BEIJING YIYUEQIJI SCIENCE AND TECHNOLOGY DEVELOPMENT LTD. INC.

INDEX TO FINANCIAL STATEMENTS

Nine-Months Ended September 30, 2011 (Unaudited)and Fiscal Years December 31, 2010 (Audited)

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

YIYUEQIJI-1

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

YIYUEQIJI-2

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

YIYUEQIJI-3

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

YIYUEQIJI-4

BEIJING YIYUEQIJI SCIENCE AND TECHNOLOGY DEVELOPMENT LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 1

 ORGANIZATION AND DESCRIPTION OF BUSINESS                              

Beijing Yiyueqiji Science and Technology Development Ltd. Inc.(the "Company") was incorporated under the laws of the People’s Republic of China on December 29, 2009.The Company is primarily engaged in the manufacturing and distributing of E-reading technology and equipment in China.

NOTE 2

UNAUDITED INFORMATION

The balance sheet of the “Company as of September 30, 2011, and thestatements of operations, stockholders deficit and cash flows for the eight -month period ended September 30, 2011have not been audited.However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the financial position of the Company as of September 30, 2011, and the results of operations for the eight-months ended September 30, 2011.

Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading.Interim period results are not necessarily indicative of the results to be achieved for an entire year.These financial statements should be read in conjunction with the financialstatements and notes to financial statements included in the Company’s audited financial statements for the year ended December 31, 2010.

NOTE 3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The company maintains its books and accounting records in Renminbi (“RMB”), and its reporting currency is United States dollars.

USE OF ESTIMATES

The preparation of financial statements in conformity with US GAAP requires 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 the financial statements and the reported amounts of revenues and expenses during the reporting period.In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included.Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.

YIYUEQIJI-5

BEIJING YIYUEQIJI SCIENCE AND TECHNOLOGY DEVELOPMENT LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

IMPACT OF NEW ACCOUNTING STANDARDS

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.

NOTE 4

GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.The Company has not established enough source of revenue to cover its operating costs.The Company will engage in very limited activities without incurring any liabilities that must be satisfied in cash until a source of funding is secured.The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.

NOTE 5

FIXED ASSETS

At September 30, 2011, property and equipment consist of the following:

(Unaudited)

Office equipment                                                                   $              12,200

Less: accumulated depreciation                                                          (3,431)

                                                                                               $                   8,769

Depreciation of property and equipment is provided using the straight-line method. For the nine months period ended September 30, 2011, depreciation expense amounted to $1,515.

NOTE 6

OTHER PAYABLES

At September 30, 2011, other payables consist of the following:

September 30, 2011

(Unaudited)

Payables to related parties

$                  234,789

Others

      2,425

$                  237,214

YIYUEQIJI-6

BEIJING YIYUEQIJI SCIENCE AND TECHNOLOGY DEVELOPMENT LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 7

CAPITAL CONTRBUTIONS:

At September 30, 2011, paid-in capital consists of the following:

September 30, 2011

(Unaudited)

Su jin

$                  119,533

Xing Zhibin

      114,846

$                  234,379

Su Jin and Xing Zhibin injected RMB816,000 and RMB784,000, equivalent to $119,533 and $114,846, respectively. Beijing Yong Qin Certified Public Accountants has verified the above capital contributions, and issued the capital verification reports.

NOTE 8

COMMITMENT AND CONTIGENCIES

Other than in the normal course of business, the Company did not have significant capital and other commitments, or significant guarantees as of September 30, 2011.

NOTE 9

SUBSEQUENT EVENTS

No material subsequent event was noticed.

YIYUEQIJI-7

Stan J.H. Lee, CPA

2160 North Central Rd.  Suite 209* Fort Lee *NJ 07024

P.O. Box 436402 *San Diego * CA 92143-9402

619-623-7799 *Fax 619-564-3408 * E-mail) stan2u@gmail.com

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Beijing Yiyueqiji Science and Technology Development Ltd. Inc.

We have audited the accompanying balance sheets of Beijing Yiyueqiji Science and Technology Development Ltd. Inc.as of December 31, 2010, and the related statements of operation, shareholders’ deficit and cash flows for the calendar year then ended . These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  An  audit includes consideration of internal control over financial  reporting  as  a  basis  for  designing  audit  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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Beijing Yiyueqiji Science and Technology Development Ltd. Inc. as of December 31, 2010, and the results of its operation and its cash

flows for the calendar years aforementioned in conformity with U.S. generally accepted accounting principles.

The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the note to the financial statements, the Company lacks liquidity and has accumulated losses from operations which  raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Stan J.H. Lee, CPA

___________________

 Stan J.H. Lee, CPA. CMA

December 5, 2011

Fort Lee, New Jersey

YIYUEQIJI-8

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

YIYUEQIJI-9

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

YIYUEQIJI-10

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

YIYUEQIJI-11

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

YIYUEQIJI-12

BEIJING YIYUEQIJI SCIENCE AND TECHNOLOGY DEVELOPMENT LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010

(AUDITED)

NOTE 1

ORGANIZATION AND DESCRIPTION OF BUSINESS                              

Beijing Yiyueqiji Science and Technology Development Ltd. Inc.(the "Company") was incorporated under the laws of the People’s Republic of China on December 29, 2009.  The Company is primarily engaged in the manufacturing and distributing of E-reading technology and equipment in China.

NOTE 2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                            

BASIS OF PRESENTION

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The company maintains its books and accounting records in Renminbi (“RMB”), and its reporting currency is United States dollars.

ACCOUNTING METHOD

The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a fiscal year ending on December 31.

USE OF ESTIMATES                                                                

The preparation of financial statements in conformity with US GAAP requires 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 the financial statements and the reported amounts of revenues and expenses during the reporting period.  In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included.  Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS                                                                

The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.                           

IMPACT OF NEW ACCOUNTING STANDARDS                                              

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.

YIYUEQIJI-13

BEIJING YIYUEQIJI SCIENCE AND TECHNOLOGY DEVELOPMENT LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010

(AUDITED)

NOTE 3

GOING CONCERN                                                          

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not established enough source of revenue to cover its operating costs.  The Company will engage in very limited activities without incurring any liabilities that must be satisfied in cash until a source of funding is secured.  The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.

NOTE 4.

FIXED ASSETS

At December 31, 2010, property and equipment consist of the following:

Depreciation of property and equipment is provided using the straight-line method. For the year ended December 31, 2010, depreciation expense amounted to $1,810.  

NOTE 5.

OTHER PAYABLES

At December 31, 2010, other payables consist of the following:

YIYUEQIJI-14

BEIJING YIYUEQIJI SCIENCE AND TECHNOLOGY DEVELOPMENT LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010

(AUDITED)

NOTE 6.

CAPITAL CONTRBUTIONS

At December 31, 2010, paid-in capital consists of the following:

Su Jin and Xing Zhibin injected Renminbi (“RMB”)816,000 and RMB784,000, equivalent to $119,533 and $114,846, respectively. Beijing Yong Qin Certified Public Accountants has verified the above capital contributions, and issued the capital verification reports.

NOTE 7. COMMITMENT AND CONTIGENCIES

Other than in the normal course of business, the Company did not have significant capital and other commitments, or significant guarantees as of December 31, 2010.

NOTE 8. SUBSEQUENT EVENTS

There is no material subsequent event to disclose.

YIYUEQIJI-15

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

INDEX TO FINANCIAL STATEMENTS

Nine-Months Ended September 30, 2011 (Unaudited)and Fiscal Years December 31, 2010 and 2009 (Audited)

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

XINGWEI-1

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

XINGWEI-2

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

XINGWEI-3

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

XINGWEI-4

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 1

ORGANIZATION AND DESCRIPTION OF BUSINESS

Guangzhou Xingwei Communications Technology Ltd. Inc.(the "Company") was incorporated under the laws of the People’sRepublic of China on January 11 , 2007.The Company is primarily engaged in the service, research and development of computer software and hardware, telecom technology in China.

NOTE 2

UNAUDITED INFORMATION

The balance sheet ofthe “Company” as of September 30, 2011, and thestatements of operations, stockholders deficit and cash flows for the eight -month period ended September 30, 2011have not been audited.However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the financial position of the Company as of September 30, 2011, and the results of operations for the eight-months ended September 30, 2011.

Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading.Interim period results are not necessarily indicative of the results to be achieved for an entire year.These financial statements should be read in conjunction with the financialstatements and notes to financial statements included in the Company’s audited financial statements for the year ended December 31, 2010.

NOTE 3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The company maintains its books and accounting records in Renminbi (“RMB”), and its reporting currency is United States dollars.

USE OF ESTIMATES

The preparation of financial statements in conformity with US GAAP requires 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 the financial statements and the reported amounts of revenues and expenses during the reporting period.In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included.Actual results could differ from those estimates.

XINGWEI-5

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.

TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are recorded at the contract amount after deduction of trade discounts, allowances, if any, and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions.

The Company reviews its allowance for doubtful accounts monthly. Past due balances over 1 year and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis by aging of such balances. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. No allowance was made for the period 8-months ended September 30, 2011.

REVENUE RECOGNITION

Sales revenue is recognized at the date of shipment from the Company’s facilities to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, ownership has passed, no other significant obligations of the Company exist and collectability is reasonably assured.

The Company’s revenue consists of the invoiced value of goods, net of value-added tax (“VAT”).

FOREIGN CURRENCY TRANSLATION

The functional currency of the Company is the RMB and the RMB is not freely convertible into foreign currencies. The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

For financial reporting purposes, the financial statements of the Company, which are prepared using the functional currency, have been translated into United States dollars. Assets and liabilities translated at exchange rates at the balance sheet date, revenue and expenses are translated at the average exchange rates for the period, and members' equity is translated at historical exchange rates. Translation adjustments are included in accumulated other comprehensive income, a component of members’ equity.

XINGWEI-6

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income represents the change in equity of the Company during the periods presented from foreign currency translation adjustments.

TAXATION

Taxation on profits earned in the PRC has been calculated on the estimated assessable profits for the year at the rates of taxation prevailing in the PRC where the Company operates after taking into effect the benefits from any special tax credits or “tax holidays” allowed in the county of operations.

The Company does not accrue United States income tax since it has no operating income in the United States. The Company is organized and located in the PRC and do not conduct any business in the United States.

Enterprise income tax

In accordance with the relevant tax laws in the PRC, as a high-tech enterprise, the Company is exempted from corporate income tax for its first two profit-making years after deducting losses incurred in previous years and is entitled to a 50% tax reduction for the succeeding three years. Accordingly, the company statutory rate was 0% and 0% for the period nine-months ended September 30, 2011.

Value added tax

The Provisional Regulations of The People’s Republic of China Concerning Value Added Tax promulgated by the State Council came into effect on January 1, 1994. Under these regulations and the Implementing Rules of the Provisional Regulations of the PRC Concerning Value Added Tax, value added tax (“VAT”) is imposed on goods sold in or imported into the PRC and on processing, repair and replacement services provided within the PRC.

VAT payable in The People’s Republic of China is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of VAT included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year.

IMPACT OF NEW ACCOUNTING STANDARDS

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.

XINGWEI-7

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 4

ADVANCES TO SUPPLIES

At September 30, 2011, advances to suppliers consisted of the following:

September 30, 2011

(Unaudited)

Prepayment to third parties suppliers

US$628,120

NOTE 5

INVENTORIES

Inventories are stated at the lower of cost or market value. Cost is determined using moving weighted average method. Cost of finished goods comprises direct material, direct production cost and an allocated portion of production overheads based on normal operating capacity.

Inventories at September 30, 2011 consist of the following:

September 30, 2011

(Unaudited)

Raw material

US $144,969

Finished goods

5,457

150,426

Provision for Inventory

-

150,426

NOTE 6

PROPERTY, PLANT and EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation on property, plant and equipment is calculated on the straight-line method after taking into account their respective estimated residual values over the estimated useful lives of the assets as follows:

Furniture and office equipment

3—5 years

Maintenance and repair costs are expensed as incurred, whereas significant renewals and betterments are capitalized.

Property, Plant and Equipment at September 30, 2011 consists of the following:

                                                                                            September 30, 2011

(Unaudited)

Furniture and office equipment                                                  US $67,034

Less: Accumulated depreciation                                                       (26,145)

                                                                                                                  40,889

XINGWEI-8

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 7

ADVANCES FROM CUSTOMERS

At September 30, 2011, advances from customers consisted of the following:

September 30, 2011

(Unaudited)

Advances from third parties customers

US $363,458

NOTE 8

CAPITAL CONTRBUTIONS

At September 30, 2011, paid-in capital consists of the following:

September 30, 2011

(Unaudited)

Zhu Chengwu

US $15,341

He Qijian

25,569

He Songtao

86,933

127,843

Zhu Chengwu, He Qijian and He Songtao injected Renminbi (“RMB”)120,000, RMB200,000 and RMB680,000, equivalent to $15,341, $25,569 and $86,933, respectively. GuangZhouHaiZheng Certified Public Accountants has verified the above capital contributions, and issued the capital verification reports.

NOTE 9

COMMITMENT AND CONTIGENCIES

Other than in the normal course of business, the Company did not have significant capital and other commitments, or significant guarantees as of September 30, 2011.

NOTE 10

SUBSEQUENT EVENTS

No material subsequent event was noticed.

XINGWEI-9

Stan J.H. Lee, CPA

2160 North Central Rd.  Suite 209* Fort Lee *NJ 07024

P.O. Box 436402 *San Diego * CA 92143-9402

619-623-7799 *Fax 619-564-3408 * E-mail) stan2u@gmail.com

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

We have audited the accompanying balance sheet of GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC. of  December  31, 2010 and 2009 and the related statements of operations, shareholders' deficit  and  cash  flows for the  years then ended. These   financial statements  are  the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 audit 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 audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining on a test basis, evidence supporting the amount and disclosures in the combined financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements  referred  to above present fairly, in all material respects, the financial position of SPICY GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC as of Deecember 31, 2010 and 2009, and the results of its operation  and  its  cash flows for the aforementioned years in conformity with U.S. generally accepted accounting principles.

/s/ Stan J.H. Lee, CPA_________________________

Stan J.H. Lee, CPA, CMA

December 5, 2011

Fort Lee, New Jersey

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

XINGWEI-11

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

XINGWEI-12

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

XINGWEI-13

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

XINGWEI-14

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009

(AUDITED)

NOTE 1

ORGANIZATION AND DESCRIPTION OF BUSINESS

Guangzhou Xingwei Communications Technology Ltd. Inc. (the "Company") was incorporated under the laws of the People’s Republic of China on January 11^th , 2007.  The Company is primarily engaged in the service, research and development of computer software and hardware, telecom technology in China.

NOTE 2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                            

BASIS OF PRESENTATION                              

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The company maintains its books and accounting records in Renminbi (“RMB”), and its reporting currency is United States dollars.

ACCOUNTING METHOD

The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a fiscal year ending on December 31.

USE OF ESTIMATES                                                                

The preparation of financial statements in conformity with US GAAP requires 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 the financial statements and the reported amounts of revenues and expenses during the reporting period.  In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included.  Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS                                                                

The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.                           

TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are recorded at the contract amount after deduction of trade discounts, allowances, if any, and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions.

XINGWEI-15

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009

(AUDITED)

NOTE 2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

TRADE ACCOUNTS RECEIVABLE (CONTINUED)

The Company reviews its allowance for doubtful accounts monthly. Past due balances over 1 year and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis by aging of such balances. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. No allowance was made for the years ended December 31, 2009 and 2010.

REVENUE RECOGNITION

Sales revenue is recognized at the date of shipment from the Company’s facilities to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, ownership has passed, no other significant obligations of the Company exist and collectibility is reasonably assured.

The Company’s revenue consists of the invoiced value of goods, net of value-added tax (“VAT”).

FOREIGN CURRENCY TRANSLATION

The functional currency of the Company is the RMB and the RMB is not freely convertible into foreign currencies. The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

For financial reporting purposes, the financial statements of the Company, which are prepared using the functional currency, have been translated into United States dollars. Assets and liabilities translated at exchange rates at the balance sheet date, revenue and expenses are translated at the average exchange rates for the period, and members' equity is translated at historical exchange rates. Translation adjustments are included in accumulated other comprehensive income, a component of members’ equity.

ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income represents the change in equity of the Company during the periods presented from foreign currency translation adjustments.

XINGWEI-16

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009

(AUDITED)

NOTE 2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

TAXATION

Taxation on profits earned in the PRC has been calculated on the estimated assessable profits for the year at the rates of taxation prevailing in the PRC where the Company operates after taking into effect the benefits from any special tax credits or “tax holidays” allowed in the county of operations.

The Company does not accrue United States income tax since it has no operating income in the United States. The Company is organized and located in the PRC and do not conduct any business in the United States.

Enterprise income tax

In accordance with the relevant tax laws in the PRC, as a high-tech enterprise, the Company is exempted from corporate income tax for its first two profit-making years after deducting losses incurred in previous years and is entitled to a 50% tax reduction for the succeeding three years. Accordingly, the company statutory rate was 0% and 0%  for the years 2009 and 2010, respectively.

Value added tax

The Provisional Regulations of The People’s Republic of China Concerning Value Added Tax promulgated by the State Council came into effect on January 1, 1994. Under these regulations and the Implementing Rules of the Provisional Regulations of the PRC Concerning Value Added Tax, value added tax (“VAT”) is imposed on goods sold in or imported into the PRC and on processing, repair and replacement services provided within the PRC.

VAT payable in The People’s Republic of China is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of VAT included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year.

IMPACT OF NEW ACCOUNTING STANDARDS                                              

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.

XINGWEI-17

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009

(AUDITED)

NOTE 3

ADVANCES TO SUPPLIERS

At December 31, 2010 and 2009, advances to suppliers consisted of the following:

NOTE 4

INVENTORIES

Inventories are stated at the lower of cost or market value. Cost is determined using moving weighted average method. Cost of finished goods comprises direct material, direct production cost and an allocated portion of production overheads based on normal operating capacity.

Inventories at December 31, 2010 and 2009 consist of the following:

NOTE 5

PROPERTY, PLANT and EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation on property, plant and equipment is calculated on the straight-line method after taking into account their respective estimated residual values over the estimated useful lives of the assets as follows:

Maintenance and repair costs are expensed as incurred, whereas significant renewals and betterments are capitalized.

XINGWEI-18

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009

(AUDITED)

NOTE 5

PROPERTY, PLANT and EQUIPMENT (CONTINUED)

Property, Plant and Equipment at December 31, 2009 and 2010 consists of the following:

NOTE 6

ADVANCES FROM CUSTOMERS

At December 31, 2010 and 2009, advances from customers consisted of the following:

NOTE 7

CAPITAL CONTRBUTIONS

At December 31, 2010 and 2009, paid-in capital consists of the following:

Zhu Chengwu, He Qijian and He Songtao injected Renminbi (“RMB”)120,000, RMB200,000 and RMB680,000, equivalent to $15,341, $25,569 and $86,933, respectively. GuangZhou HaiZheng Certified Public Accountants has verified the above capital contributions, and issued the capital verification reports.

XINGWEI-19

GUANGZHOU XINGWEI COMMUNICATIONS TECHNOLOGY LTD. INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009

(AUDITED)

NOTE 8

COMMITMENT AND CONTIGENCIES

Other than in the normal course of business, the Company did not have significant capital and other commitments, or significant guarantees as of December 31, 2010 and 2009.

NOTE 9

SUBSEQUENT EVENTS

There is no material subsequent event to disclose.

XINGWEI-20

AMS-INT ASIA LIMITED AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

Nine-Months Ending September 30, 2011 (Unaudited)and Fiscal Years December 31, 2010 and 2009

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

AMS-1