UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10−Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2011

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to _____________

Commission File Number: 000-53547

CHINA GREEN ENERGY INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)

Jiangsu Wujin Lijia Industrial Park
Lijia Town
Wujin District, Changzhou City
Jiangsu Province 213176
People’s Republic of China
(Address of principal executive offices, Zip Code)

(86) 519-86230102
(Registrant’s telephone number, including area code)

_____________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [  ] No [  ]

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

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

Yes [  ] No [X]

The number of shares outstanding of each of the issuer’s classes of common stock, as of May 14, 2011 is as follows:

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

PART II
OTHER INFORMATION

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CHINA GREEN ENERGY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2011 AND 2010

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Condensed Consolidated Statements of Operations and Comprehensive Income
For the three months ended March 31, 2011 and 2010

See the accompanying Notes to Condensed Consolidated Financial Statements

- 2 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Condensed Consolidated Balance Sheets
As of March 31, 2011 and December 31, 2010

See the accompanying notes to the consolidated financial statements

- 3 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2011 and 2010

See the accompanying Notes to Condensed Consolidated Financial Statements

- 4 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

- 5 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

- 6 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

- 7 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

Details of customers representing 10% or more of the Company’s trade accounts receivables as of March 31, 2011 and December 31, 2010, respectively, are as follows:

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China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

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China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

Maintenance or repairs are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Construction in progress mainly represents expenditures in respect of the Company’s offices and factories under construction. All direct costs relating to the acquisition or construction of the Company’s offices and factories are capitalized as construction in progress. No depreciation is provided in respect of construction in progress.

Land use rights

Land use rights are stated at cost less accumulated amortization. Amortization is provided using the straight-line method over the terms of the lease of 50 years obtained from the relevant PRC land authority.

Purchased Intangible Assets

The Company conducts an impairment analysis annually and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s purchased intangible assets may be less than its carrying amount. The Company is in the process of finalizing its purchase price allocation for the NICONIA trademark acquisition.

The determination of fair value requires significant judgment and estimates, and the ultimate allocation of purchase price may change. Acquired intangibles with definite lives will be amortized on a straight-line basis over the remaining estimated economic life of the underlying assets. Intangible assets with indefinite lives are not amortized. The Company reviews its indefinite and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Recoverability of an asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset group is expected to generate. If it is determined that an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset group exceeds its fair value. In addition, the Company assesses its long-lived assets for impairment if they are abandoned.

- 10 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

Net sales of products represent the value of goods, net of value added taxes (“VAT”), sales returns, trade discounts and allowances. The Company is subject to VAT which is levied on majority of their products at the rate of 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. Provision for sales returns are recorded as a reduction of revenue in the same period that revenue is recognized. The provision for sales returns, which is based on historical sales returns data, is the Company’s best estimate of the amounts of goods that will be returned from their customers. During the reporting periods, there were no sales returns and the Company did not recognize any provision for sales returns.

Government grants

During the three months ended March 31, 2011 and 2010, the Company received government grants of $45,540 and $31,003, respectively. The grants were subsidies which were unconditional, non-refundable and without any restrictions on usage at the time of grant to and receipt by the Company. Such grants were recognized as income in the years received.

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China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

- 12 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

- 13 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

- 14 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

No additional allowance for obsolete inventories was recognized during the three months ended March 31, 2011 and 2010.

- 15 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

Notes:

- 16 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

During the reporting periods, depreciation is included in:

As of March 31, 2011 and December 31, 2010, property, plant and equipment with net book values of $1,608,351 and $1,598,264, respectively, were pledged as collateral under certain loan arrangements (Note 15).

Intangible assets represent the brand name of “Niconia” for LEV’s purchased for a total consideration of RMB20 million or $3,044,000 (see Note 2). The Company acquired the brand in January 2011 for which $1,522,000 has been paid and the remaining $1,522,00 remains payable is due January 2012.

- 17 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

The Company obtained the right from the relevant PRC land authority for a period of fifty years to use the land on which the office premises, production facilities and warehouses of the Company are situated.

As of March 31, 2011 and December 31, 2010, land use rights with net book values of $1,036,795 and $1,037,606, respectively, were pledged as collateral under certain loans agreements (Note 15).

Amortization for the three months ended March 31, 2011 and 2010 amounted to $5,591 and $5,388, respectively. The estimated amortization expense for each years following March 31, 2011 is approximately $22,000 per year.

- 18 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

All bank loans are repayable within one year.

The bank loans as of March 31, 2011 and December 31, 2010 carried annual interest from 5.10% to 6.23% and are due at various dates through March 2011. Four loans totaling approximately $3.3 million were renewed in 2011 under similar terms for an additional year.

The secured bank loans were secured by the Company’s following assets, which are presented at their net book values:

The unsecured bank loans as of March 31, 2011 and December 31, 2010 were guaranteed by Mr. and Mrs. Shi and two non-related parties. Each of the aforementioned parties did not receive any compensation for acting as guarantors for the Company.

During the reporting periods, there were no covenant requirements under the bank loans granted to the Company. The Company has available approximately $1.0 million remaining under these loan agreements, which it can borrow.

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China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

- 20 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

A reconciliation is provided for unallocated amounts relating to corporate operations which are not included in the segment information.

- 21 -

China Green Energy Industries, Inc.
(Formerly TradeOn, Inc.)
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2011 and 2010

All of the Company’s long-lived assets are located in the PRC. Geographic information about the revenues, which are classified based on the customers, is set out as follows:

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2010, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Use of Terms

Except where the context otherwise requires and for the purposes of this report only:

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Overview of our Business

We manufacture and distribute clean technology-based consumer products. We also manufacture and distribute network and HDMI cable. Our products consist of light electric vehicles, or LEVs, and cryogen-free refrigerators. We manufacture several different varieties of LEVs and cryogen-free refrigerators. We sell some of our products under our own brand name of “BEST” and the balance of our products as an original equipment manufacturer, or OEM, for other companies, who are our customers.

Our corporate headquarters and manufacturing base are located in Changzhou, China, where we own an aggregate of approximately 46,800 square meters of manufacturing facilities and office space. We own the right to use a total of 49,900 square meters of land in China. We believe that our existing and planned facilities are adequate for our requirements for the foreseeable future. Our annual manufacturing capacity for our LEVs, Cryogen-free refrigerators and sets of network and HDMI cables (combined) is 20,000 units, 115,000 units and 25 million sets, respectively.

Recent Developments

On January 25, 2011, Best Appliances acquired the NICONIA LEV brand name and retail sales network. The NICONIA brand was purchased from Changzhou Benshen Bicycle Co., Ltd. (“Benshen”) and will compliment the Company’s line of LEV’s. The total purchase price for the NICONIA brand and retail sales network was approximately $3.04 million pursuant to a Purchase Agreement, dated January 25, 2011, among Best Appliances and Benshen. At January 25, 2011, $1.5 million of cash was paid upon signing the Purchase Agreement and the remaining cash payable of $1.5 million is due on January 25, 2012.

First Quarter Financial Performance Highlights

We experienced decline in revenues, gross profit, and reported loss in the first quarter of 2011, primarily as a result of the decrease in production due to Spring Festival and shortage of qualified workers. The following summarizes certain key financial information for the first quarter of 2011:

• Revenue: Revenue was $3.27 million for the three months ended March 31, 2011, a decrease of $1.89 million, or 37%, from $5.16 million for the same period last year.

• Gross Profit and Margin: Gross profit was $0.57 million for the three months ended March 31, 2011, a decrease of $0.92 million, or 62%, from $1.49 million for the same period last year. Gross margin was 17.3% for the three months ended March 31, 2011 as compared to 28.9% for the same period last year, an 11.6% decrease.

• Net Income(loss): Net loss was $0.32 million for the three months ended March 31, 2011, a decrease of $1.08 million from $0.76 million of net profit for the same period of last year.

• Fully diluted net income per share: Fully diluted net loss per share for the three months ended March 31, 2011 was $0.01, as compared to net income per share of $0.04 for the same period last year.

Results of Operations

Comparison of Three Months Ended March 31, 2011 and March 31, 2010

The following table shows key components of our results of operations during the three months ended March 31, 2011 and 2010, in both dollars and as a percentage of our total sales.

24

Revenues. To date, most of our revenues have been generated through sales in the PRC and Hong Kong region. Our revenues decreased $1.89 million, or 37%, to $3.27 million for the three months ended March 31, 2011 from $5.16 million during the same period in 2010. The decrease was primarily due to a decrease in sales of refrigerators. Revenue of cable products decreased by 30.5% from $2.91 million in the three months ended March 31, 2010 to $2.02 million in the three months ended March 31, 2011. The decrease was mainly due to decreased production as a result of a shortage of qualified workers. Revenue from refrigerators decreased by 73.3% from $2.25 million in the three months ended March 31, 2010 to $0.6 million in the three months ended March 31, 2011. The decrease was mainly due to decreased production as a result of a shortage of qualified workers. The Company experienced an increase in LEV sales, whose sales increased from zero in the three months ended March 31, 2010 to $0.6 million in the three months ended March 31, 2011, which was attributable to the acquisition of the Niconia LEV brand. Since the end of the first quarter, the shortage of workers has been resolved. We were able to increase our production volume to satisfy market demand with our existing manufacturing capacity.

Cost of goods sold. Our cost of sales is primarily comprised of the costs of our raw materials, components, labor and overhead. Our cost of goods sold decreased $0.96 million, or 26%, to $2.71 million in the three months ended March 31, 2011, from $3.67 million during the same period in 2010. The decrease in cost of goods sold was generally in line with our decreased sales volume and revenues. As a percentage of revenues, our cost of goods sold increased from 71.1% in the three months ended March 31, 2010 to 82.7% in the three months ended March 31, 2011. The increase was primarily due to increased fixed production costs and raw material price.

Gross profit. Our gross profit is equal to the difference between our revenue and our cost of goods sold. Our gross profit decreased $0.92 million, or 62%, to $0.57 million in the three months ended March 31, 2011, from $1.49 million during the same period in 2010. Such decrease was generally in line with our decreased sales volume and revenues. Gross profit as a percentage of revenue was 17.3% and 28.9% for three months ended March 31, 2011 and 2010, respectively.

Selling and marketing expenses. Our selling and marketing expenses consist primarily of compensation and benefits to our sales and marketing staff, sales commission, cost of advertising, promotion, business travel, after-sale support, transportation costs and other sales related costs. Our selling and marketing expenses increased $0.05 million, or 29%, to $0.22 million in the three months ended March 31, 2011, from $0.17 million during the same period in 2010. The increase was primarily attributable to increased spending on advertising.

General and administrative expenses. General and administrative expenses consist primarily of compensation and benefits to our general management, finance and administrative staff, professional advisor fees, bad debts reserve and other expenses incurred in connection with general operations. Our general and administrative expenses increased $0.36 million, or 116%, to $0.67 million in the three months ended March 31, 2011, from $0.31 million during the same period in 2010. Such increase was attributable to increased administrative staff numbers and average salaries.

Interest expense. Interest expense increased $0.06 million, or 67%, to $0.15 million for the three months ended March 31, 2011, from $0.09 million during the same period in 2010. Such increase was mainly due to the increased bank loans.

Income (loss) before Income Taxes. Our income before income taxes decreased $1.32 million, to a $0.32 million loss in the three months ended March 31, 2011, from $0.99 million profit during the same period in 2010, as a result of the factors described above.

Income Taxes. Since we suffered a loss for the three months ended March 31, 2011, we didn’t accrue any income tax provision, while the income tax provision was $0.24 million during the same period in 2010.

25

Net Income (loss). As a result of the factors described above, we generated a net loss of $0.32 million in the three months ended March 31, 2011, a decrease of $1.08 million from a $0.76 million net profit during the same period in 2010.

Liquidity and Capital Resources

As of March 31, 2011, we had cash and cash equivalents of approximately $0.38 million, primarily consisting of cash on hand and demand deposits. The following table provides a summary of our net cash flows from operating, investing, and financing activities.

Cash Flow

Operating Activities

Net cash used in operating activities was $3.65 million for the three months ended March 31, 2011, as compared to $0.82 million for the same period in 2010. The increase was primarily attributable to (i) our net loss of $0.32 million, (ii) increase in due from related parties of $0.96 million, (iii) increase in inventories of $1.88 million, (iv) paydown of $0.82 of other payables and accrued charges, and (v) offset by a decrease in receivables of $2.2 million.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2011 was $5.10 million, as compared to $1.72 million during the same period in 2010. The increase in net cash used in investing activities was mainly attributable to the purchase of the Niconia brand, amounting to $1.56 million and the setting aside of restricted cash of $3.41 million.

Financing Activities

Net cash generated from financing activities for the three months ended March 31, 2011 was $8.05 million, as compared to $2.80 million during the same period in 2010. The increase in net cash generated from financing activities was mainly attributable to the increase in bills payable of $6.06 million.

Loan Commitments

As of the date of the Report, we are party to several loan and bill acceptance agreements as follows:

Loan Agreements:

• Loan Agreement between Best Cable and Wujin Rural Commercial Bank, pursuant to which Wujin Rural Commercial Bank provided a loan with a total amount of RMB1,450,000 (approximately $221,000) at March 31, 2011. The loan agreement is for a term from July 12, 2010 to June 25, 2011. The monthly interest rate is 0.523%. The loan outstanding at March 31, 2011 totaled approximately $221,000.

• Loan Agreement between Best Cable and Wujin Agriculture Bank pursuant to which Wujin Agriculture Bank provided loans with a total amount available to borrow of RMB10,000,000 (approximately $1,522,000) at March 31, 2011. The Company borrowed RMB3,000,000 (approximately $457,000) at March 31, 2011 and RMB5,000,000 (approximately $761,000) at March 31, 2011 respectively to Best Cable, for a term from February 28, 2011 to August 27, 2011 and December 22, 2010 to June 21, 2011, respectively. The monthly interest rate is 0.537% and 0.446%, respectively. The loans outstanding at March 31, 2011 totaled approximately $1,218,000.

26

• Loan Agreement between Best Cable and Wujin ICBC pursuant to which Wujin ICBC provided loans with a total amount available to borrow of RMB26,000,000 (approximately $3,957,000) at March 31, 2011. The agreement is for a term from November 16, 2009 to October 31, 2011. Wujin ICBC has disbursed RMB24,800,000 (approximately $3,757,000) at March 31, 2011 to Best Cable, with terms starting from December 8, 2010 and ending at December 20, 2011. The monthly interest rate is 0.5%. The loan outstanding at March 31, 2011 totaled approximately $3,775,000.

• Loan Agreement between Best Appliances and Wujin Rural Commercial Bank for a loan with a total amount available to borrow of RMB21,000,000 (approximately $3,196,000 at March 31, 2011). Wujin Rural Commercial Bank has disbursed an aggregate of RMB19,670,000 (approximately $2,994,000) at March 31, 2011 to Best Appliances. The monthly interest rate is 0.523%. The term of loan is from December 10, 2008 to September 25, 2011. The loan outstanding at December 31, 2010 totaled approximately $2,994,000.

• Loan Agreement between Best Appliance and Wujin Rural Commercial Bank, pursuant to which Wujin Rural Commercial Bank provided a loan with a total amount available to borrow of RMB7,000,000 (approximately $1,065,000 at March 31, 2011). The agreement is for a term from May 27, 2010 to May 26, 2013. The monthly interest rate is 0.523%. Wujin Rural Commercial Bank has disbursed RMB5,000,000 (approximately $761,000) at March 31, 2011 to Best Appliance for a term from June 7, 2010 to May 25, 2011. The loan outstanding at March 31, 2010 totaled approximately $761,000.

• Loan Agreement between Best Cable and Pudong Development Bank Changzhou Branch, pursuant to which Pudong Development Bank Changzhou Branch provided a loan with a total amount available to borrow of RMB 10,000,000 (approximately $1,522,000 at March 31, 2011). The agreement is for a term from January 6, 2011 to September 20, 2011. The monthly interest rate is 0.557%. Pudong Development Bank Changzhou Branch has disbursed RMB10,000,000 (approximately $1,522,000) at March 31, 2011 to Best Cable. The loan outstanding at March 31, 2011 totaled approximately $1,522,000.

Certain bank loans are secured by our buildings and land rights. Other unsecured bank loans were guaranteed by Mr. Shi, his wife Ms. Wang, and two non-related parties. Four loans totaling approximately $3.3 million were renewed in 2011 under similar terms for an additional year.

Bill Acceptance Agreements:

• Commercial Bill Acceptance Agreement, between Best Cable and Pudong Development Bank Changzhou Branch, pursuant to which Pudong Development Bank Changzhou Branch provided commercial bills with a total amount available to borrow of RMB40,000,000 (approximately $6,088,000) at March 31, 2011. The agreement is for a term from January 6, 2011 to January 6, 2012, however, the bills payable at March 31, 2011 become due at various times through July 2011. As the Company incurs future expenses, it will borrow additional funds under these arrangements. The bills outstanding at March 31, 2011 totaled $6,088,000.

• Commercial Bill Acceptance Agreement, between Best Cable and Communication Bank Fangzhicheng Subbranch, pursuant to which Communication Bank Fangzhicheng Subbranch, provided commercial bills with a total amount available to borrow of RMB10,000,000 (approximately $1,522,000) at March 31, 2011. The agreement is for a term from January 21, 2011 to March 28, 2012, however, the bills payable at March 31, 2011 become due at various times through September 2011. As the Company incurs future expenses, it will borrow additional funds under these arrangements. The bills outstanding at March 31, 2011 totaled $1,522,000.

• Commercial Bill Acceptance Agreement, between Best Cable and Wujin Agricultural Bank, pursuant to which Wujin ABC provided four commercial bills with a total amount available to borrow of RMB12,000,000 (approximately $1,826,000) at March 31, 2011. The agreement is for a term from June 1, 2009 to June 30, 2011, guaranteed by our CEO Mr. Shi, his wife, Ms. Wang, and KK Lighting, an unrelated party however, the bills payable at March 31, 2011 become due at various times through September 2011. As the Company incurs future expenses, it will borrow additional funds under these arrangements. The bills outstanding at March 31, 2011 totaled $2,131,000.

• Bank Acceptance Agreement, between Best Cable and Wujin Rural Commercial Bank pursuant to which Wujin Rural Commercial Bank provided a bill with a total amount available to borrow of RMB24,000,000 (approximately $3,653,000) at March 31, 2011. The agreement is for a term from April 21, 2010 to April 20, 2012, however, the bills payable at March 31, 2011 become due at various times through May 2011. As the Company incurs future expenses, it will borrow additional funds under these arrangements. The bills outstanding at March 31, 2011 totaled $3,653,000.

27

Capital Expenditures and Capital Requirements

Our capital expenditures for the three months ended March 31, 2011 and 2010 were $1.84 million and $0.28 million, respectively, representing the total amount of investment activities. Our capital expenditures during the first quarter of 2011 consisted of capital expenditures relating to the purchase of the Niconia brand, as compared to the first quarter of 2010, when we acquired certain equipment.

To date, we have financed our operations primarily through cash flows from operations, augmented by short-term bank loans and equity contributions by our stockholders. We believe that our cash on hand and cash flow from operations will meet a portion of our present cash needs and we will require additional cash resources, including equity investment, to meet our expected capital expenditures and working capital requirements for the next 12 months. We may, however, in the future, require additional cash resources due to changed business conditions, implementation of our strategy to expand our marketing efforts and increase brand awareness, or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Inflation

Inflation and changing prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in the Chinese economy and our industry and continually maintain effective cost controls in operations.

Off Balance Sheet Arrangements

As of March 31, 2011 and December 31, 2010, the Company acted as guarantor for bank loans granted to certain business associates totaling $6,301,080 and $6,272,100, respectively. The maximum amount that can be drawn on these guaranteed loans is $7,975,280 at March 31, 2011 and these guarantees expire at various times through August 2013. None of the Company’s directors or executive officers are involved in the normal operations or have invested in the business of the guaranteed business associates. All the business associates have a healthy record of paying back the loans in a timely manner.

All the above guarantees have no recourse provisions that would enable the Company to recover from the business associates any amounts paid under the guarantees and any assets held as collateral that the Company can obtain or liquidate to recover all or a portion of the amounts that could be paid under the guarantees. If the business associates fail to perform under their contractual obligation, the Company is obligated to make future payments including the contractual principal amounts, related interest and penalties.

Management has assessed the fair value of the obligation arising from the above financial guarantees and considered it is immaterial to the consolidated financial statements. Therefore, no obligations with respect of the above guarantees were recognized as of March 31, 2011 and December 31, 2010, respectively.

Seasonality

Our operating results and operating cash flows historically have been subject to seasonal variations. Our revenues usually increase over each quarter of the calendar year with the first quarter usually the slowest quarter because fewer projects are undertaken during and around the Chinese spring festival.

Critical Accounting Policies

28

Trade and other accounts receivables

Trade and other accounts receivables are recorded at the sales value, net of allowances for doubtful accounts and sales returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing trade and other accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Changes in allowance for doubtful accounts are included in the general and administrative expenses.

Outstanding accounts balances are reviewed individually for collectibility. Accounts balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, the Company has not charged off any balances as they have yet to exhaust all means of collection.

Loans and Investments in Privately Held Entities

From time-to-time, the Company makes investments in and/or loans to privately-held companies. The Company determines whether the fair values of any investments in privately held entities have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considers any such decline to be other than temporary (based on various factors, including historical financial results, and the overall health of the investee’s industry), a write-down to estimated fair value is recorded. On a quarterly basis, the Company reviews outstanding loans receivable to determine if a provision for doubtful loans is necessary. These reviews include discussions with senior management of the investee, and evaluations of, among other things, the investee’s progress against its business plan, its product development activities and customer base, industry market conditions, historical and projected financial performance, expected cash needs and recent funding events.

Inventories

Inventories are stated at the lower of cost and market. The cost of inventories is determined using weighted average cost method, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of finished goods and work in progress, cost includes materials, labor and an appropriate share of production overhead based on normal operating capacity.

The Company regularly reviews the cost of inventories against their estimated fair market value and may record a write-down for inventories that have cost in excess of estimated market value.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Depreciation is provided on the straight-line basis (after taking into account the respective estimated residual values) over the estimated useful lives of property, plant and equipment.

Maintenance or repairs are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Construction in progress mainly represents expenditures in respect of the Company’s offices and factories under construction. All direct costs relating to the acquisition or construction of the Company’s offices and factories are capitalized as construction in progress. No depreciation is provided in respect of construction in progress.

Variable interest entities

Each of the VIEs and Mr. Jianliang Shi ("Mr. Shi") and Ms. Xueqin Wang ("Mrs. Shi") entered into the following agreements with Best Green Changzhou, pursuant to which the VIEs became the VIE of Best Green Changzhou.

Consulting Agreement

Under a Consulting Agreement, Best Green Changzhou provides exclusive technical, business and management consulting services to the VIEs in exchange for service fees equal to 100% of the total annual net profits of the VIEs.

Business Operation Agreement

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Business Operation Agreement imposes restrictions on the operations of the VIEs. Under the Business Operation Agreement, the VIEs are each prohibited from engaging in any transaction which may materially affect their assets, obligations, rights or business operations without prior consent from Best Green Changzhou. The VIEs are also required to accept policies and suggestions provided by Best Green Changzhou from time to time with respect to employment or dismissal of employees, corporate management and financial management systems. The VIEs are also required to appoint the directors and members of senior management that Best Green Changzhou designates.

Equity Interest Pledge Agreement

Mr. and Mrs. Shi have pledged their entire equity interests in the VIEs to Best Green Changzhou pursuant to an Equity Interest Pledge Agreement. The equity interests are pledged as collateral security for the obligations of the VIEs under the Consulting Agreement and the Business Operation Agreement.

Proxy Agreement

The Proxy Agreement among Best Green Changzhou and Mr. and Mrs. Shi requires Mr. and Mrs. Shi to vote all of the equity interests in the VIEs at any shareholders’ meeting or other time when shareholders of the VIEs vote in accordance with Best Green Changzhou’s instructions.

Purchased Intangible Assets

The Company conducts an impairment analysis annually and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s purchased intangible assets may be less than its carrying amount. The Company is in the process of finalizing its purchase price allocation for the NICONIA trademark acquisition.

The determination of fair value requires significant judgment and estimates, and the ultimate allocation of purchase price may change. Acquired intangibles with definite lives will be amortized on a straight-line basis over the remaining estimated economic life of the underlying assets. Intangible assets with indefinite lives are not amortized. The Company reviews its indefinite and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Recoverability of an asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset group is expected to generate. If it is determined that an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset group exceeds its fair value. In addition, the Company assesses its long-lived assets for impairment if they are abandoned

Revenue recognition

The Company recognizes revenues in accordance with ASC 605-10-S99, “Revenue Recognition” when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations. Accordingly, all of the following criteria must be met in order for the Company to recognize revenue:

Net sales of products represent the value of goods, net of value added taxes (“VAT”), sales returns, trade discounts and allowances. The Company is subject to VAT which is levied on majority of their products at the rate of 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. Provision for sales returns are recorded as a reduction of revenue in the same period that revenue is recognized. The provision for sales returns, which is based on historical sales returns data, is the Company’s best estimate of the amounts of goods that will be returned from their customers. During the reporting periods, there were no sales returns and the Company did not recognize any provision for sales returns.

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Recent Accounting Pronouncements

In July, 2010, the FASB issued ASU 2010-20 “Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses”. The objective of ASU 2010-20 is to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. Under ASU 2010-20, a entity is required to provide disclosures so that financial statement users can evaluate the nature of the credit risk inherent in the entity’s portfolio of financing receivables, how that risk is analyzed and assessed to arrive at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses. ASU 2010-20 is applicable to all entities, both public and non-public and is effective for interim and annual reporting periods that ending on or after December 15, 2010. Comparative disclosure for earlier reporting periods that ended before initial adoption is encouraged but not required. However, comparative disclosures are required to be disclosed for those reporting periods ending after initial adoption. The Company is currently evaluating the impact of the adoption of ASU 2010-20 on its financial statements.

In April 2010, the FASB issued ASU 2010-28, “When to Perform Step 2 of the Intangibles-Goodwill and Others”, to provide guidance on when to perform step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts. This amendment to ASC 350 is effective for annual reporting periods beginning after December 15, 2010 for public companies. Transition requirements specify that companies must perform the Step 2 test on adoption for reporting units with a zero or negative carrying amount for which qualitative factors exist that indicate it is more likely than not that a goodwill impairment exists. Any resulting impairment charge would be recorded through a cumulative-effect adjustment to beginning retained earnings. This amendment is not expected to have a material impact for the Company.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission (“SEC”) rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective.

During the reporting period, the cash received from sales of all LEV’s were deposited into a personal account under Ms. Xueqing Wang’s name, however this account is actually managed and controlled by the Company as a cash account. Ms. Wang is our CEO Mr. Shi’s wife.  The cash in this account has been subsequently transferred to the Company’s bank account and going forward cash generated from sales for all LEV’s will be deposited directly into the Company’s bank account.

Changes in Internal Control over Financial Reporting

Other than the deposit of all LEV sales to Ms. Wang’s account, no other change in our internal control over financial reporting occurred during the fiscal quarter ended March 31, 2011 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

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ITEM 1A. RISK FACTORS.

Not Applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the period covered by this report, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of this report or incorporated by reference:

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.