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1. Organization and Nature of Business XcelMobility Inc. XcelMobility Inc. (a development stage company) (“Xcel” or the “Company”) was incorporated under the laws of the State of Nevada on December 27, 2007. Initial operations have included organization and incorporation, target market identification, marketing plans, and capital formation. The Company has generated no revenues since inception. Share Cancellation On August 11, 2011, Moses Carlo Supera Paez, a director and shareholder of the Company, surrendered 17,700,000 shares of common stock for cancellation. Further, on August 30, 2011, Mr. Paez surrendered an additional 7,350,000 shares of our common stock for cancellation and Mr. Jaime Brodeth, one of our former directors and a shareholder, surrendered 22,950,000 shares of our common stock for cancellation. As such, immediately prior to the Exchange Transaction as further discussed in detail later and after giving effect to the foregoing cancellations, the Company had 29,700,000 shares of common stock issued and outstanding. Immediately after the Exchange Transaction, the Company had 60,000,000 shares of common stock issued and outstanding. CC Mobility Limited CC Mobility Limited (“CC Mobility”), a company organized under the laws of Hong Kong, was formed on May 3, 2011 and has authorized capital of 10,000 shares with registered capital of HK$1,000 at HK$1 per share. At formation, CC Mobility Limited has issued 560 shares to CC Wireless Limited, a company organized under the laws of Hong Kong, and 440 shares to Sheen Ventures Limited, a company organized under the laws of Hong Kong. The Company is a holding company formed for the purpose of acquiring a target company to effect a reverse merger with a U.S. reporting company. The reverse merger was completed on August 30, 2011. CC Power Investment Consulting Co. Ltd. Shenzhen CC Power Investment Consulting Co. Ltd. (“CC Investment”), a wholly-owned subsidiary of CC Mobility, was incorporated on July 27, 2011 under the laws of the People’s Republic of China (“PRC”) as a wholly foreign owned limited liability company. The required registered capital is $2,000,000 and as of September 30, 2012, $400,000 of the registered capital has been contributed. Shenzhen CC Power Corporation Shenzhen CC Power Corporation (“CC Power”, the Company) is a Chinese enterprise organized in the PRC on March 13, 2003 in accordance with the Laws of the People’s Republic of China. The required registered capital of the Company was approximately $1,547,000 (RMB10,000,000) and as of December 31, 2011, the Company has paid up approximately $346,000 (RMB2, 526,000). In March 2011, Mr. Ryan Ge sold his 5% ownership in CC Power to the other shareholder, Xili Wang (“CC Power Shareholder”). Ms. Wang holds 100% ownership interest in CC Power as of September 30, 2012 and December 31, 2011. CC Power is primarily engaged in the research, development and commercialization of applications for mobile devices that access the Internet utilizing mobile phone networks. CC Power’s principal activity is the design, testing sale and support of software to support mobile internet applications on cellular phones, smart phones, tablets and mobile computers in China. The principal product designed and built by CC Power is its Mach 5 Accelerator. This product has been independently tested by all 3 mobile phone carriers in China and accesses the internet 5 times faster than with other mobile browsers. The speed of the Mach 5 browser enables CC Power to develop other mobile software that can leverage off the Mach 5 products speed of processing. In order to support CC Power products the Company has built a series of server locations throughout China. CC Power sells its products to corporations directly, to individual users via the company’s website and retail locations, through distribution agents and through all three mobile phone carriers in China. As noted above, the primary purpose of CC Power is to develop software that allows user faster access to the Internet. CC Power’s primary focus is in the mobile Internet market, with a focus on providing software that significantly increases the speed that users of smartphones, tablets and laptops can access the Internet over cellular phone networks. CC Power also uses their technology to increase the speed at which users of Virtual Private Networks can access data from their networks. CC Power had 60% equity interest in Shenzhen Nanovision Technology Ltd. (“Nanovision”) as of December 31, 2010. On June 15, 2011, CC Power sold 25% of its ownership in Nanovision. In August 2011, CC Power sold its remaining 35% interest in Nanovision, after the disposition, CC Power has neither ownership nor involvement in Nanovision. Share Exchange Agreement On August 30, 2011, the Company completed a voluntary share exchange transaction with Shenzhen CC Power Corporation, CC Mobility Limited and the shareholders of CC Mobility (“Selling Shareholders”) pursuant to a Share Exchange Agreement dated July 5, 2011 (the “Exchange Agreement”). In accordance with the terms of Exchange Agreement, on the Closing Date, Xcel issued 30,300,000 shares of its common stock to the Selling Shareholders in exchange for 100% of the issued and outstanding capital stock of CC Mobility (the “Exchange Transaction”). As a result of the Exchange Transaction, there was a change of control in the Company as the Selling Shareholders of CC Mobility acquired 50.5% of Xcel’s issued and outstanding common stock, CC Mobility became Xcel’s wholly-owned subsidiary, and Xcel acquired the business and operations of CC Mobility and CC Power. For accounting purposes, the merger transaction is being accounted for as a reverse merger. The transaction has been treated as a recapitalization of CC Mobility and its subsidiaries, with Xcel (the legal acquirer of CC Mobility and its subsidiaries) considered the accounting acquiree and CC Mobility whose management took control of Xcel (the legal acquire of CC Mobility) considered the accounting acquirer. CC Power is owned by an individual but controlled by CC Investment through a series of contractual arrangements that transferred all of the benefits and responsibilities for the operations of CC Power to CC Investment. CC Investment accounts for CC Power as a Variable Interest Entity (“VIE”) under ASC 810 “Consolidation.” Accordingly, CC Investment consolidates CC Power’s results, assets and liabilities. As a result of the Exchange Transaction, the organizational structure of the Company is as follows: **PLEASE SEE HTML DOCUMENT FOR IMAGES

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2. Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries at September 30, 2012 and for the three and nine months ended September 30, 2012 and 2011 reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2011. The Company follows the same accounting policies in the preparation of interim reports. The Company’s accounting policies used in the preparation of the accompanying financial statements conform to accounting principles generally accepted in the United States of America (“US GAAP”) The functional currency is the Chinese Renminbi, however the accompanying condensed consolidated financial statements have been translated and presented in United States Dollars ($). All significant inter-company balances and transactions have been eliminated in consolidation. All dollars are rounded to nearest hundred except for share data. Reclassification Cost of revenue –Cost of revenue totaled $300 and 29,300 for the three and nine months ended September 30, 2011 has been reclassified from cost of revenue to selling expense and general and administrative expense to conform to current presentation. Use of estimates In preparing financial statements in conformity with US GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported periods. Actual results could differ from those estimates. Significant Estimates These financial statements include some amounts that are based on management’s best estimates and judgments. The most significant estimates relate to depreciation of property, plant and equipment, the valuation allowance for deferred taxes. It is reasonably possible that the above-mentioned estimates and others may be adjusted as more current information becomes available, and any adjustment could be significant in future reporting periods. Variable Interest Entity The accounts of CC Power have been consolidated with the accounts of the Company because CC Power is a variable interest entity with respect to CC Investment, which is a wholly-owned subsidiary of the Company. CC Investment entered into five agreements dated August 22, 2011 with CC Power Shareholder and with CC Power pursuant to which CC Investment provides CC Power with exclusive technology consulting and management services. In summary, the five agreements contain the following terms: Entrusted Management Agreement. This agreement provides that CC Investment will provide exclusive management services to CC Power. Such management services include but are not limited to financial management, business management, marketing management, human resource management and internal control of CC Power. The Entrusted Management Agreement will remain in effect until the acquisition of all assets or equity of CC Power by CC Investment is complete (as more fully described in the Exclusive Purchase Option Agreement below). Technical Services Agreement. This agreement provides that CC Investment will provide exclusive technical services to CC Power. Such technical services include but are not limited to software, computer system, data analysis, training and other technical services. CC Investment shall be entitled to charge CC Power service fees equivalent to CC Power’s total net income. The Technical Service Agreement will remain in effect until the acquisition of all assets or equity of CC Power by CC Investment is complete (as more fully described in the Exclusive Purchase Option Agreement below). Exclusive Purchase Option Agreement. Under the Exclusive Purchase Option Agreement, the CC Power Shareholder granted CC Investment an irrevocable and exclusive purchase option to acquire CC Power’s equity and/or assets at a nominal consideration. CC Investment may exercise the purchase option at any time. Loan Agreement. Under the Loan Agreement, CC Investment agreed to lend RMB10,000,000 to the CC Power Shareholder, to be used solely for the operations of CC Power. Equity Pledge Agreement. Under the Equity Pledge Agreement, the CC Power Shareholder pledged all of its equity interests in CC Power, including the proceeds thereof, to guarantee all of CC Investment’s rights and benefits under the Entrusted Management Agreement, the Technical Service Agreement, the Exclusive Purchase Option Agreement and the Loan Agreement. Prior to termination of this Equity Pledge Agreement, the pledged equity interests cannot be transferred without CC Investment’s prior consent. The CC Power Shareholder covenants to CC Investment that among other things, it will only appoint/elect the candidates for the directors of CC Power nominated by CC Investment. In sum, the agreements transfer to CC Investment all of the benefits and all of the risk arising from the operations of CC Power, as well as complete managerial authority over the operations of CC Power. Through these contractual arrangements, the Company has the ability to substantially influence CC Power’s daily operations and financial affairs, appoint its directors and senior executives, and approve all matters requiring board and/or shareholder approval. These contractual arrangements enable the Company to control CC Power and operate our business in the PRC through CC Investment. By reason of the relationship described in these agreements, CC Power is a variable interest entity with respect to CC Investment and CC Investment is considered the primary beneficiary of CC Power because the following characteristics identified in ASC 810-10-15-14 are present: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="5%"> <ul> <li> </li> </ul> </td> <td> The holder of the equity investment in CC Power lacks the direct or indirect ability to make decisions about the entity’s activities that have a significant effect on the success of CC Power, having assigned their voting rights and all managerial authority to CC Investment. (ASC 810-10-15-14(b)(1)). </td> </tr> <tr> <td width="5%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%"> <ul> <li> </li> </ul> </td> <td> The holder of the equity investment in CC Power lacks the obligation to absorb the expected losses of CC Power, having assigned to CC Investment all revenue and responsibility for all payables. (ASC 810-10-15-14(b)(2). </td> </tr> <tr> <td width="5%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%"> <ul> <li> </li> </ul> </td> <td> The holder of the equity investment in CC Power lacks the right to receive the expected residual returns of CC Power, having granted to CC Investment all revenue as well as an option to purchase the equity interests at a fixed price. (ASC 810-10-15-14(b)(3)). </td> </tr> </table> Accordingly, the Company’s condensed consolidated financial statements reflect the results of operations, assets and liabilities of CC Power. The carrying amount and classification of CC Power’s assets and liabilities included in the Condensed Consolidated Balance Sheets are as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Total current assets</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   215,300 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   326,600 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Total assets</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 294,200 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 390,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Total current liabilities</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 427,700 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 460,200 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Total liabilities</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 448,500 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 470,900 </td> <td align="left" width="2%"> </td> </tr> </table> Revenue recognition Our source of revenues is from internet accelerator software, which includes new software license revenues and software plus hardware and maintenance arrangements. During the quarter ended September 30, 2012, we also have revenues derived from GPS system development and website development projects along with maintenance arrangements. We evaluate revenue recognition based on the criteria set forth in FASB ASC 985-605, Software: Revenue Recognition and Staff Accounting Bulletin (“SAB”) No. 101, Revenue Recognition in Financial Statements, as revised by SAB No. 104, Revenue Recognition. Revenue Recognition for Software Products (Software Elements) New software license revenues represent fees earned from granting customers licenses to download our software products that aim at improving the internet connection speed of the mobile phone, computers or servers. The basis for software license revenue recognition is substantially governed by the accounting guidance contained in ASC 985-605, Software-Revenue Recognition. For software license that do not require significant modification or customization of the underlying software, we recognize new software license revenues when: (1) we enter into a legally binding arrangement with a customer for the license of software; (2) we deliver the products; (3) the sale price is fixed or determinable and free of contingencies or significant uncertainties; and (4) collection is probable. Revenues that are not recognized at the time of sale because the foregoing conditions are not met are recognized when those conditions are subsequently met. Our software license arrangements do not include acceptance provisions, software license updates or product support contracts. Revenue Recognition for Multiple-Element Arrangements – Software Products and Software Related Services (Software Arrangements) We enter into arrangements with customers that purchase software related products that include one to three year product support service and a short training session (referred to as software related multiple-element arrangements). Such software related multiple-element arrangements include the sale of our software products, and product support contracts whereby software license delivery is followed by the subsequent delivery of the other elements. Our software license arrangements include acceptance provisions. We recognize revenue upon the receipt of written customer acceptance. The vast majority of our software license arrangements include software license updates and product support contracts. Software license updates provide customers with rights to unspecified software product upgrades during the term of the support period. Product support includes telephone access to technical support personnel or on-site support. For those software related multiple-element arrangements, we recognized revenue pursuant to ASC 985-605. Since we are unable to determine the fair value of the selling price for the undelivered elements in a multiple-element arrangement, which is the product support service and training, the entire arrangement consideration is deferred and is recognized ratably over the term of the arrangement, typically one year to three years. Revenue Recognition for Multiple-Element Arrangements – Arrangements with Software and Hardware Elements We also enter into multiple-element arrangements that may include a combination of our software installed in the hardware products we purchased from third parties and service offerings including purchased hardware , new software licenses, installation of the software in the hardware and one to three years product support. We adopted Accounting Standards Update (“ASU”) 2009-13, Revenue Recognition (Topic 605) : Multiple-Deliverable Revenue Arrangements . This guidance modifies the fair value requirements of FASB ASC subtopic 605-25, Revenue Recognition-Multiple Element Arrangements , by allowing the use of the “best estimate of selling price” in addition to vendor-specific objective evidence and third-party evidence for determining the selling price of a deliverable for non-software arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence, (b) third-party evidence, or (c) estimated selling price. In addition, the residual method of allocating arrangement consideration is no longer permitted. In such arrangements, we first allocate the total arrangement consideration based on the relative selling prices of the software group of elements as a whole and to the hardware elements. We recognize the hardware element considerations upon delivery of the hardware. The consideration allocated to the software group which includes the software element and the product support is recognized in according to the software arrangements policy as described above. Cost of Revenue Cost of revenue primarily consists of business tax and surcharges on revenue. Credit risk The Company may be exposed to credit risk from its cash and fixed deposits at bank. No allowance has been made for estimated irrecoverable amounts determined by reference to past default experience and the current economic environment. Accounts receivable Accounts receivable consists of amounts due from customers. An allowance for doubtful accounts is established and determined based on management’s assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment. As of September 30, 2012 and December 31, 2011, no allowance for doubtful accounts was deemed necessary based on management’s assessment. Fair Value of Financial Instruments FASB accounting standards require disclosing fair value to the extent practicable for financial instruments that are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. For certain financial instruments, including cash, accounts payable, accruals and other payables, the carrying amounts approximate fair value because of the near term maturities of such obligations. Patents The Company has three patents as listed in the table below relating to its internet accelerator software products. Fees related to registering these patents were insignificant and have been expensed as incurred. <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> Patent </td> <td align="center" width="20%"> Register Number </td> <td align="left" width="40%"> Issued By </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Mach5 Internet Acceleration Software V.6.0</td> <td align="center" bgcolor="#e6efff" width="20%">2007SR09253</td> <td align="left" bgcolor="#e6efff" width="40%">National Copyright Administration of PRC</td> </tr> <tr valign="top"> <td align="left">Mach5 Enterprise Acceleration Software V.3.3</td> <td align="center" width="20%">2009SR058767</td> <td align="left" width="40%">National Copyright Administration of PRC</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Mach5 Web Browser Software</td> <td align="center" bgcolor="#e6efff" width="20%">2010SR001089</td> <td align="left" bgcolor="#e6efff" width="40%">National Copyright Administration of PRC</td> </tr> </table> Research and development and Software Development Costs All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 985-20, Software-Costs of Software to be Sold, Leased or Marketed , were not material to our consolidated financial statements for the three and nine months ended September 30, 2012 and 2011. Research and development expenses amounted to $47,000 and $5,800 for three months ended September 30, 2012 and 2011, respectively, and were included in general and administrative expense. Research and development expenses amounted to $192,500 and $15,500 for nine months ended September 30, 2012 and 2011, respectively, and were included in general and administrative expense. Comprehensive income Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. For the Company, comprehensive income for the periods presented includes net income and foreign currency translation adjustments. Income taxes Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred income tax liabilities or assets are recorded to reflect the tax consequences in future differences between the tax basis of assets and liabilities and the financial reporting amounts at each year end. A valuation allowance is recognized if it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. Foreign currency translation Assets and liabilities of the Company’s subsidiaries with a functional currency other than US$ are translated into US$ using period end exchange rates. Income and expense items are translated at the average exchange rates in effect during the period. Foreign currency translation differences are included as a component of Accumulated Other Comprehensive Income in Shareholders’ Equity. The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the financial statements were as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left">September 30, 2012</td> <td align="left" width="50%"> </td> </tr> <tr valign="top"> <td align="left">Balance sheet</td> <td align="left" width="50%"> RMB6.3265 to US $1.00 </td> </tr> <tr valign="top"> <td align="left">Statement of operations and other comprehensive loss</td> <td align="left" width="50%"> RMB6.3180 to US $1.00 </td> </tr> <tr> <td> </td> <td width="50%"> </td> </tr> <tr valign="top"> <td align="left">September 30, 2011</td> <td align="left" width="50%"> </td> </tr> <tr valign="top"> <td align="left">Balance sheet</td> <td align="left" width="50%"> RMB6.3952 to US $1.00 </td> </tr> <tr valign="top"> <td align="left">Statement of operations and other comprehensive loss</td> <td align="left" width="50%"> RMB6.4972 to US $1.00 </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="50%"> </td> </tr> <tr valign="top"> <td align="left">December 31, 2011</td> <td align="left" width="50%"> </td> </tr> <tr valign="top"> <td align="left">Balance sheet</td> <td align="left" width="50%"> RMB6.3585 to US $1.00 </td> </tr> <tr valign="top"> <td align="left">Statement of operations and other comprehensive loss</td> <td align="left" width="50%"> RMB6.4640 to US $1.00 </td> </tr> </table> The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation. Post-retirement and post-employment benefits The Company contributes to a state pension plan in respect of its PRC employees. Other than the state pension plan, the Company does not provide any other post-retirement or post-employment benefits. Statutory surplus reserve In accordance with the relevant laws and regulations of the PRC and the articles of associations of the Company, CC Power is required to allocate 10% of its net income reported in the PRC statutory accounts, after offsetting any prior years’ losses, to the statutory surplus reserve, on an annual basis. When the balance of such reserve reaches 50% of the respective registered capital, any further allocation is optional. The statutory surplus reserves can be used to offset prior years’ losses, if any, and may be converted into registered capital, provided that the remaining balances of the reserve after such conversion is not less than 25% of registered capital. The statutory surplus reserve is non-distributable. Recently Issued Accounting Pronouncements In December 2011, the FASB issued Accounting Standards Update 2011-11 (“ASU 2011-11”), Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU 2011-11 enhances disclosure requirements about the nature of an entity’s right to offset and related arrangements associated with its financial instruments and derivative instruments. The new guidance requires the disclosure of the gross amounts subject to rights of set-off, amounts offset in accordance with the accounting standards followed, and the related net exposure. The new guidance will be effective for us beginning January 1, 2013. Other than requiring additional disclosures, we do not anticipate material impacts on our financial statements upon adoption.

Basis of presentation The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries at September 30, 2012 and for the three and nine months ended September 30, 2012 and 2011 reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2011. The Company follows the same accounting policies in the preparation of interim reports. The Company’s accounting policies used in the preparation of the accompanying financial statements conform to accounting principles generally accepted in the United States of America (“US GAAP”) The functional currency is the Chinese Renminbi, however the accompanying condensed consolidated financial statements have been translated and presented in United States Dollars ($). All significant inter-company balances and transactions have been eliminated in consolidation. All dollars are rounded to nearest hundred except for share data.

Reclassification Cost of revenue –Cost of revenue totaled $300 and 29,300 for the three and nine months ended September 30, 2011 has been reclassified from cost of revenue to selling expense and general and administrative expense to conform to current presentation.

Use of estimates In preparing financial statements in conformity with US GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported periods. Actual results could differ from those estimates.

Significant Estimates These financial statements include some amounts that are based on management’s best estimates and judgments. The most significant estimates relate to depreciation of property, plant and equipment, the valuation allowance for deferred taxes. It is reasonably possible that the above-mentioned estimates and others may be adjusted as more current information becomes available, and any adjustment could be significant in future reporting periods.

Variable Interest Entity The accounts of CC Power have been consolidated with the accounts of the Company because CC Power is a variable interest entity with respect to CC Investment, which is a wholly-owned subsidiary of the Company. CC Investment entered into five agreements dated August 22, 2011 with CC Power Shareholder and with CC Power pursuant to which CC Investment provides CC Power with exclusive technology consulting and management services. In summary, the five agreements contain the following terms: Entrusted Management Agreement. This agreement provides that CC Investment will provide exclusive management services to CC Power. Such management services include but are not limited to financial management, business management, marketing management, human resource management and internal control of CC Power. The Entrusted Management Agreement will remain in effect until the acquisition of all assets or equity of CC Power by CC Investment is complete (as more fully described in the Exclusive Purchase Option Agreement below). Technical Services Agreement. This agreement provides that CC Investment will provide exclusive technical services to CC Power. Such technical services include but are not limited to software, computer system, data analysis, training and other technical services. CC Investment shall be entitled to charge CC Power service fees equivalent to CC Power’s total net income. The Technical Service Agreement will remain in effect until the acquisition of all assets or equity of CC Power by CC Investment is complete (as more fully described in the Exclusive Purchase Option Agreement below). Exclusive Purchase Option Agreement. Under the Exclusive Purchase Option Agreement, the CC Power Shareholder granted CC Investment an irrevocable and exclusive purchase option to acquire CC Power’s equity and/or assets at a nominal consideration. CC Investment may exercise the purchase option at any time. Loan Agreement. Under the Loan Agreement, CC Investment agreed to lend RMB10,000,000 to the CC Power Shareholder, to be used solely for the operations of CC Power. Equity Pledge Agreement. Under the Equity Pledge Agreement, the CC Power Shareholder pledged all of its equity interests in CC Power, including the proceeds thereof, to guarantee all of CC Investment’s rights and benefits under the Entrusted Management Agreement, the Technical Service Agreement, the Exclusive Purchase Option Agreement and the Loan Agreement. Prior to termination of this Equity Pledge Agreement, the pledged equity interests cannot be transferred without CC Investment’s prior consent. The CC Power Shareholder covenants to CC Investment that among other things, it will only appoint/elect the candidates for the directors of CC Power nominated by CC Investment. In sum, the agreements transfer to CC Investment all of the benefits and all of the risk arising from the operations of CC Power, as well as complete managerial authority over the operations of CC Power. Through these contractual arrangements, the Company has the ability to substantially influence CC Power’s daily operations and financial affairs, appoint its directors and senior executives, and approve all matters requiring board and/or shareholder approval. These contractual arrangements enable the Company to control CC Power and operate our business in the PRC through CC Investment. By reason of the relationship described in these agreements, CC Power is a variable interest entity with respect to CC Investment and CC Investment is considered the primary beneficiary of CC Power because the following characteristics identified in ASC 810-10-15-14 are present: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="5%"> <ul> <li> </li> </ul> </td> <td> The holder of the equity investment in CC Power lacks the direct or indirect ability to make decisions about the entity’s activities that have a significant effect on the success of CC Power, having assigned their voting rights and all managerial authority to CC Investment. (ASC 810-10-15-14(b)(1)). </td> </tr> <tr> <td width="5%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%"> <ul> <li> </li> </ul> </td> <td> The holder of the equity investment in CC Power lacks the obligation to absorb the expected losses of CC Power, having assigned to CC Investment all revenue and responsibility for all payables. (ASC 810-10-15-14(b)(2). </td> </tr> <tr> <td width="5%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%"> <ul> <li> </li> </ul> </td> <td> The holder of the equity investment in CC Power lacks the right to receive the expected residual returns of CC Power, having granted to CC Investment all revenue as well as an option to purchase the equity interests at a fixed price. (ASC 810-10-15-14(b)(3)). </td> </tr> </table> Accordingly, the Company’s condensed consolidated financial statements reflect the results of operations, assets and liabilities of CC Power. The carrying amount and classification of CC Power’s assets and liabilities included in the Condensed Consolidated Balance Sheets are as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Total current assets</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   215,300 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   326,600 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Total assets</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 294,200 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 390,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Total current liabilities</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 427,700 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 460,200 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Total liabilities</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 448,500 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 470,900 </td> <td align="left" width="2%"> </td> </tr> </table>

Revenue recognition Our source of revenues is from internet accelerator software, which includes new software license revenues and software plus hardware and maintenance arrangements. During the quarter ended September 30, 2012, we also have revenues derived from GPS system development and website development projects along with maintenance arrangements. We evaluate revenue recognition based on the criteria set forth in FASB ASC 985-605, Software: Revenue Recognition and Staff Accounting Bulletin (“SAB”) No. 101, Revenue Recognition in Financial Statements, as revised by SAB No. 104, Revenue Recognition. Revenue Recognition for Software Products (Software Elements) New software license revenues represent fees earned from granting customers licenses to download our software products that aim at improving the internet connection speed of the mobile phone, computers or servers. The basis for software license revenue recognition is substantially governed by the accounting guidance contained in ASC 985-605, Software-Revenue Recognition. For software license that do not require significant modification or customization of the underlying software, we recognize new software license revenues when: (1) we enter into a legally binding arrangement with a customer for the license of software; (2) we deliver the products; (3) the sale price is fixed or determinable and free of contingencies or significant uncertainties; and (4) collection is probable. Revenues that are not recognized at the time of sale because the foregoing conditions are not met are recognized when those conditions are subsequently met. Our software license arrangements do not include acceptance provisions, software license updates or product support contracts. Revenue Recognition for Multiple-Element Arrangements – Software Products and Software Related Services (Software Arrangements) We enter into arrangements with customers that purchase software related products that include one to three year product support service and a short training session (referred to as software related multiple-element arrangements). Such software related multiple-element arrangements include the sale of our software products, and product support contracts whereby software license delivery is followed by the subsequent delivery of the other elements. Our software license arrangements include acceptance provisions. We recognize revenue upon the receipt of written customer acceptance. The vast majority of our software license arrangements include software license updates and product support contracts. Software license updates provide customers with rights to unspecified software product upgrades during the term of the support period. Product support includes telephone access to technical support personnel or on-site support. For those software related multiple-element arrangements, we recognized revenue pursuant to ASC 985-605. Since we are unable to determine the fair value of the selling price for the undelivered elements in a multiple-element arrangement, which is the product support service and training, the entire arrangement consideration is deferred and is recognized ratably over the term of the arrangement, typically one year to three years. Revenue Recognition for Multiple-Element Arrangements – Arrangements with Software and Hardware Elements We also enter into multiple-element arrangements that may include a combination of our software installed in the hardware products we purchased from third parties and service offerings including purchased hardware , new software licenses, installation of the software in the hardware and one to three years product support. We adopted Accounting Standards Update (“ASU”) 2009-13, Revenue Recognition (Topic 605) : Multiple-Deliverable Revenue Arrangements . This guidance modifies the fair value requirements of FASB ASC subtopic 605-25, Revenue Recognition-Multiple Element Arrangements , by allowing the use of the “best estimate of selling price” in addition to vendor-specific objective evidence and third-party evidence for determining the selling price of a deliverable for non-software arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence, (b) third-party evidence, or (c) estimated selling price. In addition, the residual method of allocating arrangement consideration is no longer permitted. In such arrangements, we first allocate the total arrangement consideration based on the relative selling prices of the software group of elements as a whole and to the hardware elements. We recognize the hardware element considerations upon delivery of the hardware. The consideration allocated to the software group which includes the software element and the product support is recognized in according to the software arrangements policy as described above.

Cost of Revenue Cost of revenue primarily consists of business tax and surcharges on revenue.

Credit risk The Company may be exposed to credit risk from its cash and fixed deposits at bank. No allowance has been made for estimated irrecoverable amounts determined by reference to past default experience and the current economic environment.

Accounts receivable Accounts receivable consists of amounts due from customers. An allowance for doubtful accounts is established and determined based on management’s assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment. As of September 30, 2012 and December 31, 2011, no allowance for doubtful accounts was deemed necessary based on management’s assessment.

Fair Value of Financial Instruments FASB accounting standards require disclosing fair value to the extent practicable for financial instruments that are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. For certain financial instruments, including cash, accounts payable, accruals and other payables, the carrying amounts approximate fair value because of the near term maturities of such obligations.

Patents The Company has three patents as listed in the table below relating to its internet accelerator software products. Fees related to registering these patents were insignificant and have been expensed as incurred. <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> Patent </td> <td align="center" width="20%"> Register Number </td> <td align="left" width="40%"> Issued By </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Mach5 Internet Acceleration Software V.6.0</td> <td align="center" bgcolor="#e6efff" width="20%">2007SR09253</td> <td align="left" bgcolor="#e6efff" width="40%">National Copyright Administration of PRC</td> </tr> <tr valign="top"> <td align="left">Mach5 Enterprise Acceleration Software V.3.3</td> <td align="center" width="20%">2009SR058767</td> <td align="left" width="40%">National Copyright Administration of PRC</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Mach5 Web Browser Software</td> <td align="center" bgcolor="#e6efff" width="20%">2010SR001089</td> <td align="left" bgcolor="#e6efff" width="40%">National Copyright Administration of PRC</td> </tr> </table>

Research and development and Software Development Costs All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 985-20, Software-Costs of Software to be Sold, Leased or Marketed , were not material to our consolidated financial statements for the three and nine months ended September 30, 2012 and 2011. Research and development expenses amounted to $47,000 and $5,800 for three months ended September 30, 2012 and 2011, respectively, and were included in general and administrative expense. Research and development expenses amounted to $192,500 and $15,500 for nine months ended September 30, 2012 and 2011, respectively, and were included in general and administrative expense.

Comprehensive income Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. For the Company, comprehensive income for the periods presented includes net income and foreign currency translation adjustments.

Income taxes Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred income tax liabilities or assets are recorded to reflect the tax consequences in future differences between the tax basis of assets and liabilities and the financial reporting amounts at each year end. A valuation allowance is recognized if it is more likely than not that some portion, or all, of a deferred tax asset will not be realized.

Foreign currency translation Assets and liabilities of the Company’s subsidiaries with a functional currency other than US$ are translated into US$ using period end exchange rates. Income and expense items are translated at the average exchange rates in effect during the period. Foreign currency translation differences are included as a component of Accumulated Other Comprehensive Income in Shareholders’ Equity. The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the financial statements were as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left">September 30, 2012</td> <td align="left" width="50%"> </td> </tr> <tr valign="top"> <td align="left">Balance sheet</td> <td align="left" width="50%"> RMB6.3265 to US $1.00 </td> </tr> <tr valign="top"> <td align="left">Statement of operations and other comprehensive loss</td> <td align="left" width="50%"> RMB6.3180 to US $1.00 </td> </tr> <tr> <td> </td> <td width="50%"> </td> </tr> <tr valign="top"> <td align="left">September 30, 2011</td> <td align="left" width="50%"> </td> </tr> <tr valign="top"> <td align="left">Balance sheet</td> <td align="left" width="50%"> RMB6.3952 to US $1.00 </td> </tr> <tr valign="top"> <td align="left">Statement of operations and other comprehensive loss</td> <td align="left" width="50%"> RMB6.4972 to US $1.00 </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="50%"> </td> </tr> <tr valign="top"> <td align="left">December 31, 2011</td> <td align="left" width="50%"> </td> </tr> <tr valign="top"> <td align="left">Balance sheet</td> <td align="left" width="50%"> RMB6.3585 to US $1.00 </td> </tr> <tr valign="top"> <td align="left">Statement of operations and other comprehensive loss</td> <td align="left" width="50%"> RMB6.4640 to US $1.00 </td> </tr> </table> The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

Post-retirement and post-employment benefits The Company contributes to a state pension plan in respect of its PRC employees. Other than the state pension plan, the Company does not provide any other post-retirement or post-employment benefits.

Statutory surplus reserve In accordance with the relevant laws and regulations of the PRC and the articles of associations of the Company, CC Power is required to allocate 10% of its net income reported in the PRC statutory accounts, after offsetting any prior years’ losses, to the statutory surplus reserve, on an annual basis. When the balance of such reserve reaches 50% of the respective registered capital, any further allocation is optional. The statutory surplus reserves can be used to offset prior years’ losses, if any, and may be converted into registered capital, provided that the remaining balances of the reserve after such conversion is not less than 25% of registered capital. The statutory surplus reserve is non-distributable.

Recently Issued Accounting Pronouncements In December 2011, the FASB issued Accounting Standards Update 2011-11 (“ASU 2011-11”), Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU 2011-11 enhances disclosure requirements about the nature of an entity’s right to offset and related arrangements associated with its financial instruments and derivative instruments. The new guidance requires the disclosure of the gross amounts subject to rights of set-off, amounts offset in accordance with the accounting standards followed, and the related net exposure. The new guidance will be effective for us beginning January 1, 2013. Other than requiring additional disclosures, we do not anticipate material impacts on our financial statements upon adoption.

215300 326600 294200 390000 427700 460200 448500 470900 300 29300 10000000 47000 5800 192500 15500 6.3265 1 6.318 1 6.3952 1 6.4972 1 6.3585 1 6.464 1 0.1 0.5 0.25

3. Going Concern The Company has incurred significant continuing losses during the nine months ended September 30, 2012 and has an accumulated deficit at September 30, 2012. The Company has relied on its registered capital and issuance of convertible notes to fund operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. As of September 30, 2012, the Company had limited cash resources and management plans to continue its efforts to raise additional funds through debt or equity offerings which will be used to fund operations.

4. Property and Equipment, net Property, plant and equipment, net consist of the following: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Equipment</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   128,500 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   86,900 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Office equipment</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 13,800 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 13,500 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Leasehold improvements</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 8,400 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 8,300 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Software</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 1,900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 1,900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 153,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 110,600 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Less: Accumulated depreciation</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> (58,900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> (44,400 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">)</td> </tr> <tr valign="top"> <td align="left">Property and equipment, net</td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%">   93,700 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%">   66,200 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> </tr> </table> The depreciation expense was $5,200 and $1,000 for the three months ended September 30, 2012 and 2011, respectively. The depreciation expense was $14,300 and $9,100 for the nine months ended September 30, 2012 and 2011, respectively.

128500 86900 13800 13500 8400 8300 1900 1900 153000 110600 -58900 -44400 93700 66200 5200 1000 14300 9100

5. Equity Investment in Affiliated Company and Deconsolidation of Subsidiary On June 15, 2011, CC Power sold 25% of its ownership in Nanovision to an unrelated party for RMB250,000. After the disposition, CC Power retains 35% ownership interest in Nanovision as of June 30, 2011. The fair value of our 35% retained interest approximates the pro-rata share of the net asset value of Nanovision as of the date of disposal, which is approximately $35,000. During the three months period ended September 30, 2011, despite CC Power has no continue involvement in the operation of Nanovision, it retains voting rights and 35% ownership interest in Nanovision and therefore has significant influence on Nanovision. As such, CC Power accounts for its investment in Nanovision under the equity method during the three months ended September 30, 2011. Prior to the disposition of the 25% equity interest in Nanovision, CC Power held 60% equity interest in Nanovision. Up through June 15, 2011, Nanovision was consolidated with CC Power. In August 2011, CC Power disposed its remaining 35% ownership interest in Nanovision to Xili Wang, sole shareholder of CC Power for proceeds totaled RMB350,000. After the disposition, CC Power has no ownership interest and no involvement in Nanovision. The results of operations for Nanovision for the three and nine months ended September 30, 2011, which includes the calibration panel sales segment and the technical consulting service segment, are reported as a discontinued operation. The following are the summarized results of discontinued operations for Nanovision attributable to the Company for the three and nine months ended September 30, 2011. <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">For the Three</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">For the Nine</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Months Ended</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Months Ended</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Net revenues</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 84,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Total cost of sales and expenses</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 78,600 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Investment income from equity investment in discontinued operation</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 23,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 23,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Gain (loss) on disposal of discontinued operation</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> (4,800 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">)</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 4,100 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Income before tax</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 18,200 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 32,500 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Income tax (income)/expense</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> - </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 1,300 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Gain from discontinued operation</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%">   18,200 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 31,200 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> </tr> </table> As of September 30, 2012 and December 31, 2011, the Company has no ownership interest in Nanovision and therefore the balance sheet of the discontinued operations is not included in the condensed consolidated balance sheet of the Company.

0 84000 0 78600 23000 23000 -4800 4100 18200 32500 0 1300 18200 31200 0.25 250000 0.35 0.35 35000 0.35 0.25 0.6 0.35 350000

6. Deferred Revenue Deferred revenue represents deferred internet accelerator license revenue over the maintenance period of one to three years for our multiple element arrangements (Note 2). In addition, deferred revenue includes two government grants for use in research and development related expenditures for periods through July 2014. The portion of the grants that has not been spent is deferred and recognize as other income as the funds are spent on research and development related expenditures. Deferred revenue included on the balance sheets as of September 30, 2012 and December 31, 2011 is as follow: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Deferred revenue:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Current</td> <td align="left" width="1%">$</td> <td align="right" width="12%">   161,900 </td> <td align="left" width="2%"> </td> <td align="left" width="1%">$</td> <td align="right" width="12%">   290,500 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Non-current</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 20,700 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 10,700 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Total</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">$</td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">   182,600 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">$</td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">   301,200 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> </table> The table below sets forth the deferred revenue activities during the nine months ended September 30, 2012 and 2011: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="27%">For the nine months ended September 30,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Deferred revenue, balance at beginning of period</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   301,200 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 44,400 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Add: Payments received from customers during the nine months</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 94,700 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 15,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Add: Government grant received during the nine months</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 95,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (40,300 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> </tr> <tr valign="top"> <td align="left">Less: government grant earned during the nine months</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> (111,200 </td> <td align="left" width="2%">)</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 73,500 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Less: Revenue earned during the nine months</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> (197,100 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> (13,500 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">)</td> </tr> <tr valign="top"> <td align="left">Deferred revenue, balance at end of period</td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%">   182,600 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 79,100 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> </tr> </table>

301200 44400 94700 15000 95000 -40300 -111200 73500 -197100 -13500 182600 79100

7. Convertible Promissory Notes Outstanding balances for the four convertible promissory notes as of September 30, 2012 and December 31, 2011 are as follow: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 8pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="center" nowrap="nowrap"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Loan </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Interest </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> September 30, </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> December 31, </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> Lender </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Date of Note </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Maturity Date </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Amount </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Rate (p.a.)    </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> 2012 </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> 2011 </td> <td align="left" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Vantage Associates SA</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">April 15, 2011</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">April 15, 2016</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="11%">   150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="11%">   150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="11%">   150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Empa Trading Ltd.</td> <td align="left" width="1%"> </td> <td align="left" width="11%">June 5, 2011</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">June 5, 2016</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 100,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 5% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 100,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 100,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">First Capital A.G.</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">July 14, 2011</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">July 14, 2016</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">First Capital A.G.</td> <td align="left" width="1%"> </td> <td align="left" width="11%">September 9, 2011</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">September 9, 2016</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 200,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 5% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 200,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 200,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Vantage Associates SA</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">September 9, 2011</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">September 9, 2016</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 200,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 200,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 200,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Vantage Associates SA</td> <td align="left" width="1%"> </td> <td align="left" width="11%">October 27, 2011</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">October 27, 2016</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 50,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 5% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 50,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%">50,000-</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">First Capital A.G.</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">December 1, 2011</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">December 1, 2016</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 50,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 50,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%">50,000-</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">First Capital A.G.</td> <td align="left" width="1%"> </td> <td align="left" width="11%">January 23, 2012</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">January 23, 2017</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 50 000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 5% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 50,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> - </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">First Capital A.G.</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">April 25, 2012</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">April 25,2014</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Asher Enterprises, Inc.</td> <td align="left" width="1%"> </td> <td align="left" width="11%">July 27th, 2012</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">April 13th, 2013</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 63,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 8% </td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="11%"> 63,000 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="11%"> - </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="11%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="11%">   1,113,000 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="11%">   900,000 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">Less:</td> <td align="left" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="11%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="11%"> </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#E6EFFF"> </td> <td align="left" bgcolor="#E6EFFF" width="1%"> </td> <td align="left" bgcolor="#E6EFFF" width="11%"> </td> <td align="left" bgcolor="#E6EFFF" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" width="1%"> </td> <td align="left" bgcolor="#E6EFFF" width="11%"> </td> <td align="left" bgcolor="#E6EFFF" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" width="1%"> </td> <td align="left" bgcolor="#E6EFFF" width="11%"> </td> <td align="left" bgcolor="#E6EFFF" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" width="1%"> </td> <td align="left" bgcolor="#E6EFFF" width="11%">Current portion</td> <td align="left" bgcolor="#E6EFFF" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="11%"> 63,000 </td> <td align="left" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="11%"> - </td> <td align="left" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">Non-current portion</td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="11%">   1,050,000 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="11%">   900,000 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> </table> Interest expense for the three months ended September 30, 2012 and 2011 was $14,200 and $5,400, respectively. Interest expense for the nine months ended September 30, 2012 and 2011 was $38,700 and $5,400, respectively. Except for the convertible promissory note issued to Asher Enterprises, Inc., all the convertible promissory notes (the “Notes”) are convertible upon the occurrence of the following events: (1) At any time, prior to the maturity date, the Company and the holder of the notes may mutually agree on a date to convert in whole or in part the notes into shares of common stock of the Company on the following terms: Holder of the note will be issued share units comprising of one common share to be purchased at a price of $0.5, and one warrant that is convertible into one common share at a price of $1.00, and expires two years from the date of the Exchange Transaction is completed, and one warrant that is convertible into one common share at a price of $1.5, and expires three years from the date the Exchange Transaction is completed. (2) Unless earlier converted into common stock mentioned above, if within twelve months of the date hereof the Company completes a Qualified Financing, as defined by the respective convertible promissory notes, the holder agrees to exchange the notes simultaneously with the initial closing of such Qualified Financing as follows: (a) In the event of a debt Qualified Financing (“Qualified Debt Financing”), the Holder may at its option exchange in whole or in part this Note for a promissory note (or other evidence of indebtedness) in the same form and with the same terms and conditions as those issued in such Qualified Debt Financing and in a principal amount equal to the then outstanding Debt. (b) In the event of an equity Qualified Financing (“Qualified Equity Financing”), the Holder may at its option convert the Debt into shares of capital stock of the same class and series and with the same rights, preferences and privileges as those issued in such Qualified Equity Financing, at a price per share equal to the purchase price paid by investors in such Qualified Equity Financing. The convertible promissory note issued to Asher Enterprises, Inc., is convertible upon the occurrence of the following events: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr> <td valign="top" width="5%">1)</td> <td> At any time during the period beginning on the date which is 180 days following the date of the convertible promissory note, which is July 27, 2012, and ending on the later of the maturity date and the date of payment in default, the remaining outstanding principal amount shall convert into fully paid and non-assessable shares of the company’s common stock. The conversion price shall equal the variable conversion price, which is 60% multiplied by the market price of the common stock, as defined in the promissory note agreement. </td> </tr> <tr> <td width="5%"> </td> <td> </td> </tr> <tr> <td valign="top" width="5%">2)</td> <td> In the event of a consolidation or merger with any other corporation (other than a merger in which the Company is the surviving corporation and its capital stock is unchanged), or asset sale, then the conversion price is subject to adjustment, as defined by the convertible promissory note agreement. </td> </tr> </table>

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 8pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="center" nowrap="nowrap"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Loan </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Interest </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> September 30, </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> December 31, </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> Lender </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Date of Note </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Maturity Date </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Amount </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> Rate (p.a.)    </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> 2012 </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="11%"> 2011 </td> <td align="left" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Vantage Associates SA</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">April 15, 2011</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">April 15, 2016</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="11%">   150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="11%">   150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="11%">   150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Empa Trading Ltd.</td> <td align="left" width="1%"> </td> <td align="left" width="11%">June 5, 2011</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">June 5, 2016</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 100,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 5% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 100,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 100,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">First Capital A.G.</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">July 14, 2011</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">July 14, 2016</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 150,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">First Capital A.G.</td> <td align="left" width="1%"> </td> <td align="left" width="11%">September 9, 2011</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">September 9, 2016</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 200,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 5% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 200,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 200,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Vantage Associates SA</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">September 9, 2011</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">September 9, 2016</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 200,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 200,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 200,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Vantage Associates SA</td> <td align="left" width="1%"> </td> <td align="left" width="11%">October 27, 2011</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">October 27, 2016</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 50,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 5% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 50,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%">50,000-</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">First Capital A.G.</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">December 1, 2011</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">December 1, 2016</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 50,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 50,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%">50,000-</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">First Capital A.G.</td> <td align="left" width="1%"> </td> <td align="left" width="11%">January 23, 2012</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">January 23, 2017</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 50 000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 5% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 50,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> - </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">First Capital A.G.</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">April 25, 2012</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%">April 25,2014</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 5% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="11%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Asher Enterprises, Inc.</td> <td align="left" width="1%"> </td> <td align="left" width="11%">July 27th, 2012</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">April 13th, 2013</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 63,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="11%"> 8% </td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="11%"> 63,000 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="11%"> - </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="11%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="11%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="11%">   1,113,000 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="11%">   900,000 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">Less:</td> <td align="left" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="11%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="11%"> </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#E6EFFF"> </td> <td align="left" bgcolor="#E6EFFF" width="1%"> </td> <td align="left" bgcolor="#E6EFFF" width="11%"> </td> <td align="left" bgcolor="#E6EFFF" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" width="1%"> </td> <td align="left" bgcolor="#E6EFFF" width="11%"> </td> <td align="left" bgcolor="#E6EFFF" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" width="1%"> </td> <td align="left" bgcolor="#E6EFFF" width="11%"> </td> <td align="left" bgcolor="#E6EFFF" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" width="1%"> </td> <td align="left" bgcolor="#E6EFFF" width="11%">Current portion</td> <td align="left" bgcolor="#E6EFFF" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="11%"> 63,000 </td> <td align="left" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="11%"> - </td> <td align="left" bgcolor="#E6EFFF" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="11%">Non-current portion</td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="11%">   1,050,000 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="11%">   900,000 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> </table> 31 150000 0.05 150000 150000 100000 0.05 100000 100000 150000 0.05 150000 150000 200000 0.05 200000 200000 200000 0.05 200000 200000 50000 0.05 50000 50000 0.05 50000 50 0 0.05 50000 0 100000 0.05 100000 0 63000 0.08 63000 0 1113000 900000 63000 0 1050000 900000 14200 5400 38700 5400 0.5 1 1.5 180 0.6

8. Income Tax We are subject to income tax in the United States, Hong Kong and PRC. The Company’s subsidiaries, CC Power and CC Investment are incorporated in PRC and are subjected to PRC enterprises income tax at the applicable tax rates on the taxable income as reported in their Chinese statutory accounts in accordance with the relevant enterprises income tax laws (“EIT Law”). The subsidiaries locate in Shenzhen, a special economic region, where companies are allowed to gradually phase into the 25% statutory tax rate. The Company’s statutory income tax rate was 22% and 20% for 2010 and 2009, respectively. For 2011 the statutory income tax rate is 24% and the rate will be 25% for 2012 and thereafter. The open tax years in PRC are 2009-2011. CC Mobility is incorporated in Hong Kong and is subjected to Hong Kong corporate income tax at 16.5% statutory income tax rate. No Hong Kong profits tax has been provided in the financial statements, as the Company did not have any assessable profits for the three and nine months ended September 30, 2012 and 2011. The open tax year for CC Mobility in Hong Kong is 2011. The Company has no income tax expense for the three and nine months ended September 30, 2012 and 2011 because it has incurred loss before tax from continuing operation. The Company applied the provisions of ASC 740.10.50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. ASC 740.10.50 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. ASC 740.10.50 also provides guidance related to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the statements of operation. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense. The following table sets forth the components of deferred income taxes as of September 30, 2012 and December 31, 2011: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">2012</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">2011</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Deferred tax assets:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> Net operating losses - U.S.</td> <td align="left" width="1%">$</td> <td align="right" width="12%">   198,700 </td> <td align="left" width="2%"> </td> <td align="left" width="1%">$</td> <td align="right" width="12%">   83,100 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> Net operating losses - PRC and Hong Kong</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 146,100 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 59,100 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> Deferred revenue</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 45,700 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 75,300 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> Allowance for doubtful accounts</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 391,400 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 218,400 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Valuation allowance</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> (391,400 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">)</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> (218,400 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Deferred tax assets, net</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> </tr> </table> As of September 30, 2012, the Company has net operating losses carry forward of $584,300 in the U.S. and $626,800 in Hong Kong and PRC available to offset future taxable income. They will begin to expire in 2030 and 2012, respectively. We provided for a full valuation allowance against the deferred tax assets of $391,400 on the expected future tax benefits from the net operating loss carry forwards as management believes it is more likely than not that these assets will not be realized in the future. The change in valuation allowance for the nine months ended September 30, 2012 and 2011 was an increase of $173,000 and an increase of $152,700, respectively. The Company did not recognize any interest or penalties related to unrecognized tax benefits for the nine months ended September 30, 2012 and 2011.

198700 83100 146100 59100 45700 75300 900 900 391400 218400 -391400 -218400 0 0 0.25 0.22 0.2 0.24 0.25 0.165 584300 626800 391400 173000 152700

9. Employee Benefits The Company contributes to a state pension plan organized by municipal and provincial governments in respect of its employees in PRC. The compensation expense related to this plan was $2,000 and $1,500 for the three months ended September 30, 2012 and 2011, respectively. The compensation expense related to this plan was $4,600 and $3,600 for the nine months ended September 30, 2012 and 2011, respectively.

2000 1500 4600 3600

10. (Loss) earning per Share Basic (loss) earning per share is computed on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the if-converted method for the convertible notes and preferred stock and the treasury stock method for warrants and options. The following table sets forth the computation of basic and diluted net loss per share: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">For The Three Months Ended</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">For The Nine Months Ended</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">September 30,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2011</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Net (loss) available for common shareholders - basic</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%">   (125,100 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> (153,300 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%">   (600,800 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%">   (156,400 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td> </tr> <tr valign="top"> <td align="left">Interest expense on convertible notes</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 14,200 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 5,400 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 38,700 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 5,400 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Net (loss) available for common shareholders - diluted</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   (110,900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> (147,900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   (562,100 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   (151,000 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%">)</td> </tr> <tr> <td> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Weighted average outstanding shares of common stock – basic and diluted</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 60,000,000 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 67,888,043 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 60,000,000 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 74,393,407 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> <tr> <td> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Loss per share - basic and diluted:</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Continuing Operations</td> <td align="left" valign="bottom" width="1%">$</td> <td align="right" valign="bottom" width="10%">   - </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%">$</td> <td align="right" valign="bottom" width="10%">   - </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%">$</td> <td align="right" valign="bottom" width="10%">   (0.01 </td> <td align="left" valign="bottom" width="2%">)</td> <td align="left" valign="bottom" width="1%">$</td> <td align="right" valign="bottom" width="10%">   - </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Discontinued Operations</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="10%">   (0.01 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%">)</td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> </table>

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">For The Three Months Ended</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">For The Nine Months Ended</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">September 30,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2011</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Net (loss) available for common shareholders - basic</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%">   (125,100 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> (153,300 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%">   (600,800 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%">   (156,400 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td> </tr> <tr valign="top"> <td align="left">Interest expense on convertible notes</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 14,200 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 5,400 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 38,700 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 5,400 </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Net (loss) available for common shareholders - diluted</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   (110,900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> (147,900 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   (562,100 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   (151,000 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%">)</td> </tr> <tr> <td> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Weighted average outstanding shares of common stock – basic and diluted</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 60,000,000 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 67,888,043 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 60,000,000 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%"> 74,393,407 </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> <tr> <td> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> <td valign="bottom" width="1%"> </td> <td valign="bottom" width="10%"> </td> <td valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Loss per share - basic and diluted:</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Continuing Operations</td> <td align="left" valign="bottom" width="1%">$</td> <td align="right" valign="bottom" width="10%">   - </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%">$</td> <td align="right" valign="bottom" width="10%">   - </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%">$</td> <td align="right" valign="bottom" width="10%">   (0.01 </td> <td align="left" valign="bottom" width="2%">)</td> <td align="left" valign="bottom" width="1%">$</td> <td align="right" valign="bottom" width="10%">   - </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Discontinued Operations</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="10%">   (0.01 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%">)</td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="10%">   - </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" valign="bottom" width="2%"> </td> </tr> </table>

-125100 -153300 -600800 -156400 14200 5400 38700 5400 -110900 -147900 -562100 -151000 60000000 67888043 60000000 74393407 0 0 -0.01 0 0 0 0 0 0 0 -0.01 0

11. Commitments and Contingencies Operating commitments: Operating commitment consists of the lease for office space under operating lease agreement which expired in August 2012 and the Company has renewed the lease for a one year period. Operating lease agreement generally contains renewal options that may be exercised at the Company’s discretion after the completion of the terms. The Company’s obligations under operating lease are as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left" bgcolor="#e6efff">Remainder of 2012</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   21,200 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">2013</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 63,700 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Thereafter</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Total minimum payment</td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%">   84,900 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> </tr> </table> The Company incurred rental expenses of $21,300 and $7,200 for the three months ended September 30, 2012 and 2011, respectively. The Company incurred rental expenses of $63,800 and $18,900 for the nine months ended September 30, 2012 and 2011, respectively.

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left" bgcolor="#e6efff">Remainder of 2012</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   21,200 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">2013</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 63,700 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Thereafter</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> - </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Total minimum payment</td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%">   84,900 </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%"> </td> </tr> </table>

21200 63700 0 84900 21300 7200 63800 18900

12. Concentrations, Risks, and Uncertainties Customer Concentrations The Company has the following concentrations of business with each customer constituting greater than 10% of the Company’s gross sales: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">For The Three Months Ended</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">For The Nine Months Ended</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" width="23%">September 30,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2011</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2012</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="10%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Customer A</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 82% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%">*</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 90% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%">*</td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Customer B</td> <td align="left" width="1%"> </td> <td align="right" width="10%">*</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 89% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%">*</td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 24% </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Customer C</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 70% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> </table> * Constitutes less than 10% of the Company’s gross sales. The Company has not experienced any significant difficulty in collecting its accounts receivable in the past and is not aware of any financial difficulties being experienced by its major customers.

0.1 0.82 0.9 0.89 0.24 0 0 0 0.7 0.1 13. Operating Risk The Company’s operations are all carried out in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in the North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

14. Unaudited Pro-Forma Financial Information The accompanying unaudited pro forma financial information for the financial statements for the three and nine months ended September 30, 2011 present the historical financial information of the accounting acquirer. The pro forma financial information is presented for information purposes only. Such information is based upon the standalone historical results of each company and does not reflect the actual results that would have been reported had the acquisition been completed when assumed, nor is it indicative of the future results of operations for the combined enterprise. The following represents pro forma revenue and earnings information for the three and nine months ended September 30, 2011 as if the acquisition of XcelMobility Inc. and the recapitalization had occurred on the beginning of each of the periods. <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Unaudited, Pro forma</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Unaudited, Pro forma</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Three Months Ended</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Nine Months Ended</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">September 30,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%">2011</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Revenues</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   4,100 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   43,300 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Net Profit (Loss) applicable to common shareholders</td> <td align="left" width="1%">$</td> <td align="right" width="12%">   26,700 </td> <td align="left" width="2%"> </td> <td align="left" width="1%">$</td> <td align="right" width="12%">   (400,700 </td> <td align="left" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Loss per share</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%">   (0.01 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Weighted Average Shares Outstanding</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 60,000,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 60,000,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> </table> The unaudited, pro forma information for the three and nine months ended September 30, 2011 depicted above reflect the impacts of expenses for a total of $300,000 incurred in connection with the recapitalization.

15. Related Party Transaction Effective October 1, 2011 for a period of one year, the Company’s subsidiary, CC Mobility engaged the Company’s shareholder, CC Wireless Limited, to provide technical consultation for product R&D and business development. The monthly fee is determined periodically. During the three and nine months ended September 30, 2012, $14,100 and $42,700, respectively, of consulting fee were paid to CC Wireless Limited.

14100 42700 16. Restricted Stock to Director On April 20, 2012, the Board of Directors of the Company appointed Jack Zwick as the independent director of the Company and granted to Mr. Zwick 360,000 shares of the Company’s common stock. The restricted stock shall vest with respect to 1/8 th of the total number of restricted stock per quarter from vesting commencement date of April 1, 2012 such that all restricted stock shall vest on January 1, 2013, subject to his continuous service. The fair value of the restricted stock on the grant date is $201,600. On August 14, 2012, the Board of Directors of the Company granted 360,000 shares of the Company’s common stock to Gregory Tse for his service to serve as the Company’s independent director. The restricted stock shall vest with respect to 135,000 shares of Restricted Stock immediately, 45,000 shares on September 1, 2012, 45,000 shares on January 1, 2013, 45,000 shares on May 1, 2013, 45,000 shares on September 1, 2013, and the remaining 45,000 shares on January 1, 2014, subject to his continuous service. The fair value of the restricted stock on the grant date is $82,800. The fair value of the restricted stock is recognized as stock based compensation over the service period. The shares have not been issued as of September 30, 2012. During the three and nine months ended September 30, 2012, 45,000 and 270,000 shares were vested and stock based compensation expense totaled $25,200 and $88,800 were recorded, respectively. 360000 201600 360000 135000 45000 45000 45000 45000 45000 82800 45000 270000 25200 88800

17. Subsequent Events The Company has no significant subsequent events from September 30, 2012 through the consolidated financial statements issue date of this report.