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<SEC-DOCUMENT>0001010549-07-000987.txt : 20071119
<SEC-HEADER>0001010549-07-000987.hdr.sgml : 20071119
<ACCEPTANCE-DATETIME>20071119161546
ACCESSION NUMBER:		0001010549-07-000987
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20070930
FILED AS OF DATE:		20071119
DATE AS OF CHANGE:		20071119

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA RECYCLING ENERGY CORP
		CENTRAL INDEX KEY:			0000721693
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-BUSINESS SERVICES, NEC [7389]
		IRS NUMBER:				900093373
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12536
		FILM NUMBER:		071256576

	BUSINESS ADDRESS:	
		STREET 1:		429 GUANGDONG ROAD
		CITY:			SHANGHAI
		STATE:			F4
		ZIP:			200001
		BUSINESS PHONE:		86-21 6336-8686

	MAIL ADDRESS:	
		STREET 1:		429 GUANGDONG ROAD
		CITY:			SHANGHAI
		STATE:			F4
		ZIP:			200001

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CHINA DIGITAL WIRELESS INC
		DATE OF NAME CHANGE:	20040810

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BOULDER ACQUISITIONS  INC
		DATE OF NAME CHANGE:	20020430

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BOULDER BREWING CO
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>crec111907form10qsb.htm
<DESCRIPTION>FORM 10QSB
<TEXT>
<html>

<head>
<title>China Recycling Energy Corporation: Form 10QSB</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<font FACE="Times New Roman" SIZE="5">
<p align="center">
</font><b>
<font FACE="Times New Roman" SIZE="5">
UNITED STATES <br>
SECURITIES AND EXCHANGE COMMISSION
</font>
<font FACE="Times New Roman" SIZE="2">
<br>
Washington, D.C. 20549
</font></b> </p>
<font FACE="Times New Roman" SIZE="5">
<p align="center"><b>FORM 10-QSB </b> </p>
</font>
<font FACE="Wingdings 2" SIZE="4">
<p style="margin-bottom: 0">Q</p>
</font>
<font FACE="Times New Roman" SIZE="2">
<p style="margin-left: 30; margin-top: -13pt">QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </p>
<p align="center">For the quarterly period ended September 30, 2007 </p>
<p style="margin-bottom: 0">
<font FACE="Wingdings 2" SIZE="4">
&#163;</font></p>
<p style="margin-left: 30; margin-top: -13pt">TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </p>
<p align="center">For the Transition Period From _________ to _________ </p>
<p align="center"><b>0-12536 </b><br>
(Commission File Number) </p>
</font>
<font FACE="Times New Roman" SIZE="5">
<p align="center"><b>CHINA RECYCLING ENERGY CORPORATION <br>
</b>
</font>
<font FACE="Times New Roman" SIZE="2">
(Exact Name of Small Business Issuer as
Specified in Its Charter) </p>
<p align="center"><b>Nevada <br>
</b>(State or Other jurisdiction of Incorporation or Organization) </p>
<p align="center"><b>90-0093373 <br>
</b>(IRS Employer Identification No.) </p>
<p align="center"><b>429 Guangdong Road <br>
Shanghai, People's Republic of China 200001 <br>
</b>(Address of Principal Executive
Offices) </p>
<p align="center">Issuer's Telephone Number, Including Area Code: <b>(86 21) 6336-8686
</b> </p>
<p ALIGN="JUSTIFY">Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to the filing requirements for at least the past 90
days.
<font FACE="Wingdings 2" SIZE="4">
Q</font> Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font FACE="Wingdings 2" SIZE="4">&#163;</font>&nbsp; No </p>
<p>Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). <font FACE="Wingdings 2" SIZE="4">&#163;</font>
Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font FACE="Wingdings 2" SIZE="4">Q</font>&nbsp; No</p>
<p>As of September 30, 2007, there were 17,147,268 shares of $.001 par value
common stock outstanding. </p>
<p>Transitional Small Business Disclosure Format:
<font FACE="Wingdings 2" SIZE="4">&#163;</font> Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font FACE="Wingdings 2" SIZE="4">Q</font>&nbsp; No</p>
</font><hr color="#000000" size="5"><p style="page-break-before: always">
<p align="center"><b><font FACE="Times New Roman" SIZE="2">TABLE OF CONTENTS</font></b></p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">PART I
    &#150; </font></td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    FINANCIAL INFORMATION</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">3</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom"><font FACE="Times New Roman" SIZE="2">ITEM
    1. </font></td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</font></td>
    <td WIDTH="10%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">3</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">CONDENSED
    CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2007 (UNAUDITED)
    AND DECEMBER 31, 2006</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">4</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom">&nbsp;</td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">CONDENSED CONSOLIDATED
    STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) FOR THE NINE
    MONTHS ENDED SEPTEMBER 30, 2007 AND
    2006</font></td>
    <td WIDTH="10%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">5</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">7</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom">&nbsp;</td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">FOR THE
    NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006</font></td>
    <td WIDTH="10%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS </font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">9</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom">&nbsp;</td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">(UNAUDITED)</font></td>
    <td WIDTH="10%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">ITEM
    2. </font></td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">17</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom"><font FACE="Times New Roman" SIZE="2">ITEM
    3. </font></td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">
    CONTROLS AND PROCEDURES</font></td>
    <td WIDTH="10%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">21</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">PART
    II &#150; </font></td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">OTHER
    INFORMATION</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">21</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom"><font FACE="Times New Roman" SIZE="2">ITEM
    1. </font></td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">LEGAL
    PROCEEDINGS</font></td>
    <td WIDTH="10%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">21</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">ITEM
    2. </font></td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">21</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom"><font FACE="Times New Roman" SIZE="2">ITEM
    3. </font></td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">
    DEFAULTS UPON SENIOR SECURITIES</font></td>
    <td WIDTH="10%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">23</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">ITEM
    4. </font></td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">23</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom"><font FACE="Times New Roman" SIZE="2">ITEM
    5. </font></td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">OTHER
    INFORMATION</font></td>
    <td WIDTH="10%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">23</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">ITEM
    6. </font></td>
    <td WIDTH="80%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    EXHIBITS</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">24</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" valign="bottom">&nbsp;</td>
    <td WIDTH="80%" valign="bottom"><font FACE="Times New Roman" SIZE="2">SIGNATURES</font></td>
    <td WIDTH="10%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">24</font></td>
  </tr>
  </table>
<p><font face="Times New Roman" size="2"><br>
&nbsp;</font></p>
<hr color="#000000" size="5"><p style="page-break-before: always"><font FACE="Times New Roman" SIZE="2">
<p><b>PART I - FINANCIAL INFORMATION </b></p>
<p><b>ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS </b></p>
<p>&nbsp;</p>
<b>
<div style="border-top-style: solid; border-top-width: 2; padding-top: 1">
  <p align="center">CHINA RECYCLING ENERGY CORPORATION <br>
  (FORMERLY CHINA DIGITAL WIRELESS INC.)
</div>
<p align="center">(Unaudited) </p>
<div style="border-bottom-style: solid; border-bottom-width: 2; padding-bottom: 1">
  <p align="center">Condensed Consolidated Financial Statements <br>
  For The Nine Months Ended September 30, 2007 <br>
&nbsp;</div>
</b>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<b>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p align="center">CHINA RECYCLING ENERGY CORPORATION <br>
(FORMERLY CHINA DIGITAL
WIRELESS INC.) </p>
<p align="center">INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS <br>
(UNAUDITED)
</p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="90%">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="10%" align="center"><font FACE="Times New Roman" SIZE="2"><b>Page</b></font></td>
  </tr>
  <tr>
    <td WIDTH="90%">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="10%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Condensed
    Consolidated Balance Sheet as of September 30, 2007 and December 31, 2006</font></td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">F-2</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Condensed
    Consolidated Statements of Operations And Comprehensive Income (Loss) for
    the three and
    nine months ended September 30, 2007 and 2006</font></td>
    <td WIDTH="10%" align="center"><font FACE="Times New Roman" SIZE="2">F-3 to F-4</font></td>
  </tr>
  <tr>
    <td WIDTH="90%" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Condensed
    Consolidated Statements of Cash Flows for the nine months ended September
    30, 2007 and 2006</font></td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">F-5 to F-6</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Condensed Consolidated
    Statements of Stockholders&#146; Equity for the nine
    months ended September 30, 2007</font></td>
    <td WIDTH="10%" align="center"><font FACE="Times New Roman" SIZE="2">F-7</font></td>
  </tr>
  <tr>
    <td WIDTH="90%" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Notes to Condensed
    Consolidated Financial Statements</font></td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">F-8 to F-18</font></td>
  </tr>
</table>
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman" size="2">F-1</font></p>
<hr color="#000000" size="5"><p style="page-break-before: always"><font FACE="Times New Roman" SIZE="2"><b>
<p ALIGN="CENTER">CHINA RECYCLING ENERGY CORPORATION <br>
(FORMERLY CHINA DIGITAL
WIRELESS INC.) <br>
CONDENSED CONSOLIDATED BALANCE SHEETS <br>
AS OF SEPTEMBER 30, 2007
AND DECEMBER 31, 2006 <br>
(Currency expressed in United States Dollars (&quot;US$&quot;), except for number of
shares) </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" height="772">
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="15%" height="19" colspan="2" align="center" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">September 30, 2007</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" COLSPAN="2" align="center" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">December
    31, 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="15%" height="19" colspan="2" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p align="center"><font FACE="Times New Roman" SIZE="2">(Unaudited)</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="15%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" colspan="2" valign="bottom">
    <p align="center"><font FACE="Times New Roman" SIZE="2">(audited)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>ASSETS</b></font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Current assets:</font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Cash and cash
    equivalents</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">6,379</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">252,000</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Accounts receivable,
    net</font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">123</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Advances and deposits
    to suppliers</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">755,635</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Value added tax
    recoverable</font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">11,241</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">10,702</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Due from a third party</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,003,881</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Due from related
    parties</font></td>
    <td WIDTH="3%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">3,446,275</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Total current assets</font></td>
    <td WIDTH="3%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,021,624</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,464,612</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="12" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Investment in
    financing leases, net</font></td>
    <td WIDTH="3%" height="12" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom"></td>
    <td WIDTH="12%" align="right" height="12" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,960,395</font></td>
    <td WIDTH="3%" align="left" height="12" style="border-style: none; border-width: medium" valign="bottom"></td>
    <td WIDTH="3%" align="left" height="12" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"></td>
    <td WIDTH="12%" align="right" height="12" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>TOTAL ASSETS</b></font></td>
    <td WIDTH="3%" height="19" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">8,982,019</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,464,612</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>LIABILITIES AND
    STOCKHOLDERS&#146; EQUITY</b></font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Current liabilities:</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Accounts payable</font></td>
    <td WIDTH="3%" height="19" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">2,345,768</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Advance from customers</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">26,681</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">141,832</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Deferred revenue</font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">33,299</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Income tax payable</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">100,417</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">437</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Due to a director</font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">49,079</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Due to a third party</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">965,023</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Other current
    liabilities</font></td>
    <td WIDTH="3%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">799,380</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">942,407</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Total current
    liabilities</font></td>
    <td WIDTH="3%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,286,348</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">1,117,975</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Stockholders&#146; equity:</font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Common stock, $0.001
    par value; 100,000,000 shares authorized; 17,147,268
    shares issued and outstanding</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">17,148</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">17,148</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Additional paid-in
    capital</font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,229,845</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,229,845</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Statutory reserves</font></td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">574,666</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">574,666</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Accumulated other
    comprehensive income</font></td>
    <td WIDTH="3%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">1,795,910</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">1,037,674</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 40"><font FACE="Times New Roman" SIZE="2">Accumulated deficits</font></td>
    <td WIDTH="3%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(1,921,898)</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(2,512,696)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Total stockholders&#146;
    equity</font></td>
    <td WIDTH="3%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,695,671</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">3,346,637</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>TOTAL LIABILITIES
    AND STOCKHOLDERS&#146; EQUITY</b></font></td>
    <td WIDTH="3%" height="19" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" height="19" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">8,982,019</font></td>
    <td WIDTH="3%" align="left" height="19" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" height="19" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">4,464,612</font></td>
  </tr>
</table>
<p align="center"><font face="Times New Roman" size="2">See accompanying notes to condensed
consolidated financial statements. <br>
<br>
F-2 </font></p>
<hr color="#000000" size="5"><p style="page-break-before: always"><font FACE="Times New Roman" SIZE="2"><b>
<p align="center">CHINA RECYCLING ENERGY CORPORATION <br>
(FORMERLY CHINA DIGITAL
WIRELESS INC.) <br>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS <br>
AND
COMPREHENSIVE INCOME (LOSS) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2007 AND 2006 <br>
(Currency expressed in United States Dollars (&quot;US$&quot;), except for
number of shares) <br>
(Unaudited) </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="27%" align="center" colspan="5" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">Three
    months ended September 30,</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="27%" align="center" colspan="5" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">
    Nine months ended September 30,</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom"><font FACE="Times New Roman" SIZE="2">2007</font></td>
    <td WIDTH="3%" align="center" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom"><font FACE="Times New Roman" SIZE="2">2006</font></td>
    <td WIDTH="3%" align="center" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom"><font FACE="Times New Roman" SIZE="2">2007</font></td>
    <td WIDTH="3%" align="center" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom"><font FACE="Times New Roman" SIZE="2">2006</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Revenues from
    direct financing leases</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">413,526</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">810,803</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Cost of revenues</b></font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(25,923)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(58,076)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Gross profit</b></font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">387,603</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">752,727</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Operating expenses:</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">General and
    administrative</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(29,720)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(32,880)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(106,191)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(189,147)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Total operating
    expenses</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">(29,720)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">(32,880)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">(106,191)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">(189,147)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Income (loss) from
    operations</b></font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">357,883</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(32,880)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">646,536</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(189,147)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Other income:</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Interest income</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">3</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">32</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">107</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">152</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Income (loss)
    before income taxes</b></font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">357,886</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(32,848)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">646,643</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(188,995)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Income tax expense</font></td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(53,803)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(100,417)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Net income (loss)
    from continuing operations</b></font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">304,083</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(32,848)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">546,226</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">(188,995)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Discontinued
    operations</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Income from operations
    of discontinued
    components</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">11,273</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(111,971)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">44,572</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">85,782</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Net income (loss)</b></font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">315,356</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(144,819)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">590,798</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(103,213)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Other comprehensive
    income: - Foreign currency
    translation gain</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">230,058</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">71,055</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">758,236</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">121,853</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2"><b>Comprehensive
    income (loss)</b></font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">545,414</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">(73,764)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">1,349,034</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">18,640</font></td>
  </tr>
</table>
<p align="center"><font face="Times New Roman" size="2">F-3</font></p>
<hr color="#000000" size="5"><p style="page-break-before: always"><font FACE="Times New Roman" SIZE="2"><b>
<p align="center">CHINA RECYCLING ENERGY CORPORATION (FORMERLY CHINA DIGITAL
WIRELESS INC.) </p>
<p ALIGN="CENTER">CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
(Currency expressed in United States Dollars (&quot;US$&quot;), except for number of
shares) (Unaudited)</b> </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="27%" align="center" colspan="5" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">Three
    months ended September 30,</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="27%" align="center" colspan="5" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom"><font FACE="Times New Roman" SIZE="2">
    Nine months ended September 30,</font></td>
    </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom"><font FACE="Times New Roman" SIZE="2">2007</font></td>
    <td WIDTH="3%" align="center" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom"><font FACE="Times New Roman" SIZE="2">2006</font></td>
    <td WIDTH="3%" align="center" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom"><font FACE="Times New Roman" SIZE="2">2007</font></td>
    <td WIDTH="3%" align="center" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom"><font FACE="Times New Roman" SIZE="2">2006</font></td>
    </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Net income (loss) from continuing operations
    per common share &#150; Basic and diluted</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">0.02</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(0.00)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">0.03</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(0.01)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Net income from discontinuing
    operations per common share &#150;
    Basic and diluted</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">0.00</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">(0.01)</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">0.00</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">0.01</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom" bgcolor="#E6E6E6">
    <p style="text-indent: -20; margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" valign="bottom">
    <p style="text-indent: -20; margin-left: 20"><font FACE="Times New Roman" SIZE="2">Weighted average
    number of common shares outstanding &#150; Basic
    and diluted</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">17,147,268</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">17,147,268</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">17,147,268</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom"><font FACE="Times New Roman" SIZE="2">17,147,268</font></td>
  </tr>
</table>
<font FACE="Times New Roman" SIZE="2">
<p align="center">See accompanying notes to condensed consolidated financial
statements.<b> </p>
</b></font>
<p align="center"><font face="Times New Roman" size="2">F-4</font></p>
<hr color="#000000" size="5"><p style="page-break-before: always"><font FACE="Times New Roman" SIZE="2"><b>
<p align="center">CHINA RECYCLING ENERGY CORPORATION (FORMERLY CHINA DIGITAL
WIRELESS INC.) </p>
<p ALIGN="CENTER">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2007 and 2006 (Currency expressed in United States
Dollars (&quot;US$&quot;)) (Unaudited) </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="33%" align="center" valign="bottom" colspan="5" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">Nine
    Months Ended September 30,</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="15%" align="center" valign="bottom" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2"><font FACE="Times New Roman" SIZE="2">2007</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="15%" valign="bottom" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" align="center"><font FACE="Times New Roman" SIZE="2">2006</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2"><b>Cash flows from
    operating activities:</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Net income (loss)</font></td>
    <td WIDTH="3%" align="left" valign="bottom"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium"><font FACE="Times New Roman" SIZE="2">590,798</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">(103,213)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Adjustments to
    reconcile net income to net cash provided by (used in) operating
    activities:</font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Income from operations
    of discontinued components</font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium"><font FACE="Times New Roman" SIZE="2">(44,572)</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">(85,782)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Changes in operating
    assets and liabilities:</font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Amount due to a
    director</font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium"><font FACE="Times New Roman" SIZE="2">48,079</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Income tax payable</font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">99,972</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Accrued liabilities
    and other payables</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">61,905</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Net cash provided by
    (used in) operating activities of continuing operations</font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium"><font FACE="Times New Roman" SIZE="2">756,182</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">(188,995)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Net cash (used in)
    provided by operating activities of discontinued operations</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(189,156)</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">65,466</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Net cash provided by
    (used in) operating activities</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">567,026</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(123,529)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2"><b>Cash flows from
    investing activities:</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Investment in direct
    financing leases</font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium"><font FACE="Times New Roman" SIZE="2">(2,779,812)</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Proceeds from direct
    financing leases</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">1,055,813</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Net cash used in
    investing activities of continuing operations</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(1,723,999)</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Net cash used in
    investing activities of discontinued operations</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">(2,266,042)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Net cash used in
    investing activities</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">(1,723,999)</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">(2,266,042)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom"><font FACE="Times New Roman" SIZE="2"><b>Cash flows from
    financing activities:</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Due to a third party</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">906,144</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Net cash provided by
    financing activities</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">906,144</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2"><b>Foreign currency
    translation adjustment</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">5,208</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">101,072</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2"><b>NET CHANGE IN CASH
    AND CASH EQUIVALENTS</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(245,621)</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(2,288,499)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2"><b>CASH AND CASH
    EQUIVALENTS, BEGINNING OF PERIOD</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">252,000</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">3,578,367</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2"><b>CASH AND CASH
    EQUIVALENTS, END OF PERIOD</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">6,379</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">1,289,868</font></td>
  </tr>
</table>
<font FACE="Times New Roman" size="2">
<p align="center">F-5 </p>
</font><font FACE="Times New Roman" SIZE="3"><hr color="#000000" size="5"><p style="page-break-before: always">
</font><font FACE="Times New Roman" SIZE="2"><b>
<p align="center">CHINA RECYCLING ENERGY CORPORATION <br>
(FORMERLY CHINA DIGITAL
WIRELESS INC.) <br>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS <br>
FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2007 and 2006 <br>
(Currency expressed in United States
Dollars (&quot;US$&quot;)) <br>
(Unaudited)</b> </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="33%" align="center" valign="bottom" colspan="5" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">Nine
    Months Ended September 30,</font></td>
    </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="15%" align="center" valign="bottom" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2"><font FACE="Times New Roman" SIZE="2">2007</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="15%" valign="bottom" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="2" align="center"><font FACE="Times New Roman" SIZE="2">2006</font></td>
    </tr>
  <tr>
    <td WIDTH="67%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-right-style: none; border-right-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-left-width: medium">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2"><b>
    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION</b></font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" style="border-style: none; border-width: medium"><font FACE="Times New Roman" SIZE="2">Cash paid for income
    taxes</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-right-style: none; border-top-style: none; border-bottom-style: double; border-bottom-width: 3"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-left-style: none; border-right-style: none; border-top-style: none; border-bottom-style: double; border-bottom-width: 3"><font FACE="Times New Roman" SIZE="2">446</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-right-style: none; border-top-style: none; border-bottom-style: double; border-bottom-width: 3"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-left-style: none; border-right-style: none; border-top-style: none; border-bottom-style: double; border-bottom-width: 3"><font FACE="Times New Roman" SIZE="2">159,190</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Cash paid for interest
    expenses</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-right-style: none; border-top-style: none; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-left-style: none; border-right-style: none; border-top-style: none; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" style="border-left-style: none; border-right-style: none; border-top-style: none; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" style="border-left-style: none; border-right-style: none; border-top-style: none; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
</table>
</font>
<font FACE="Times New Roman" SIZE="2">
<p align="center">See accompanying notes to condensed consolidated financial
statements. </p>
<p align="center">&nbsp;</p>
</font>
<p align="center"><font face="Times New Roman" size="2">F-6</font></p>
<hr color="#000000" size="5"><p style="page-break-before: always"><font FACE="Times New Roman" SIZE="2"><b>
<p align="center">CHINA RECYCLING ENERGY CORPORATION (FORMERLY CHINA DIGITAL
WIRELESS INC.)</b> </p>
<b>
<p ALIGN="CENTER">CONDENSED CONSOLDIATED STATEMENT OF STOCKHOLDERS&#146; EQUITY FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2007 (Currency expressed in United States
Dollars (&quot;US$&quot;), except for number of shares) (Unaudited)</b> </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" height="269">
  <tr>
    <td WIDTH="32%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="19%" valign="bottom" align="center" colspan="4" height="19" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" style="font-size: 9pt">Common
    stock</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="60" style="border-right-style: none; border-right-width: medium">&nbsp;</td>
    <td WIDTH="8%" valign="bottom" align="right" height="60" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" style="font-size: 9pt">No. of
    shares</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="3" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1"></td>
    <td WIDTH="1%" valign="bottom" align="right" height="3" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" colspan="2">
    <font FACE="Times New Roman" style="font-size: 9pt">Amount</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="3" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium"></td>
    <td WIDTH="1%" valign="bottom" align="right" height="3" colspan="2" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" style="font-size: 9pt">
    Additional<br>
    paid-in
    capital</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="3" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium"></td>
    <td WIDTH="1%" valign="bottom" align="right" height="3" colspan="2" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" style="font-size: 9pt">
    Accumulated<br>
    other<br>
    comprehensive<br>
    income</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="3" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium"></td>
    <td WIDTH="1%" valign="bottom" align="right" height="3" colspan="2" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" style="font-size: 9pt">
    Statutory<br>
    reserve</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="3" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium"></td>
    <td WIDTH="1%" valign="bottom" align="right" height="3" colspan="2" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" style="font-size: 9pt">
    Retained<br>
    earnings</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="3" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium"></td>
    <td WIDTH="1%" valign="bottom" align="right" height="3" colspan="2" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" style="font-size: 9pt">Total<br>
    Stockholder&#146;s<br>
    equity</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="8%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    Balance as of January 1, 2007</font></td>
    <td WIDTH="8%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    17,147,268</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">17,148</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    4,229,845</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    1,037,674</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">574,666</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    (2,512,696)</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    3,346,637</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="8%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    Foreign currency translations
    adjustment</font></td>
    <td WIDTH="8%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">758,236</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    758,236</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="8%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">Net
    income for the period</font></td>
    <td WIDTH="8%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">-</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">590,798</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    590,798</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="8%" valign="bottom" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="8%" valign="bottom" align="right" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" valign="bottom" align="left" height="19">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" valign="bottom" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    Balance as of September 30, 2007</font></td>
    <td WIDTH="8%" valign="bottom" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    17,147,268</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">17,148</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    4,229,845</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    1,795,910</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">574,666</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    (1,921,898)</font></td>
    <td WIDTH="2%" valign="bottom" align="left" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" valign="bottom" align="left" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">$</font></td>
    <td WIDTH="7%" valign="bottom" align="right" height="19" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" style="font-size: 9pt">
    4,695,671</font></td>
  </tr>
</table>
<font FACE="Times New Roman" SIZE="2">
<p>See accompanying notes to condensed consolidated financial statements.</p>
<p align="center">F- 7 </p>
</font><hr color="#000000" size="5"><p style="page-break-before: always"><b><font FACE="Times New Roman" SIZE="2">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>
<font SIZE="2">1</font> </font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">BASIS OF
PRESENTATION </p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p align="justify">The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with both generally accepted
accounting principles for interim financial information, and the instructions to
Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. The accompanying unaudited
condensed consolidated financial statements reflect all adjustments (consisting
of normal recurring accruals) that are, in the opinion of management, considered
necessary for a fair presentation of the results for the interim periods
presented. Interim results are not necessarily indicative of results for a full
year. </p>
<p align="justify">These unaudited condensed consolidated financial statements
and related disclosures have been prepared with the presumption that users of
the interim financial information have read or have access to our audited
consolidated financial statements for the preceding fiscal year. Accordingly,
these unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and the related notes
thereto contained in our Annual Report on Form 10-KSB for the year ended
December 31, 2006. </p>
</font><b><font FACE="Times New Roman" SIZE="2">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>2
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">ORGANIZATION AND
BUSINESS BACKGROUND </p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p align="justify">China Recycling Energy Corporation (the &quot;Company&quot; or &quot;CREG&quot;)
(formerly China Digital Wireless, Inc.) was incorporated on May 8, 1980, under
the laws of the State of Colorado. The Company, through its subsidiary,
currently commences the recycling energy business in the provision of energy
saving and recycling products and services. Consequently, the businesses of
mobile phone distribution and provision of pager and mobile phone value-added
information services were discontinued. On March 8, 2007, the Company changed
its name to &quot;China Recycling Energy Corporation&quot;. </p>
<p align="justify">On September 6, 2001, the Company re-domiciled its state of
incorporation from Colorado to Nevada. </p>
<p align="justify">On June 23, 2004, the Company entered into a stock exchange
agreement with Sifang Holdings Co. Ltd. (&quot;Sifang Holdings&quot;) and certain
shareholders. Pursuant to the stock exchange agreement, the Company issued
13,782,636 shares of its common stock in exchange for a 100% equity interest in
Sifang Holdings, making Sifang Holdings a wholly owned subsidiary of the
Company. Sifang Holdings was established under the laws of the Cayman Islands on
February 9, 2004 for the purpose of holding a 100% equity interest in Shanghai TCH Data Technology Co., Ltd. (&quot;TCH&quot;). TCH was established as a foreign
investment enterprise in Shanghai under the laws of the People&#146;s Republic of
China (the &quot;PRC&quot;) on May 25, 2004. </p>
<p align="justify">Since January 2007, the Company has gradually phased out and
substantially scaled down most of its business of mobile phone distribution and
provision of pager and mobile phone value-added information services. In the
first and second quarter of 2007, the Company did not engage in any substantial
transaction and activity in connection to these businesses. On May 10, 2007, the
Company approved and announced that it completely ceased and discontinued these
businesses. These businesses are reflected in continuing operations for all
periods presented based on the criteria for discontinued operations prescribed
by Statement of Financial Accounting Standards (SFAS) No. 144, <i>&quot;Accounting
for the Impairment or Disposal of Long-Lived Assets&quot;</i>. </p>
<p align="justify">On February 1, 2007, the Company&#146;s subsidiary, TCH, entered
into two TRT Project Joint-Operation Agreements (&quot;Joint-Operation Agreement&quot;)
with Xi&#146;an Yingfeng Science and Technology Co., Ltd. (&quot;Yingfeng&quot;). Yingfeng is a
joint stock company registered in Xi&#146;an, Shaanxi Province, the PRC, and engages
in the business of designing, installing, and operating TRT systems and sales of
other renewable energy products. </p>
<p align="center">&lt;Page&gt; 8 </p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p align="justify">Under the Joint-Operation Agreement, TCH and Yingfeng jointly
operate a top gas recovery turbine projects (&quot;TRT Project&quot;) which is to design,
construct, install and operate a TRT system and lease to Zhangzhi Iron and Steel
Holdings Ltd. (&quot;Zhangzhi&quot;). The total investment costs contributed by TCH is
approximately $1,426,000 (equivalent to RMB10,690,000). TCH provides various
forms of investments and properties into the TRT Project including cash,
hardware, software, equipments, major components and devices. The construction
of the TRT Project was completed and put into operation in August 2007. TCH
became entitled to the rights, titles, benefits and interests in the TRT Project
and received a monthly rental payment of $58,700 (equivalent to RMB440,000) from
Zhangzhi for a lease term of thirteen years. At the end of the lease term, TCH
transfers the rights and titles of the TRT Project to Zhangzhi without cost. </p>
<p align="justify">Under another Joint-Operation Agreement, TCH and Yingfeng
jointly operate a TRT Project which is to design, construct, install and operate
a TRT system and lease to Xingtai Iron and Steel Company Ltd. (&quot;Xingtai&quot;). TCH
provides various forms of investments and properties into the TRT Project
including cash, hardware, software, equipments, major components and devices.
The total estimated investment cost of this TRT Project is approximately
$3,900,000 (equivalent to RMB30,000,000). The construction of the TRT Project
was completed and put into operation in February 2007. TCH became entitled to
all the rights, titles, benefits and interests of the TRT Project and received a
monthly rental payment of $116,930 (equivalent to RMB900,000) from Xingtai for a
lease term of five years. At the end of the lease term, TCH transfers all the
rights and titles of the TRT Project to Xingtai without cost. </p>
<p align="justify">On September 21, 2007, the Company&#146;s subsidiary, TCH changed
its name to &quot;Shanghai TCH Energy Technology Co., Ltd.&quot;. </p>
<p align="justify">Except as indicated, amounts reflected in the condensed
consolidated financial statements or the notes thereto relate to our continuing
operations. </p>
<b>
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>3
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES </p>
</b><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Basis of
presentation </font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">These accompanying condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States of America (&quot;US GAAP&quot;) and pursuant to the rules
and regulations of the Securities and Exchange Commission (&quot;SEC&quot;) for annual
financial statements. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Use of estimates
</font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">In preparing these condensed consolidated financial
statements, management makes estimates and assumptions that affect the reported
amounts of assets and liabilities in the balance sheets and revenues and
expenses during the year reported. Actual results may differ from these
estimates. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Basis of
consolidation </font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">The condensed consolidated financial statements include the
accounts of CREG and, its subsidiaries, Sifang Holdings, and TCH. Substantially
all of the Company's revenues are derived from the operations of TCH, which
represents substantially all of the Company&#146;s consolidated assets and
liabilities as of September 30, 2007. </p>
<p align="justify">Subsidiaries are those entities in which the Company,
directly or indirectly, controls more than one half of the voting power; has the
power to govern the financial and operating policies; to appoint or remove the
majority of the members of the board of directors; or to cast majority of votes
at the meeting of directors. </p>
<p align="center">&lt;Page&gt; 9</p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p align="justify">All significant inter-company balances and transactions
within the Company have been eliminated on consolidation. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Cash and cash
equivalents </font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">Cash and cash equivalents are carried at cost and represent
cash on hand, demand deposits placed with banks or other financial institutions
and all highly liquid investments with an original maturity of three months or
less as of the purchase date of such investments. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Accounts
receivable and concentration of credit risk </font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">Accounts receivable are recorded at the invoiced amount and
do not bear interest. The Company extends unsecured credit to its customers in
the ordinary course of business but mitigates the associated risks by performing
credit checks and actively pursuing past due accounts. An allowance for doubtful
accounts is established and determined based on managements&#146; assessment of known
requirements, aging of receivables, payment history, the customer&#146;s current
credit worthiness and the economic environment. As of September 30, 2007 and
2006, the Company recorded an allowance for doubtful accounts of $nil and
$1,917, respectively. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Impairment of
long-life assets </font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">In accordance with SFAS No. 144,<i> &quot;Accounting for the
Impairment or Disposal of Long-Lived Assets,&quot; </i>the Company reviews its
long-lived assets, including property, plant and equipment, for impairment
whenever events or changes in circumstances indicate that the carrying amounts
of the assets may not be fully recoverable. If the total of the expected
undiscounted future net cash flows is less than the carrying amount of the
asset, a loss is recognized for the difference between the fair value and
carrying amount of the asset. There has been no impairment as of September 30,
2007. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Direct financing
lease and related revenue recognition </font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">The Company invests and leases TRT system to Xingtai and
Zhangzhi under a joint operation arrangement with Yingfeng. Ultimately, the
Company will transfer all benefits, risks and ownership of the TRT system to
Xingtai and Zhangzhi at the end of the lease term. The Company&#146;s investment in
these projects is recorded as direct financing leases in accordance with SFAS
No. 13, <i>&quot;Accounting for Leases&quot;</i> and its various amendments and
interpretations. The investment in direct financing lease consists of the sum of
the total future minimum contracted payments receivable and the estimated
unguaranteed residual value of lease equipment, less unearned finance income.
Unearned finance income, which is recognized as revenue over the term of the
financing by the effective interest method, represents the excess of the total
future minimum lease payments plus the estimated unguaranteed residual value
expected to be realized at the end of the lease term over the cost of the relate
equipment. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Cost of revenue
</font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">Cost of revenue consists primarily of related business tax of
5% on revenues from direct financing lease. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Comprehensive
income </font></font><font FACE="Symbol MT" LANG="JA" SIZE="2">
</p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">SFAS No.130, <i>&quot;Reporting Comprehensive Income&quot;,</i>
establishes standards for reporting and display of comprehensive income, its
components and accumulated balances. Comprehensive income as defined includes
all changes in equity during a period from non-owner sources. Accumulated
comprehensive income, as presented in the accompanying statement of changes in
stockholders&#146; equity consists of changes in unrealized gains and losses on
foreign currency translation. This comprehensive income is not included in the
computation of income tax expense or benefit. </p>
</font>
<p align="center">&lt;Page&gt; 10</p>
<hr color="#000000" size="5"><p style="page-break-before: always"></font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Income taxes
</font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p ALIGN="JUSTIFY">The Company accounts for income taxes in interim periods as
required by Accounting Principles Board Opinion No. 28, </font>
<font FACE="Times New Roman" SIZE="2"><i>&quot;Interim Financial Reporting&quot;</i> and
as interpreted by FASB Interpretation No. 18, </font>
<font FACE="Times New Roman" SIZE="2"><i>&quot;Accounting for Income Taxes in Interim
Periods.&quot;</i> The Company has determined an estimated annual effective tax rate.
The rate will be revised, if necessary, as of the end of each successive interim
period during the Company&#146;s fiscal year to the Company&#146;s best current estimate.
The estimated annual effective tax rate is applied to the year-to-date ordinary
income at the end of the interim period. </p>
<p ALIGN="JUSTIFY">The Company also accounts for income tax using SFAS No. 109
</font><font FACE="Times New Roman" SIZE="2"><i>&quot;Accounting for Income Taxes&quot;</i>,
which requires the asset and liability approach for financial accounting and
reporting for income taxes. Under this approach, deferred income taxes are
provided for the estimated future tax effects attributable to temporary
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases, and for the expected future tax
benefits from loss carry-forwards and provisions, if any. Deferred tax assets
and liabilities are measured using the enacted tax rates expected in the years
of recovery or reversal and the effect from a change in tax rates is recognized
in the consolidated statement of operations and comprehensive income in the
period of enactment. A valuation allowance is provided to reduce the amount of
deferred tax assets if it is considered more likely than not that some portion
of, or all of the deferred tax assets will not be realized. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Net income (loss) per share
</font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p ALIGN="JUSTIFY">The Company calculates net income (loss) per share in
accordance with SFAS No.128, </font><font FACE="Times New Roman" SIZE="2"><i>
&quot;Earnings per Share&quot;</i>. Basic net income (loss) per share is computed by
dividing the net income (loss) by the weighted-average number of common shares
outstanding. Diluted net income (loss) per share is computed similar to basic
net income (loss) per share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the
potential common stock equivalents had been issued and if the additional common
shares were dilutive. The Company did not have any potentially dilutive common
share equivalents as of September 30, 2007 and 2006. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2"><font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Foreign currencies
translation </font></p>
</font><font FACE="Times New Roman" SIZE="2">
<p ALIGN="JUSTIFY">Transactions denominated in currencies other than the
functional currency are translated into the functional currency at the exchange
rates prevailing at the dates of the transaction. Monetary assets and
liabilities denominated in currencies other than the functional currency are
translated into the functional currency using the applicable exchange rates at
the balance sheet dates. The resulting exchange differences are recorded in the
consolidated statement of operations. </p>
<p ALIGN="JUSTIFY">The functional and reporting currency of the Company is the
United States dollars (&quot;U.S. dollars&quot;). The accompanying condensed consolidated
financial statements have been expressed in U.S. dollars. In addition, the
Company&#146;s operating subsidiary in the PRC, TCH maintains its books and records
in its local currency, the Renminbi Yuan (&quot;RMB&quot;), which is functional currency
as being the primary currency of the economic environment in which its
operations are conducted. </p>
<p ALIGN="JUSTIFY">Assets and liabilities of its subsidiary whose functional
currency is not the U.S. dollars are translated into US dollars, in accordance
with SFAS No 52, &quot;</font><font FACE="Times New Roman" SIZE="2"><i>Foreign
Currency Translation&quot;</i>, using the exchange rate on the balance sheet date.
Revenues and expenses are translated at average rates prevailing during the
period. The gains and losses resulting from translation of financial statements
of foreign subsidiary is recorded as a separate component of accumulated other
comprehensive income within the statement of stockholders&#146; equity. </p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="center">&lt;Page&gt; 11</p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font><font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Segment reporting </p>
<p align="justify">SFAS No.131 <i>&quot;Disclosures about Segments of an Enterprise
and Related Information&quot;</i> establishes standards for reporting information
about operating segments on a basis consistent with the Company&#146;s internal
organization structure as well as information about geographical areas, business
segments and major customers in financial statements. The Company operates in
one reportable operating segment. </p>
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font><font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Fair value of
financial instruments </p>
<p align="justify">The carrying value of the Company&#146;s financial instruments,
which include cash and cash equivalents, accounts receivables, inventories,
advances and deposits to suppliers, accounts payable, other current liabilities,
approximate their fair values due to the short-term maturity of these
instruments. </p>
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font><font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Related parties </font> </p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">Parties, which can be a corporation or individual, are
considered to be related if the Company has the ability, directly or indirectly,
to control the other party or exercise significant influence over the other
party in making financial and operating decisions. Companies are also considered
to be related if they are subject to common control or common significant
influence. </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="2">
<font FACE="Times New Roman" SIZE="2">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font><font FACE="Times New Roman" SIZE="2">&#9679;</font></p>
<p align="justify" style="margin-left: 30; margin-top: -11pt">Recently issued
accounting standard </font> </p>
</font><font FACE="Times New Roman" SIZE="2">
<p align="justify">The Company has reviewed all recently issued, but not yet
effective, accounting pronouncements and do not believe the future adoption of
any such pronouncements may be expected to cause a material impact on its
financial condition or the results of its operations. </p>
<p align="justify">In June 2006, the FASB issued Interpretation No. 48, <i>
Accounting for Uncertainty in Income Taxes</i> (&quot;FIN 48&quot;). FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in the Company&#146;s financial
statements in accordance with SFAS No. 109. FIN 48 prescribes a recognition
threshold and measurement attributes for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. The
Company adopted FIN48 on January 1, 2007. The adoption of FIN 48 did not have an
effect on the results of operations or financial condition. The Company did not
have any unrecognized tax benefits as of September 30, 2007. </p>
<p align="justify">On February 15, 2007, the Financial Accounting Standards
Board (&quot;FASB&quot;) issued Statement of Financial Accounting Standards No.159,<i>
&quot;The Fair Value Option for Financial Assets and Financial Liabilities &#151;
Including an Amendment of FASB Statement No.115&quot; </i>(&quot;SFAS 159&quot;). This standard
permits an entity to measure financial instruments and certain other items at
estimated fair value. Most of the provisions of SFAS No.159 are elective;
however, the amendment to FASB No.115, &quot;Accounting for Certain Investments in
Debt and Equity Securities,&quot; applies to all entities that own trading and
available-for-sale securities. The fair value option created by SFAS 159 permits
an entity to measure eligible items at fair value as of specified election
dates. The fair value option (a) may generally be applied instrument by
instrument, (b) is irrevocable unless a new election date occurs, and (c) must
be applied to the entire instrument and not to only a portion of the instrument.
SFAS 159 is effective as of the beginning of the first fiscal year that begins
after November 15, 2007. Early adoption is permitted as of the beginning of the
previous fiscal year provided that the entity (i) makes that choice in the first
120 days of that year, (ii) has not yet issued financial statements for any
interim period of such year, and (iii) elects to apply the provisions of FASB
157. Management is currently evaluating the impact of SFAS 159, if any, on the
Company&#146;s financial statements. </p>
<p align="center">&lt;Page&gt; 11</p>
<hr color="#000000" size="5"><p style="page-break-before: always"><b>
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>
<font SIZE="2">4</font>
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">DISCONTINUED
OPERATIONS </p>
</b>
<p ALIGN="JUSTIFY">Since January 2007, the Company has gradually phased out and
substantially scaled down most of its business of mobile phone distribution and
provision of pager and mobile phone value-added information services. In the
first and second quarter of 2007, the Company did not engage in any substantial
transaction or activity in connection with these businesses. On May 10, 2007,
the Company approved and announced that it completely ceased and discontinued
these businesses. Accordingly, the results of the discontinued operations have
been segregated from continuing operations in the consolidated statements of
operations and cash flows for the nine-month periods ended September 30, 2007
and 2006. The discontinued operations incurred an income of $44,578 and $85,782
for the nine month periods ended September 30, 2007 and 2006, respectively and
the basic income per share from discontinued operations was $0.00 and $0.01 for
the respective periods. The income represented the write down of deferred
revenue generated from the provision of pager value-added information services.
</p>
<b>
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>5
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">DUE FROM A THIRD
PARTY </p>
</b>
<p ALIGN="JUSTIFY">The amount due from a third party, Shanghai Sifang
Information Technology Co. (&quot;Sifang Information&quot;), a Shanghai-based privately
owned enterprise established under the laws of the PRC, is unsecured,
non-interest bearing and repayable in the next twelve months. </p>
<p ALIGN="JUSTIFY">During 2006, Sifang Information was considered as a related
party whereas its shareholders were related through common ownership with the
major shareholders of the Company. On January 24, 2007, these shareholders of
Sifang Information disposed of their ownership in the Company and Sifang
Information became a non-related party. </p>
<b>
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>6
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">INVESTMENT IN
DIRECT FINANCING LEASES </p>
</b>
<p ALIGN="JUSTIFY">Under direct financing leases, TCH leases a TRT systems to
Xingtai and Zhangzhi with a term of five years and thirteen years, respectively.
Unguaranteed residuals for direct financing leases represent the estimated
amounts recoverable at lease termination from lease extension or disposition of
the equipment. </p>
<p>The components of the net investment in direct financing leases as of
September 30, 2007 are as follows: </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" height="168">
  <tr>
    <td WIDTH="85%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="49%" COLSPAN="2" align="center" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19">
    <font FACE="Times New Roman" SIZE="2">September 30, 2007</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1" valign="bottom" height="20">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" height="20">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="15" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">Total future minimum lease payments
    receivables</font></td>
    <td WIDTH="3%" valign="bottom" height="15" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" height="15" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">15,282,818</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="19">
    <font FACE="Times New Roman" SIZE="2">Less: estimated executory costs</font></td>
    <td WIDTH="3%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" height="19">
    <font FACE="Times New Roman" SIZE="2">(824,440)</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">Less: unearned rental income</font></td>
    <td WIDTH="3%" valign="bottom" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" height="19" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">(11,532,401)</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="20">
    <font FACE="Times New Roman" SIZE="2">Residuals, net of unearned residual
    income</font></td>
    <td WIDTH="3%" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="20">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="20">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,034,418</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="19" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1" valign="bottom" height="20" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" height="20" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="21">
    <font FACE="Times New Roman" SIZE="2">Net investment in direct financing
    leases</font></td>
    <td WIDTH="3%" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" height="22">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" height="22">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">4,960,395</font></td>
  </tr>
</table>
<p align="center">&lt;Page&gt; 13</p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p align="justify">As of September 30, 2007, the future minimum rentals to be
received on non-cancelable direct financing leases are as follows:</p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="85%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Three
    months ending December 31, 2007</font></td>
    <td WIDTH="3%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">536,286</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom"><font FACE="Times New Roman" SIZE="2">Years
    ending December 31,</font></td>
    <td WIDTH="3%" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">2008</font></td>
    <td WIDTH="3%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,145,144</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom"><font size="2">2009</font></td>
    <td WIDTH="3%" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">2,145,144</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" bgcolor="#E6E6E6"><font size="2">2010</font></td>
    <td WIDTH="3%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">2,145,144</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom"><font size="2">2011</font></td>
    <td WIDTH="3%" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">2,265,208</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" bgcolor="#E6E6E6"><font size="2">Thereafter</font></td>
    <td WIDTH="3%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">6,045,892</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="19">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1" valign="bottom" height="20">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" height="20">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="85%" valign="bottom" height="21" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" height="22" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    $</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" height="22" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">15,282,818</font></td>
  </tr>
</table>
</font></font><b><font FACE="Times New Roman" SIZE="2">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>7
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">DUE TO A THIRD
PARTY </p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p align="justify">The balance represented a temporary advance from Yingfeng in
relation to the TRT projects during the nine months ended September 30, 2007.
The balance is unsecured, non-interest bearing and repayable in the next twelve
months. </font><b><font FACE="Times New Roman" SIZE="2"></p>
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>8
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">DUE TO A DIRECTOR</p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p align="justify">The balances due to a director represented unsecured advances
which are interest free and repayable in the next twelve months. </p>
</font><b><font FACE="Times New Roman" SIZE="2">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>9
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">ACCRUED
LIABILITIES AND OTHER PAYABLES </p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p align="justify">Accrued liabilities and other payables consist of the
following: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="35%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" COLSPAN="2" align="center" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">September 30, 2007</font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" COLSPAN="2" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p align="center">December 31, 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="15%" align="center" style="border-top-style: solid; border-top-width: 1" colspan="2" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(audited)</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="35%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Other
    payables</font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">507,967</font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">448,714</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" valign="bottom"><font FACE="Times New Roman" SIZE="2">
    Employee welfare payable</font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">222,772</font></td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">213,870</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" valign="bottom" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    Accrued expenses</font></td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">68,641</font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">279,823</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="35%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">799,380</font></td>
    <td WIDTH="3%" align="left" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">942,407</font></td>
  </tr>
</table>
<b><font FACE="Times New Roman" SIZE="2">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>10
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">INCOME TAXES </p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p align="justify">The Company is registered in the United States of America and
has operations in the United States of America and the PRC. For the three and
nine months ended September 30, 2007, there was no operation in the United
States of America. </p>
<p align="justify">The Company&#146;s subsidiary generated substantially all of its
net income from its PRC operation and has recorded income tax provision of
$53,803 and $100,417 for the three and nine months ended September 30, 2007
respectively. Its effective income tax rates for the three and nine months ended
September 30, 2007 were 15%. There were no effective income tax rates for the
three and nine months ended September 30, 2006 since the PRC operation was
incurred net operating losses during the period. </p>
</font><b><font FACE="Times New Roman" SIZE="2">
<font FACE="Symbol MT" LANG="JA" SIZE="2">
<p align="justify" style="margin-bottom: 0"></font>
<font FACE="Times New Roman" SIZE="2">NOTE<font FACE="Arial" SIZE="2"> </font>11
</font></p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">CONCENTRATION AND
RISK </p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p style="margin-bottom: 0">(a) </p>
<p style="margin-left: 30; margin-top: -11pt">Major customers</p>
</font>
<p align="center"><font size="2">&lt;Page&gt; 14</font></p>
<hr color="#000000" size="5"><p style="page-break-before: always"><font FACE="Times New Roman" SIZE="2">
<p align="justify">For the nine months ended September 30, 2007, 100% of the
Company&#146;s assets were located in the PRC and 100% of the Company&#146;s revenues were
derived from customers located in the PRC. </p>
<p align="justify">For the nine months ended September 30, 2007, customer who
accounts for 10% or more of revenues is presented as follows: </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="55%" valign="bottom" style="border-style: none; border-width: medium">
    <u><font FACE="Times New Roman" SIZE="2">Customers</font></u></td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" colspan="2" valign="bottom">
    <br>
    <font FACE="Times New Roman" SIZE="2">Revenue</font></td>
    <td WIDTH="3%" align="center" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">Percentage of<br>
    revenue</font></td>
    <td WIDTH="3%" align="center" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-left-style: none; border-left-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1; border-right-style:none; border-right-width:medium" colspan="2" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">Accounts<br>
    receivable</font></td>
  </tr>
  <tr>
    <td WIDTH="55%" valign="bottom" style="border-style: none; border-width: medium">
    &nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-right-style:none; border-right-width:medium; border-bottom-style:none; border-bottom-width:medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-left-style:none; border-left-width:medium; border-bottom-style:none; border-bottom-width:medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="left" style="border-left-style: none; border-left-width: medium; border-right-style:none; border-right-width:medium; border-bottom-style:none; border-bottom-width:medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-right-style:none; border-right-width:medium; border-bottom-style:none; border-bottom-width:medium" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-bottom-style:none; border-bottom-width:medium" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="55%" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">Customer A</font></td>
    <td WIDTH="3%" align="left" style="border-style:none; border-width:medium; " valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-style:none; border-width:medium; " valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">721,615</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-style:none; border-width:medium; " valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">89%</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style:none; border-width:medium; " valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">123</font></td>
  </tr>
  <tr>
    <td WIDTH="55%" valign="bottom" style="border-style: none; border-width: medium">
    <font FACE="Times New Roman" SIZE="2">Customer B</font></td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-left-style:none; border-left-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">89,188</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-left-style: none; border-left-width: medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">11%</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1" valign="bottom">&nbsp;</td>
    <td WIDTH="9%" align="right" valign="bottom" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="55%" valign="bottom" style="border-style: none; border-width: medium" bgcolor="#E6E6E6">
    &nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: none; border-bottom-width: medium; border-right-style:none; border-right-width:medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-right-width: medium; border-bottom-style: none; border-bottom-width: medium; border-left-style:none; border-left-width:medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-left-style: none; border-left-width: medium; border-bottom-style: none; border-bottom-width: medium; border-right-style:none; border-right-width:medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-left-width: medium; border-bottom-style: none; border-bottom-width: medium; border-right-style:none; border-right-width:medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: none; border-bottom-width: medium; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="55%" valign="bottom" style="border-style: none; border-width: medium">
    &nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-top-style: none; border-right-style:none; border-bottom-style:double; border-bottom-width:3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: none; border-top-style: none; border-left-style:none; border-bottom-style:double; border-bottom-width:3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">810,803</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-left-style: none; border-top-style: none; border-right-style:none; border-bottom-style:double; border-bottom-width:3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">100%</font></td>
    <td WIDTH="3%" align="left" style="border-style: none; border-width: medium" valign="bottom">&nbsp;</td>
    <td WIDTH="3%" align="left" style="border-left-style: none; border-top-style: none; border-right-style:none; border-bottom-style:double; border-bottom-width:3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: none; border-left-style:none; border-right-style:none; border-bottom-style:double; border-bottom-width:3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">123</font></td>
  </tr>
</table>
<p style="margin-bottom: 0">(b) </p>
<p style="margin-left: 30; margin-top: -11pt">Credit risk </p>
<p align="justify">Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of cash and trade
accounts receivable. The Company performs ongoing credit evaluations of its
customers&#146; financial condition, but does not require collateral to support such
receivables. </p>
</font><b><font FACE="Times New Roman" SIZE="2">
<p align="justify">NOTE</font><font FACE="Arial" SIZE="2"> </font>
<font FACE="Times New Roman" SIZE="2">12 COMPARATIVE FIGURES</font></b><font FACE="Times New Roman" SIZE="2">
</p>
<p align="justify">Comparative figures included in prior year&#146;s consolidated
balance sheet and the consolidated statements of operations and cash flows have
not been included in these condensed consolidation financial statements as they
were not comparable because the Company had discontinued its business in mobile
phone distribution and provision of pager and mobile phone value-added
information services and changed to recycling energy business in the provision
of energy saving and recycling products and services. </p>
</font><b><font FACE="Times New Roman" SIZE="2">
<p align="justify">NOTE</font><font FACE="Arial" SIZE="2"> </font>
<font FACE="Times New Roman" SIZE="2">13 SUBSEQUENT EVENTS </p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p align="justify">On November 13, 2007, the Company approved the 2007
Non-statutory Stock Option Plan (the &quot;2007 Plan&quot;) under the Form S-8
Registration Statement. Pursuant to the 2007 Plan, the Company may issue stock,
or grant options at $1.23 per share to acquire the Company's common stock at par
value $0.001 (the &quot;Stock&quot;), with an aggregate amount of 3,000,000 shares of the
Stock, from time to time to employees and directors of the Company or other
individuals, including consultants or advisors, all on the terms and conditions
set forth in the 2007 Plan. The vesting terms of options grant under the 2007
Plan is subject to the Non-Statutory Stock Option Agreements for managerial and
non-managerial employees. For managerial employees, no more than 15% of the
total stock options shall vest and become exercisable on the six month
anniversary of the grant date. An additional 15% and 50% of the total stock
options shall vest and become exerciable on the first and second year
anniversary of the grant date, respectively. The remaining 20% of the total
stock options shall vest and become exercisable on the third year anniversary of
the grant date. For non-managerial employees, no more than 30% of the total
stock options shall vest and become exercisable in the first year anniversary of
the grant date. An additional 50% of the total stock options shall vest and
become exercisable in the second year anniversary of the grant date. The
remaining 20% of the total stock options shall vest and become exercisable on
the third year anniversary of the grant date. Each stock option shall become
vested and exercisable over a period of no longer than five years from the grant
date. </p>
<p align="justify">On November 13, 2007, the Company granted stock options with
an aggregate amount of 3,000,000 shares of the Stock to twenty (20) managerial
and non-managerial employees under the 2007 Plan. The fair value of all options
granted is determined approximately as $2,383,430, using the Black-Scholes
option pricing model. </p>
<p align="center">&lt;Page&gt; 15</p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p align="justify">On November 14, 2007, the Company entered into an Assets
Transfer and Share Issuance Agreement (the &quot;Agreement A&quot;) with Mr. Zheng Hanqiao
(&quot;Mr. Zheng&quot;), the President and major shareholder of the Company and TCH. Under
the Agreement A, Mr. Zheng sold and transferred two TRT systems (the &quot;Assets&quot;)
valued at $9,677,420 (equivalent to RMB 72,000,000) to the Company in exchange
for 7,867,821 shares of common stock of the Company at a 23-days weighted
average market price of $1.23 per share. Under the same Agreement A, the Company
subsequently sold and transferred to TCH the aforementioned Assets for a total
price of $9,677,420 (equivalent to RMB 72,000,000). Currently, the management of
TCH has no intention to engage the Assets to any new direct financing projects.
</p>
<p align="justify">Also on November 14, 2007, the Company entered into a Share
Purchase Agreement (the &quot;Agreement B&quot;) with Mr. Zheng for a cash investment of
$4,032,258 in exchange for 3,278,259 shares of common stock of the Company
issued at a 23-days weighted average market price of $1.23 per share. </p>
<p align="justify">As a result of the Agreement A and the Agreement B, Mr. Zheng
acquired a total of 11,146,080 shares of common stock of the Company at a
23-days weighted average market price of $1.23 per share and these shares were
fully issued on November 14, 2007. As of 19 November 2007, Mr. Zheng owned
approximately 68% of the issued and outstanding shares of the Company&#146;s common
stock. </p>
<p align="justify">On November 16, 2007, the Company entered into a Stock and
Notes Purchase Agreement with two investors (the &quot;Investors&quot;) pursuant to which
the Company agreed to sell and issue, and the Investors agreed to purchase, (i)
$5,000,000 principal amount of 10% Senior Secured Convertible Promissory Note
(the &quot;First Note&quot;), plus accrued interest thereon, expiring on November 16,
2009; (ii) 4,066,706 shares of newly issued common stock, $0.001 par value, of
the Company at an offering price of $1.23 (the &quot;Purchased Shares&quot;); and (iii)
$15,000,000 principal amount of 5% Senior Secured Convertible Promissory Note
(the &quot;Second Note&quot;). </p>
<p align="justify">Both the First Note and the Second Note were secured by a
perfected first priority lien on 50% of all of the equity interests of the
pledgor under the Share Pledge Agreement. Under the Share Pledge Agreement dated
as of November 16, 2007, its principal shareholder of the Company, Mr. Hanqiao
Zheng agreed to pledge 50% of his shareholding in an aggregate of 19,306,943
shares of common stock (equivalent to 9,653,471 of pledged shares) as collateral
to the Investors. </p>
<p align="justify">The Company paid a placement fee up to a maximum of $400,000.
Proceeds of the financing will be used to fund the capital investments required
under its Business Plan and for its other working capital needs. </p>
<p align="justify">The Company has agreed to file a registration statement with
the Securities and Exchange Commission in order to register the resale of the
shares issuable upon conversion of the First Note and the Second Note and the
Purchased Shares under the Registration Rights Agreement dated as of November
16, 2007.</p>
<p align="center">&lt;Page&gt; 16</p>
</font><hr color="#000000" size="5"><p style="page-break-before: always">

<font face="Times New Roman" size="2">
<p align="justify"><b>ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION </b></p>
<p align="justify" style="text-indent: 30">This report contains certain
forward-looking statements that involve risks and uncertainties. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as &quot;may,&quot;
&quot;will,&quot; &quot;could,&quot; &quot;expect,&quot; &quot;plan,&quot; &quot;intend,&quot; &quot;anticipate,&quot; &quot;believe,&quot;
&quot;estimate,&quot; &quot;predict,&quot; &quot;potential,&quot; or &quot;continue,&quot; or the negative of such terms
or other comparable terminology. These statements are only predictions and are
subject to certain risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described herein. </p>
<p style="TEXT-INDENT: 30px" align="justify">The following discussion should be
read in conjunction with our consolidated financial statements and the notes
thereto and the other financial information appearing elsewhere in this
document. We do not undertake to publicly update or revise any of its
forward-looking statements even if experience or future changes show that the
indicated results or events will not be realized. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. </p>
<p><b>Overview of Business Background </b></p>
<p style="TEXT-INDENT: 30px">On May 8, 1980, China Recycling Energy Corporation
(the &quot;Company&quot;) (formerly known as China Digital Wireless, Inc.) was
incorporated under the laws of the State of Colorado. </p>
<p style="TEXT-INDENT: 30px">On September 6, 2001, the Company re-domiciled its
state of incorporation from Colorado to Nevada. </p>
<p style="TEXT-INDENT: 30px" align="justify">On June 23, 2004, the Company
entered into a stock exchange agreement with Sifang Holdings Co. Ltd. (&quot;Sifang
Holdings&quot;) and certain shareholders. Pursuant to the stock exchange agreement,
the Company issued 13,782,636 shares of its common stock in exchange for a 100%
equity interest in Sifang Holdings, making Sifang Holdings a wholly owned
subsidiary of the Company. Sifang Holdings was established under the laws of the
Cayman Islands on February 9, 2004 for the purpose of holding a 100% equity
interest in Shanghai TCH Data Technology Co., Ltd. (&quot;TCH&quot;). TCH was established
as a foreign investment enterprise in Shanghai under the laws of the PRC on May
25, 2004. </p>
<p style="TEXT-INDENT: 30px" align="justify">From May 2004 to December 2006, the
Company through TCH engaged in the business of mobile phone distribution,
advertising services and other provisions of pager and mobile phone value-added
information services under the Company&#146;s previous name &quot;China Digital Wireless,
Inc.&quot; </p>
<p style="TEXT-INDENT: 30px" align="justify">Since January 2007, the Company has
gradually phased out and substantially scaled down most of its business of
mobile phone distribution and provision of pager and mobile phone value-added
information services. In the first quarter of 2007, the Company did not engage
in any substantial transaction and activity in connection to these businesses.
</p>
<p style="TEXT-INDENT: 30px" align="justify">On February 1, 2007, the Company's
subsidiary, TCH, entered into a TRT Project Joint-Operation Agreement
(&quot;Joint-Operation Agreement&quot;) with Xi'an Yingfeng Science and Technology Co.,
Ltd. (&quot;Yingfeng&quot;). Yingfeng is a Chinese company that is located in Xi'an,
Shaanxi Province, China, and is engaging in the business of designing, selling,
installing, and operating TRT systems and other renewable energy products. </p>
<p style="TEXT-INDENT: 30px" align="justify">Under the Joint-Operation
Agreement, TCH and Yingfeng will jointly pursue a top gas recovery turbine
project (&quot;Project&quot;) which is to design, construct, install and operate a TRT
system in Xingtai Iron and Steel Company, Ltd. (&quot;Xingtai&quot;). This project was
originally initiated by a Contract to Design and Construct TRT System (&quot;Project
Contract&quot;) entered by Yingfeng and Xingtai on September 26, 2006. TCH provides
various forms of investments and properties into the Project including cash,
hardware, software, equipments, major components and devices. In return, TCH
becomes entitled to all the rights, titles, benefits and interests that Yingfeng
originally had under the Project Contract, including but not limited to the cash
payment made by Xingtai on regular basis and other property rights and
interests. TCH also entered direct financing lease with Xingtai. Under the
direct financing lease, TCH provides various forms of investments and properties
into the Project including cash, hardware, software, equipments, major
components and devices to complete a TCH system and leases the TRT system to
Xingtai with a term of five years. The total future minimum lease receivables
under the direct financing lease are $ 6,781,863. In February and March 2007,
the Company and TCH have taken several preliminary actions in preparation for
the full pursuit of the Project, including selecting and purchasing necessary
components and software for TRT system, organizing and training the technician
team for the Project and developing the construction and installation plan for
the TRT system. On April 08, 2007, the Board of the Company approved and made
effective this Joint-Operation Agreement. </p>
<p style="TEXT-INDENT: 30px" align="justify">On March 8, 2007, the name of the
Company was changed to &quot;China Recycling Energy Corporation&quot; and engages in
recycling energy business, providing energy saving and recycling products and
services. Consequently, the businesses of mobile phone distribution and
provision of pager and mobile phone value-added information services were
discontinued. </p>
<p align="center">&lt;Page&gt; 17 </p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p style="TEXT-INDENT: 30px" align="justify">On May 10, 2007, the Company
officially announced that it changed its main business operations to energy
saving and recycling systems and services. The new business operations include
developing and constructing recovered energy power systems such as TRT(Blast-Furnace
Top Pressure Recovery Turbine Unit), CHPG (Power generation by recovering cement
residual heat without additional fuel), GTPG(Gas turbine power generation) and
CGGE(Comprehensive utilization of coal gangue generating electricity);selling
the electricity generated by the recovered energy power systems to steel plants
and other customers; constructing power plants on a turnkey - EPC (Engineering,
Procurement and Construction) basis for developers, industrial users and public
facilities; developing flexible, custom-tailored ECO-Energy solutions that
enable customers to quickly and easily improve energy efficiency and educe
fossil fuel consumption and Green House Gases emission. </p>
<p style="TEXT-INDENT: 30px" align="justify">In connection with the change of
business operations, the Company has established a technical team that is
composed of recognized experts and technicians specialized in the development
and construction of energy saving and recycling systems. </p>
<p style="TEXT-INDENT: 30px">On September 21, 2007, TCH changed its name to
&quot;Shanghai TCH Energy Technology Co., Ltd.&quot;. </p>
<p><b>Discussion and Analysis of Operating Results </b></p>
<p>Nine months ended September 30, 2007 Compared to Nine months Ended September
30, 2006 </p>
<p><b>Discontinued Operation </b></p>
<p style="TEXT-INDENT: 30px" align="justify">Since January 2007, the Company has
gradually phased out and substantially scaled down most of its business of
mobile phone distribution, advertising services and provision of pager and
mobile phone value-added information services. On May 10, 2007, the Company
approved and announced that it completely ceased and discontinued these
businesses. For the nine months ended September 30, 2007, the Company did not
engage in any substantial transaction and activity in connection to these
businesses. Accordingly, the results of the discontinued operations have been
segregated from continuing operations in the consolidated statements of
operations and cash flows for the nine-month periods ended September 30, 2007
and 2006. For the nine months ended September 30, 2007, there was no substantial
sales revenue from product sales, product sales to related parties, and net
information and advertising service revenue related to the discontinued
operations and there was no cost of goods sold and cost of service related to
discontinued operations, either. The discontinued operations incurred an income
of $44,578 and $85,782 for nine months ended September 30, 2007 and 2006,
respectively and the basic income per share from discontinued operations was
$0.00 and $0.01 for the respective periods. This income represented the write
down of deferred revenue generated from the provision of pager value-added
information services. </p>
<p><b>Revenues from direct financing lease </b></p>
<p style="TEXT-INDENT: 30px">Revenues for the nine months ended September 30,
2007 were $810,803, which represents the revenue received from Xingtai and
Zhangzhi under the direct financing leases. </p>
<p><b>Cost of Revenues </b></p>
<p style="TEXT-INDENT: 30px" align="justify">Total cost of revenue for the nine
months ended September 30, 2007 consists primarily of related business tax of 5%
on revenues from direct financing leases between the Company, Xingtai and
Zhangzhi. Total cost of revenue for the nine months ended September 30, 2007 was
$58,076. </p>
<p>Gross profit </p>
<p align="center">&lt;Page&gt; 18 </p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p style="TEXT-INDENT: 30px" align="justify">After taking into account the cost
of revenues, our gross profit for the nine months ended September 30, 2007 was
$752,727. The gross profit generated from the operation in the business of
energy saving and recycling systems and services for the nine months ended
September 30, 2007. </p>
<p><b>General and administrative expenses </b></p>
<p style="TEXT-INDENT: 30px" align="justify">General and administrative expenses
for the nine months ended September 30, 2007 decreased by $82,956 to $106,191,
compared to $189,147 for the same period of the prior year, representing a 44%
decrease. The decrease was mainly due to the discontinuance of the business of
mobile phone distribution advertising services and provision of pager and mobile
phone value-added information services. </p>
<p><b>Interest income, net </b></p>
<p style="TEXT-INDENT: 30px">During the nine months ended September 30, 2007,
the interest income derived from bank deposits decreased by $45, compared to
$152 for the same period of the prior year. </p>
<p><b>Income from operations of discontinued components </b></p>
<p style="TEXT-INDENT: 30px" align="justify">Since January 2007, the Company has
gradually phased out and substantially scaled down most of its business of
mobile phone distribution and provision of pager and mobile phone value-added
information services. For the nine months ended September 30, 2007, the Company
did not engage in any substantial transaction and activity in connection to
these businesses. On May 10, 2007, the Company approved and announced that it
completely ceased and discontinued these businesses. Accordingly, the results of
the discontinued operations have been segregated from continuing operations in
the statements of operations and cash flows for the nine months ended September
30, 2007 and 2006. The discontinued operations incurred an income of $44,578 and
$85,782 for the nine months ended September 30, 2007 and 2006, respectively and
the basic income per share from discontinued operations was $0.00 and $0.01 for
the respective periods. The income represented the write down of deferred
revenue generated from the provision of pager value-added information services.
</p>
<p><b>Net income from continuing operation in energy saving and recycling
businesses </b></p>
<p style="TEXT-INDENT: 30px" align="justify">For the nine months ended September
30, 2007, we recorded a net income of $590,798 received from our new operations
in energy saving and recycling businesses. Compared to the second quarter of
2007, the net income from these new operations was increased by $315,356, due to
the growth of our energy saving and recycling businesses. </p>
<p><b>Foreign currency translation gain </b></p>
<p style="TEXT-INDENT: 30px" align="justify">Foreign currency translation gain
for the nine months ended September 30, 2007 increased by $636,383 to $758,236
compared to $121,853 for the same period of the prior year, representing a 522%
increase. The increase was mainly due to the continuous appreciation of RMB Yuan
against US Dollars. </p>
<p><b>Comprehensive income</b></p>
<p style="TEXT-INDENT: 30px" align="justify">We recorded comprehensive income of
$1,349,034 for the nine months ended September 30, 2007, a $1,330,394 increase
in comprehensive income compared to comprehensive income of $18,640 for the same
period of the prior year, representing an increase of approximately 7,137%. The
increase in comprehensive income was attributable to (i) the revenues received
from the direct financing leases related to the Company&#146;s continuing operation
in energy saving and recycling businesses and (ii) the increase of foreign
currency translation. </p>
<p><b>Net income from continuing operations per share </b></p>
<p style="TEXT-INDENT: 30px">For the nine months ended September 30, 2007, our
net income from continuing operation per share was $0.03 compared to the $0.01
net loss from continuing operation per share for the same period of the prior
year, representing a net increase of $0.04 per share. The increase in net income
per share is attributable to the revenues and earnings received from our new
operations in energy saving and recycling business. </p>
<p align="center">&lt;Page&gt; 19 </p>
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<p><b>Liquidity and Capital Resources </b></p>
<p style="TEXT-INDENT: 30px">Our net cash used during the nine months ended
September 30, 2007 was $245,621 compared to net cash of $2,288,499 used during
the same period in 2006, which represents a net change of $[2,042,878]. </p>
<p style="TEXT-INDENT: 30px" align="justify">Net cash flows provided by
operating activities including the discontinued operations and continued
operations was $567,026 during the nine months ended September 30, 2007 compared
to net cash flows used in operating activities of $123,529 during the same
period of the prior year. </p>
<p style="TEXT-INDENT: 30px">Net cash flows used in investing activities related
to the continuing operations in energy saving and recycling business for the
nine months ended September 30, 2007, was $1,723,999. </p>
<p style="TEXT-INDENT: 30px">Net cash provided by financing activities related
to the continuing operations in energy saving and recycling business for the
nine months ended September 30, 2007 was $906,144. </p>
<p style="TEXT-INDENT: 30px" align="justify">We believe that current cash
balance and cash flows from operations, if any, will be sufficient to meet
present growth strategies and related working capital. In regards to the capital
expenditures, we have sufficient funds to expand our operations. We plan to
utilize a combination of internally generated funds from operations with
potential debt and/or equity financings to fund our longer-term growth over a
period of two to five years. The availability of future financings will depend
on market conditions. There is no assurance that the future funding will be
available. </p>
<p style="TEXT-INDENT: 30px">The forecast of the period of time through which
our financial resources will be adequate to support operations is a
forward-looking statement that involves risks and uncertainties. </p>
<p><b>Off-Balance Sheet Arrangements </b></p>
<p style="TEXT-INDENT: 30px" align="justify">We have never entered into any
off-balance sheet financing arrangements and have not formed any special purpose
entities. We have not guaranteed any debt or commitment of other entities or
entered into any options or non-financial assets. </p>
<p><b>Recently issued accounting standard </b></p>
<p style="TEXT-INDENT: 30px" align="justify">The Company has reviewed all
recently issued, but not yet effective, accounting pronouncements and do not
believe the future adoption of any such pronouncements may be expected to cause
a material impact on its financial condition or the results of its operations.
</p>
<p style="TEXT-INDENT: 30px" align="justify">In June 2006, the FASB issued
Interpretation No. 48, <i>Accounting for Uncertainty in Income Taxes</i> (&quot;FIN
48&quot;). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
in the Company&#146;s financial statements in accordance with SFAS No. 109. FIN 48
prescribes a recognition threshold and measurement attributes for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. The Company adopted FIN48 on January 1, 2007. The
adoption of FIN 48 did not have an effect on the results of operations or
financial condition. The Company did not have any unrecognized tax benefits as
of September 30, 2007. </p>
<p style="TEXT-INDENT: 30px" align="justify">On February 15, 2007, the Financial
Accounting Standards Board (&quot;FASB&quot;) issued Statement of Financial Accounting
Standards No.159,<i> &quot;The Fair Value Option for Financial Assets and Financial
Liabilities &#151; Including an Amendment of FASB Statement No.115&quot; </i>(&quot;SFAS 159&quot;).
This standard permits an entity to measure financial instruments and certain
other items at estimated fair value. Most of the provisions of SFAS No.159 are
elective; however, the amendment to FASB No.115, &quot;Accounting for Certain
Investments in Debt and Equity Securities,&quot; applies to all entities that own
trading and available-for-sale securities. The fair value option created by SFAS
159 permits an entity to measure eligible items at fair value as of specified
election dates. The fair value option (a) may generally be applied instrument by
instrument, (b) is irrevocable unless a new election date occurs, and (c) must
be applied to the entire instrument and not to only a portion of the instrument.
SFAS 159 is effective as of the beginning of the first fiscal year that begins
after November 15, 2007. Early adoption is permitted as of the beginning of the
previous fiscal year provided that the entity (i) makes that choice in the first
120 days of that year, (ii) has not yet issued financial statements for any
interim period of such year, and (iii) elects to apply the provisions of FASB
157. Management is currently evaluating the impact of SFAS 159, if any, on the
Company&#146;s financial statements. </p>
<p align="center">&lt;Page&gt; 20 </p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p><b>ITEM 3. CONTROLS AND PROCEDURES </b></p>
<p style="TEXT-INDENT: 30px" align="justify">Prior to the conclusion of the
period covered by this report, we carried out an evaluation, under the
supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures pursuant to
Exchange Act Rule 13(a)-14(c). Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and
procedures are effective in timely alerting them to information relating to us
(including our consolidated subsidiaries) required to be included in our
periodic SEC filings. </p>
<p style="TEXT-INDENT: 30px" align="justify">There were no changes in our
internal controls over financial reporting that materially affected or are
reasonably likely to materially affect our internal control over financial
reporting during the quarter ended June 30, 2007. </p>
<p><b>PART II OTHER INFORMATION </b></p>
<p><b>ITEM 1. LEGAL PROCEEDINGS </b></p>
<p>The Company is not currently involved in any material pending legal
proceedings. </p>
<p><b>ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS </b>
</p>
<p style="TEXT-INDENT: 30px" align="justify">On January 24, 2007, a group of
individual purchasers entered a share purchase agreement with a group of
shareholders of China Digital Wireless, Inc. (&quot;Company&quot;) to purchase 12,911,835
shares of Company&#146;s common stocks owned by Sellers, $ 0.001 par value, for an
aggregate purchase price of $ 490, 000.00. Purchasers are Guohua Ku, Hanqiao
Zheng, Ping Sun, Qianping Huang, Xiaohong Zhang and Lixia Zhang. Sellers are
Caihua Tai, Ming Mao, Ying Shi, Sixing Fu, Xiaodong Zhang, Tianqi Huang, Wei
Huang, Jing Song, Ruijie Yu, and Weiping Jing, all of whom are shareholders of
Company. In accordance with the share purchase agreement, Guohua Ku acquired
9,073,700 shares. Hanqiao Zheng acquired 2,406,365 shares. Ping Sun acquired
745,880 shares. Qianping Huang acquired 157,755 shares. Xiaohong Zhang acquired
72,018 shares. Lixia Zhang acquired 456,117 shares. This sale was a sale of
restricted shares between the shareholders of the Company and the individual
purchasers under Rule 144A of the Securities Act of 1933. Therefore, the Company
did not issue any new share to purchasers and this sale did not change the total
number of issued and outstanding shares of the Company. The proceeds of the sale
were directly paid by the purchasers to the sellers and Company neither was
entitled to nor received the proceeds of the sale. </p>
<p align="center">&lt;Page&gt; 21 </p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p style="TEXT-INDENT: 30px" align="justify">On June 21, 2007, two of Company&#146;s
major shareholders, Guohua Ku and Hanqiao Zheng executed and consummated a share
exchange agreement with a group of individual purchasers all of whom are
shareholders of Xi&#146;an Yingfeng Science and Technology Co. Ltd (&quot;Yingfeng&quot;).
Guohua Ku and Hanqiao Zheng sold 289,427 and 2,406,365 shares of CREG&#146;s common
stocks (&quot;CREG shares&quot;) they owned, respectively, to the purchasers for a total
of 8,087,376 shares of Yingfeng&#146;s common stocks (&quot;Yingfeng Shares&quot;), at the
exchange rate of one CREG share for three Yingfeng shares. The share exchange
agreement was initially negotiated and signed by Guohua Ku, Hanqiao Zheng and
the representative of the purchasers on February 22, 2007. On June 21, 2007, the
agreement was executed and consummated when all Purchasers and Sellers received
the physical stock certificates of CREG shares and Yingfeng Shares delivered by
the other party, pursuant to the Execution and Closing Clause of the share
exchange agreement. As the result of this share exchange transaction, the
purchasers, who are 472 individual shareholders of Yingfeng, acquired in total
2,695,792 shares of CREG&#146;s common stocks. None of the purchasers acquired more
than 1% of the total issued and outstanding common stocks of CREG in this
transaction. Guohua Ku and Hanqiao Zheng own 8,784,273 and 0 shares of CREG&#146;s
common stocks, respectively, upon the consummation of this transaction. None of
the purchasers in this share exchange transaction is a U.S Person, as such term
is defined in Rule 902(k) of Regulation S, or located within the United States.
This transaction is between non-U.S. Persons and takes place outside of the
United States. Therefore, this transaction is exempt from registration under the
Securities Act of 1933 in reliance upon the exemption from registration pursuant
to Regulation S of the rules and regulations promulgated by the Securities and
Exchange Commission under the Securities Act of 1933. </p>
<p style="TEXT-INDENT: 30px" align="justify">On August 22, 2007, Guohua Ku
executed and consummated a share exchange agreement with another group of
individual shareholders of Yingfeng. Under the terms of this Agreement, Guohua
Ku sold 623,410 shares of CREG&#146;s common stocks he owned to the Purchasers for a
total of 1,870,230 shares of Yingfeng&#146;s common stocks, at the exchange rate of
one CREG share for three Yingfeng shares. As the result of this share exchange
transaction, this group of Yingfeng Shareholders acquired in total 623,410
shares of CREG&#146;s common stocks. None of them acquired more than 1% of the total
issued and outstanding common stocks of CREG in this transaction. Guohua Ku,
owns 8,160,863 shares of CREG&#146;s common stocks after the consummation of this
transaction. </p>
<p style="TEXT-INDENT: 30px" align="justify">On August 23, 2007, Guohua Ku
executed and consummated a share purchase agreement with Hanqiao Zheng to sell
8,160,863 shares of CREG&#146;s common stocks he owned to Hanqiao Zheng for a total
price of US $ 2,040,215. As the result of this share purchase transaction,
Hanqiao Zheng acquired in total 8,160,863 shares of CREG&#146;s common stocks. Guohua
Ku, owns 0 share of CREG&#146;s common stocks after the consummation of this
transaction. </p>
<p style="TEXT-INDENT: 30px" align="justify">On November 14, 2007, the Company
entered into an Assets Transfer and Share Issuance Agreement (the &quot;Agreement A&quot;)
with Mr. Zheng Hanqiao (&quot;Mr. Zheng&quot;), the President and major shareholder of the
Company and TCH. Under the Agreement A, Mr. Zheng sold and transferred two TRT
systems equipments (the &quot;Assets&quot;) amounted to $9,677,420 (equivalent to RMB
72,000,000) to the Company in exchange for 7,867,821 shares of common stock of
the Company at a 23-days weighted average market price of $1.23 per share. Under
the same Agreement A, the Company subsequently sold and transferred to TCH the
aforementioned Assets for a total price of $9,677,420 (equivalent to RMB
72,000,000). Currently, the management of TCH has no intention to engage the
Assets to any new direct financing projects. </p>
<p style="TEXT-INDENT: 30px" align="justify">Also on November 14, 2007, the
Company entered into a Share Purchase Agreement (the &quot;Agreement B&quot;) with Mr.
Zheng for a cash investment of $4,032,258 in exchange for 3,278,259 shares of
common stock of the Company issued at a 23-days weighted average market price of
$1.23 per share. </p>
<p style="TEXT-INDENT: 30px" align="justify">As a result of the Agreement A and
the Agreement B, Mr. Zheng acquired a total of 11,146,080 shares of common stock
of the Company at a 23-days weighted average market price of $1.23 per share and
these shares were fully issued on November 14, 2007. </p>
<p style="TEXT-INDENT: 30px" align="justify">On November 16, 2007, the Company
and its wholly-owned direct and indirect subsidiaries entered into a Stock and
Notes Purchase Agreement (&quot;Purchase Agreement&quot;) with Carlyle Asia Growth
Partners III, L.P., a limited partnership organized under the laws of the Cayman
Islands (&quot;CAGP&quot;), and CAGP III Co-Investment, L.P., a limited partnership
organized under the laws of the Cayman Islands (together with CAGP, the
&quot;Investors&quot;). </p>
<p align="center">&lt;Page&gt; 22 </p>
<hr color="#000000" size="5"><p style="page-break-before: always">
<p style="TEXT-INDENT: 30px" align="justify">Under the terms of the Purchase
Agreement, the Company sold to the Investors a 10% Secured Convertible
Promissory Note in the principal amount of $5,000,000 (the &quot;First Note&quot;).
Additionally, the Purchase agreement provides for two subsequent transactions to
be effected by the Company and the Investors, which include (i) the issuance by
the Company and subscription by the Investors of a total of 4,066,706 shares of
common stock of Company, at the price of $1.23 per share for an aggregate
purchase price of approximately $5,000,000, and (ii) the issuance and sale by
the Company to the Investors of a 5% Secured Convertible Promissory Note in the
principal amount of $15,000,000 (the &quot;Second Note&quot; and collectively with the
First Note, the &quot;Notes&quot;) (the foregoing transactions, together with sale and
purchase of the First Note, are hereinafter referred to as the &quot;Offering&quot;). The
subsequent transactions are contingent upon the satisfaction of certain
conditions specified in the Purchase Agreement, including entry into specified
energy and recycling project contracts and the purchase of certain energy
recycling systems. </p>
<p style="TEXT-INDENT: 30px" align="justify">The First Note bears interest at
10% per annum and matures on November 16, 2009. The principal face amount of the
First Note, together with any interest thereon, convert, at the option of the
holders at any time on or prior to maturity, into shares of the Company&#146;s common
stock at an initial conversion price of $1.23 per share (subject to
anti-dilution adjustments). The First Note is subject to mandatory conversion
upon the consummation of the aforementioned issuance and subscription of shares
of the Company&#146;s common stock under the Purchase Agreement. As more fully
described in the First Note, the obligations of the Company under the First Note
shall rank senior to all other debt of the Company. </p>
<p style="TEXT-INDENT: 30px" align="justify">If issued, the Second Note will
bear interest at 5% per annum and will mature five years from the date of
issuance. The Second Note is convertible at a conversion price that is tied to
the after-tax net profits of the Company for the fiscal year ending December 31,
2008, as described in the Second Note. </p>
<p style="TEXT-INDENT: 30px" align="justify">As collateral for the First Note
(and the Second Note, if such Second Note is issued), Hanqiao Zheng, the
President and a major shareholder of Company, pledged 9,653,471 of the shares of
Company&#146;s common stock held by him to secure the First Note (and the Second
Note, if such Second Note is issued) (the &quot;Share Pledge Agreement&quot;). </p>
<p style="TEXT-INDENT: 30px" align="justify">In connection with the Offering,
the Company, Hanqiao Zheng and Ping Sun entered into a Shareholders Agreement,
dated as of November 16, 2007, with the Investors (the &quot;Shareholders
Agreement&quot;). The Shareholders Agreement contains certain restrictions on the
ability of the parties to the Shareholders Agreement to transfer their shares of
the Company&#146;s common stock and provides the Investors with the right to
designate up to two directors on the Company&#146;s board of directors and certain
other rights, including consent rights over certain transactions and preemptive
rights in respect of subsequent issuances by the Company of equity securities.
</p>
<p style="TEXT-INDENT: 30px" align="justify">Additionally, the Company has
granted certain registration rights to the Investors requiring the Company to
file a registration statement covering the shares of the Company&#146;s common stock
acquired by the Investors pursuant to the Offering within one hundred and twenty
(120) days from the date of the Purchase Agreement (the &quot;Registration Rights
Agreement&quot;). </p>
<p><b>ITEM 3. DEFAULTS UPON SENIOR SECURITIES </b></p>
<p>None. </p>
<p><b>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS </b></p>
<p>None. </p>
<p><b>ITEM 5. OTHER INFORMATION </b></p>
<p>Not Applicable. </p>
<p align="center">&lt;Page&gt; 23 </p>
<hr color="#000000" size="5"><p style="page-break-before: always"></font>
<p><b><font face="Times New Roman" size="2">ITEM 6. EXHIBITS</font></b></p>
<table style="BORDER-COLLAPSE: collapse" borderColor="#111111" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <tr>
    <td colSpan="2"><font face="Times New Roman" size="2">The following
    documents are filed as part of this report:</font></td>
  </tr>
  <tr>
    <td width="6%">&nbsp;</td>
    <td width="94%">&nbsp;</td>
  </tr>
  <tr>
    <td width="6%" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <a href="crec111907exh311.htm" style="text-decoration: none">31.1</a></font></td>
    <td width="94%" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <a href="crec111907exh311.htm" style="text-decoration: none">Chief Executive
    Officer Certification furnished pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002</a></font></td>
  </tr>
  <tr>
    <td width="6%">&nbsp;</td>
    <td width="94%">&nbsp;</td>
  </tr>
  <tr>
    <td width="6%" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <a href="crec111907exh312.htm" style="text-decoration: none">31.2</a></font></td>
    <td width="94%" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <a href="crec111907exh312.htm" style="text-decoration: none">Chief Financial
    Officer Certification furnished pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002</a></font></td>
  </tr>
  <tr>
    <td width="6%">&nbsp;</td>
    <td width="94%">&nbsp;</td>
  </tr>
  <tr>
    <td width="6%" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <a href="crec111907exh321.htm" style="text-decoration: none">32.1</a></font></td>
    <td width="94%" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <a href="crec111907exh321.htm" style="text-decoration: none">Chief Executive
    Officer Certification furnished pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002</a></font></td>
  </tr>
  <tr>
    <td width="6%">&nbsp;</td>
    <td width="94%">&nbsp;</td>
  </tr>
  <tr>
    <td width="6%" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <a href="crec111907exh322.htm" style="text-decoration: none">32.2</a></font></td>
    <td width="94%" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <a href="crec111907exh322.htm" style="text-decoration: none">Chief Financial
    Officer Certification furnished pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002</a></font></td>
  </tr>
</table>
<font face="Times New Roman" size="2">
<p align="center"><b>SIGNATURES </b></p>
<p>In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized. </p>
</font>
<table style="BORDER-COLLAPSE: collapse" borderColor="#111111" height="416" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">China Recycling Energy Corporation
    (Registrant)</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" height="19">&nbsp;</td>
    <td width="45%" colSpan="2" height="19">&nbsp;</td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Date: November 19, 2007</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" height="19">&nbsp;</td>
    <td width="45%" colSpan="2" height="19">&nbsp;</td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td style="BORDER-BOTTOM: 1px solid" width="5%" height="19">
    <font face="Times New Roman" size="2">/s/</font></td>
    <td style="BORDER-BOTTOM: 1px solid" width="45%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Hanqiao Zheng</font></td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td style="BORDER-TOP: 1px solid" width="5%" height="19">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" width="45%" colSpan="2" height="19">&nbsp;</td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Hanqiao Zheng</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">President and Chairman</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" height="19">&nbsp;</td>
    <td width="45%" colSpan="2" height="19">&nbsp;</td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Date: November 19, 2007</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" height="19">&nbsp;</td>
    <td width="45%" colSpan="2" height="19">&nbsp;</td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td style="BORDER-BOTTOM: 1px solid" width="5%" height="19">
    <font face="Times New Roman" size="2">/s/</font></td>
    <td style="BORDER-BOTTOM: 1px solid" width="45%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Guangyu Wu</font></td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td style="BORDER-TOP: 1px solid" width="5%" height="19">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" width="45%" colSpan="2" height="19">&nbsp;</td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Guangyu Wu</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Chief Executive Officer</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" height="19">&nbsp;</td>
    <td width="45%" colSpan="2" height="19">&nbsp;</td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Date: November 19, 2007</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" height="19">&nbsp;</td>
    <td width="45%" colSpan="2" height="19">&nbsp;</td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td style="BORDER-BOTTOM: 1px solid" width="5%" height="19">
    <font face="Times New Roman" size="2">/s/</font></td>
    <td style="BORDER-BOTTOM: 1px solid" width="45%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Mingda Rong</font></td>
    <td width="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td style="BORDER-TOP: 1px solid" width="5%" height="17"></td>
    <td style="BORDER-TOP: 1px solid" width="45%" colSpan="2" height="17"></td>
    <td width="50%" height="17"></td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Mingda Rong</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colSpan="2" height="19">
    <font face="Times New Roman" size="2">Chief Financial Officer</font></td>
    <td width="50%" colSpan="2" height="19">&nbsp;</td>
  </tr>
</table>
<font face="Times New Roman" size="2">
<p align="center">&lt;Page&gt; 24 </p>
<hr color="#000000" size="5"></font>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>crec111907exh311.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<html>

<head>
<title>China Recycling Energy Corporation: Exhibit 31.1</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<font FACE="Times New Roman" SIZE="2">
<p>Form 10Q-SB EXHIBIT 31.1 </p>
<p align="center"><b>CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER </b> </p>
<p align="center"><b>PURSUANT TO RULE 15d-14(a) (17 CFR 240.15d-14(a)) </b> </p>
<p align="center"><b>(AUTHORIZED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)
</b>
</p>
<p align="justify">I, Guangyu Wu, Chief Executive Officer (principal executive officer) of the
Registrant, China Recycling Energy Corporation (&quot;China Digital Wireless, Inc.&quot;
prior to March 8, 2007), certifies that: </p>
<p style="margin-bottom: 0" align="justify">1. </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">I have reviewed
this quarterly report on Form 10-QSB of the Registrant, China Recycling Energy
Corporation (&quot;China Digital Wireless, Inc.&quot; prior to March 8, 2007). </p>
<p style="margin-bottom: 0" align="justify">2. </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">Based on my
knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report; </p>
<p style="margin-bottom: 0" align="justify">3. </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">Based on my
knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the small business issuer as of, and
for, the periods presented in this report; </p>
<p ALIGN="justify" style="margin-bottom: 0">4. </p>
<p ALIGN="justify" style="margin-left: 30; margin-top: -11pt">The small business issuer's other certifying officer(s)
and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
small business issuer and have: </p>
<p style="margin-left: 30; margin-bottom: 0" align="justify">a) </p>
<p style="margin-left: 60; margin-top: -11pt" align="justify">Designed such
disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the small business issuer, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared; </p>
<p style="margin-left: 30; margin-bottom: 0" align="justify">b) </p>
<p style="margin-left: 60; margin-top: -11pt" align="justify">Evaluated the
effectiveness of the small business issuer's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and </p>
<p style="margin-left: 30; margin-bottom: 0" align="justify">c) </p>
<p style="margin-left: 60; margin-top: -11pt" align="justify">Disclosed in this
report any change in the small business issuer's internal control over financial
reporting that occurred during the small business issuer's most recent fiscal
quarter (the small business issuer's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over financial
reporting; and </p>
<p style="margin-bottom: 0" align="justify">5. </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions): </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p style="margin-left: 30; margin-bottom: 0">a) </p>
<p style="margin-left: 60; margin-top: -11pt" align="justify">All significant
deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
the small business issuer's ability to record, process, summarize and report
financial information; and </p>
<p style="margin-left: 30; margin-bottom: 0" align="justify">b) </p>
<p style="margin-left: 60; margin-top: -11pt" align="justify">Any fraud, whether
or not material, that involves management or other employees who have a
significant role in the small business issuer's internal control over financial
reporting. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="492"><font SIZE="2">SIGNATURE</font></td>
    <td WIDTH="493">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="492">&nbsp;</td>
    <td WIDTH="493" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="492"><font SIZE="2">Date: November 19, 2007</font></td>
    <td WIDTH="493" align="center"><font SIZE="2">/s/Guangyu Wu</font></td>
  </tr>
  <tr>
    <td WIDTH="492">&nbsp;</td>
    <td WIDTH="493" align="center"><font SIZE="2">
    <div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
      Guangyu Wu</font></div>
    </td>
  </tr>
  <tr>
    <td WIDTH="492">&nbsp;</td>
    <td WIDTH="493" align="center"><font SIZE="2">Chief Executive Officer</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<hr color="#000000" size="5">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>crec111907exh312.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<html>

<head>
<title>China Recycling Energy Corporation: Exhibit 32.1</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<font FACE="Times New Roman" SIZE="2">
<p>Form 10Q-SB EXHIBIT 31.2 </p>
<p align="center"><b>CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER </b> </p>
<p align="center"><b>PURSUANT TO RULE 15d-14(a) (17 CFR 240.15d-14(a)) </b> </p>
<p align="center"><b>(AUTHORIZED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)
</b>
</p>
<p align="justify">I, Mingda Rong, Chief Financial Officer (principal executive officer) of the
Registrant, China Recycling Energy Corporation (&quot;China Digital Wireless, Inc.&quot;
prior to March 8, 2007), certifies that: </p>
<p style="margin-bottom: 0" align="justify">1. </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">I have reviewed
this quarterly report on Form 10-QSB of the Registrant, China Recycling Energy
Corporation (&quot;China Digital Wireless, Inc.&quot; prior to March 8, 2007). </p>
<p style="margin-bottom: 0" align="justify">2. </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">Based on my
knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report; </p>
<p style="margin-bottom: 0" align="justify">3. </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">Based on my
knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the small business issuer as of, and
for, the periods presented in this report; </p>
<p ALIGN="justify" style="margin-bottom: 0">4. </p>
<p ALIGN="justify" style="margin-left: 30; margin-top: -11pt">The small business issuer's other certifying officer(s)
and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
small business issuer and have: </p>
<p style="margin-left: 30; margin-bottom: 0" align="justify">a) </p>
<p style="margin-left: 60; margin-top: -11pt" align="justify">Designed such
disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the small business issuer, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared; </p>
<p style="margin-left: 30; margin-bottom: 0" align="justify">b) </p>
<p style="margin-left: 60; margin-top: -11pt" align="justify">Evaluated the
effectiveness of the small business issuer's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and </p>
<p style="margin-left: 30; margin-bottom: 0" align="justify">c) </p>
<p style="margin-left: 60; margin-top: -11pt" align="justify">Disclosed in this
report any change in the small business issuer's internal control over financial
reporting that occurred during the small business issuer's most recent fiscal
quarter (the small business issuer's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over financial
reporting; and </p>
<p style="margin-bottom: 0" align="justify">5. </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions): </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p align="justify" style="margin-left: 30; margin-bottom: 0">a) </p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">All significant
deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
the small business issuer's ability to record, process, summarize and report
financial information; and </p>
<p align="justify" style="margin-left: 30; margin-bottom: 0">b) </p>
<p align="justify" style="margin-left: 60; margin-top: -11pt">Any fraud, whether
or not material, that involves management or other employees who have a
significant role in the small business issuer's internal control over financial
reporting. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="985" colspan="2" align="center">
    <p align="left"><font SIZE="2">SIGNATURE</font></td>
  </tr>
  <tr>
    <td WIDTH="492">&nbsp;</td>
    <td WIDTH="493">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="492"><font SIZE="2">Date: November 19, 2007</font></td>
    <td WIDTH="493" align="center"><font SIZE="2">/s/Mingda Rong</font></td>
  </tr>
  <tr>
    <td WIDTH="492">&nbsp;</td>
    <td WIDTH="493" align="center"><font SIZE="2">
    <div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
      Mingda Rong</font></div>
    </td>
  </tr>
  <tr>
    <td WIDTH="492">&nbsp;</td>
    <td WIDTH="493" align="center"><font SIZE="2">Chief Financial Officer</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<hr color="#000000" size="5">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>crec111907exh321.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
<html>

<head>
<title>China Recycling Energy Corporation: Exhibit 32.1</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<font FACE="Times New Roman" SIZE="2">
<p>Form 10-QSB Exhibit 32.1 </p>
<p align="center"><b>CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER </b> </p>
<p align="center"><b>PURSUANT TO 18 U.S.C. ss. 1350 </b> </p>
<p align="center"><b>(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002) </b> </p>
<p align="justify">I, Guangyu Wu, Chief Executive Officer (principal executive officer) of the
Registrant, China Recycling Energy Corporation (&quot;China Digital Wireless, Inc.&quot;
prior to March 8, 2007), certify pursuant to 18 U.S.C. ss. 1350, as adopted
pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, based upon a review
of the Quarterly Report on Form 10-QSB for the period ended September 30, 2007
of the Registrant (the &quot;Report&quot;): </p>
<p style="margin-bottom: 0" align="justify">(1) </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">The Report fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and </p>
<p style="margin-bottom: 0" align="justify">(2)
</p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">The information
contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Registrant.
</p>
<p ALIGN="JUSTIFY">A signed original of this written statement required by
Section 906 has been provided to the Registrant and will be retained by the
Registrant and furnished to the Securities and Exchange Commission or its staff
upon request. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="50%"><font SIZE="2">SIGNATURE</font></td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="50%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="50%"><font SIZE="2">Date: November 19, 2007</font></td>
    <td WIDTH="50%" align="center"><font SIZE="2">/s/Guangyu Wu</font></td>
  </tr>
  <tr>
    <td WIDTH="50%">&nbsp;</td>
    <td WIDTH="50%" align="center"><font SIZE="2">
    <div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
      Guangyu Wu</font></div>
    </td>
  </tr>
  <tr>
    <td WIDTH="50%">&nbsp;</td>
    <td WIDTH="50%" align="center"><font SIZE="2">Chief Executive Officer</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<hr color="#000000" size="5">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>crec111907exh322.htm
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
<html>

<head>
<title>China Recycling Energy Corporation: Exhibit 32.2</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<font FACE="Times New Roman" SIZE="2">
<p>Form 10-QSB Exhibit 32.2 </p>
<p align="center"><b>CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER </b> </p>
<p align="center"><b>PURSUANT TO 18 U.S.C. ss. 1350 </b> </p>
<p align="center"><b>(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002) </b> </p>
<p align="justify">I, Mingda Rong, Chief Financial Officer (principal executive officer) of the
Registrant, China Recycling Energy Corporation (&quot;China Digital Wireless, Inc.&quot;
prior to March 8, 2007), certify pursuant to 18 U.S.C. ss. 1350, as adopted
pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, based upon a review
of the Quarterly Report on Form 10-QSB for the period ended September 30, 2007
of the Registrant (the &quot;Report&quot;): </p>
<p style="margin-bottom: 0" align="justify">(1) </p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">The Report fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and </p>
<p style="margin-bottom: 0" align="justify">(2)
</p>
<p style="margin-left: 30; margin-top: -11pt" align="justify">The information
contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Registrant.
</p>
<p ALIGN="JUSTIFY">A signed original of this written statement required by
Section 906 has been provided to the Registrant and will be retained by the
Registrant and furnished to the Securities and Exchange Commission or its staff
upon request. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="50%"><font SIZE="2">SIGNATURE</font></td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="50%">&nbsp;</td>
    <td WIDTH="50%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="50%"><font SIZE="2">Date: November 19, 2007</font></td>
    <td WIDTH="50%" align="center"><font SIZE="2">/s/Mingda Rong</font></td>
  </tr>
  <tr>
    <td WIDTH="50%">&nbsp;</td>
    <td WIDTH="50%" align="center"><font SIZE="2">
    <div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
      Mingda Rong</font></div>
    </td>
  </tr>
  <tr>
    <td WIDTH="50%">&nbsp;</td>
    <td WIDTH="50%" align="center"><font SIZE="2">Chief Financial Officer</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<hr color="#000000" size="5">

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