The following discussion should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this Form 10-QSB.

Safe Harbor Regarding Forward-Looking Statements

The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

The following table presents the statement of operations for the three months ended June 30, 2007 as compared to the comparable period of the three months ended June 30, 2006. The discussion following the table is based on these results.

                                               Three Month Periods Ended
                                            June 30, 2007      June 30, 2006
                                             (Restated)         (Restated)
Revenue, net                               $       368,823   $      3,027,810

Cost of sales                                      635,645          2,119,460

Gross profit                                      (266,822 )          908,350

Operating Expenses
Selling expense                                      7,273              8,591
General and administrative expenses                778,556            416,777
Goodwill impairment                                      -                  -
Total operating expenses                           785,829            425,368

Income (loss) from operations                   (1,052,651 )          482,982

Other (Income) Expense
Interest income                                          -             (5,482 )
Miscellaneous income                                     -                  -
Interest expense                                     7,319             65,486

Total Other Expense                                  7,319             60,004

Income (loss) before income taxes               (1,059,970 )          422,978

Provision for income taxes                         (59,269 )           32,102

Income (loss) from continuing operations        (1,000,701 )          390,876

Discontinued operations
Loss on disposal of subsidiary                      (8,366 )                -
Loss from discontinued operations                  (37,578 )                -

Net Income (loss)                               (1,046,645 )          390,876

Net sales

Net sales for the three month periods ended June 30, 2007 totaled $368,823 compared to $3,027,810 for the three month periods ended June 30, 2006, a decrease of $2,658,987, or approximately 87.8%. The decrease was due to increased competition and decreased demands from our customers for the three month periods ended June 30, 2007 as compared to the same periods ended June 30, 2006. Due to the appreciation of RMB dollar and changes in export policy by China Government, several of our customers lost their customers from abroad and because of the increase in costs for raw material, E'jenie could not offer the same low price and high quality that was previously produced. Several of our customers went to our competitors who provide relative low price products but also lower quality.

Cost of Sales

Cost of sales for the three month periods ended June 30, 2007 totaled $635,645 or 172.3% of net revenue compared to $2,119,460 or approximately 70% of net revenue for the three month periods ended June 30, 2006, a decrease of $1,483,815, approximately 70%. The decrease was due to decreased net revenue for the three month periods ended June 30, 2007. The gross profit rate decreased102.3% to (72%) from 30% due to the fact that some cost are fixed and is not impacted by the decrease in revenue.

Operating Expense

Selling and general and administrative expenses for the three month periods ended June 30, 2007 totaled $785,829 or approximately 213% of net revenue compared to $425,368 or approximately 14% of net revenue for the three month periods ended June 30, 2006, an increase of $360,461 or approximately 84.7%. The increase in general and administrative expenses was primarily due to the increase in accounting , legal and other professional fees related to SEC comment letters and 2004 re audit during the three month periods ended June 30,2007.

Income (Loss) from Operations

Income (loss) from operations for the three month periods ended June 30, 2007 totaled $(1,052,651) or approximately 285.4 % of net revenue compared to $482,982 or approximately 16% of net revenue for the three month periods ended June 30, 2006, a decrease of $1,535,633 or approximately 317.9%. The decrease in income from operations was primarily due to decrease in sales during the three month periods ended June 30, 2007.

Interest Expense

Interest expense for the three month periods ended June 30, 2007 totaled $7,319 compared to $65,486 for the three month periods ended June 30, 2006, a decrease of $58,167, or approximately 89%. The decrease in interest expense was due to indebtedness related to the potential acquisition of new business during 2006.

Net Income

Net income (loss) for the three month periods ended June 30, 2007 totaled $(1,046,645) compared to $390,876 for the three month periods ended June 30, 2006, a decrease of $1,437,521 or approximately 368%. The decrease in net income was primarily due to reason described above.

RESULTS OF OPERATIONS

The following table presents the statement of operations for the six month
periods ended June 30, 2007 as compared to the comparable period of the six
month periods ended June 30, 2006. The discussion following the table is based
on these results.

                                       4
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                                                Six Month Periods Ended
                                           June 30, 2007      June 30, 2006
                                             (Restated)        (Restated)
Revenue, net                               $    2,007,811   $      6,211,357

Cost of sales                                   1,796,629          4,328,727

Gross profit                                      211,182          1,882,630

Operating Expenses
Selling expense                                    13,366             15,785
General and administrative expenses             1,050,284            664,779
Goodwill impairment                                     -                  -
Total operating expenses                        1,063,650            680,564

Income (loss) from operations                    (852,468 )        1,202,066

Other (Income) Expense
Interest income                                    (1,670 )          (10,597 )
Miscellaneous income                                    -                268
Interest expense                                    9,355             95,326

Total Other Expense                                 7,685             84,997

Income (loss) before income taxes                (860,153 )        1,117,069

Provision for income taxes                              -             72,639

Income (loss) from continuing operations         (860,153 )        1,044,430

Discontinued operations
Loss on disposal of subsidiary                    (35,635 )                -
Goodwill impairment                            (1,295,556 )                -
Loss from discontinued operations                 (37,578 )                -

Net Income (loss)                          $   (2,228,922 ) $      1,044,430

Net sales

Net sales for the six month periods ended June 30, 2007 totaled $2,007,811 compared to $6,211,357 for the six month periods ended June 30, 2006, a decrease of $4,203,546, or approximately 67.7%. The decrease was due to increased competition and decreased demands from our customers for the six month periods ended June 30, 2007 as compared to the same periods ended June 30, 2006. Due to the appreciation of RMB dollar and changes in export policy by China Government, several of our customers lost their customers from abroad and because of the increase in costs for raw material, E'jenie could not offer the same low price and high quality that was previously produced. Several of our customers went to our competitors who provide relative low price products but also lower quality.

Cost of Sales

Cost of sales for the six month periods ended June 30, 2007 totaled $1,796,629 or 89.5% of net revenue compared to $4,328,727 or approximately 69.7% of net revenue for the six month periods ended June 30, 2006, a decrease of $2,532,098, approximately 58.5%. . The decrease was due to decreased net revenue for the six month periods ended June 30, 2007. The gross profit rate decreased 19.8% to 10.5% from 30.3% due to the change of labor cost structure during the six months ended June 30, 2007 as compare to June 30, 2006. In order to retain skilled workers, the company decided to use fixed salary instead of variable salary based on quantity of units produced.

Operating Expense

Selling and general and administrative expenses for the six month periods ended June 30, 2007 totaled $1,063,650 or approximately 53% of net revenue compared to $680,564 or approximately 11.0% of net revenue for the six month periods ended June 30, 2006, an increase of $383,086 or approximately 56%. The increase in general and administrative expenses was primarily due to the increase in accounting , legal and other professional fees related to SEC comment letters and 2004 re audit during the six month periods ended June 30,2007.

Income (Loss) from Operations

Income (loss) from operations for the six month periods ended June 30, 2007 totaled $(852,468) or approximately 42.4% of net revenue compared to $1,202,066 or approximately 19.4% of net revenue for the six month periods ended June 30, 2006, a decrease of $2,054,534 or approximately 171%. The decrease in income from operations was primarily due to decrease in sales during the six month periods ended June 30, 2007.

Interest Expense

Interest expense for the six month periods ended June 30, 2007 totaled $9,355 compared to $95,326 for the six month periods ended June 30, 2006, a decrease of $85,971, or approximately 90.2%. The decrease in interest expense was due to indebtedness related to the potential acquisition of new business during 2006.

Discontinued Operations

Discontinued operations for the six month periods ended June 30, 2007 totaled $(1,368,769) compared to $0 for the six month periods ended June 30, 2006, a decrease of $1,368,769. The Company acquired Galaxy View on June 26, 2006 and during the first quarter of 2007, our two largest customers; China mobile and China Unicom changed their purchase procedures. In the past, purchase orders were made by their local branch offices based on their needs and demand. The change now only allowed their main head office to place purchase orders from their selected vendors. They evaluated all vendors based on their criteria and unfortunately Sono Digital was not selected as one of their vendors. With the loss of the two largest users of our products, the fact that the telecom industry in China was a monopoly, there was no longer a market for our products.

Once the decision was made by our two largest customers, the Company discussed and considered selling Galaxy View.

On April 24, 2007, the Company entered into an Agreement on Transfer of Shares of Galaxy View with Liu Changqing and Wang Feng (collectively, the Purchasers") for the sale of our wholly-owned subsidiary Galaxy View (the "Agreement"). Changqing purchased a 60% interest and Feng will purchase a 40% interest in Galaxy View. In exchange for all of the outstanding shares of Galaxy View, the Purchasers agreed to pay $3,000,000 USD as consideration for the acquisition. We entered into promissory notes with the Purchasers for payment of their share of the $3,000,000 which is due within 90 days of April 24, 2007. If payment is not made within 90 days, the promissory notes will accrue interest at 18% per annum from the closing date.

Net Income

Net income (loss) for the six month periods ended June 30, 2007 totaled $(2,228,922) compared to $1,044,430 for the six month periods ended June 30, 2006, a decrease of $3,273,352 or approximately 313.4%. The decrease in net income was primarily due to reason described above.

LIQUIDTY AND CAPITAL RESOURCES

Cash has historically been generated from operations. Operations and liquidity needs are funded primarily through cash flows from operations and short-term borrowings. Cash and cash equivalents were $815,571 at June 30, 2007 and current assets totaled $4,887,539
at June 30, 2007. The Company's total current liabilities were $1,062,290 at June 30, 2007. Working capital at June 30, 2007 was $3,825,249. During the six month periods ended June 30, 2007, net cash provided by operating activities was $1,953,537.

Net cash used in investing activities totaled $(2,643,635) for the six month periods ended June 30, 2007, compared with $(2,302,115) for the same periods ended June 30, 2006. The net cash change was $(259,264) and $1,173,692 for the six month periods ended June 30, 2007 and 2006, respectively.

We will continue to evaluate alternative sources of capital to meet our growth requirements, including other asset or debt financing, issuing equity securities and entering into other financing arrangements. There can be no assurance, however, that any of the contemplated financing arrangements described herein will be available and, if available, can be obtained on terms favorable to us.

The sale of Galaxy View for $3 million dollar will help our cash balance and our working capital. The Company's current operations do not generate sufficient cash to cover its operating costs. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company has taken certain restructuring steps to provide the necessary capital to continue its operations. These steps included: 1) acquire profitable operations through issuance of equity instruments, 2) to continue actively seeking additional funding and restructure the acquired subsidiaries to increase profits and minimize the liabilities.

Working Capital Requirements

Historically operations, short term financing and the sale of our company stock have been sufficient to meet our cash needs. We believe that we will be able to generate revenues from sales. However, our actual working capital needs for the long and short term will depend upon numerous factors, including operating results, competition, and the availability of credit facilities, none of which can be predicted with certainty. Future expansion will be limited by the availability of financing products and raising capital.

OFF-BALANCE SHEET ARRANGEMENTS

We have never entered into any off-balance sheet financing arrangements and have never established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.