article 6 of the Executive Regulations to the Capital Market Law of Oman (issued vide Ministerial Decision No 4/2001), and nor does it constitute a distribution of non-Omani securities in Oman as contemplated under the Rules for Distribution of Non-Omani Securities in Oman issued by the Capital Market Authority of Oman (“CMA”). Additionally, this memorandum is not intended to lead to the conclusion of any contract of whatsoever nature within the territory of Oman. This memorandum has been sent at the request of the investor in Oman, and by receiving this memorandum, the person or entity to whom it has been issued and sent understands, acknowledges and agrees that this memorandum has not been approved by the CMA or any other regulatory body or authority in Oman, nor has any authorization, license or approval been received from the CMA or any other regulatory authority in Oman, to market, offer, sell, or distribute the common stock within Oman. No marketing, offering, selling or distribution of any financial or investment products or services has been or will be made from within Oman and no subscription to any securities, products or financial services may or will be consummated within Oman. The Underwriters are neither companies licensed by the CMA to provide investment advisory, brokerage, or portfolio management services in Oman, nor banks licensed by the Central Bank of Oman to provide investment banking services in Oman. The Underwriters do not advise persons or entities resident or based in Oman as to the appropriateness of investing in or purchasing or selling securities or other financial products. Nothing contained in this memorandum is intended to constitute Omani investment, legal, tax, accounting or other professional advice. This memorandum is for your information only, and nothing herein is intended to endorse or recommend a particular course of action. You should consult with an appropriate professional for specific advice on the basis of your situation. Any recipient of this memorandum and any purchaser of the common stock pursuant to this memorandum shall not market, distribute, resell, or offer to resell the common stock within Oman without complying with the requirements of applicable Omani law, nor copy or otherwise distribute this memorandum to others.

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Canada.

Resale Restrictions

The distribution of our securities in Canada is being made only on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of our securities are made. Any resale of our securities in Canada must be made under applicable securities laws that will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of our securities.

Representations of Purchasers

By purchasing our securities in Canada and accepting a purchase confirmation a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:

the purchaser is entitled under applicable provincial securities laws to purchase our securities without the benefit of a prospectus qualified under those securities laws;

where required by law, that the purchaser is purchasing as principal and not as agent;

the purchaser has reviewed the text above under Resale Restrictions; and

the purchaser acknowledges and consents to the provision of specified information concerning its purchase of our securities to the regulatory authority that by law is entitled to collect the information.

Further details concerning the legal authority for this information are available on request.

Rights of Action — Ontario Purchasers Only

Under Ontario securities legislation, certain purchasers who purchase a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of our securities, for rescission against us in the event that this prospectus contains a misrepresentation without regard to whether the purchaser relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for our securities. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for our securities. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us. In no case will the amount recoverable in any action exceed the price at which our securities were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we will have no liability. In the case of an action for damages, we will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of our securities as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

Enforcement of Legal Rights

All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

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Taxation and Eligibility for Investment

Canadian purchasers of our securities should consult their own legal and tax advisors with respect to the tax consequences of an investment in our securities in their particular circumstances and about the eligibility of our securities for investment by the purchaser under relevant Canadian legislation.

LEGAL MATTERS

The validity of the common stock offered by this prospectus will be passed upon for us by Burton Bartlett & Glogovac, Reno Nevada. Anslow + Jaclin LLP, Manalapan, New Jersey, is acting as counsel for the Underwriters and Team-Run Legal is acting as PRC counsel for the Underwriters.

EXPERTS

The consolidated financial statements of Chisen Electric Corporation and its subsidiaries as of March 31, 2010 and 2009 appearing in this prospectus and the registration statement have been audited by Mazars CPA Limited, an independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

We filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 for the shares of common stock in this offering. This prospectus does not contain all of the information in the registration statement and the exhibits and schedule that were filed with the registration statement. For further information with respect to us and our common stock, we refer you to the registration statement and the exhibits and schedule that were filed with the registration statement. Statements contained in this prospectus about the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and we refer you to the full text of the contract or other document filed as an exhibit to the registration statement. A copy of the registration statement and the exhibits and schedules that were filed with the registration statement may be inspected without charge at the Public Reference Room maintained by the Securities and Exchange Commission at 100 F Street, N.E. Washington, DC 20549, and copies of all or any part of the registration statement may be obtained from the Securities and Exchange Commission upon payment of the prescribed fee. Information regarding the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov.

We file periodic reports under the Securities Exchange Act of 1934, including annual, quarterly and special reports, and other information with the Securities and Exchange Commission. These periodic reports and other information are available for inspection and copying at the regional offices, public reference facilities and website of the Securities and Exchange Commission referred to above.

We make available free of charge on or through our internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

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INDEX TO FINANCIAL STATEMENTS

CHISEN ELECTRIC CORPORATION AND ITS SUBSIDIARIES

FINANCIAL STATEMENTS

INDEX

	Page

Consolidated Financial Statements For the years ended March 31, 2010 and 2009

Report of Independent Registered Public Accounting Firm		F-1

Consolidated Statements of Operations and Other Comprehensive Income		F-2

Consolidated Balance Sheets		F-3

Consolidated Statements of Changes in Shareholders' Equity		F-5

Consolidated Statements of Cash Flows		F-6

Notes to and Forming Part of Consolidated Financial Statements		F-8

Unaudited Condensed Consolidated Financial Statements For the nine months ended December 31, 2010

Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income		F-31

Unaudited Condensed Consolidated Balance Sheets		F-33

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity		F-35

Unaudited Condensed Consolidated Statements of Cash Flows		F-36

Notes to and Forming Part of Unaudited Condensed Consolidated Financials Statements		F-38

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and stockholders of:

Chisen Electric Corporation

We have audited the accompanying consolidated balance sheets of Chisen Electric Corporation ( “Chisen Electric”) and its subsidiaries (collectively referred to as the “Company”) as of March 31, 2010 and 2009, and the related consolidated statements of operations and other comprehensive income, changes in stockholders' equity and cash flows for each of the years 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 audits.

We 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 audits to obtain reasonable assurance about whether the 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 control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing auditing procedures that are appropriate in the circumstances, 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. Our audits also included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Mazars CPA Limited

Mazars CPA Limited

Certified Public Accountants

Hong Kong

Date: June 28, 2010

F-1

Chisen Electric Corporation

Consolidated Statements of Operations and Other Comprehensive Income

For the years ended March 31, 2010 and 2009

		Years ended March 31,
		2010			2009
	Note	US$’000			US$’000
					(As restated)
Operating revenues:

Net sales to third parties			177,192			109,020

Cost of sales			(153,708	)		(88,945	)

Gross income			23,484			20,075

Operating expenses:
Sales, marketing and distribution			(8,696	)		(5,459	)
General and administrative			(3,647	)		(3,763	)

Operating income			11,141			10,853

Other income, net			1,671			758
Interest income			343			362
Interest expense			(2,068	)		(1,232	)

Income before income taxes			11,087			10,741

Income taxes expenses	4		(1,587	)		(1,861	)

Net income			9,500			8,880

Other comprehensive income
Foreign currency translation adjustment			106			278

Comprehensive income			9,606			9,158

		Shares			Shares
					(As restated)
Earnings per share	2
Weight average number of common stock outstanding
- basic and diluted			50,000,000			40,753,425

		US$			US$
					(As restated)
Net income per share of common stock
- basic and diluted			0.19			0.22

The financial statements should be read in conjunction with the accompanying notes.

F-2

Chisen Electric Corporation

Consolidated Balance Sheets

As of March 31, 2010 and 2009

		As of March 31,
		2010		2009
	Note	US$’000		US$’000
ASSETS

Current assets:
Cash and cash equivalents			6,019		2,620
Restricted bank balances	5		21,420		13,878
Other financial assets	6		7,438		1,314
Trade receivables, net			50,440		35,023
Other receivables			800		842
Prepayments			4,933		862
Due from related parties	14(b)		8		474
Inventories	7		30,038		17,135

Total current assets			121,096		72,148

Available-for-sale financial assets	8		882		878
Long-term land lease prepayments, net			749		608
Property, plant and equipment, net	9		10,474		5,315

Total assets			133,201		78,949

The financial statements should be read in conjunction with the accompanying notes.

F-3

Chisen Electric Corporation

Consolidated Balance Sheets

As of March 31, 2010 and 2009

		As of March 31,
		2010		2009
	Note	US$’000		US$’000

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Trade payables			14,923		11,176
Notes payable	10		35,504		23,343
Accrued expenses and other accrued liabilities			5,087		3,769
Due to related parties	14(b)		2,532		639
Income taxes payable			148		264
Short-term bank borrowings	11		46,141		20,451

Total current liabilities			104,335		59,642

Government subsidies	12		139		186
Deferred tax liabilities	4(c)		460		460

Total non-current liabilities			599		646

Total liabilities			104,934		60,288

Commitments and contingencies	15		-		-

Shareholders’ equity:
Preferred stock, US$0.001 par value each:
10,000,000 shares authorized and no shares issued and outstanding			-		-
Common stock, US$0.001 par value each:
100,000,000 shares authorized 50,000,000 shares issued and outstanding			50		50
Capital reserves			144		144
Statutory reserves	13		2,239		1,103
Accumulated other comprehensive income			1,054		948
Retained earnings			24,780		16,416

Total shareholders’ equity			28,267		18,661

Total liabilities and shareholders’ equity			133,201		78,949

The financial statements should be read in conjunction with the accompanying notes.

F-4

Chisen Electric Corporation

Consolidated Statements of Changes in Shareholders' Equity

For the years ended March 31, 2010 and 2009

	Common stock issued
	Number of shares		Amount		Capital reserves			Statutory reserves		Retained earnings			Accumulated other comprehensive income		Total
					US$’000			US$’000		US$’000			US$’000		US$’000

Balance as of April 1, 2008 (As restated) (Note 17)		35,000,000		35		159			71		8,568			670		9,503
Recapitalization upon reverse acquisition		15,000,000		15		(15	)		-		-			-		-
Net income		-		-		-			-		8,880			-		8,880
Transfer to statutory reserves		-		-		-			1,032		(1,032	)		-		-
Foreign currency translation adjustment		-		-		-			-		-			278		278

Balance as of March 31, 2009		50,000,000		50		144			1,103		16,416			948		18,661

Balance as of April 1, 2009		50,000,000		50		144			1,103		16,416			948		18,661
Net income		-		-		-			-		9,500			-		9,500
Transfer to statutory reserves		-		-		-			1,136		(1,136	)		-		-
Foreign currency translation adjustment		-		-		-			-		-			106		106

Balance as of March 31, 2010		50,000,000		50		144			2,239		24,780			1,054		28,267

The financial statements should be read in conjunction with the accompanying notes.

F-5

Chisen Electric Corporation

Consolidated Statements of Cash Flows

For the years ended March 31, 2010 and 2009

	Years ended March 31,
	2010			2009
	US$’000			US$’000
Cash flows from operating activities
Net income		9,500			8,880
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation of property, plant and equipment		646			451
Written-off of property, plant and equipment		6			44
Amortization of long-term land lease prepayments		13			13
Exchange differences		22			(84	)
Provision for warranty costs		197			(302	)
Government grant recognized		(47	)		(47	)
Investment income from available-for-sale financial assets		-			(131	)
Deferred taxation		-			460
Changes in assets and liabilities:
Other financial assets		(6,118	)		3,851
Trade receivables, net		(15,265	)		(19,148	)
Other receivables		46			(377	)
Prepayment		(4,067	)		(520	)
Due from related parties		468			800
Inventories		(12,830	)		(4,524	)
Trade payables		3,699			4,949
Notes payable *		12,060			23,343
Accrued expenses and other accrued liabilities		732			637
Due to related parties *		1,891			(6,348	)
Income taxes payable		(116	)		142

Net cash (used in) provided by operating activities		(9,163	)		12,089

Cash flows from investing activities
Purchase of property, plant and equipment		(5,417	)		(1,647	)
Additions of long-term land lease prepayments		(151	)		(113	)
Investment in restricted bank balances, net		(7,482	)		(7,304	)
Dividend received from available-for-sale financial assets		-			131

Net cash used in investing activities		(13,050	)		(8,933	)

The financial statements should be read in conjunction with the accompanying notes.

F-6

Chisen Electric Corporation

Consolidated Statements of Cash Flows

For the years ended March 31, 2010 and 2009

	Years ended March 31,
	2010			2009
	US$’000			US$’000
Cash flows from financing activities
Proceeds from bills financing		3,668			-
Proceeds from short-term bank loans		41,666			20,451
Repayment of short-term bank loans		(19,733	)		(21,912	)

Net cash provided by (used in) financing activities		25,601			(1,461	)

Net increase in cash and cash equivalents		3,388			1,695

Cash and cash equivalents, beginning of year		2,620			786
Effect on exchange rate changes		11			139

Cash and cash equivalents, end of year		6,019			2,620

Supplemental disclosure of cash flow information
Interest received		343			261
Interest paid		1,981			1,160
Tax paid		1,635			1,264

* The amounts represent cash payments specific for the procurement of materials for manufacturing

The financial statements should be read in conjunction with the accompanying notes.

F-7

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES

Chisen Electric Corporation (“Chisen Electric”), formerly known as World Trophy Oufitters, Inc., was formed as a Nevada corporation on January 13, 2005. Its common stocks are currently trading on the Over-The-Counter Bulletin Board under the symbol “CIEC.OB”.

Chisen Electric is an investment holding company with no operations. The principal activities of its subsidiaries (together with Chisen Electric, collectively referred as “the Company”) are the manufacture and sales of sealed lead-acid battery products and investment holding.

Details of Chisen Electric’s subsidiaries as of March 31, 2010 are as follows:

Name	Place and date of establishment / incorporation	Percentage of effective equity interest / voting right attributable to the Company			Principal activities

Fast More Limited (“Fast More”)	Hong Kong December 17, 2007		100	%	Investment holding

Changxing Chisen Battery Co., Limited (“Changxing Chisen”) *	Zhejiang, the People’s Republic of China (“PRC”) February 25, 2002		100	%	Manufacture and sales of sealed lead- acid battery products

Chisen Technology Holdings Corporation (“Chisen Technology”)	Nevada, United States May 18, 2009		100	%	Inactive

* This is a direct translation of the name in Chinese for identification purpose only and is not the official name in English.

On November 12, 2008, Chisen Electric entered into a Share Exchange Agreement (“Exchange”) with Fast More, Cheer Gold Development Limited (“Cheer Gold”) and Floster Investment Limited (Floster Investment Limited and together with Cheer Gold, the “Stockholders”) whereby Chisen Electric acquired all of the issued and outstanding common stock of Fast More from the Stockholders in exchange for the issuance by Chisen Electric to the Stockholders of an aggregate 35,000,000 newly-issued shares of Chisen Electric’s common stock, par value of US$0.001 each, representing 70% of Chisen Electric’s common stock issued and outstanding upon completion of the share exchange (the “Share Exchange Transaction”).

Prior to the closing of the Share Exchange Transaction, Chisen Electric implemented a 3 for 1 forward stock split, resulting to the increase of Chisen Electric’s common stock issued and outstanding from 11,219,400 shares to 33,658,200 shares, immediately before the completion of the Share Exchange Transaction.

F-8

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

Upon the completion of the Share Exchange Transaction (including, but not limited to, the cancellation of the 18,658,200 shares of Chisen Electric’s common stock concurrent and simultaneous with the consummation of the Share Exchange Transaction) on November 12, 2008, there were 50,000,000 shares of Chisen Electric’s common stock issued and outstanding.

The acquisition by Chisen Electric of Fast More is deemed to be a reverse acquisition in accordance with generally accepted accounting principles. In accordance with the Accounting and Financial Reporting Interpretations and Guidance prepared by the staff of the U.S. Securities and Exchange Commission, Chisen Electric (the legal acquirer) is considered the accounting acquiree and Fast More (the legal acquiree) is considered the accounting acquirer. The consolidated financial statements of the consolidated entity will in substance be those of Fast More, with the assets and liabilities, and revenues and expenses, of Chisen Electric being included effective from the date of completion of Share Exchange Transaction. Chisen Electric is deemed to be a continuation of the business of Fast More. The outstanding common stock of Chisen Electric prior to the Share Exchange Transaction will be accounted for at their net book value and no goodwill will be recognized.

In order to rationalize the corporate structure and prepare for the Share Exchange Transaction, Fast More and Changxing Chisen (collectively referred to as “the Fast More Group”) underwent a reorganization (“Reorganization”) prior to the consummation of the Share Exchange Transaction. On February 16, 2008, Fast More acquired the 51%, 9% and 40% equity interest in Changxing Chisen from Mr. Xu Ke Cheng, Mr. Xu Ke Yong and BEME International Co., Limited at a consideration of RMB6,502,500 (equivalent to USD926,000), RMB1,147,500 (equivalent to USD164,000) and RMB5,100,000 (equivalent to USD726,000) respectively. Upon completion of the transactions, Changxing Chisen has become a wholly-owned subsidiary of Fast More.

Since the ultimate beneficial owner of the companies now comprising the Fast More Group was, all the time prior to the completion of the Reorganization, Mr. Xu Ke Cheng, the ownership transfer transaction was accounted for as a transfer of entities under common control in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations”. Hence, the consolidation has been accounted for at historical cost and prepared on the basis as if the Reorganization had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting principles

The consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States of America (“USGAAP”).

Basis of consolidation

The consolidated financial statements include the financial information of Chisen Electric and its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation.

F-9

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue recognition

Volume-based rebates are made at the time of sales of goods and are recognized as a reduction of sales.

Costs related to shipping and handling are included in selling, marketing and distribution expenses.

Segmental information

During the years ended March 31, 2010 and 2009, all revenue of the Company represented income from sales of sealed lead-acid batteries and therefore no financial information by business segment is presented. Furthermore, as all income is derived from the PRC, no geographical segment information is presented.

Research and development costs

All costs of research and development activities are generally expensed as incurred. Research and development costs were US$244,000 and US$117,000 for the years ended March 31, 2010 and 2009, respectively.

Advertising and promotion costs

Advertising and promotion costs are expensed as sales, marketing and distribution costs as incurred. Advertising costs were US$681,000 and US$389,000 for the years ended March 31, 2010 and 2009, respectively.

Shipping and handling costs

Shipping and handling costs are expensed as sales, marketing and distribution costs as incurred. Shipping costs were US$3,597,000 and US$2,776,000 for the years ended March 31, 2010 and 2009, respectively.

Retirement plan costs

F-10

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income taxes

Tax rate changes are reflected in the computation of the income tax provision during the period such changes are enacted.

Comprehensive income

ASC Topic 220, "Reporting Comprehensive Income", requires the presentation of comprehensive income, in addition to the existing statements of operations. Comprehensive income is defined as the change in equity during the year from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated comprehensive income consists of changes in unrealized gains and losses on foreign currency translation.

Available-for-sale financial assets

The Company’s available-for-sale financial assets consist of investment in unlisted equity securities and are recorded at cost.

The Company periodically assesses whether its investment in non-marketable equity securities are impaired and if any impairment is other than temporary. Factors considered in assessing whether an impairment is other than temporary include the credit quality of the investment, the duration of the impairment, the Company’s ability and intent to hold the investment until recovery and overall economic conditions. A decline in value of these securities below cost that is deemed to be other than temporary results in an impairment charge to earnings that reduces the carrying amount of the securities to fair value establishing a new cost basis.

The Company principally takes into account the financial information of the investee and investment returns for the purpose of identifying potential impairment.

F-11

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property, plant and equipment (“PPE”) and long-term land lease prepayments

PPE are stated at cost less accumulated depreciation, and include expenditure that substantially increases the useful lives of existing assets.

Buildings	20 years
Leasehold improvements	Over the unexpired term of lease
Furniture, fixtures and office equipment	10 years
Motor vehicles	5 years
Plant and machinery	10 years

Long-term land lease prepayments are amortized on a straight-line basis over the term of lease.

Impairment of long-lived assets

Long-lived assets are reviewed at least annually for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, impairment is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets and recorded as a reduction of original costs. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

F-12

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Inventories

Trade receivables and allowance for doubtful accounts

Cash and cash equivalents

Foreign currency translation

Items included in the financial statements of the Company’s subsidiary are measured using Renminbi (“RMB”), the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in United States Dollars (“US$”), which is the Company’s presentation currency.

On consolidation, the results and financial position of all the group entities that have a functional currency different from the presentation currency are translated as follows:

(a)

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(b)

income and expenses for each statement of operations are translated at average exchange rates;

(c)

all resulting exchange differences are recognized as a separate component of equity.

F-13

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments

Fair value measurements

Level 1: Observable inputs, such as unadjusted quoted market prices in active markets for the identical asset or liabilities.

Level 2: Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3: Unobservable inputs reflecting the entity’s own assumptions in measuring the asset or liability at fair value.

Warranty

	Years ended March 31,
	2010			2009
	US$’000			US$’000

Balance as of April 1,		121			413
Exchange realignment		1			9
Accrual for warranties issued during the year		188			91
Settlement made during the year		(84	)		(392	)

Balance as of March 31,		226			121

F-14

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Government subsidies

Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Rental payables under operating leases are recognized as expenses on the straight-line basis over the lease term.

Use of estimates

Earnings per share

Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common stocks outstanding during the year. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common stocks that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Since there were no potentially dilutive securities for the years ended March 31, 2010 and 2009, basic and diluted earnings per share are the same for both years.

Upon the completion of the Share Exchange Transaction, the number of Chisen Electric’s common stock issued and outstanding, taken into account of the 3 for 1 forward split as detailed in Note 1 was increased to 50,000,000 shares and was applied retrospectively for the calculation of earnings per share.

F-15

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent accounting pronouncements

In May 2009, FASB issued ASC 855, Subsequent Events, which establishes general standards for the evaluation, recognition and disclosure of events and transactions that occur after the balance sheet date. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing standards. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material effect on the Company’s consolidated financial statements.

F-16

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent accounting pronouncements (Continued)

F-17

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent accounting pronouncements (Continued)

In January 2010, FASB issued ASU No. 2010-06 – Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarify existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company is currently evaluating the impact of Update 2010-06 will have on its consolidated financial statements.

F-18

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

3.	OPERATING RISKS

(a)

Concentration of major customers and suppliers

	Years ended March 31,
	2010			2009
Major customers with revenues of more than 10% of the Company’s sales
Sales to major customers	US$	71,161,000		US$	51,676,000
Percentage of sales		40	%		47	%
Number		2			1

Major suppliers with purchases of more than 10% of the Company’s purchases
Purchases from major suppliers	US$	100,982,000		US$	47,415,000
Percentage of purchases		64	%		60	%
Number		4			4

Trade receivables related to the Company’s major customers comprised 80% and 85% of all account receivables as of March 31, 2010 and 2009, respectively.

Trade payables related to the Company’s major suppliers comprised 20% and 24% of all account payables as of March 31, 2010 and 2009, respectively.

Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arisen from financial economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The major concentrations of credit risk arise from the Company’s accounts receivable. Even though the Company has major concentrations, it does not consider itself exposed to significant risk with regards to the related receivables.

(b)

Country risks

The Company’s major subsidiary has operation conducted in the PRC. Accordingly, its business, financial condition and result of operation maybe influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC economy.

The operation in the PRC is subject to special considerations and significant risks not typically associated with companies in the United States. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange and remittance restrictions. The Company’s results maybe adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, inter alia. The management does not believe these risks to be significant. There can be no assurance, however, those changes in political and other conditions will not result in any adverse impact.

F-19

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

3.	OPERATING RISKS (CONTINUED)

(c)

Cash and time deposits

The Company mainly maintains its cash balances with various banks located in the PRC. In common with local practice, such amounts are not insured or otherwise protected should the financial institutions be unable to meet their liabilities. There has been no history of credit losses. There are neither material commitment fees nor compensating balance requirements for any outstanding loans of the Company.

4.	INCOME TAXES

Chisen Electric had a net operating loss carry-forward for income tax reporting purposes that might be offset against future taxable income. These net operating loss carry-forwards are severely limited when Chisen Electric experiences a change in control. Therefore, following the Exchange as mentioned in Note 1 in November 2008, the amount available to offset future taxable income is limited. No tax benefit has been reported in the financial statements, because Chisen Electric believes that it is more likely than not that the carry-forwards will finally expire and therefore cannot be used. Accordingly, the potential tax benefits of the loss carry-forwards are offset by a valuation allowance of the same amount.

Chisen Electric’s subsidiaries are subject to income taxes on an entity basis on income arising in or derived from the tax jurisdictions in which each entity domiciles and operates.

Hong Kong Profits Tax has not been provided as Fast More had no assessable profit for the year.

Changxing Chisen is subject to state and local enterprise income taxes in the PRC at a standard rate of 25%. Changxing Chisen received official designation by the local tax authority as a foreign invested enterprise engaged in manufacturing activities and is confirmed by the local tax authority that it is exempted from enterprise income tax for two years commencing from the first profitable year in 2006, followed by a 50% reduction for the next three years.

Dividends payable by a foreign invested enterprise in the PRC to its foreign investors in Hong Kong are subject to a 5% withholding tax and deferred tax expenses of US$Nil and US$460,000 were charged to the statement of operations for the years ended March 31, 2010 and 2009, respectively.

F-20

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

4.	INCOME TAXES (CONTINUED)

(a)

Income tax expenses are comprised of the following:

	Years ended March 31,
	2010		2009
	US$’000		US$’000

Current taxes arising in the PRC:
For the year		1,587		1,401

Deferred taxes arising in the PRC:
For the year		-		460

		1,587		1,861

The FASB ASC Topic 740 “Income Taxes” clarifies the accounting and disclosure for uncertainty in tax positions, as defined, and prescribes the measurement process and a minimum recognition threshold for a tax position, taken or expected to be taken in a tax return, that is required to be met before being recognized in the financial statements. Under ASC 740, the Company must recognize the tax benefit from an uncertain position only if it is more-likely-than-not the tax position will be sustained on examination by the tax authority, based on the technical merits of the position. The tax benefits recognized in the financial statements attributable to such position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate resolution of the position.

Subject to the provision of ASC 740, the Company has analyzed its filing positions in all of the domestic and foreign jurisdictions where it is required to file income tax returns. As of March 31, 2010 and 2009, the Company has identified the following jurisdictions as “major” tax jurisdictions, as defined, in which it is required to file income tax returns in United States, Hong Kong and the PRC. Based on the evaluations noted above, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its consolidated financial statements.

As of March 31, 2010 and 2009, the Company had no unrecognized tax benefits or accruals for the potential payment of interest and penalties. The Company’s policy is to record interest and penalties in this connection as a component of the provision for income tax expense. For the years ended March 31, 2010 and 2009, no interest or penalties were recorded.

F-21

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

4.	INCOME TAXES (CONTINUED)

(b)

Reconciliation from the expected income tax expenses calculated with reference to the statutory tax rate in the PRC of 25% (2009: 25%) is as follows:

	Years ended March 31,
	2010			2009
	US$’000			US$’000

Expected income tax expenses		2,772			2,693
Effect on tax incentives / holiday		(1,389	)		(1,319	)
Non-deductible items		6			217
Withholding tax		-			481
Others		198			(211	)

Income tax expenses		1,587			1,861

(c)

Components of net deferred tax liabilities were as follows:

	As of March 31,
	2010		2009
	US$’000		US$’000

Withholding tax on undistributed earnings of a PRC subsidiary		460		460

5.	RESTRICTED BANK BALANCES

Restricted bank balances represented time deposits with original maturity between three and twelve months to secure banking facilities granted by various financial instruments as follows:

		As of March 31,
		2010		2009
	Note	US$’000		US$’000

Notes payable	10		19,659		13,878
Bills financing	11		1,761		-

			21,420		13,878

6.	OTHER FINANCIAL ASSETS

Other financial assets represented notes receivable from customers for the settlement of accounts receivable balances. As of March 31, 2010 and 2009, all notes receivable were guaranteed by established banks in the PRC and had maturities of 6 months or less from the date of issue. The fair value of the notes receivable approximated their carrying value.

F-22

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

7.	INVENTORIES

Inventories consisted of the following:

	As of March 31,
	2010		2009
	US$’000		US$’000

Raw materials		7,186		4,269
Work-in-progress and semi-finished goods		13,482		9,370
Finished goods		9,370		3,496

		30,038		17,135

8.	AVAILABLE-FOR-SALE FINANCIAL ASSETS

Available-for-sale financial assets as of March 31, 2010 and March 31, 2009 represented investment in unlisted equity securities and are recorded at cost. The management has estimated that the recoverable amount of the assets exceed their carrying value.

9.	PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment is summarized as follows:

	As of March 31,
	2010			2009
	US$’000			US$’000

Buildings		5,468			2,632
Leasehold improvements		495			-
Plant and machinery		4,071			2,386
Motor vehicles		974			807
Furniture, fixtures and office equipment		1,419			427
Construction-in-progress		-			365

		12,427			6,617

Accumulated depreciation		(1,953	)		(1,302	)

		10,474			5,315

Depreciation expenses were approximately US$646,000 and US$451,000 for the years ended March 31, 2010 and 2009, respectively.

The Company has pledged certain buildings as collaterals against general banking facilities granted to Changxing Chisen. Details of which are disclosed in Note 11.

F-23

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

10.	NOTES PAYABLE

Notes payable were issued by the Company to creditors with the banker’s acceptance payable at the maturity date for the purpose of raw materials for production exclusively. The Company has to repay the notes within six months from date of issuance and service fees would be charged by banks for the issuance for the notes. The notes payable were collateralized by restricted bank balances as set out in Note 5 and certain land lease prepayments and buildings as set out in Note 11(i) below.

In addition, various parties have issued guarantee against these notes payable as follows:

	As of March 31,
	2010		2009
	US$’000		US$’000

Corporate and personal guarantees issued by related parties (Note 14(d))		14,377		8,034
Corporate guarantees issued by third parties		1,467		2,922

11.	SHORT-TERM BANK BORROWINGS

Short-term bank borrowings comprise of the followings:

		As of March 31,
	Note	2010		2009
		US$’000		US$’000

Short-term bank loans	(i)		42,473		20,451
Bills financing	(ii)		3,668		-

			46,141		20,451

(i)

Short-term bank loans

Short-term bank loans represent amounts due to various banks which are due within 12 months, and these loans can normally be renewed with the banks upon expiry/maturity.

The loans and the notes payables as set out in Note 10 are collateralized by land lease prepayments and buildings of the Company with carrying values as follows:

	As of March 31,
	2010		2009
	US$’000		US$’000

Land lease prepayments		598		608
Buildings		2,018		2,069

		2,616		2,677

F-24

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

11.	SHORT-TERM BANK BORROWINGS (CONTINUED)

(i)	Short-term bank loans (continued)

Various parties have also issued guarantee against these short-term bank loans as follows:

	As of March 31,
	2010		2009
	US$’000		US$’000

Corporate and personal guarantees issued by related parties (Note 14(d))		30,589		16,069
Corporate guarantees issued by third parties		1,467		4,381
Corporate and personal guarantees issued by related parties and a third party jointly (Note 14(d))		8,802		-

The weighted average annual interest rates of the short-term bank loans were 5.40% and 6.55% as of March 31, 2010 and 2009 respectively.

(ii)	Bills financing

Bill financing represents amounts due to various banks which are repayable within six months from the date of issue. At March 31, 2010, the bills are secured by certain restricted bank balances of the Company with carrying value of US$1,761,000 and guaranteed by certain related parties to the extent of US$1,907,000.

The weighted average annual interest rates of the bills financing were 3.96% as of March 31, 2010.

12.	GOVERNMENT SUBSIDIES

F-25

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

13.	DISTRIBUTION OF INCOME

Upon completion of the Reorganization as detailed in Note 1, Changxing Chisen became wholly foreign owned enterprises when all of their equity interest have been acquired by the Company and are required by relevant laws and regulation to transfer at least 10% of their after-tax profit determined in accordance with the PRC accounting rules and regulations to a statutory surplus reserve until such reserve balance reaches 50% of Changxing Chisen’s registered capital.

The Company transferred US$1,136,000 and US$1,032,000 out of the after-tax income to the statutory reserve for the years ended March 31, 2010 and 2009, respectively.

The statutory surplus reserve can only be utilized to offset prior years' losses or for capitalization as paid-in capital. No distribution of the remaining reserves shall be made other than upon liquidation of Changxing Chisen.

14.	RELATED PARTY TRANSACTIONS

(a)	Names and relationship of related parties:

Name of related party		Existing relationships with the Company

Mr. Xu Kecheng		Director and controlling stockholder of Chisen Electric
Zhejiang Chisen Glass Company Limited (“Chisen Glass”)*		A company controlled by a close family member of Mr. Xu Kecheng
Mr. Xu Keyong		A close family member of Mr. Xu Kecheng
Ms. Zhou Fang Qin		Spouse of Mr. Xu Kecheng
Changxing Chisen Xinguangyuan Company Limited (“Xinguangyuan”)*		A company controlled by a close family member of Mr. Xu Kecheng
Zhejiang Ai Ge Organism Products Company Limited (“Ai Ge Organism”)*		A company controlled by Mr. Xu Kecheng
Zhejiang Changxing Nuo Wan Te Ke Glass Company Limited (“Nuo Wan Te Ke”)*		A company controlled by a close family member of Mr. Xu Kecheng
Zhejiang Changxing Ruilang Electronic Company Limited (“Ruilang Electronic”)		A company controlled by a close family member of Mr. Xu Kecheng

These are direct translations of the name in Chinese for identification purpose only and are not official names in English.

F-26

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

14.	RELATED PARTY TRANSACTIONS (CONTINUED)

(b)	Summary of balances with related parties:

	As of March 31,
	2010		2009
	US$’000		US$’000
Due from related parties:
Ms. Zhou Fang Qin		8		195
Chisen Glass		-		278
Xinguangyuan		-		1

		8		474

Due to related parties:
Mr. Xu Keyong		25		24
Chisen Glass		110		-
Ruilang Electronic		2,102		-
Ai Ge Organism		292		602
Nuo Wan Te Ke		3		13

		2,532		639

All amounts due from / to related parties represent unsecured advances which are interest-free and repayable on demand.

(c)	Summary of related party transactions:

Name of related party	Nature of transactions	Years ended March 31,
		2010		2009
		US$’000		US$’000

Chisen Glass	Purchase of raw materials		106		-
	Acquisition of motor vehicle		-		160

Ruilang Electronic	Purchase of raw materials		3,799		-
	Acquisition of land use right and buildings		2,859		-

F-27

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

14.	RELATED PARTY TRANSACTIONS (CONTINUED)

(d)	Other arrangements:

As of March 31, 2010, Chisen Glass provided guarantees, in aggregate, amounting to US$5,868,000, US$440,000 and US$440,000 to secure the short-term bank loans, notes payable and bill financing of the Company, respectively.

As of March 31, 2010, US$5,868,000 of the Company’s short-term bank loans was collateralized by land use rights owned by Ruilang Electronic and guaranteed by Mr. Xu Kecheng and Ms. Zhou Fang Qin.

As of March 31, 2010, Xinguangyuan, Mr. Xu Kecheng and a third party provided guarantees, in aggregate, amounting to US$8,802,000 to secure the short-term bank loans of the Company.

As of March 31, 2010, Xinguangyuan and Mr. Xu Kecheng provided guarantees, in aggregate, amounting to US$11,737,000 and US$5,868,000 to secure the short-term bank loans and notes payable of the Company, respectively.

As of March 31, 2010, Chisen Glass, Mr. Xu Kecheng and Ms. Zhou Fang Qin provided guarantees, in the aggregate, amounting to US$2,714,000, US$4,401,000 and US$1,467,000 to secure the short-term bank loans, notes payable and bills financing of the Company, respectively.

As of March 31, 2010, Xinguangyuan provided guarantees, in aggregate, amounting to US$3,667,000 to secure the notes payable of the Company.

As of March 31, 2010, US$4,402,000 of the Company’s short-term bank loans was collateralized by a guarantee provided by Mr. Xu Kecheng.

F-28

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

15.	COMMITMENTS AND CONTINGENCIES

(a)	Operating lease commitments

The Company leases certain office premises under non-cancelable operating leases. Rental expenses under operating leases for the years ended March 31, 2010 and 2009 were US$474,000 and US$206,000, respectively.

The following table summarizes the approximate future minimum rental payments under non-cancelable operating leases in effect as of March 31, 2010 and 2009:

	As of March 31,
	2010		2009
	US$’000		US$’000

Within one year		599		185
One to two years		630		205
Two to three years		661		202
Three to four years		489		212
Four to five years		115		54

Total		2,494		858

(b)	Capital commitments

As of March 31, 2010 and 2009, the Company had capital expenditure commitments for construction projects and purchase of machineries for an aggregate amount of approximately US$84,000 and US$423,000, respectively.

16.	SUBSEQUENT EVENTS

In preparing the consolidated financial statements, the Company has evaluated all subsequent events and transactions for potential recognition or disclosure through the date the consolidated financial statements were issued, and determined there were no subsequent events to report as of that date.

F-29

Chisen Electric Corporation

Notes to and Forming Part of Consolidated Financial Statements

For the years ended March 31, 2010 and 2009

17.	RESTATEMENT OF FINANCIAL STATEMENTS

(a)

The Company’s previously issued consolidated financial statements for the year ended March 31, 2009 have been restated to correct an accounting error in relation to the Share Exchange Transaction as detailed in Note 1 above. The table below shows the effect of restatements:

As previously reported

Consolidated statement of changes in

shareholders’ equity

Number of

Amount

Capital

reserves

US$’000

Balance as of April 1, 2008 and March 31, 2009

50,000,000

144

	As restated
Consolidated statement of changes in shareholders’ equity	Number of Shares		Amount		Capital reserves
			US$’000		US$’000

Balance as of April 1, 2008		35,000,000		35		159
Recapitalization upon reverse acquisition		15,000,000		15		(15	)

Balance as of March 31, 2009		50,000,000		50		144

The effect of restatements on 2009 was to increase the basic and diluted earnings per share as follows:

	Year ended March 31, 2009
Earnings per share	As previously reported		As restated
	Shares		Shares

Weighted average number of common stock outstanding - basic and diluted		50,000,000		40,753,425

Net income per share of common stock - basic and diluted		0.18		0.22

There was no impact on the 2009 consolidated statement of operations and other comprehensive income, consolidated balance sheet and consolidated statement of cash flows.

17.	RESTATEMENT OF FINANCIAL STATEMENTS (CONTINUED)

(b)

Certain comparative figures in the 2009 consolidated statement of operations and other comprehensive income have been restated by the Company to conform to the current year’s presentation of financial statements. The table below shows the effect of restatements:

	Years ended March 31, 2009
	As previously reported		As Restated
	US$’000		US$’000

Cost of sales		88,823		88,945
Gross income		20,197		20,075
Sales, marketing and distribution		5,337		5,459
General and administrative		4,007		3,763

F-30

Chisen Electric Corporation

Unaudited Condensed Consolidated Statements of Operations and

Other Comprehensive Income

For the nine months ended December 31, 2010 and 2009

		Three months ended December 31						Nine months ended December 31
		2010			2009			2010			2009
	Note	US$’000			US$’000			US$’000			US$’000
					(As restated)						(As restated)
Operating revenues:
Net sales to third parties			67,670			47,237			194,712			127,104

Cost of sales			(59,200	)		(41,398	)		(170,460	)		(107,764	)

Gross income			8,470			5,839			24,252			19,340

Operating expenses:
Sales, marketing and distribution			(2,560	)		(2,677	)		(8,111	)		(6,630	)
General and administrative			(987	)		(702	)		(2,628	)		(2,236	)

Operating income			4,923			2,460			13,513			10,474

Other income, net			276			464			889			1,189
Loss on disposal of scrap inventories			(2,307	)		-			(2,307	)		-
Interest income			117			-			315			56
Interest expense			(940	)		(399	)		(2,231	)		(1,147	)

Income before income taxes			2,069			2,525			10,179			10,572

Income taxes expense	4		(1,260	)		(314	)		(2,421	)		(1,439	)

Income before extraordinary item			809			2,211			7,758			9,133

Extraordinary item (less applicable income taxes of US$0)	20		1,738			-			1,738			-

Net income attributable to CIEC common stockholders			2,547			2,211			9,496			9,133

Other comprehensive income
Foreign currency translation adjustment			561			-			1,115			24

Comprehensive income			3,108			2,211			10,611			9,157

The financial statements should be read in conjunction with the accompanying notes.

F-31

Chisen Electric Corporation

Unaudited Condensed Consolidated Statements of Operations and

Other Comprehensive Income

For the nine months ended December 31, 2010 and 2009

		Three months ended December 31				Nine months ended December 31
		2010		2009		2010		2009
		US$’000		US$’000		US$’000		US$’000
				(As restated)				(As restated)
		Shares		Shares		Shares		Shares

Earnings per share	3
Weight average number of common stock outstanding
- basic and diluted			50,000,000		50,000,000		50,000,000		50,000,000

		US$		US$		US$		US$

Net income per share of common stock outstanding before extraordinary item
- basic and diluted			0.02		0.04		0.16		0.18

Net income per share of common stock outstanding after extraordinary item
- basic and diluted			0.05		0.04		0.19		0.18

The financial statements should be read in conjunction with the accompanying notes.

F-32

Chisen Electric Corporation

Unaudited Condensed Consolidated Balance Sheets

As of December 31, 2010 and March 31, 2010

		As of December 31,		As of March 31,
		2010		2010
	Note	US$’000		US$’000
ASSETS

Current assets:
Cash and cash equivalents			6,237		6,019
Restricted bank balances	5		26,468		21,420
Other financial assets	6		5,950		7,438
Trade receivables, net			69,811		50,440
Other receivables			8,791		800
Prepayments			7,120		4,933
Due from a related party	14(b)		4		8
Inventories	7		26,502		30,038
Assets classified as held for sale	19(a)		2,558		-

Total current assets			153,441		121,096

Available-for-sale financial assets	8		2,735		882
Long-term land lease prepayments, net			150		749
Property, plant and equipment, net	9		10,945		10,474
Deposit for acquisition of land and buildings			798		-

Total assets			168,069		133,201

The financial statements should be read in conjunction with the accompanying notes.

F-33

Chisen Electric Corporation

Unaudited Condensed Consolidated Balance Sheets

As of December 31, 2010 and March 31, 2010

		As of December 31,		As of March 31
		2010		2010
	Note	US$’000		US$’000
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Trade payables			15,118		14,923
Notes payable	10		49,155		35,504
Accrued expenses and other accrued liabilities			6,294		5,087
Due to related parties	14(b)		5,004		2,532
Income taxes payable			1,111		148
Short-term bank borrowings	11		50,969		46,141
Liabilities directly associated with assets classified as held for sale	19(b)		886		-

Total current liabilities			128,537		104,335

Government subsidies	12		106		139
Deferred tax liabilities	4(c)		460		460

Total non-current liabilities			566		599

Total liabilities			129,103		104,934

Commitments and contingencies	15		-		-

Stockholders’ equity:
Preferred stock, US$0.001 par value each:
10,000,000 shares authorized and no shares issued and outstanding			-		-
Common stock, US$0.001 par value each:
100,000,000 shares authorized
50,000,000 shares issued and outstanding			50		50
Capital reserves			144		144
Statutory reserves			3,430		2,239
Accumulated other comprehensive income			2,169		1,054
Retained earnings			33,085		24,780

Total CIEC stockholders’ equity			38,878		28,267

Non-controlling interests			88		-

Total stockholders’ equity			38,966		28,267

Total liabilities and stockholders’ equity			168,069		133,201

The financial statements should be read in conjunction with the accompanying notes.

F-34

Chisen Electric Corporation

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity

For the nine months ended December 31, 2010

	Common stock issued								Accumulated other					Total CIEC		Non-		Total
	Number of shares		Amount		Capital reserves		Statutory reserves		comprehensive income		Retained earnings			stockholders’ equity		controlling interests		stockholders’ equity
			US$’000		US$’000		US$’000		US$’000		US$’000			US$’000		US$’000		US$’000

Balance as of April 1, 2010		50,000,000		50		144		2,239		1,054		24,780			28,267		-		28,267
Net income		-		-		-		-		-		9,496			9,496		-		9,496
Transfer to statutory reserves		-		-		-		1,191		-		(1,191	)		-		-		-
Foreign currency translation adjustment		-		-		-		-		1,115		-			1,115		-		1,115
Capital contributed by non-controlling interests		-		-		-		-		-		-			-		88		88

Balance as of December 31, 2010		50,000,000		50		144		3,430		2,169		33,085			38,878		88		38,966

The financial statements should be read in conjunction with the accompanying notes.

F-35

Chisen Electric Corporation

Unaudited Condensed Consolidated Statements of Cash Flows

For the nine months ended December 31, 2010 and 2009

	Nine months ended December 31,
	2010			2009
	US$’000			US$’000
Cash flows from operating activities
Net income		9,496			9,134
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment		807			423
Written-off of property, plant and equipment		-			6
Loss on disposal of property, plant and equipment		18			-
Amortization of long-term land lease prepayments		12			13
Exchange differences		252			(17	)
Provision for warranty costs		818			44
Government grant recognized		(36	)		(36	)
Changes in assets and liabilities:
Other financial assets		1,718			(2,488	)
Trade receivables, net		(17,812	)		(12,008	)
Other receivables		(7,080	)		393
Prepayment		(2,034	)		(6,771	)
Due from a related party		4			474
Inventories		4,465			(9,719	)
Trade payables		(266	)		7,144
Notes payable *		12,553			16,849
Accrued expenses and other accrued liabilities		686			448
Due to related parties *		2,393			(309	)
Income taxes payable		958			50

Net cash provided by operating activities		6,952			3,630

Cash flows from investing activities
Purchase of property, plant and equipment		(3,396	)		(4,689	)
Proceeds on disposal of property, plant and equipment		1			-
Addition of long-term land lease prepayments		-			(179	)
Investment in restricted bank balances, net		(4,386	)		(9,507	)
Deposit paid for acquisition of land and buildings		(798	)		-
Acquisition of available-for-sale financial assets		(1,826	)		-

Net cash used in investing activities		(10,405	)		(14,375	)

The financial statements should be read in conjunction with the accompanying notes.

F-36

Chisen Electric Corporation

Unaudited Condensed Consolidated Statements of Cash Flows

For the nine months ended December 31, 2010 and 2009

	Nine months ended December 31,
	2010			2009
	US$’000			US$’000
Cash flows from financing activities
Proceeds from short-term bank loans		14,368			25,303
Repayment of short-term bank loans		(10,209	)		(13,163	)
Proceeds from bills financing		3,025			-
Repayment of bills financing		(3,781	)		-
Capital contributed by non-controlling interests		88			-

Net cash provided by financing activities		3,491			12,140

Net increase in cash and cash equivalents		38			1,395

Cash and cash equivalents, beginning of period		6,019			2,620

Effect on exchange rate changes		180			22

Cash and cash equivalents, end of period		6,237			4,037

Supplemental disclosure of cash flow information
Interest received		315			56
Interest paid		2,186			1,085
Tax paid		1,458			1,389

Non-cash investing activities
Deferred compensation income for factory relocation (Note (19(b))		886			-

Compensation income for cessation of production activities for relocation (note 20)		1,738			-

* The amounts represents cash payments specific for the procurement of materials for manufacturing.

The financial statements should be read in conjunction with the accompanying notes.

F-37

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES

Details of Chisen Electric’s subsidiaries as of December 31, 2010 are as follows:

Name	Place and date of establishment / incorporation	Percentage of effective equity interest / voting right attributable to the Company			Principal activities

Fast More Limited (“Fast More”)	Hong Kong December 17, 2007		100	%	Investment holding

Changxing Chisen Battery Co., Limited * (Currently known as Zhejiang Chisen Electric Co., Limited) (“Changxing Chisen”)	Zhejiang, the People’s Republic of China (“PRC”) February 25, 2002		100	%	Manufacture and sales of sealed lead-acid battery products

Chisen Technology Holdings Corporation (“Chisen Technology”)	Nevada, United States May 18, 2009		100	%	Inactive

Chisen Electric Jiangsu Co., Limited * (“Chisen Jiangsu”)	Jiangsu, PRC August 23, 2010		98	%	Inactive

These are direct translation of the name in Chinese for identification purpose only and are not the official name in English.

F-38

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

2.	PREPRATION OF INTERIM FINANCIAL STATEMENTS

Basis of presentations

The accompanying unaudited condensed consolidated financial statements as of December 31, 2010 have been prepared based upon Securities and Exchange Commission rules that permit reduced disclosure for interim periods and include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the financial position, results of operations and cash flows as of December 31, 2010 and for all periods presented. Information as of March 31, 2010 was derived from the audited consolidated financial statements of the Company for the year ended March 31, 2010.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“USGAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Chisen Electric's Form 10-K filed on June 28, 2010 for the year ended March 31, 2010. The results of operations for the three months and nine months ended December 31, 2010 are not necessarily indicative of the operating results to be expected for the full year ending March 31, 2011.

The condensed consolidated financial statements and accompanying notes are presented in United States dollars and prepared in conformity with USGAAP which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basis of consolidation

Recent accounting pronouncements

F-39

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

3.	EARNINGS PER SHARE

Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common stocks outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common stocks that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no potentially dilutive securities for both the three months and nine months ended December 31, 2010 and 2009.

4.	INCOME TAXES

Chisen Electric had a net operating loss carry-forward for income tax reporting purposes that might be offset against future taxable income. No tax benefit has been reported in the financial statements, because Chisen Electric believes that it is more likely than not that the carry-forwards will finally expire and therefore cannot be used. Accordingly, the potential tax benefits of the loss carry-forwards are offset by a valuation allowance of the same amount.

Chisen Electric’s subsidiaries are subject to income taxes on an entity basis on income arising in or derived from the tax jurisdictions in which each entity domiciles and operates.

Hong Kong Profits Tax has not been provided as Fast More had no assessable profit for the period.

Dividends payable by a foreign invested enterprise in the PRC to its foreign investors in Hong Kong are subject to a 10% withholding tax. No deferred tax expenses on undistributed profits were charged to the statement of operations for both the three months and nine months ended December 31, 2010 and 2009.

(a)

Income tax expenses are comprised of the following:

	Three months ended December 31				Nine months ended December 31
	2010		2009		2010		2009
	US$’000		US$’000		US$’000		US$’000

Current taxes arising in the PRC:
Corporate income tax		322		314		1,483		1,439
Withholding tax on dividends declared by the PRC foreign investment enterprise		938		-		938		-

		1,260		314		2,421		1,439

F-40

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

4.	INCOME TAXES (CONTINUED)

(a)

(Continued)

Subject to the provision of ASC 740, the Company has analyzed its filing positions in all of the jurisdictions where it is required to file income tax returns. As of December 31, 2010 and March 31, 2010, the Company has identified the following jurisdictions as “major” tax jurisdictions, as defined, in which it is required to file income tax returns namely the United States, Hong Kong and the PRC. Based on the evaluations noted above, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its unaudited condensed consolidated financial statements.

As of December 31, 2010 and March 31, 2010, the Company had no unrecognized tax benefits or accruals for the potential payment of interest and penalties. The Company’s policy is to record interest and penalties in this connection as a component of the provision for income tax expense. For the nine months ended December 31, 2010 and 2009, no interest or penalties were recorded.

(b)

Reconciliation from the expected income tax expenses calculated with reference to the statutory tax rate in the PRC of 25% (2009: 25%) is as follows:

	Three months ended December 31						Nine months ended December 31
	2010			2009			2010			2009
	US$’000			US$’000			US$’000			US$’000

Expected income tax expenses		517			631			2,545			2,643
Effect on tax incentives / holiday		(259	)		(328	)		(1,273	)		(1,420	)
Withholding tax		938			-			938			-
Non-deductible items		-			25			(34	)		197
Non-taxable income		-			-			-			-
Others		64			(14	)		245			19

Income tax expenses		1,260			314			2,421			1,439

F-41

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

4.	INCOME TAXES (CONTINUED)

(c)

Components of net deferred tax liabilities were as follows:

	As of December 31,		As of March 31,
	2010		2010
	US$’000		US$’000

Withholding tax on undistributed earnings of a PRC subsidiary		460		460

5.	RESTRICTED BANK BALANCES

Restricted bank balances as of December 31, 2010 and March 31, 2010 represented time deposits with original maturity due within six months. As of December 31, 2010 and March 31, 2010, all restricted bank balances were pledged for the issue of notes payable as disclosed in Note 10 below.

6.	OTHER FINANCIAL ASSETS

Other financial assets represented notes receivable from customers for the settlement of trade receivable balances. As of December 31, 2010 and March 31, 2010, all notes receivable were guaranteed by established banks in the PRC and had maturities of 6 months or less from the date of issue. The fair value of the notes receivable approximated their carrying value.

7.	INVENTORIES

Inventories consisted of the following:

	As of December 31,		As of March 31,
	2010		2010
	US$’000		US$’000

Raw materials		2,602		7,186
Work-in-progress and semi-finished goods		13,873		13,482
Finished goods		10,027		9,370

		26,502		30,038

8.	AVAILABLE-FOR-SALE FINANCIAL ASSETS

Available-for-sale financial assets as of December 31, 2010 and March 31, 2010 represented investment in unlisted equity securities and are recorded at cost. The management has estimated that the recoverable amount of the assets exceed their carrying value.

F-42

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

9.	PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment is summarized as follows:

	As of December 31,			As of March 31,
	2010			2010
	US$’000			US$’000

Buildings		2,974			5,468
Construction in progress		1,370			-
Leasehold improvements		886			495
Plant and machinery		5,038			4,071
Motor vehicles		1,004			974
Furniture, fixtures and office equipment		1,747			1,419

		13,019			12,427

Accumulated depreciation		(2,074	)		(1,953	)

		10,945			10,474

Depreciation expenses were approximately US$267,000 and US$153,000 for the three months ended December 31, 2010 and 2009, respectively, and US$807,000 and US$423,000 for the nine months ended December 31, 2010 and 2009, respectively.

The Company has pledged certain buildings as collaterals against general banking facilities granted to the Company, details of which are disclosed in Note 11.

10.	NOTES PAYABLE

Notes payable were issued by the Company to creditors with the banker’s acceptance payable at the maturity date for the purpose of raw materials for production exclusively. The Company has to repay the notes within nine months from date of issuance and service fees would be charged by banks for the issuance for the notes. The notes payable were collateralized by restricted bank balances as set out in Note 5 and certain land lease prepayments and buildings as set out in Note 11(i) below.

In addition, various parties have issued guarantee against these notes payable as follows:

	As of December 31,		As of March 31,
	2010		2010
	US$’000		US$’000

Corporate and personal guarantees issued by related parties (Note 14(d))		22,309		14,377
Corporate guarantees issued by third parties		3,403		1,467

F-43

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

11.	SHORT-TERM BANK BORROWINGS

Short-term bank borrowings comprise of the followings:

		As of December 31,		As of March 31,
	Note	2010		2010
		US$’000		US$’000

Short-term bank loans	(i)		47,944		42,473
Bills financing	(ii)		3,025		3,668

			50,969		46,141

(i)

Short-term bank loans

Short-term bank loans represent amounts due to various banks which are due within 12 months, and these loans can normally be renewed with the banks upon expiry/maturity.

The loans and the notes payables as set out in Note 10 are collateralized by assets of the Company with carrying values as follows:

	As of December 31,		As of March 31,
	2010		2010
	US$’000		US$’000

Land lease prepayments		-		598
Buildings		-		2,018
Land lease prepayments classified as held for sale		609		-
Buildings classified as held for sale		1,949		-

		2,558		2,616

Various parties have also issued guarantee against these short-term bank loans as follows:

	As of December 31,		As of March 31,
	2010		2009
	US$’000		US$’000

Corporate and personal guarantees issued by related parties (Note 14(d))		24,350		30,589
Corporate guarantees issued by third parties		5,294		1,467
Corporate and personal guarantees issued jointly by related parties and a third party (Note 14(d))		9,075		8,802

The weighted average annual interest rates of the short-term bank loans were 5.45% and 5.40% as of December 31, 2010 and March 31, 2010 respectively.

F-44

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

11.	SHORT-TERM BANK BORROWINGS (CONTINUED)

(ii)

Bills financing

Bills financing represents amounts due to various banks which are repayable within nine months from the date of issue. At December 31, 2010, the bills are guaranteed by certain related parties to the extent of US$3,025,000.

The weighted average annual interest rates of the bills financing were 3.00% and 3.96% as of December 31, 2010 and March 31, 2010, respectively.

12. GOVERNMENT SUBSIDIES

During the year ended March 31, 2008, the Company received a government grant of approximately US$231,000 for the purpose of subsidising its acquisition of property, plant and equipment, of which approximately US$12,000 and US$12,000 was credited to the statement of operations for the three months ended December 31, 2010 and 2009, respectively, and US$36,000 and US$36,000 were credited to the statement of operations for the nine months ended December 31, 2010 and 2009 respectively.

13. FAIR VALUE MEASUREMENT

Level 1:	Observable inputs, such as unadjusted quoted market prices in active markets for the identical asset or liabilities.

Level 2:	Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3:	Unobservable inputs reflecting the entity’s own assumptions in measuring the asset or liability at fair value.

The Company’s financial instruments consist principally of cash and cash equivalents, restricted bank balances, other financial assets, trade receivables and payables, prepayment and other receivables, notes payable, accrued expenses and other liabilities, amount due from/to related parties and short-term borrowings which are carried at amounts that generally approximate their fair values because of the short-term maturity of these instruments.

F-45

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

14.	RELATED PARTY TRANSACTIONS

(a)

Names and relationship of related parties:

Name of related party		Existing relationships with the Company

Mr. Xu Kecheng		Director and controlling stockholder of Chisen Electric
Zhejiang Chisen Glass Company Limited (“Chisen Glass”)*		A company controlled by a close family member of Mr. Xu Kecheng
Mr. Xu Keyong		A close family member of Mr. Xu Kecheng
Ms. Zhou Fang Qin		Spouse of Mr. Xu Kecheng
Changxing Chisen Xinguangyuan Company Limited (“Xinguangyuan”)*		A company controlled by a close family member of Mr. Xu Kecheng
Zhejiang Ai Ge Organism Products Company Limited (“Ai Ge Organism”)*		A company controlled by Mr. Xu Kecheng
Zhejiang Changxing Nuo Wan Te Ke Glass Company Limited (“Nuo Wan Te Ke”)*		A company controlled by a close family member of Mr. Xu Kecheng
Zhejiang Changxing Ruilang Electronic Company Limited (“Ruilang Electronic”)		A company controlled by a close family member of Mr. Xu Kecheng

These are direct translation of the name in Chinese for identification purpose only and are not the official names in English.

(b)

Summary of balances with related parties:

	As of December 31,		As of March 31,
	2010		2010
	US$’000		US$’000
Due from a related party:
Ms. Zhou Fang Qin		4		8

Due to related parties:
Mr. Xu Keyong		26		25
Chisen Glass		1,380		110
Ruilang Electronic		3,294		2,102
Ai Ge Organism		301		292
Nuo Wan Te Ke		3		3

		5,004		2,532

All amounts due from / to related parties represent unsecured advances which are interest-free and repayable on demand.

F-46

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

14.	RELATED PARTY TRANSACTIONS (CONTINUED)

(c)

Summary of related party transactions:

Name of related party	Nature of transactions	Three months ended December 31				Nine months ended December 31
		2010		2009		2010		2009
		US$’000		US$’000		US$’000		US$’000

Ruilang Electronic	Purchase of raw materials		2,609		-		6,743		-
	Deposit paid for acquisition of land and building		-		2,925		-		2,925

Chisen Glass	Purchase of raw materials		988		-		2,408		-

(d)

Other arrangements:

As of December 31, 2010, Chisen Glass provided guarantees, in aggregate, amounting to US$6,050,000 and US$6,428,000 to secure the short-term bank loans and notes payable of the Company, respectively.

As of December 31, 2010, US$5,747,000 of the Company’s short-term bank loans was collateralized by land use rights owned by Ruilang Electronic and guaranteed by Mr. Xu Kecheng and Ms. Zhou Fang Qin.

As of December 31, 2010, Xinguangyuan, Mr. Xu Kecheng and a third party provided guarantees, in aggregate, amounting to US$9,075,000 to secure the short-term bank loans of the Company.

As of December 31, 2010, Xinguangyuan and Mr. Xu Kecheng provided guarantees, in aggregate, amounting to US$9,074,000, US$6,050,000 and US$3,025,000 to secure the short-term bank loans, notes payable and bills financing of the Company, respectively.

As of December 31, 2010, Chisen Glass, Mr. Xu Kecheng and Ms. Zhou Fang Qin provided guarantees, in the aggregate, amounting to US$3,479,000 and US$6,050,000 to secure the short-term bank loans and notes payable of the Company, respectively.

As of December 31, 2010, Xinguangyuan provided guarantees, in aggregate, amounting to US$3,781,000 to secure the notes payable of the Company.

F-47

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

15.	COMMITMENTS AND CONTINGENCIES

(a)

Operating lease commitments

The following table summarizes the approximate future minimum rental payments under non-cancelable operating leases in effect as of December 31, 2010 and March 31, 2010:

	As of December 31,		As of March 31,
	2010		2010
	US$’000		US$’000

Within one year		641		599
One to two years		673		630
Two to three years		610		661
Three to four years		183		489
Four to five years		4		115

Total		2,111		2,494

(b)

Capital commitments

As of December 31, 2010 and March 31, 2010, the Company had outstanding capital expenditure commitments relating to various construction projects and purchase of land and machineries for an aggregate amount of approximately US$161,088,000 and US$84,000 respectively.

16.	PROVISION FOR WARRANTY

Estimated warranty costs are recognized at the time when the Company sells its products and are included in sale, marketing and distribution expenses. The Company uses historical failure rates and costs to repair product defects during the warranty period to estimate warranty costs while are reviewed periodically in light of actual experience. The reconciliation of the changes in the warranty obligation is as follows:

	Three months ended December 31						Nine months ended December 31
	2010			2009			2010			2009
	US$’000			US$’000			US$’000			US$’000

Beginning balance		469			192			226			121
Exchange realignment		1			-			6			1
Accrual for warranties issued during the period		282			46			836			151
Settlement made during the period		(431	)		(42	)		(747	)		(77	)

Closing balance		321			196			321			196

F-48

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

17.	RETIREMENT PLAN COSTS

Contributions to defined contribution retirement schemes are charged to cost of sales, sales, marketing and distribution costs and general and administrative expenses in the consolidated statements of operations and other comprehensive income as and when the related employee services are provided. Retirement plan costs were US$235,000 and US$66,000 for the three months ended December 31, 2010 and 2009 respectively, and US$650,000 and US$305,000 for the nine months ended December 31, 2010 and 2009 respectively.

18.	SEGMENTAL INFORMATION

During the nine months ended December 31, 2010 and 2009, all revenue of the Company represented income from sales of sealed lead-acid battery and therefore no financial information by business segment is presented. Furthermore, as all income is derived from the PRC, no geographical segment is presented.

19.	ASSETS CLASSIFIED AS HELD FOR SALE

		As of December 31,		As of March 31,
		2010		2010
	Note	US$’000		US$’000

Long-term land lease prepayments			609		-
Buildings			1,949		-

	(a)		2,558		-

Liabilities directly associated with assets classified as held for sale	(b)		886		-

(a)

On August 20, 2010, the Company’s wholly owned subsidiary, Changxing Chisen, entered into an investment agreement with the Administrative Committee of Changxing Economic Development Zone (“ACC”). Changxing Chisen agreed to relocate its business and production plant to a new location within one year from the date of the investment agreement. As a result, ACC will buy back the long-term land lease prepayments and buildings located in the existing plant of Jingyi Road, Changxing Economic Development Zone. All the related assets were reclassified at their carrying amounts from property, plant and equipment and long-term land lease prepayments to assets held for sale on the date of the investment agreement. As of December 31, 2010, the fair value less cost of sale of the assets exceeded their carrying amounts.

(b)

As of December 31, 2010 and March 31, 2010, the Company had deferred compensation income from ACC of approximately US$886,000 (equivalent to 5% of total compensation) and US$Nil respectively.

F-49

Chisen Electric Corporation

Notes to and Forming Part of Unaudited Condensed Consolidated Financial Statements

For the nine months ended December 31, 2010 and 2009

20.	EXTRAORDINARY ITEM

On December 12, 2010, Changxing Chisen ceased its production activities in the plant at Jingyi Road. Pursuant to the Compensation Agreement on Relocation and Acquisition entered by Changxing Chisen and ACC, ACC shall compensate the loss, amounting to RMB11,748,000 (US$1,738,000), when Changxing Chisen ceased its production and ready for relocation.

The transaction of relocation was considered as involuntary conversion of non-monetary asset into monetary asset. According to ASC605-40-25, to the extent the cost of a nonmonetary asset differs from the amount of monetary assets received, the realization of a gain from the transaction was recognized.

The Company considered the cost related to cessation of production was US$0 or immaterial since the production capacity of Jingyi Road Plant (plant related to relocation) could be fully absorbed by Jing’er Road Plant without significant investment. For the period ended December 31, 2010, the Company recorded an extraordinary gain of US$1,738,000 in the consolidated statements of operations and other comprehensive income.

Pursuant to the Implementation Regulations to the EIT law of the PRC, only the portion of compensation income exceeds the reinvestment amount related to the relocation is taxable. All compensation income received by the Company would be reinvested into the fixed assets and long-term land lease prepayment in Jingsi Road and therefore no income tax was applicable.

21.	RESTATEMENT OF FINANCIAL STATEMENTS

Certain comparative figures in the 2009 consolidated statement of operations and other comprehensive income have been restated by the Company to conform to the current period’s presentation of financial statements. The table below shows the effect of restatements:

	Three months ended December 31, 2009
	As previously reported		As restated
	US$’000		US$’000

Cost of sales		41,337		41,398
Gross income		5,900		5,839
General and administrative		763		702

	Nine months ended December 31, 2009
	As previously reported		As restated
	US$’000		US$’000

Cost of sales		107,150		107,764
Gross income		19,954		19,340
General and administrative		2,850		2,236

F-50

Chisen Electric Corporation

PROSPECTUS

Newbridge Securities Corporation

, 2011

Until , 2011, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses, other than underwriting discounts and commissions, if any, payable by the Registrant relating to the sale of common stock being registered.

Securities and Exchange Commission registration fee (1)	$	423.55
FINRA Filing Fee (1)
NYSE Amex Listing Fee (1)
Printing and transfer agent fees
Accounting fees and expenses
Legal fees and expenses
Underwriters’ counsel fees and blue sky fees
Roadshow fees and expenses
Total:	$

(1)	All amounts are estimates other than the Commission’s registration fee, FINRA filing fee and NYSE Amex listing fee.

Item 14. Indemnification of directors and officers

Under the Nevada Revised Statutes, director immunity from liability to a company or its stockholders for monetary liabilities applies automatically unless it is specifically limited by a company’s Articles of Incorporation.

Our Articles of Incorporation provide that to the fullest extent permitted by the laws of the State of Nevada, no director shall be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of such provision shall not adversely affect any right or protection thereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. Such provision shall not be deemed to limit or preclude indemnification of a director by the Company for any liability of a director which has not been eliminated by such provisions.

Our Articles of Incorporation further state that we may indemnify an individual against liability incurred in a proceeding where the individual was made a party to a proceeding because the person is or was a director or officer and if: (1) the individual's conduct was in good faith; (2) the individual reasonably believed that the conduct was in, or not opposed to, the corporation's best interests; and (3) in the case of any criminal proceeding, the individual had no reasonable cause to believe the individual's conduct was unlawful. We will indemnify a director or officer who was successful, on the merits or otherwise, in defense of any proceeding, or in defense of any claim, issue, or matter in the proceeding, to which the individual was a party because the person is or was a director or officer, against reasonable expenses incurred by the individual in connection with the proceeding or claim with respect to which the individual has been successful. We may not indemnify a director or officer in connection with: (1) acts or omissions which involve intentional misconduct, fraud, or a knowing violation of law; or (2) the payment of distributions in violation of NRS 78.300.

Our Bylaws provide that unless otherwise provided in our Articles of Incorporation, we shall indemnify any individual made a party to a proceeding because he is or was an officer, director, employee or agent of the Company against liability incurred in the proceeding, all pursuant to and consistent with the provisions of NRS 78.751, as amended from time to time. The expenses of officers and Directors incurred in defending a civil or criminal action, suit or proceeding shall be paid by us as they are incurred and in advance of the final disposition of the action, suit or proceeding, but only after our receipt of an undertaking by or on behalf of the officer or Director on terms set by the Board of Directors, to repay the expenses advanced if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by us. The indemnification permitted in our Bylaws is intended to be to the fullest extent permissible under the laws of the State of Nevada, and any amendments thereto.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, officers and controlling persons pursuant to the foregoing, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

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Item 15. Recent sales of unregistered securities

On May 27, 2008, Donald Peay sold 9,500,000 shares of Common Stock to Mathew Evans. Immediately prior to the Exchange, Mr. Evans controlled 84.67% of the Common Stock then issued and outstanding by the Registrant (there were 11,219,400 shares issued and outstanding prior to the November 4, 2008 3-for-1 dividend distribution of the Common Stock with Mr. Evans holding 9,500,000 shares, and 33,658,200 shares issued and outstanding post split with Mr. Evans holding 28,500,000 shares). Mr. Peay resigned his positions of sole officer and director, and Mr. Evans was appointed to these positions on June 13, 2008. Mr. Evans resigned as sole officer effective as of the Closing Date of the Exchange and his resignation as a director of the Registrant shall become effective on the 10 th day following the Information Filing Date.

On November 4, 2008, the Board declared a dividend distribution of the Common Stock, effective November 4, 2008. The dividend distribution of the Common Stock was on a 3-for-1 basis affecting World Trophy’s issued and outstanding Common Stock. Each holder of record of Common Stock as of November 4, 2008 was entitled to receive 2 additional shares of Common Stock for each share of Common Stock held on such date. No shares were issued for fractional shares. World Trophy’s Transfer Agent mailed the additional stock certificates on November 4, 2008.

On November 12, 2008, pursuant to the terms of the Exchange Agreement, World Trophy acquired all of the issued and outstanding capital stock of Fast More in exchange for Thirty-Five Million (35,000,000) newly-issued shares of Common Stock and Mathew Evans cancelled 18,658,200 shares of Common Stock. As of November 12, 2008 and as of that date of this prospectus immediately prior to this offering, there were 50,000,000 shares of Common Stock issued and outstanding.

We have never utilized an underwriter for an offering of our securities. Other than the securities mentioned above, we have not issued or sold any securities.

Item 16. Exhibits

EXHIBIT NO.	DESCRIPTION	LOCATION
1.1	Form of Underwriting Agreement	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

2.1	Share Exchange Agreement, dated November 12, 2008, by and among World Trophy Outfitters, Inc., Fast More Limited, Cheer Gold Development Ltd. and Floster Investment Limited	Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

3.1	Articles of Incorporation of World Trophy Outfitters, Inc. (n/k/a Chisen Electric Corporation)	Incorporated by reference to Exhibit 3(i).1 to the Registrant’s Registration Statement on Form SB-2 as filed with the SEC on September 23, 2005

3.2

Certificate of Amendment to Articles of Incorporation of Chisen Electric Corporation (name change)

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K as filed with the SEC on February 4, 2009

3.3	Amended and Restated Bylaws of Chisen Electric Corporation	Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K as filed with the SEC on February 4, 2009

3.4	Certificate of Incorporation of Fast More Limited, dated December 17, 2007	Incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

3.5	Memorandum and Articles of Association of Fast More Limited, dated as of December 17, 2007	Incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

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3.6	Certificate of Incorporation of Changxing Chisen Electric Co., Ltd.	Incorporated by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

3.7	Articles of Association of Changxing Chisen Electric Co., Ltd.	Incorporated by reference to Exhibit 3.6 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

3.8	Business Registration Certificate of Changxing Chisen Electric Co., Ltd. (English Translated Version and Mandarin Version)	Incorporated by reference to Exhibit 3.8 to Amendment No. 3 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on January 18, 2011

4.1	Specimen Certificate of Common Stock	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

4.2	Form of Underwriter Warrant	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

5.1	Opinion of Burton Bartlett & Glogovac	Provided herewith

10.1	Agreement on Establishment of Changxing Chisen Physical Chemistry Power Research and Development Center, dated April 30, 2008	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.2	Form of Labor Contract	Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.3	Lease Agreement, dated March 30, 2008, by and between Changxing Chisen Electric Co., Ltd. and Changxing Xiangyi Industrial Park Investment Co., Ltd.	Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.4	Contract For Loan on Guarantee, by and among Zhejiang Changxing Agricultural Cooperative Bank, Changxing Chisen Electric Co., Ltd. and Zhejiang Chisen Glass Co., Ltd.	Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.5	Renminbi Loan Contract, dated January 11, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Construction Bank Corporation (Changxing Branch)	Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.6

Renminbi Loan Contract, dated April 11, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Construction Bank Corporation (Changxing Branch)

Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

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10.7	Renminbi Loan Contract, dated March 31, 2008, by and between Changxing Chisen Electric Co., Ltd. and Bank of China (Hong Kong) Limited Shanghan Branch	Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.8	Loan Contract (Short Term), dated August 15, 2008, by and between Changxing Chisen Electric Co., Ltd. and Bank of China Changxing Branch	Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.9	Acceptance Agreement, dated August 25, 2008, by and between Changxing Chisen Electric Co., Ltd. and Industrial Bank Co., Ltd. Hangzhou Branch	Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.10	Acceptance Agreement of Commercial Bill, dated September 18, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Bank Co., Ltd. Changxing Branch	Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008
10.11	Cooperation Agreement, dated April 20, 2008, by and between Changxing Chisen Electric Co., Ltd. and Xiamen University	Included by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K as filed with the SEC on June 28, 2010

10.11	Acceptance Agreement of Commercial Bill, dated July 29, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Construction Bank Changxing Branch Co., Ltd.	Incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.12	Acceptance Agreement of Commercial Bill, dated September 9, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Construction Bank Changxing Branch Co., Ltd.	Incorporated by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.13	Components Purchase Contract, effective as of January 1, 2008, by and between Changxing Chisen Electric Co., Ltd. and Jiansu Xinri Electric Bicycle Co., Ltd.	Incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.14	Supply Contract, dated April 22, 2008, by and between Changxing Chisen Electric Co., Ltd. And Jiangsu Yadea Science & Technology Development Co., Ltd.	Incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.15	Sales Contract of Battery, dated November 10, 2007, by and between Changxing Chisen Electric Co., Ltd. and Hu Qinzhong, Yancheng Office	Incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.16	Sales Contract of Battery, dated February 17, 2008, by and between Changxing Chisen Electric Co., Ltd. and Song Chunwei	Incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

10.17

Compensation Agreement of Corporate Relocation Acquisition, dated August 20, 2010, by and between the Company’s chief operating subsidiary, Changxing Chisen Electric Co., Ltd., and the Administrative Committee of Changxing Economic Development Zone, Zhejiang

Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as filed with the SEC on August 24, 2010.

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10.18	Investment Agreement, dated August 20, 2010, by and between the Company’s chief operating subsidiary, Changxing Chisen Electric Co., Ltd., and the Administrative Committee of Changxing Economic Development Zone, Zhejiang	Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K as filed with the SEC on August 24, 2010.

10.19	Supplemental Agreement, dated August 20, 2010, by and between the Company’s chief operating subsidiary, Changxing Chisen Electric Co., Ltd., and the Administrative Committee of Changxing Economic Development Zone, Zhejiang	Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K as filed with the SEC on August 24, 2010.

10.20	Xuyi Economic Development Zone Project Investment Contract, dated September 6, 2010, by and between Chisen Electric Jiangsu Co., Ltd. and Jiangsu Xuyi Economic Development Zone Administrative Committee	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on September 13, 2010.

10.21	Xuyi Economic Development Zone Project Investment Contract Supplemental Agreement, dated September 6 2010, by and between Chisen Electric Jiangsu Co., Ltd. and Jiangsu Xuyi Economic Development Zone Administrative Committee	Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as filed with the SEC on September 13, 2010.

10.22	Electrode Purchase Contract, dated August 2, 2010, by and between Changxing Chisen Electric Co., Ltd. and Jiangsu XiangFa Electric Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on November 29, 2010

10.25	Sales Contract, dated August 31, 2009, by and between Changxing Chisen Electric Co., Ltd. and Anqing Burui Power Supply Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on November 29, 2010

10.26	Contract, dated November 24, 2009, by and between Changxing Chisen Electric Co., Ltd. and Anyang City Yubei Gold and Lead Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on November 29, 2010

10.27	Parts Acquisition Contract, dated January 1, 2010, by and between Changxing Chisen Electric Co., Ltd. and Jiangsu Xinri E-Vehicle Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on November 29, 2010

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10.29	Contract, dated August 1, 2010, by and between Changxing Chisen Electric Co., Ltd. and Tianjin Aima Technology Company Limited (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on November 29, 2010

10.30	Supplementary Agreement of Changxing Chisen Electric Co., Ltd. Relocation Project (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.31	Contract of Guaranty of Maximum Amount, dated on our about February 10, 2010, by and between Agricultural Bank of China (Changxing County Branch) and Zhejiang Chisen Glass Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.32	Guarantee Contact, dated on or about April 2, 2010, by and between China Construction Bank Corporation (Longxing Branch) and Zhejiang Chisen Glass Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.33	Contract Guarantee of Maximum Amount, dated on or about April 14, 2009, by and between Shanghai Pudong Development Bank (Huzhou Branch) and Zhejiang Changxing Chisen Xinguangyuan Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.34	Guarantee Contract, dated on or about January 12, 2010, by and between Changxing Economic Development Zone and Zhejiang Changxing Ruilang Electric Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.35	Contract of Guarantee with a Maximum Amount, dated on or about July 1, 2008, by and between Bank of China (Changxing Branch) and Mr. Xu Kecheng (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.36	Contract of Guarantee, undated, by and between CITIC Trust Co., Ltd. and Zhejiang Changxing Xinguangyuan Co., Ltd. (RMB40,000,000) (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.37	Contact of Guarantee, undated, by and between CITIC Trust Co., Ltd. and Zhejiang Changxing Chisen Xinguangyuan Co., Ltd. (RMB60,000,000) (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

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10.38	Guarantee Contract (64720012302010005), dated January 13, 2010, by and among China Construction Bank Corporation, on the one hand, and Mr. Xu Kecheng and Ms. Zho Fangqin, on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.39	Guarantee Contract (64720012302010004), dated January 13, 2010, by and among China Construction Bank Corporation, on the one hand, and Mr. Xu Kecheng and Ms. Zho Fangqin, on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on December 22, 2010

10.40	Contract of Guarantee of Maximum Amount (33905201000030826), undated, by and between Agricultural Bank of China Changxing County Sub-branch, on the one hand, and Zhejiang Chisen Glass Co., Ltd., on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.41	Contract of Guarantee with a Maximum Amount (BOC 130), dated October 25, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and Bank of China Ltd., on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.42	Contract of Guarantee (3350012010AM00077300), dated November 16, 2010, by and between Zhejiang Changxing Chisen Xinguangyuan Co., Ltd. and Bank of Communication (Huzhou Branch) (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.43	Contract of Guarantee (3350012010AM00077301), dated November 16, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and Bank of Communication (Huzhou Branch) on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.44	Guarantee Contract (6435009992012194), dated September 27, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.45	Guarantee Contract (64720012302010012), dated April 19, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

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10.46	Guarantee Contract (647200123020100201), dated October 9, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.47	Guarantee Contract (64720092302010036), dated October 18, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.48	Guarantee Contract (647200923020100381), dated November 10, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.49	Contract of Guarantee (P2009M17SZJZH0001JF14-0081-1) under Trust Loan Contract No. P2009M17SZJZH0001JF14-0081-1 , undated, by and between Xu Kecheng and CITIC Trust Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.50

Contract of Guarantee (P2009M17SZJZH0001JF14-0081-2) under Trust Loan Contract No. P2009M17SZJZH0001JF14-0081-2), undated, by and between Xu Kecheng and CITIC Trust Co., Ltd. (English Translated and Mandarin Versions)

Incorporated by reference to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on February 16, 2011

10.51	Contract of Guarantee (003), by and between Zhejiang Changxing Chisen Xinguangyuan Co., Ltd. and the Bank of China (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

10.52	Contract by and between Changxing Chisen Electric Co., Ltd. and Zhejiang Chisen Glass Co., Ltd. dated March 8, 2010 (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

10.53	Contract by and between Changxing Chisen Electric Co., Ltd. and Zhejiang Chisen Glass Co., Ltd., dated December 20, 2010 (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

10.54	Contract by and between Changxing Chisen Electric Co., Ltd. and Zhejiang Changxing Ruilang Electronic Company Limited dated October 18, 2010 (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

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10.55	Summary of Oral Loan Agreement with Ai Ge Organism Products Company Limited	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

10.56	Electrode Purchase Contract, dated August 2, 2010, by and between Changxing Chisen Electric Co., Ltd. and Jiangsu XiangFa Electric Co., Ltd. (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

10.57	Electrode Plate Supply Contract, by and between Changxing Chisen Electric Co., Ltd. and Anqing Borui Power Supply Co., Ltd., dated August 2, 2010 (English Translated and Mandarin Versions)	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

14.1	Code of Business Conduct and Ethics	Incorporated by reference to Exhibit 14.1 to the Company’s Current Report on Form 8-K as filed with the SEC on February 4, 2009

16.1	Letter to SEC from Pritchett, Siler & Hardy, P.C.	Incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K as filed with the SEC on January 21, 2009

17	Resignation of Mathew Evans, dated November 12, 2008	Incorporated by reference to Exhibit 17 to the Company’s Current Report on Form 8-K as filed with the SEC on November 12, 2008

21	List of Subsidiaries	Included by reference to Exhibit 21 to the Company’s Annual Report on Form 10-K as filed with the SEC on June 28, 2010

23.1	Consent of Mazars CPA Limited	Provided herewith

23.2	Consent of Burton Bartlett & Glogovac (contained in Exhibit 5.1)	Provided herewith

24.1	Power of Attorney	Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on October 8, 2010

99.1	Audit Committee Charter, dated January 15, 2009	Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K as filed with the SEC on February 4, 2009

99.2	Compensation Committee Charter, dated January 15, 2009	Incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K as filed with the SEC on February 4, 2009

99.3	Corporate Governance and Nominating Committee Charter, dated January 15, 2009	Incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K as filed with the SEC on February 4, 2009

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99.4	China Battery Industry Association Certificate of Ranking (English Translated Version)	Incorporated by reference to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on November 29, 2010

99.5	China News Article entitled “Electric Bicycles are Involved in Government’s Subsidy Program” (English and Mandarin Versions)	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

99.6	Subsidize Policy on New Energy Vehicle (English and Mandarin Versions)	Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form S-1 (File No. 333-169850) as filed with the SEC on March 15, 2011

Item 17. Undertakings

Undertaking Required by Item 512 of Regulation S-K.

(a) The undersigned registrant hereby undertakes:

(1) to file, during any period in which it offers or sells securities are being made, a post-effective amendment to this Registration Statement to:

(i) include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) For determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.

(b) For determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the registrant undertakes that in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(1) Any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;

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(2) Any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant;

(3) The portion of any other free writing prospectus relating to the offering containing material information about the registrant or its securities provided by or on behalf of the registrant; and

(4) Any other communication that is an offer in the offering made by the registrant to the purchaser.

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(d) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

If the registrant is relying on Rule 430A:

(i) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Amendment No. 6 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Changxing, People’s Republic of China, on the 8th day of April, 2011.

	CHISEN ELECTRIC CORPORATION

	By:	/s/ Xu Kecheng
	Name:	Xu Kecheng
	Title:	President & Chief Executive Officer

Pursuant to the requirements of the Securities Act, this Registration Statement on Form S-1 has been signed by the following persons in the capacities held on April 8, 2011:

SIGNATURE		TITLE

/s/ Xu Kecheng
Xu Kecheng		President, Chief Executive Officer and Chairman of the Board

/s/ *
Liu Chuanjie		Chief Financial Officer, Treasurer and Director

/s/ *
Lou Shourong		Vice President and Director

/s/ *
Dong Quanfeng		Director

/s/ *
Jiang Yanfu		Director

/s/ *
Gong Xiaoyan		Director

/s/ *
Yun Hon Man		Director

*By: /s/ Xu Kecheng
Attorney-in-Fact

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EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION
1.1**		Form of Underwriting Agreement

2.1**		Share Exchange Agreement, dated November 12, 2008, by and among World Trophy Outfitters, Inc., Fast More Limited, Cheer Gold Development Ltd. and Floster Investment Limited

3.1**		Articles of Incorporation of World Trophy Outfitters, Inc. (n/k/a Chisen Electric Corporation)

3.2**		Certificate of Amendment to Articles of Incorporation of Chisen Electric Corporation (name change)

3.3**		Amended and Restated Bylaws of Chisen Electric Corporation

3.4**		Certificate of Incorporation of Fast More Limited, dated December 17, 2007

3.5**		Memorandum and Articles of Association of Fast More Limited, dated as of December 17, 2007

3.6**		Certificate of Incorporation of Changxing Chisen Electric Co., Ltd.

3.7**		Articles of Association of Changxing Chisen Electric Co., Ltd.

3.8**		Business Registration Certificate (Revised) of Changxing Chisen Electric Co., Ltd. (English Translated Version and Mandarin Version)

4.1**		Specimen Certificate of Common Stock

4.2**		Form of Underwriter Warrant

5.1***		Opinion of Burton Bartlett & Glogovac

10.1**		Agreement on Establishment of Changxing Chisen Physical Chemistry Power Research and Development Center, dated April 30, 2008

10.2**		Form of Labor Contract

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10.3**		Lease Agreement, dated March 30, 2008, by and between Changxing Chisen Electric Co., Ltd. and Changxing Xiangyi Industrial Park Investment Co., Ltd.

10.4**		Contract For Loan on Guarantee, by and among Zhejiang Changxing Agricultural Cooperative Bank, Changxing Chisen Electric Co., Ltd. and Zhejiang Chisen Glass Co., Ltd.

10.5**		Renminbi Loan Contract, dated January 11, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Construction Bank Corporation (Changxing Branch)

10.6**		Renminbi Loan Contract, dated April 11, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Construction Bank Corporation (Changxing Branch)

10.7**		Renminbi Loan Contract, dated March 31, 2008, by and between Changxing Chisen Electric Co., Ltd. and Bank of China (Hong Kong) Limited Shanghan Branch

10.8**

Loan Contract (Short Term), dated August 15, 2008, by and between Changxing Chisen Electric Co., Ltd. and Bank of China Changxing Branch

10.9**		Acceptance Agreement, dated August 25, 2008, by and between Changxing Chisen Electric Co., Ltd. and Industrial Bank Co., Ltd. Hangzhou Branch

10.10**		Acceptance Agreement of Commercial Bill, dated September 18, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Bank Co., Ltd. Changxing Branch

10.11**		Cooperation Agreement, dated April 20, 2008, by and between Changxing Chisen Electric Co., Ltd. and Xiamen University

10.11**		Acceptance Agreement of Commercial Bill, dated July 29, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Construction Bank Changxing Branch Co., Ltd.

10.12**		Acceptance Agreement of Commercial Bill, dated September 9, 2008, by and between Changxing Chisen Electric Co., Ltd. and China Construction Bank Changxing Branch Co., Ltd.

10.13**		Components Purchase Contract, effective as of January 1, 2008, by and between Changxing Chisen Electric Co., Ltd. and Jiansu Xinri Electric Bicycle Co., Ltd.

10.14**		Supply Contract, dated April 22, 2008, by and between Changxing Chisen Electric Co., Ltd. And Jiangsu Yadea Science & Technology Development Co., Ltd.

10.15**		Sales Contract of Battery, dated November 10, 2007, by and between Changxing Chisen Electric Co., Ltd. and Hu Qinzhong, Yancheng Office

10.16**		Sales Contract of Battery, dated February 17, 2008, by and between Changxing Chisen Electric Co., Ltd. and Song Chunwei

10.17**		Compensation Agreement of Corporate Relocation Acquisition, dated August 20, 2010, by and between the Company’s chief operating subsidiary, Changxing Chisen Electric Co., Ltd., and the Administrative Committee of Changxing Economic Development Zone, Zhejiang

10.18**		Investment Agreement, dated August 20, 2010, by and between the Company’s chief operating subsidiary, Changxing Chisen Electric Co., Ltd., and the Administrative Committee of Changxing Economic Development Zone, Zhejiang

10.19**		Supplemental Agreement, dated August 20, 2010, by and between the Company’s chief operating subsidiary, Changxing Chisen Electric Co., Ltd., and the Administrative Committee of Changxing Economic Development Zone, Zhejiang

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10.20**		Xuyi Economic Development Zone Project Investment Contract, dated September 6, 2010, by and between Chisen Electric Jiangsu Co., Ltd. and Jiangsu Xuyi Economic Development Zone Administrative Committee

10.21**		Xuyi Economic Development Zone Project Investment Contract Supplemental Agreement, dated September 6, 2010, by and between Chisen Electric Jiangsu Co., Ltd. and Jiangsu Xuyi Economic Development Zone Administrative Committee

10.22**		Electrode Purchase Contract, dated August 2, 2010, by and between Changxing Chisen Electric Co., Ltd. and Jiangsu XiangFa Electric Co., Ltd. (English Translated and Mandarin Versions)

10.25**		Sales Contract, dated August 31, 2009, by and between Changxing Chisen Electric Co., Ltd. and Anqing Burui Power Supply Co., Ltd. (English Translated and Mandarin Versions)

10.26**		Contract, dated November 24, 2009, by and between Changxing Chisen Electric Co., Ltd. and Anyang City Yubei Gold and Lead Co., Ltd. (English Translated and Mandarin Versions)

10.27**		Parts Acquisition Contract, dated January 1, 2010, by and between Changxing Chisen Electric Co., Ltd. and Jiangsu Xinri E-Vehicle Co., Ltd. (English Translated and Mandarin Versions)

10.29**		Contract, dated August 1, 2010, by and between Changxing Chisen Electric Co., Ltd. and Tianjin Aima Technology Company Limited (English Translated and Mandarin Versions)

10.30**		Supplementary Agreement of Changxing Chisen Electric Co., Ltd. Relocation Project (English Translated and Mandarin Versions)

10.31**		Contract of Guaranty of Maximum Amount, dated on our about February 10, 2010, by and between Agricultural Bank of China (Changxing County Branch) and Zhejiang Chisen Glass Co., Ltd. (English Translated and Mandarin Versions)

10.32**		Guarantee Contact, dated on or about April 2, 2010, by and between China Construction Bank Corporation (Longxing Branch) and Zhejiang Chisen Glass Co., Ltd. (English Translated and Mandarin Versions)

10.33**		Contract Guarantee of Maximum Amount, dated on or about April 14, 2009, by and between Shanghai Pudong Development Bank (Huzhou Branch) and Zhejiang Changxing Chisen Xinguangyuan Co., Ltd. (English Translated and Mandarin Versions)

10.34**		Guarantee Contract, dated on or about January 12, 2010, by and between Changxing Economic Development Zone and Zhejiang Changxing Ruilang Electric Co., Ltd. (English Translated and Mandarin Versions)

10.35**		Contract of Guarantee with a Maximum Amount, dated on or about July 1, 2008, by and between Bank of China (Changxing Branch) and Mr. Xu Kecheng (English Translated and Mandarin Versions)

10.36**		Contract of Guarantee, undated, by and between CITIC Trust Co., Ltd. and Zhejiang Changxing Xinguangyuan Co., Ltd. (RMB40,000,000) (English Translated and Mandarin Versions)

10.37**		Contact of Guarantee, undated, by and between CITIC Trust Co., Ltd. and Zhejiang Changxing Chisen Xinguangyuan Co., Ltd. (RMB60,000,000) (English Translated and Mandarin Versions)

10.38**		Guarantee Contract (64720012302010005), dated January 13, 2010, by and among China Construction Bank Corporation, on the one hand, and Mr. Xu Kecheng and Ms. Zho Fangqin, on the other hand (English Translated and Mandarin Versions)

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10.39**

Guarantee Contract (64720012302010004), dated January 13, 2010, by and among China Construction Bank Corporation, on the one hand, and Mr. Xu Kecheng and Ms. Zho Fangqin, on the other hand (English Translated and Mandarin Versions)

10.40**		Contract of Guarantee of Maximum Amount (33905201000030826), undated, by and between Agricultural Bank of China Changxing County Sub-branch, on the one hand, and Zhejiang Chisen Glass Co., Ltd., on the other hand (English Translated and Mandarin Versions)

10.41**		Contract of Guarantee with a Maximum Amount (BOC 130), dated October 25, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and Bank of China Ltd., on the other hand (English Translated and Mandarin Versions)

10.42**		Contract of Guarantee (3350012010AM00077300), dated November 16, 2010, by and between Zhejiang Changxing Chisen Xinguangyuan Co., Ltd. and Bank of Communication (Huzhou Branch) (English Translated and Mandarin Versions)

10.43**		Contract of Guarantee (3350012010AM00077301), dated November 16, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and Bank of Communication (Huzhou Branch) on the other hand (English Translated and Mandarin Versions)

10.44**		Guarantee Contract (6435009992012194), dated September 27, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)

10.45**		Guarantee Contract (64720012302010012), dated April 19, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)

10.46**		Guarantee Contract (647200123020100201), dated October 9, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)

10.47**		Guarantee Contract (64720092302010036), dated October 18, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)

10.48**		Guarantee Contract (647200923020100381), dated November 10, 2010, by and between Xu Kecheng and Zho Fangqin, on the one hand, and China Construction Bank Corporation (Longxing Sub-Branch) on the other hand (English Translated and Mandarin Versions)

10.49**		Contract of Guarantee (P2009M17SZJZH0001JF14-0081-1) under Trust Loan Contract No. P2009M17SZJZH0001JF14-0081-1, undated, by and between Xu Kecheng and CITIC Trust Co., Ltd. (English Translated and Mandarin Versions)

10.50**		Contract of Guarantee (P2009M17SZJZH0001JF14-0081-2) under Trust Loan Contract No. P2009M17SZJZH0001JF14-0081-2, undated, by and between Xu Kecheng and CITIC Trust Co., Ltd. (English Translated and Mandarin Versions)

10.51**		Contract of Guarantee (003), by and between Zhejiang Changxing Chisen Xinguangyuan Co., Ltd. and the Bank of China (English Translated and Mandarin Versions)

10.52**		Contract by and between Changxing Chisen Electric Co., Ltd. and Zhejiang Chisen Glass Co., Ltd. dated March 8, 2010 (English Translated and Mandarin Versions)

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10.53**		Contract by and between Changxing Chisen Electric Co., Ltd. and Zhejiang Chisen Glass Co., Ltd., dated December 20, 2010 (English Translated and Mandarin Versions)

10.54**		Contract by and between Changxing Chisen Electric Co., Ltd. and Zhejiang Changxing Ruilang Electronic Company Limited dated October 18, 2010 (English Translated and Mandarin Versions)

10.55**		Summary of Oral Loan Agreement with Ai Ge Organism Products Company Limited

10.56**		Electrode Purchase Contract, dated August 2, 2010, by and between Changxing Chisen Electric Co., Ltd. and Jiangsu XiangFa Electric Co., Ltd. (English Translated and Mandarin Versions)

10.57**		Electrode Plate Supply Contract, by and between Changxing Chisen Electric Co., Ltd. and Anqing Borui Power Supply Co., Ltd., dated August 2, 2010 (English Translated and Mandarin Versions)

14.1**		Code of Business Conduct and Ethics

16.1**		Letter to SEC from Pritchett, Siler & Hardy, P.C.

17**		Resignation of Mathew Evans, dated November 12, 2008

21**		List of Subsidiaries

23.1***		Consent of Mazars CPA Limited

23.2***		Consent of Burton Bartlett & Glogovac (contained in Exhibit 5.1)

23.4**

Consent of China Battery Industry Association

24.1**		Power of Attorney

99.1**		Audit Committee Charter, dated January 15, 2009

99.2**		Compensation Committee Charter, dated January 15, 2009

99.3**		Corporate Governance and Nominating Committee Charter, dated January 15, 2009

99.4**		China Battery Industry Association Certificate of Ranking (English Translated Version)

99.5**		China News Article entitled “Electric Bicycles are Involved in Government’s Subsidy Program” (English and Mandarin Versions)

99.6**		Subsidize Policy on New Energy Vehicle (English and Mandarin Versions)

*	To be filed by amendment

**	Previously filed with the SEC

***	Provided herewith

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