Forward-Looking Statements

Forward-looking statements in this Quarterly Report on Form 10-Q, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth and competition; and (iii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission ("SEC").

In some cases, you can identify forward-looking statements by terminology such as ''may,'' ''will,'' ''should,'' ''could,'' ''expects,'' ''plans,'' ''intends,'' ''anticipates,'' ''believes,'' ''estimates,'' ''predicts,'' ''potential,'' or ''continue'' or the negative of such terms or other comparable terminology. Although we believe the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place too much reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any forward-looking statement after the date of this Report.

BUSINESS OVERVIEW

We operate our business through our wholly-owned subsidiaries Shenzhen Anytone Technology Co., Ltd. ("Shenzhen Anytone") and Shenzhen Kim Fai Solar Energy Technology Co., Ltd. ("Kim Fai"), companies incorporated under the laws of the Peoples' Republic of China ("PRC" or "China").

Through our subsidiaries, we manufacture and distribute lithium battery related products, solar panels, and solar related products in China. Our marketing team maintains relationships with our current customers and also searches for potential new customers. We seek to maintain and strengthen our position as a provider of lithium battery related products, solar panels, and solar related products while we also strive to improve the breadth of our product line and to improve the quality of our products.

In August 2008, under the then depressed economic environment, management of the Company made some adjustments to keep the Company running and growing. To keep the existing battery pack accessories segment, the Company expanded into a related field - finished battery packs' assembly and distribution, to diversify our line of products; consequently, the Company competes in the entire battery industry.

Lithium battery was created in the 1990s, with the first mass production in 1993 in Japan. Lithium batteries were first used in notebook computers and now are used in cellular phones, video machines, laptops, digital cameras, MP3 players, global positioning satellite systems, 3G communication devices, hybrid cars and other electronic products. Batteries are becoming smaller, lighter, more efficient, longer lasting and free of pollution. Lithium battery energy/weight ration is higher than other batteries on the market. With an excellent safety standard. We beleive lithium battery is the future of the industy. According to Market Research, the market for lithium ion battery is expected to reach $43 billion by 2020. China has become one of the largest producers and consumers of lithium ion batteries. We anticipate there will be greater demand for lithium batteries in China and worldwide in the next few years. We believe the current trend towards smaller, lighter portable consumer products will continue and because of its size, the demand for lithium batteries will keep increasing.

Having engaged in the battery business for years, management of the Company has accumulated abundant knowledge about the battery industry, established a network among battery companies which are both upstream and downstream in the battery distribution flow, and gained a lot of experience in battery distribution. Assembling and distributing finished batteries has a higher profit margin than manufacturing battery accessories, so management of the Company believed our battery distribution business will be profitable due to the outstanding battery quality and strong distribution network the Company has.

On December 7, 2009, we closed the transactions contemplated by the share exchange agreement dated November 19, 2009 with Anytone International (HK) Co., Ltd. ("Anytone International") and Shenzhen Anytone. Pursuant to the share exchange agreement, we issued the shareholders of Anytone International 3,593,939 shares of the Company's restricted common stock and paid $10,000,000 in cash. Shenzhen Anytone is the Chinese operating subsidiary of Anytone International, collectively referred to a "Anytone." Anytone is engaged in the production of mobile power and related power backup products.

Through Anytone, we develop and market our branded mobile power and related power backup devices. Shenzhen Anytone was founded in 2005 and has ability in Researh and Development ("R&D") and marketing. In addition, Anytone has built its brand name in China and its products are sold to end consumers directly. By focusing on R&D and marketing, Anytone only produces sample products in-house for testing. It primarily outsources its production to third parties it has certified.

Mobile power units are lithium ion batteries' application products. Currently, more and more advanced portable consumer electronic products are introduced to the market, such as laptops, smartphones, tablet PCs, etc. All these products consume power at a high rate. The original single lithium ion battery is not enough to support these products. Mobile power units are the solution. Compared to the creation of lithium ion battery in the 1990s, mobile power was started around 10 years ago and became popular and competitive in the past few years. The increasing competition is due to 1) increasing demand - many consumers have more than one portable consumer electronic device which need power support; 2) higher profits - mobile power units are sold to end consumers directly; 3) low technology limit - a mobile power unit includes three major components, battery cells, PCBs and cases. Therefore, most lithium ion battery related manufacturers can easily find a niche market; 4) no industry standards - mobile power is still a new business in the lithium ion battery industry without official standards. Therefore, this market is rampant with counterfeit products. However, we believe this market is still in its early stage. Once official industry standards are created and the consumers' feedbacks are accumulated, only those products with real quality will survive.

On January 12, 2010, we closed the transactions contemplated by the share exchange agreement dated December 11, 2009 with NewPower. Pursuant to the share exchange agreement, our Chinese subsidiary E'jenie acquired NewPower. We issued the shareholders of NewPower 1,823,346 shares of the Company's restricted common stock and paid them $3,000,000 in cash. NewPower is engaged in manufacturing and distribution of lithium battery cells.

On November 10, 2010, the Company's subsidiary, Shenzhen Anytone executed a share exchange agreement to acquire from all the equity interest of Kim Fai, a Chinese company engaging in the technology development and sale of solar application products and solar energy batteries, all shareholders of Kim Fai. The price for the total outstanding stock of Kim Fai was $13,303,236 paid in cash, and 1,913,265 shares of common stock valued at $14,999,998, which was determined by multiplying the 1,913,265 shares by the stock price of New Energy on November 10, 2010. As of September 30, 2011, $13,303,326 was paid and 1,913,265 shares were issued.

On November 24, 2011, the Company entered into an Equity Transfer Agreement ("Equity Transfer") with Xuemei Fang ("Fang") and Weirong Xu ("Xu", and together with Fang, the "Buyers") to transfer 100% of the equity interest of Billion Electronics Limited (BVI) to the buyers for RMB85,553,892 ($13,578,043). The selling price equaled the appraised value of Billion Electronics, including its wholly owned subsidiaries E'Jenie and NewPower, less RMB153,033,107 ($24,287,500) of debt the Company owed E'Jenie, which shall be cancelled upon completion of the Equity Transfer. Xu is the Director of Marketing of NewPower and Fang is the Vice President of E'Jenie. As of June 30, 2012, the Company received RMB 36,189,824 ($5,721,802) and had an outstanding receivable of RMB 49,364,068 ($7,804,719).

During the third quarter of 2011, the Company performed annual goodwill impairment assessment for NewPower. During the fourth quarter of 2011, the Company performed annual goodwill impairment assessment for Anytone and Kim Fai. The goodwill balance prior to the impairment charge was $60,858,842 and was established primarily as a result of a series acquisition of NewPower, Anytone and Kim Fai in 2010 and 2011. The Company completed the step one analysis using a combination of market capitalization approach and discounted cash flow. The market capitalization approach uses the Company's publicly traded stock price to determine fair value ("FV"). The Discounted Cash Flow ("DCF") method uses revenue and expense projections and risk-adjusted discount rates. The process of determining FV is subjective and requires management to exercise judgment in determining future growth rates, discount and tax rates and other factors. The current economic environment has impacted the Company's ability to forecast future demand and has in turn resulted in the use of higher discount rates, reflecting the risk and uncertainty in current markets. The results of the step one analysis indicated potential impairment in NewPower and Anytone reporting units, which were corroborated by a combination of factors including a significant and sustained decline in the market capitalization, which was significantly below the book value, and the deteriorating macro environment, which has resulted in a decline in expected future demand. The Company therefore performed the second step of the goodwill impairment assessment for NewPower and Anytone to quantify the amount of impairment. This involved calculating the implied FV of goodwill, determined in a manner similar to a purchase price allocation, and comparing the residual amount to the carrying amount of goodwill. Based on the analysis incorporating the declining market capitalization in 2011, as well as the significant end market deterioration and economic uncertainties impacting expected future demand including continued slow-down of the battery industry in China, and increased competition resulting from counterfeit products and decreased selling price from other manufacturers. The Company concluded the entire goodwill balance of NewPower of $14,306,538 and a portion of Anytone's goodwill of $7,405,344 were impaired and recorded in operating expense. The goodwill impairment charge is non-cash. The goodwill impairment charge is not deductible for income tax purposes and, therefore, the Company did not record a corresponding tax benefit in 2011. On December 9, 2011, the Company disposed its subsidiaries Billion, E'jenie and NewPower. As of June 30, 2012, due to continuing losses, utilizing DCF analysis, the Company concluded intangible assets (primarily patents) and goodwill were impaired in the amounts of $5,711,877 and $2,708,219, respectively.

Effective on January 13, 2012, Kim Fai's business, including all the assets and liabilities, were transferred into Shenzhen Anytone to maximize operational efficiency and save costs. All of Kim Fai's products will be sold under the "Anytone" brand name. Kim Fai was owned 100% by Shenzhen Anytone; accordingly, this business transfer was recorded at historical cost due to the equity being under common control. Kim Fai will be dissolved after the transfer and is currently in the process of deregistration.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2012 Compared to the Three Months Ended June 30,
2011

The following table presents certain consolidated statements of operations
information for the three months ended June 30, 2012 and 2011. The discussion
following the table is based on these results. Certain columns may not add due
to rounding.

                                               2012          % of Sales           2011          % of Sales
Net sales
Battery                                    $   1,991,447              55 %    $  4,984,984               45 %
Solar panel                                    1,598,897              45 %       6,161,054               55 %
Total revenue                                  3,590,344             100 %      11,146,038              100 %

Cost of sales
Battery                                        1,763,945              49 %       2,466,610               22 %
Solar panel                                    1,527,426              43 %       4,676,631               42 %
Total cost of sales                            3,291,371              92 %       7,143,241               64 %

Gross profit                                     298,973               8 %       4,002,797               36 %

Operating expenses
Selling                                          323,378               9 %         276,110                2 %
General and administrative                     1,576,709              44 %       1,273,582               11 %
Impairment of goodwill and intangible
assets                                         8,420,096             235 %               -                - %
Total operating expenses                      10,320,183             287 %       1,549,692               14 %

Income (loss) from operations                (10,021,210 )          (279 )%      2,453,105               22 %

Other income, net                                  9,758               - %           2,898                - %

Income (loss) before income taxes            (10,011,452 )          (279 )%      2,456,003               22 %

Income tax expense (benefit)                     114,884               3 %        (668,954 )             (6 )%

Income (loss) from continued operations,
net of tax                                    (9,896,568 )          (276 )%      1,787,049               16 %
Income from discontinued operations, net
of tax                                                 -               - %       1,359,824               12 %
Net income (loss)                          $  (9,896,568 )          (276 )%   $  3,146,873               28 %

Net Sales

Net sales for the three months ended June 30, 2012 was $3.59 million, compared to $11.15 million for the comparable period of 2011, a decrease of $7.56 million or 68%. Battery production and sales, mainly from Anytone, was $2.00 million for the three months ended June 30, 2012 compared to $4.98 million in the comparable period of 2011, a decrease of $2.99 million or 60%. Sales of solar products was $1.60 million in the three months ended June 30, 2012, compared to $6.16 million in the comparable period of 2011, a decrease of $4.56 million or 74%. The decrease was mainly due to (1) the battery industry being depressed in China and market competition intensifying; and (2) integration of the business section, resulting in reduced production and a 71% decrease in sales volume of batteries during the three months ended June 30, 2012 as compared to the same period of 2011.

Cost of Sales

Cost of Sales ("COS") for the three months ended June 30, 2012 was $3.29 million, as compared to $7.14 million for the comparable period of 2011, a decrease of $3.85 million, or 54% due to decreased sales and production volume.

COS for the battery segment was $1.76 million, or 89% of total battery revenue, for the three months ended June 30, 2012, compared to $2.47 million, or 49%, for the comparable period of 2011, a decrease of $0.70 million, or 28%.

COS for solar products for the three months ended June 30, 2012 was $1.53 million, or 95% of solar products sales, as compared to $4.68 million or 76% of sales for the comparable period of 2011, a decrease of $3.15 million, or 67%.

The decrease of total COS was due to decreased sales and production volume. The percentage increase for COS to sales was mainly due to the increase of direct labor cost and the price increase of certain raw materials, as well as decreased production and sales volume. As a result, the increased variable cost absorbed by products increased in the three months ended June 30, 2012 compared to the comparable period of 2011. We raised our employees' salaries as a result of overall inflation in China. Our workshop workers' base salary increased 15% in the three months ended June 30, 2012 compared to the comparable period of 2011.

Operating Expenses

Selling, general and administrative expenses were $1.90 million for the three months ended June 30, 2012 , or 53% of net revenue, as compared to $1.55 million, or 14% of net revenue, for the comparable period of 2011, an increase of $0.35 million, or 23%.

Selling expenses for the three months ended June 30, 2012 were $0.32 million, or 9% of net revenue, compared to $0.28 million, or 2% of net revenue, for the comparable period of 2011, an increase of $0.05 million, or 17%, which was mainly due to the increased marketing expenses including $0.11 million of advertisement and promotional expenses of $0.11 million.

General and administrative ("G&A") expenses for the three months ended June 30, 2012 were $1.58 million, or 44% of net revenue, compared to $1.27 million, or 11% of net revenue, for the comparable period of 2011. The increase in G&A expenses of $0.30 million was mainly due to the increase of $0.19 million of employees' salaries and welfare expenses. For the three months ended June 30, 2012 and 2011, the US parent company recorded $0.46 million and $0.33 million as G&A expenses, respectively. These expenses mainly included stock option and warrant compensation paid to our directors and employees and certain expenses relating to being a public company in the US, such as accounting and legal fees.

During the three months ended June 30, 2012, the Company performed a goodwill and intangible asset impairment test resulting in $8.42 million impairment to goodwill and intangible assets of Anytone and Kim Fai.

Income From Discontinued Operations, net of tax

Net income from discontinued operations, net of tax was $0 for the three months ended June 30, 2012, as compared to $1.36 million for the comparable period of 2011, which was mainly from the disposed subsidiaries, Shenzhen NewPower Technology Development Co., Ltd. ("NewPower") and E'Jenie Technology Development Co., Ltd. ("E'Jenie").

Net Income (Loss)

Net loss for the three months ended June 30, 2012 was $9.90 million compared to net income of $3.15 million for the comparable period of 2011, a decrease of $13.04 million, or 414%, mainly due to goodwill impairment of $8.42 million in the first quarter of 2012.

Six Months Ended June 30, 2012 Compared to the Six Months Ended June 30, 2011

The following table presents certain consolidated statements of operations
information for the six months ended June 30, 2012 and 2011. The discussion
following the table is based on these results. Certain columns may not add due
to rounding.

                                               2012          % of Sales           2011          % of Sales

Net sales
Battery                                    $   4,988,308              58 %    $ 11,953,882               51 %
Solar panel                                    3,557,301              42 %      11,675,972               49 %
Total revenue                                  8,545,609             100 %      23,629,854              100 %

Cost of sales
Battery                                        4,639,514              93 %       5,745,805               48 %
Solar panel                                    3,390,119              95 %       8,553,509               73 %
Total cost of sales                            8,029,633              94 %      14,299,314               61 %

Gross profit                                     515,976               6 %       9,330,540               39 %

Operating expenses
Selling                                          718,733               8 %         597,973                3 %
General and administrative                     3,242,307              38 %       2,656,014               11 %
Impairment of goodwill and intangible
assets                                         8,420,096              99 %               -                - %
Total operating expenses                      12,381,136             145 %       3,253,987               14 %

Income (loss) from operations                (11,865,160 )          (139 )%      6,076,553               25 %

Other income, net                                 16,677               - %           6,787                - %

Income (loss) before income taxes            (11,848,483 )          (139 )%      6,083,340               25 %

Income tax expense (benefit)                     299,613               4 %      (1,656,055 )             (7 )%

Income (loss) from continued operations,
net of tax                                   (11,548,870 )          (135 )%      4,427,285               18 %
Income from discontinued operations, net
of tax                                                                 - %       4,180,143               18 %
Net income (loss)                          $ (11,548,870 )          (135 )%   $  8,607,428               36 %

Net Sales

Net sales for the six months ended June 30, 2012 was $8.55 million, compared to $23.63 million for the comparable period of 2011, a decrease of $15.08 million or 64%. Battery production and sales, mainly from Anytone, was $4.99 million for the six months ended June 30, 2012 compared to $11.95 million in the comparable period of 2011, a decrease of $6.97 million or 58%. Sales of solar products was $3.56 million in the six months ended June 30, 2012, compared to $11.68 million in the comparable period of 2011, a decrease of $8.12 million or 70%. The decrease was mainly due to (1) the battery industry being depressed in China and market competition intensifying; and (2) integration of the business section, resulting in reduced production and a 71% decrease in sales volume of batteries during the three months ended June 30, 2012 as compared to the same period of 2011.

Cost of Sales

COS for the six months ended June 30, 2012 was $8.03 million, as compared to $14.30 million for the comparable period of 2011, a decrease of $6.27 million, or 44% due to decreased sales and production volume.

COS for the battery segment was $4.64 million, or 93% of total battery revenue, for the six months ended June 30, 2012, as compared to $5.75 million, or 48%, for the comparable period of 2011, a decrease of $1.11 million, or 19%.

COS for solar products for the six months ended June 30, 2012 was $3.39 million, or 95% of solar products sales, as compared to $8.55 million or 73% of sales, for the comparable period of 2011, a decrease of $5.16 million, or 60%.

The decrease on total COS was due to decreased sales and production volume. The percentage increase for COS to sales was mainly due to the increase of direct labor cost and the price increase of certain raw materials, as well as decreased production and sales volume. As a result the increased variable cost absorbed by products increased in the six months ended June 30, 2012 compared to the comparable period of 2011. We raisedour employees' salaries as a result of overall inflation in China. For our workshop workers, their base salary increased 15% in 2012 compared to the Comparable period of 2011.

Operating Expenses

Operating expenses, excluding goodwill impairment, for the six months ended June 30, 2012 were $3.96 million, or 49% of net revenue, compared to $3.25 million, or 14% of net revenue, for the comparable period of 2011, an increase of $0.71 million, or 22%.

Selling expenses for the six months ended June 30, 2012 were $0.72 million, or 8% of net revenue, compared to $0.60 million, or 3% of net revenue, for the comparable period of 2011, an increase of $0.12 million, or 20%, which was mainly due to the increased marketing expenses including advertisement and promotional expenses of $0.18 million.

G&A expenses for the six months ended June 30, 2012 were $3.24 million, or 38% of net revenue, compared to $2.66 million, or 11% of net revenue, for the comparable period of 2011. The increase in G&A expenses of $0.59 million was mainly due to the increase of $0.58 million of employees' salary and welfare expenses. For the six months ended June 30, 2012 and 2011, the US parent company recorded $0.85 million and $0.82 million as G&A expenses, respectively. These expenses mainly included stock option and warrant compensation paid to our directors and employees and certain expenses relating to being a public company in the US, including accounting and legal fees.

During the six months ended June 30, 2012, the Company performed goodwill and intangible assets impairment test resulting in $8.42 million impairment to goodwill and intangible assets of Anytone and Kim Fai.

Income From Discontinued Operations, net of tax

Net income from discontinued operations, net of tax for the six months ended June 30, 2012 was $0 compared to $4.18 million for the comparable period of 2011, which was mainly from the disposed subsidiaries, NewPower and E'Jenie.

Net Income (Loss)

Net loss for the six months ended June 30, 2012 was $11.55 million compared to net income of $8.61 million for the comparable period of 2011, a decrease of $20.16 million, or 234%, due to the reasons listed above.

LIQUIDITY AND CAPITAL RESOURCES

Our operations and liquidity needs are funded primarily through cash flows from operations, short term financing and sale of Compay stock. Cash and equivalents were $9,033,416 as of June 30, 2012. Working capital as of June 30, 2012 was $22,246,998.

The following is a summary of cash provided by or used in each of the indicated types of activities during the six months ended June 30, 2012 and 2011:

                                2012             2011
Cash provided by (used in):
Operating Activities          $  (75,095)     $  6,561,484
Investing Activities            4,609,683          (12,964 )
Financing Activities                    -       (6,669,773 )

Net cash used in operating activities was $75,095 for the six months ended June 30, 2012 compared to $6.56 million provided by operating activities for the comparable period of 2011. The decrease in net cash provided by operating activities for the six months ended June 30, 2012 was mainly due to the net loss in the period and our timely payment of accounts payable. We have experienced timely payment from our customers for the six months ended June 30, 2012.

Net cash provided by investing activities was $4.61 million for the six months ended June 30, 2012 compared to $12,964 cash used in the comparable period of . . .