UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarter ended December 31, 2010

-OR-


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

For the transition period from to

Commission File Number 033-37099-S

T-BAY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


NEVADA (State or other jurisdiction of incorporation or organization)		91-1465664 (I.R.S. Employer Identification No.)

Block 3, Qiao Xing Science Technological & Industrial Zone,
Tang Quan, Huizhou, Guangdong, PRC

(Address of principal executive offices)

Issuer’s telephone number, including area code: 86-752-6209699

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

Indicate by check mark whether the registrant: (1) 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 þ No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

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


Large accelerated filer o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act). Yes o No þ

The number of shares outstanding of each of the Registrant’s classes of common stock, as of February 1, 2011 was 30,088,174 shares, all of one class of $0.001 par value Common Stock.

T-BAY HOLDINGS, INC.
FORM 10-Q
Quarter Ended December 31, 2010
TABLE OF CONTENTS


	Page
PART I—FINANCIAL INFORMATION

Item 1 Financial Statements

Consolidated Balance Sheets as of December 31, 2010 (Unaudited) and March 31, 2010		5

Unaudited Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended December 31, 2010 and 2009		6

Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the Nine Months Ended December 31, 2010		7

Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2010 and 2009		8

Notes to Unaudited Consolidated Financial Statements of December 31, 2010		9-17

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

Item 3 Quantitative and Qualitative Disclosures About Market Risk		24

Item 4 Controls and Procedures		24

PART II—OTHER INFORMATION

Item 6 Exhibits		26

SIGNATURES		26

Exhibit 31.1
Exhibit 31.2
Exhibit 32

SPECIAL NOTE ON FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in Item 2 of Part I of this report, includes forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.

Please note that we suspended operations in September 2010.

PART 1. FINANCIAL INFORMATION


ITEM 1.		FINANCIAL STATEMENTS

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Unaudited Consolidated Balance Sheets			5

Unaudited Consolidated Statements of Operations and Comprehensive Income			6

Unaudited Consolidated Statement of Changes in Stockholders’ Equity			7

Unaudited Consolidated Statements of Cash Flows			8

Notes to Unaudited Consolidated Financial Statements			9-17

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2010 and MARCH 31, 2010

(In thousands of United States dollars)


			DECEMBER 31,			MARCH 31,
	Note(s)		2010			2010
			(Unaudited)

*ASSETS*
CURRENT ASSETS
Cash and cash equivalents			$	18		$	703
Notes receivable				—			10
Prepayments, deposits and other receivables, net				14			12,517


Total current assets				32			13,230

PROPERTY, PLANT AND EQUIPMENT, NET		4		28			1,591
ACCOUNTS RECEIVABLE, NET		7		9,786			28,493
INTANGIBLE ASSETS, NET		5		26			42


TOTAL ASSETS			$	9,872		$	43,356


LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable			$	153		$	155
Accruals and other payables
Related parties		9		625			437
Third parties				1,025			1,259
Receipts in advance				143			143


Total current liabilities				1,946			1,994

LONG-TERM LIABILITIES
Due to shareholders		9		4,255			4,255


Total liabilities				6,201			6,249


COMMITMENTS AND CONTINGENCIES		10

STOCKHOLDERS’ EQUITY
Preferred stock, authorized 10,000,000 shares, par value $0.001, issued and outstanding Nil				—			—
Common stock, authorized 100,000,000 shares, par value $0.001, issued and outstanding 30,088,174				30			30
Additional paid-in capital				1,462			1,462
Public welfare fund				2,109			2,109
Statutory surplus fund				4,219			4,219
(Accumulated losses) /retained earnings				(11,332	)		21,795
Accumulated other comprehensive income				6,108			5,830


Total stockholders’ equity				2,596			35,445


NON-CONTROLLING INTEREST				1,075			1,662


TOTAL EQUITY				3,671			37,107


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	9,872		$	43,356

The accompanying notes are an integral part of these unaudited consolidated financial statements.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the three and nine months ended December 31, 2010 and 2009

(In thousands of United States dollars, except per share data)


			THREE MONTHS ENDED						NINE MONTHS ENDED
			DECEMBER 31,						DECEMBER 31,
	Note		2010			2009			2010			2009

NET REVENUE			$	—		$	8,129		$	9,641		$	28,912

COST OF REVENUE				—			7,624			9,383			27,054


GROSS PROFIT				—			505			258			1,858

OPERATING EXPENSES
Selling expenses				—			32			34			96
General and administrative expenses				7,104			6,724			34,168			17,668


TOTAL OPERATING EXPENSES				7,104			6,756			34,202			17,764


LOSS FROM OPERATIONS				(7,104	)		(6,251	)		(33,944	)		(15,906	)

OTHER INCOME				—			5			238			44
GAIN ON DISPOSAL OF A SUBSIDIARY				—			—			—			7


LOSS BEFORE INCOME TAX				(7,104	)		(6,246	)		(33,706	)		(15,855	)

INCOME TAX: CURRENT		6		—			—			—			(7	)


NET LOSS				(7,104	)		(6,246	)		(33,706	)		(15,862	)

Less: Net loss attributable to non-controlling interest				21			57			579			266


NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS				(7,083	)		(6,189	)		(33,127	)		(15,596	)

OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment				181			33			278			18


COMPREHENSIVE LOSS			$	(6,902	)	$	(6,156	)	$	(32,849	)	$	(15,578	)


WEIGHTED AVERAGE NUMBER OF SHARES (in thousands)				30,088			30,088			30,088			30,088


LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (in dollars)			$	(0.24	)	$	(0.21	)	$	(1.10	)	$	(0.52	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

For the nine months ended December 31, 2010

(In thousands of United States dollars)


											Retained			Accumulated
					Additional		Public		Statutory		earnings/			other		Total			Non-
					paid-in		welfare		surplus		(accumulated			comprehensive		stockholders’			controlling
	Common stock				capital		fund		fund		losses)			income		equity			interest			Total
	No. of
	shares

Balance, March 31, 2010		30,088,174	$	30	$	1,462	$	2,109	$	4,219	$	21,795		$	5,830	$	35,445		$	1,662		$	37,107
Net loss		—		—		—		—		—		(33,127	)		—		(33,127	)		(579	)		(33,706	)
Repayment to minority shareholder		—		—		—		—		—		—			—		—			(8	)		(8	)
Foreign currency translation adjustment		—		—		—		—		—		—			278		278			—			278

Balance, December 31, 2010		30,088,174	$	30	$	1,462	$	2,109	$	4,219	$	(11,332	)	$	6,108	$	2,596		$	1,075		$	3,671

The accompanying notes are an integral part of these unaudited consolidated financial statements.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended December 31, 2010 and 2009

(In thousands of United States dollars)


	FOR THE NINE MONTHS
	ENDED DECEMBER 31,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(33,706	)	$	(15,862	)
Adjustments to reconcile net income to net cash generated from operating activities:
Depreciation		439			660
Amortization		16			18
Gain on disposal of a subsidiary		—			(7	)
Loss on disposal of property, plant and equipment		—			12
Allowances for doubtful trade and other receivables		33,273			17,580

Changes in operating assets and liabilities:
Decrease /(increase) in notes receivable		11			(10,438	)
Increase in accounts receivable		(4,451	)		(21,939	)
Decrease in prepayments, deposits and other receivables		2,026			11,757
Increase /(decrease) in accounts payable		1,779			(278	)
Decrease in accruals and other payables		(109	)		(94	)
Decrease in receipts in advance		—			(844	)
Decrease in income tax payable		—			(262	)


Net cash used in operating activities		(722	)		(19,697	)


CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds received from disposal of property, plant and equipment		—			14


Net cash provided by investing activities		—			14


CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of cash advance to the minority shareholder		(8	)		(6	)
Cash advance from shareholders		38			112


Net cash provided by financing activities		30			106


Effect of exchange rate changes on cash		7			(10	)


Net decrease in cash and cash equivalents		(685	)		(19,587	)

Cash and cash equivalents at beginning of period		703			20,493


Cash and cash equivalents at end of period	$	18		$	906


SUPPLEMENTAL INFORMATION
Income taxes paid	$	—		$	269

Interest paid	$	—		$	—


NON-CASH OPERATING AND INVESTING ACTIVITIES
Settlement of accounts payable (Note 11)	$	1,786		$	—

The accompanying notes are an integral part of these unaudited consolidated financial statements.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2010

1. The Company and Subsidiaries

T-Bay Holdings, Inc. (the “Company” or “T-Bay”) was incorporated under the laws of the State of Utah on August 8, 1984 as “Sharus Corporation” with authorized common stock of 50,000,000 shares with a par value of US$0.001. On June 13, 1989, the domicile of the Company was changed to the state of Nevada in connection with a name change to “Golden Quest, Inc.”. On January 7, 2002, the name was changed to “T-Bay Holdings, Inc.” as part of a reverse stock split of 400 shares of outstanding stock for one share and on November 23, 2004, the Company increased the authorized common stock to 100,000,000 shares with a par value of US$0.001 as part of a reverse stock split of 20 outstanding shares for one share.

On August 16, 2005, pursuant to an Agreement and Plan of Reorganization, T-Bay issued 18,550,000 shares of its common stock for all of Amber Link International Limited’s (“Amber Link”) and Wise Target International Limited’s (“Wise Target”) outstanding shares of common stock (the “Merger”). Amber Link and Wise Target were two of the owners of Shanghai Sunplus Communication Technology Co., Ltd. (“Sunplus”). Wise Target owned a 75% interest and Amber Link owned a 20% interest in Sunplus. After the Merger, T-Bay indirectly owned a 95% interest in Sunplus. In March 2009, Wise Target transferred all its holdings (75%) in Sunplus to Amber Link for US$2,885,000 (HK$22,500,000). As a result of this transaction, Amber Link directly owned 95% of Sunplus and this transaction had no impact on the Company’s effective holdings of Sunplus. Shanghai Fanna Industrial Design Co., Ltd. owned the remaining 5% interest in Sunplus. On November 25, 2009, the Company transferred all its holdings (100%) in Amber Link to Wise Target for US$2,600. As a result of the transaction, the Company indirectly holds Amber Link and this transaction had no impact on the Company’s effective holdings of Amber Link and Sunplus.

Wise Target was incorporated on April 24, 2002 under the International Business Companies Act in the British Virgin Islands.

Amber Link was incorporated on May 10, 2002 under the International Business Companies Act in the British Virgin Islands. During the year ended March 31, 2007, Amber Link commenced the sales of mobile phones and components. In September 2010, Amber Link suspended operations.

Sunplus was established on October 17, 2002 under the laws of the People’s Republic of China (“PRC”) as a Sino-foreign joint venture specialized in the development, production and sales of electronic telecommunication devices. Sunplus commenced operations on May 1, 2003. At December 31, 2010, Sunplus has approximately 8 staff, mostly administrative staff. In September 2010, Sunplus suspended operations.

On February 12, 2007, Sunplus established a wholly-owned subsidiary, Zhangzhou JiaXun Communication Facility Co., Ltd. (“Zhangzhou JiaXun”) under the laws of the PRC. Zhangzhou JiaXun is an investment holding company.

On March 19, 2007, Sunplus and Zhangzhou JiaXun acquired 80% and 20%, respectively, of Fujian Qiaoxing Industry Co., Ltd. (“Fujian Qiaoxing”).

On March 20, 2009, Sunplus disposed of its 80% interest in Fujian Qiaoxing to Qiaoxing Telecommunication Industry Company Limited (“QiaoXing Telecom”), a third party, at a consideration of US$12,230,000 (RMB84,000,000).

On April 9, 2009, Sunplus disposed of Zhangzhou JiaXun to QiaoXing Telecom at a consideration of US$731,000 (RMB5,000,000).

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2010

1. The Company and Subsidiaries (continued)

As of December 31, 2010, the Group structure is as follows:-

2. Going concern

These financial statements have been prepared on a going concern basis which assumes the Company and its subsidiaries (collectively referred to as the “Group”) will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Group suspended operations in September 2010 with a view to minimise future losses. As of December 31, 2010, the Group had net current liabilities of US$1,914,000 and accumulated losses of US$11,332,000. This raised uncertainty about the Group’s ability to continue as a going concern. These financial statements do not include any adjustments that may result from this uncertainty. The Group’s ability to continue as a going concern is dependent upon the Group generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities as and when they fall due. Management intends to look for new business opportunities and to finance operating costs over the next twelve months with existing cash on hand and advances from shareholders.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2010

3. Summary of Significant Accounting Policies

(a) Basis of Preparation

The accompanying unaudited consolidated financial statements of T-Bay and its subsidiaries have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. In the opinion of management, these unaudited consolidated interim financial statements include all adjustments and disclosures considered necessary to make the financial statements not misleading. All adjustments are of a normal recurring nature. These unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of T-Bay for the year ended March 31, 2010 and notes thereto contained in the Form 10-K as filed with the Securities and Exchange Commission. The results of operations for the three and nine months ended December 31, 2010 are not necessarily indicative of the results for the full fiscal year ending March 31, 2011.

(b) Basis of Consolidation

The unaudited consolidated balance sheet as of December 31, 2010 and the unaudited consolidated statement of operations for the three and nine months ended December 31, 2010 include T-Bay, Wise Target, Amber Link and Sunplus. All material intercompany transactions have been eliminated upon consolidation.

(c) Loss Per Share

Basic loss per share is computed by dividing the loss for the period by the weighted average number of common shares outstanding for the period. There are no common stock equivalents outstanding for any period presented.

4. Property, Plant and Equipment, Net


	DECEMBER 31,		MARCH 31,
	2010		2010
	US$’000		US$’000
	(Unaudited)
Cost
Machinery	$	81	$	4,766
Office equipment		108		104

		189		4,870

Accumulated depreciation
Machinery		73		3,200
Office equipment		88		79

		161		3,279

Carrying value
Machinery		8		1,566
Office equipment		20		25

	$	28	$	1,591

Depreciation expense for each of the three months ended December 31, 2010 and 2009 was approximately US$9,000 and US$216,000, respectively, and for each of the nine months ended December 31, 2010 and 2009 was approximately US$439,000 and US$660,000, respectively.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2010

5. Intangible Assets, Net

Changes in the carrying amount of intangible assets for the nine months ended December 31, 2010 were as follows:-


	Software			Patent			Total
	US$’000			US$’000			US$’000
Cost:
Balance, March 31, 2010 and December 31, 2010	$	183		$	4		$	187


Less: Accumulated amortization
Balance, March 31, 2010		(141	)		(4	)		(145	)
Amortization expenses		(16	)		—			(16	)


Balance, December 31, 2010		(157	)		(4	)		(161	)


Net balance, December 31, 2010	$	26		$	—		$	26

Amortization expense for each of the three months ended December 31, 2010 and 2009 was approximately US$5,000 and US$6,000, respectively, and for each of the nine months ended December 31, 2010 and 2009 was approximately US$16,000 and US$18,000, respectively. The estimated amortization expense for the three months ending March 31, 2011 and the four years ending March 31, 2012, 2013, 2014 and 2015 amounts to approximately US$6,000, US$18,000, US$2,000, US$ nil and US$ nil, respectively.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2010

6. Income Taxes

Amber Link and Wise Target are not subject to income taxes in any tax jurisdiction.

No provision for current income tax for T-Bay has been made as it incurred a loss for each of the nine months ended December 31, 2010 and 2009, respectively.

Sunplus is subject to PRC Income Tax. Pursuant to the PRC Income Tax Laws, the prevailing statutory rate of enterprise income tax is 25%.

Zhangzhou JiaXun was inactive during the nine months ended December 31, 2009 up to date of disposal.

A reconciliation between taxes computed at the PRC statutory rate of 25% and the Group’s effective tax rate is as follows:-


	FOR THE THREE MONTHS						FOR THE NINE MONTHS
	ENDED						ENDED
	DECEMBER 31,			DECEMBER 31,			DECEMBER 31,			DECEMBER 31,
	2010			2009			2010			2009
	US$’000			US$’000			US$’000			US$’000

Loss before income tax	$	(7,104	)	$	(6,246	)	$	(33,706	)	$	(15,855	)


Income tax benefit on pretax loss at statutory rate		(1,776	)		(1,562	)		(8,426	)		(3,964	)
Effect of different tax rates of Group company operating in other jurisdictions		1,668			1,265			5,498			2,611
Change in valuation allowance		105			297			2,880			1,353
Under-provision in prior period		—			—			—			7
Tax effect of non-deductible expenses		3			—			48			—


Income tax expense	$	—		$	—		$	—		$	7

As of December 31, 2010, T-Bay had accumulated net operating loss carryforwards for United States federal tax purposes of approximately US$2,012,000, that are available to offset future taxable income. T-Bay’s net operating loss carryforwards expire in years 2012 through 2030. As of December 31, 2010, Sunplus had net operating loss carryforwards of approximately US$23,179,000 that are available to offset future taxable income up to 2015. Realization of the net operating loss carryforwards is dependent upon future profitable operations. In addition, the T-Bay carryforwards may be limited upon a change of control in accordance with Internal Revenue Code Section 382, as amended. Accordingly, management has recorded a valuation allowance to reduce deferred tax assets associated with the net operating loss carryforwards to zero at December 31, 2010.

As of December 31, 2010, deferred tax assets consist of:-


	DECEMBER 31, 2010
	US$’000

Net operating loss carryforwards	$	6,478
Less: valuation allowance		(6,478	)

	$	—

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2010

7. Concentrations and Credit Risk

The Group operates principally in the PRC (including Hong Kong) and grants credit to its customers in this geographic region. Although the PRC is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Group’s operations.

Financial instruments that potentially subject the Group to a concentration of credit risk consist of cash, accounts and other receivables.

At March 31, 2010, the Group had credit risk exposure of sales proceeds receivable from Qiaoxing Telecom of approximately US$10,475,000 (RMB71,500,000) (See Note 1).

Pursuant to the agreement signed between Shanghai Sunplus Communication Technology Co., Ltd. (“Sunplus”) and Qiaoxing Telecommunication Industry Company Limited (“Qiaoxing Telecom”) in respect of the disposal of Fujian Qiaoxing Industry Co., Ltd. (“Fujian Qiaoxing”) to Qiaoxing Telecom in March 2009, Qiaoxing Telecom was to settle this outstanding balance by June 2009. However, Qiaoxing Telecom was unable to obtain approval from the local governmental bureau in Zhangzhou to develop the land held by Fujian Qiaoxing. This was due to the delay in development by Fujian Qiaoxing. When the Zhangzhou local government granted the land use right to Fujian Qiaoxing in 2006, Fujian Qiaoxing was required to develop the land within three years. However, the land had not been developed prior to the disposal to Qiaoxing Telecom and the local authorities have refused to approve the development plans submitted by Qiaoxing Telecom. Since March 2010, the management has actively liaised with the Zhangzhou local governmental bureau to apply for an extension of the land development.

Despite various discussions and negotiations held with the Zhangzhou local authority, the effort failed, and the local authorities took back the land by forced resumption. In view of this, full allowance has been made in respect of the sales proceeds receivable from Qiaoxing Telecom of US$10,543,000 and charged to the statement of operations and comprehensive income for the nine months ended December 31, 2010.

On August 31, 2010, an agreement was signed between Sunplus and Qiaoxing Telecom for settlement. As Zhangzhou local government had taken back the land, Qiaoxing Telecom can no longer use the land for any purpose. It was mutually agreed that Sunplus will not request Qiaoxing Telecom to repay the outstanding balance of US$10,543,000 while the deposit paid by Qiaoxing Telecom will not be refunded back to Qiaoxing Telecom. In view of this, Sunplus wrote off the allowance made previously in the last quarter.

A substantial portion of revenue was generated from one group of customers for the three and nine months ended December 31, 2010 and 2009.

The net sales to customers representing at least 10% of net total sales are as follows:-


	FOR THE THREE MONTHS ENDED								FOR THE NINE MONTHS ENDED
	DECEMBER 31,								DECEMBER 31,
	2010				2009				2010				2009
	US$’000		%		US$’000		%		US$’000		%		US$’000		%

Customer A	$	—		—	$	1,922		24	$	1,881		20	$	5,840		20
Customer B		—		—		1,582		19		1,667		17		4,263		15
Customer C		—		—		893		11		850		9		3,680		13
Customer D*		—		—		416		5		1,203		12		4,015		14
Customer E		—		—		872		11		1,667		17		2,282		8
Customer F*		—		—		335		4		1,135		12		3,758		13
Customer G		—		—		1,019		13		504		5		3,193		11
Customer H		—		—		1,091		13		735		8		1,584		5
Customer Group A*		—		—		751		9		2,338		24		7,773		27

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2010

7. Concentrations and Credit Risk (continued)

The following customers had balances of at least 10% of the total accounts receivable as of December 31, 2010 and March 31, 2010:-


	DECEMBER 31, 2010				MARCH 31, 2010
	US$’000		%		US$’000		%

Customer A		8,973		19		8,248		19
Customer B		7,799		17		6,846		16
Customer F*		5,327		11		4,731		11
Customer G		4,624		10		4,497		11

Customer group A*		9,165		20		8,499		20


*		Customer Group A includes customers D and F.

*		At December 31, 2010 and March 31, 2010, this group of customers accounted for 20% of accounts receivable.

The accounts receivable that have repayment terms of more than twelve months have been discounted.

The Group does not require collateral to support financial instruments that are subject to credit risk.

8. Retirement and Welfare Benefits

The full-time employees of the PRC subsidiaries are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The PRC subsidiaries are required to accrue the employer-portion for these benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits was US$nil and US$56,000 for the three and nine months ended December 31, 2010 and US$41,000 and US$124,000 for the three and nine months ended December 2009, respectively. The PRC subsidiaries are required to make contributions to the plans out of the amounts accrued for all staff welfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits, unemployment insurance and pension benefits to be paid to these employees.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DECEMBER 30, 2010

9. Related Party Transactions

The Group engages in business transactions with the following related parties:-

a.		Li Xiaofeng, a director and stockholder of T-Bay.

b.		Li Meilian, a stockholder of T-Bay.

The Group has the following transactions and balances with related parties:-


	DECEMBER 31, 2010		MARCH 31, 2010
	US$’000		US$’000

Other payable — Li Meilian	$	604	$	437
Other payable — Li Xiaofeng		21		—


	$	625	$	437


Long-term liabilities
Other payable — Li Meilian	$	3,482	$	3,482
Other payable — Li Xiaofeng		773		773

	$	4,255	$	4,255

The balances have no stated terms for repayment, are not interest bearing, and are the result of cash advances from related parties and the repayment thereof. Those payables to Li Meilian and Li Xiaofeng which are classified as long-term liabilities are not repayable within the next twelve months.

10. Commitments and Contingencies

As of December 31, 2010, Sunplus leased office premises and staff quarters under several agreements expiring from 2010 to 2012.

Rental expenses for the three and nine months ended December 31, 2010 amounted to US$11,000 and US$53,000, respectively. Rental expenses for the three and nine months ended December 31, 2009 amounted to US$23,000 and US$69,000, respectively. All rental expenses are included in general and administrative expenses in the consolidated statements of operations and comprehensive income.

The future minimum lease payments under the above-mentioned leases as of December 31, 2010 are as follows:-


Year Ending March 31,	US$’000

2011	$	10
2012		40


Total	$	50

As of December 31, 2010, the Group had capital commitments in relation to acquisition of intangible assets of US$40,000.

T-BAY HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2010

11. Major non-cash transaction

During the nine months ended December 31, 2010, the Group settled accounts payable of US $1,786,000 with the following assets: —


	US$’000

Property, plant and equipment	$	1,140
Accounts receivable		646


Total	$	1,786


ITEM 2.		MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following review concerns the three and nine months ended December 31, 2010, which should be read in conjunction with the financial statements and notes thereto presented in the Form 10-K for the year ended March 31, 2010.

As a result of the change in consumer preference away from the types of mobile phone handsets to which our design service and our mobile phone components were suited, our business has been in decline. Management has concluded that this trend will not reverse, and therefore in September 2010 we suspended operations and have concentrated on collecting our accounts receivable. Management also seeks new business opportunities. It is not possible to predict whether this effort will succeed, or whether we will ever again engage in active business operations.

THREE MONTHS ENDED DECEMBER 31, 2010 COMPARED TO THREE MONTHS ENDED DECEMBER 31, 2009

Overview

For the three months ended December 31, 2010, our net revenue decreased from $8,129,000 for the three months ended December 31, 2009 to $nil, which represented a 100% decrease. Our net loss increased from $6,189,000 for the three months ended December 31, 2009 to $7,083,000 for the three months ended December 31, 2010, primarily as a result of the suspension of operations and the increase in allowance for doubtful receivables. We recorded a loss per share of $0.24 for the three months ended December 31, 2010, compared to a loss per share of $0.21 for the three months ended December 31, 2009.

Net Revenue


	Three months ended December 31,
				2010				2009
	(in thousand US dollars)
	% Change			Amount		%		Amount		%
Sales of mobile phone components		-100	%		Nil	nil	%		7,968		98.0	%
Revenue from design services		-100	%		Nil	nil	%		161		2.0	%

NET REVENUE		-100	%	Nil		nil	%		8,129		100	%

As a result of the suspension of our operations in September 2010, our net revenue was $nil for the three months ended December 31, 2010, a decrease of $8,129,000, or 100%, from $8,129,000 for the same period in the previous year. Revenue from sales of mobile phone components was $nil compared to $7,968,000 in the same period of the previous fiscal year, representing a 100% decrease. Revenue from design services decreased to $nil from $161,000 in the same period of the previous fiscal year, representing a 100% decrease.

Cost of Revenue

For the three months ended December 31, 2010, cost of revenue decreased to $nil from $7,624,000 for the three months ended December 31, 2009, representing a 100% decrease as we suspended operations. Cost of revenue primarily consisted of purchase cost of raw and processed materials, cost of salaries of engineers and designers, and research and development (“R&D”) expenses.

Gross Profit

Taking into account the above, we had a gross profit of $nil for the three months ended December 31, 2010 compared to gross profit $505,000 for the three months ended December 31, 2009.

Operating Expenses

Operating expenses consisted of selling expenses and general and administrative (G&A) expenses. For the three months ended December 31, 2010, operating expenses were $7,104,000, as compared to $6,756,000 for the three months ended December 31, 2009, representing a 5.2% increase.

Detailed information of operating expenses for the three months ended December 31, 2010 is as follows:-


	Three months ended December 31,
				2010				2009
	(in thousand US dollars)
						% of				% of
	% Change			Amount		Net revenue		Amount		net revenue
G&A expenses		5.7	%		7,104		n/a		6,724		82.7	%
Selling expenses		-100	%		—		n/a		32		0.4	%

Operating expenses		5.2	%		7,104		n/a		6,756		83.1	%

Operating expenses during the three months ended December 31, 2010 were $7,104,000 compared to $6,756,000 for the three months ended December 31, 2009. The increase was mainly attributed to the increase in G&A expenses.

G&A expenses were $7,104,000 compared to $6,724,000 for the three months ended December 31, 2009. The increase in G&A expenses was mainly due to the increase in allowance for doubtful receivables.

We increased the allowance for doubtful receivables to $6,980,000 for the three months ended December 31, 2010 as compared to $6,332,000 for the three months ended December 31, 2009. An allowance for doubtful receivables is maintained for all debtors based on a variety of factors, including the overall economy and industrial condition, length of time the receivables are past due, significant one-time events and historical experience. As a precautionary measure, after we suspended our operations in September 2010, we made allowance for debts that are not yet due in view of the increase in difficulty in collection of debts.

Selling expenses decreased from $32,000 to $nil as we suspended operations.

Loss from Operations

Loss from operations increased from $6,251,000 for the three months ended December 2009 to $7,104,000 for the same period this year. The increase in the loss was mainly attributable to the suspension of operations and the increase in allowance for doubtful receivables.

Income Tax

Sunplus is subject to PRC Enterprise Income Tax. Pursuant to the PRC Income Tax Laws, the prevailing statutory rate of enterprise income tax in Shanghai was 25%.

No income tax expense was recorded for Sunplus for each of the three months ended December 31, 2010 and 2009, as Sunplus incurred losses during these periods.

Non-controlling Interests

Non-controlling interests represented the portion of loss of Sunplus that we do not own. For the three months ended December 31, 2010, non-controlling interest was attributable to the 5% of the equity interest of Sunplus owned by Shanghai Fanna.

Net loss attributable to common stockholders

As a result of the above items, net loss attributable to common stockholders was $7,083,000 for the three months ended December 31, 2010, as compared to net loss attributable to common stockholders of $6,189,000 for the three months ended December 31, 2009. This increase of loss was mainly the result of the decrease in gross profit and the increase in allowance for doubtful receivables.

Loss per share attributable to common stockholders

We reported loss per share attributable to common stockholders of $0.24, based on a weighted average number of shares outstanding of 30,088,174 for the three months ended December 31, 2010. Our outstanding common stock was 30,088,174 shares as of December 31, 2010. We do not have any preferred stock issued or outstanding warrants or options.

NINE MONTHS ENDED DECEMBER 31, 2010 COMPARED TO NINE MONTHS ENDED DECEMBER 31, 2009

Overview

For the nine months ended December 31, 2010, our net revenue decreased from $28,912,000 for the nine months ended December 31, 2009 to $9,641,000, which represented a 66.7% decrease. Our net loss increased from $15,596,000 for the nine months ended December 31, 2009 to $33,127,000 for the nine months ended December 31, 2010, primarily as a result of the increase in allowance for doubtful receivables. We recorded a loss per share of $1.10 for the nine months ended December 31, 2010, compared to a loss per share of $0.52 for the nine months ended December 31, 2009.

Net Revenue


	Nine months ended December 31,
				2010					2009
	(in thousand US dollars)
	% Change			Amount		%			Amount		%

Sales of mobile phone components		-66.7	%		9,457		98.1	%		28,364		98.1	%
Revenue from design services		-66.4	%		184		1.9	%		548		1.9	%


NET REVENUE		-66.7	%		9,641		100	%		28,912		100	%

Our net revenue was $9,641,000 for the nine months ended December 31, 2010, a decrease of $19,271,000, or 66.7%, from $28,912,000 for the same period in the previous year. Revenue from sales of mobile phone components was $9,457,000 compared to $28,364,000 in the same period of the previous fiscal year, representing a 66.7% decrease. Revenue from design services decreased to $184,000 from $548,000 in the same period of the previous fiscal year, representing a 66.4% decrease.

For the nine months ended December 31, 2010 and 2009, revenue from design services represented 1.9% of total revenue, while revenue from sales of mobile phone components was 98.1%.

Detailed information on sales of mobile phone components

Before the suspension of our operations in September 2010, we designed and manufactured PCB and provided PCBA according to our customers’ specifications. Revenue from the sales of mobile phone components (comprising PCB and PCBA) decreased from $28,364,000 for the nine months ended December 31, 2009 to $9,457,000 for the same period this year, representing a 66.7% decrease, as we disengaged ourselves from the business of sales of mobile phone components.

Detailed information on revenue from design services

Revenue from design services decreased from $548,000 for the nine months ended December 31, 2009 to $184,000 for the same period this year, representing a 66.4% decrease, as we disengaged ourselves from the business of design services.

Cost of Revenue

For the nine months ended December 31, 2010, cost of revenue decreased to $9,383,000 from $27,054,000 for the nine months ended December 31, 2009, representing a 65.3% decrease. Cost of revenue primarily consisted of purchase cost of raw and processed materials, cost of salaries of engineers and designers, and research and development (“R&D”) expenses. The decrease was largely the result of the decrease in the sales of mobile phone components.

Gross Profit

Our gross profit was $258,000 for the nine months ended December 31, 2010 compared to $1,858,000 for the nine months ended December 31, 2009, representing an 86.1% decrease. Our gross profit was significantly reduced not only as a direct result of the drop in sales of our products, but also because the cost of sales was not reduced to the same extent as the reduction in revenue, as not all costs were variable with respect to revenue.

Operating Expenses

Operating expenses consisted of selling expenses and general and administrative (G&A) expenses. For the nine months ended December 31, 2010, operating expenses were $34,202,000, as compared to $17,764,000 for the nine months ended December 31, 2009, representing a 92.5% increase.

Detailed information in respect of operating expenses for the nine months ended December 31, 2010 is as follows:-


	Nine months ended December 31,
				2010					2009
	(in thousand US dollars)
						% of					% of
	% Change			Amount		Net revenue			Amount		net revenue
G&A expenses		93.4	%		34,168		354.4	%		17,668		61.1	%
Selling expenses		-64.6	%		34		0.4	%		96		0.3	%

Operating expenses		92.5	%		34,202		354.8	%		17,764		61.4	%

Operating expenses during the nine months ended December 31, 2010 were $34,202,000, or 354.8% of net revenue, compared to $17,764,000, or 61.4% of net revenue for the nine months ended December 31, 2009. The significant increase was mainly attributed to the increase in G&A expenses.

G&A expenses were $34,168,000, or 354.4% of net revenue, compared to $17,668,000, or 61.1% of net revenue, for the nine months ended December 31, 2009. The significant increase in G&A expenses was mainly due to the increase in allowance for doubtful receivables.

We increased allowance for doubtful receivables to $33,273,000 for the nine months ended December 31, 2010 as compared to $17,580,000 for the nine months ended December 31, 2009. An allowance for doubtful receivables is maintained for all debtors based on a variety of factors, including the overall economy and industrial condition, length of time the receivables are past due, significant one-time events and historical experience. As a precautionary measure, after we suspended our operations in September 2010, we made allowance for debts that are not yet due in view of the increase in difficulty in collection of debts. We have also made full allowance for the sales proceeds recoverable from Qiaoxing Telecom of $10,478,000, which is described below.

Pursuant to the agreement signed between Sunplus and Qiaoxing Telecom in respect of the disposal of Fujian Qiaoxing to Qiaoxing Telecom in March 2009, Qiaoxing Telecom was to settle this outstanding balance by June 2009. However, Qiaoxing Telecom was unable to obtain approval from the local governmental bureau in Zhangzhou to develop the land held by Fujian Qiaoxing. This was due to the delay in development by Fujian Qiaoxing. When the Zhangzhou local government granted the land use right to Fujian Qiaoxing in 2006, Fujian Qiaoxing was required to develop the land within three years. However, the land had not been developed prior to the disposal to Qiaoxing Telecom and the local authority has refused to approve the development plans submitted by Qiaoxing Telecom.

The Company has liaised with the Zhangzhou local governmental bureau to apply for an extension of the land development. This effort has, however, failed, and the local authority took back the land by forced resumption. In view of this, full allowance has been made in respect of the sales proceeds receivable from Qiaoxing Telecom of $10,543,000 in the first quarter of the fiscal year ending March 31, 2011.

On August 31, 2010, an agreement was signed between Sunplus and Qiaoxing Telecom for the settlement. As Zhangzhou local government had taken back the land, Qiaoxing Telecom can no longer use the land for any purpose. Sunplus agreed not to request Qiaoxing Telecom to repay the outstanding balance of $10,543,000 while the deposit paid by Qiaoxing Telecom will not be refunded back to Qiaoxing Telecom. In view of this, in the second quarter of the fiscal year ending March 31, 2011, Sunplus wrote off the allowance made in the first quarter of that fiscal year.

Selling expenses decreased from $96,000 for the nine months ended December 31, 2009 to $34,000 for the same period this year. The decrease was consistent with the decrease in revenue.

Loss from Operations

Loss from operations increased from $15,906,000 for the nine months ended December 31, 2009 to $33,944,000 for the same period this year. The increase in the loss was mainly attributable to the increase in allowance for doubtful receivables.

Income Tax

Sunplus is subject to PRC Enterprise Income Tax. Pursuant to the PRC Income Tax Laws, the prevailing statutory rate of enterprise income tax in Shanghai was 25%.

For the nine months ended December 31, 2010, Sunplus recorded an income tax expense of $nil, compared to $7,000 for the nine months ended December 31, 2009. The income tax expenses of US$7,000 for the nine months ended December 31, 2009 related to an under-provision in the prior year.

Non-controlling Interests

Non-controlling interests represented the portion of loss of Sunplus that we do not own. For the nine months ended December 31, 2010, non-controlling interests were attributable to the 5% of the equity interest of Sunplus owned by Shanghai Fanna.

Net loss attributable to common stockholders

As a result of the above items, net loss attributable to common stockholders was $33,127,000 for the nine months ended December 31, 2010, as compared to net loss attributable to common stockholders of $15,596,000 for the nine months ended December 31, 2009. This increase of loss was mainly the result of the increase in allowance for doubtful receivables.

Loss per share attributable to common stockholders

We reported loss per share attributable to common stockholders of $1.10, based on a weighted average number of shares outstanding of 30,088,174 for the nine months ended December 31, 2010. Our outstanding common stock was 30,088,174 shares as of December 31, 2010. We do not have any preferred stock issued or outstanding warrants or options.

LIQUIDITY AND CAPITAL RESOURCES

Assets

As of December 31, 2010, the total assets of the Company were $9,872,000 which consisted of $32,000 in current assets, $28,000 in property, plant and equipment (PPE), $9,786,000 in non-current accounts receivable and $26,000 in intangible assets.

Liabilities

Our total liabilities as of December 31, 2010 were $6,201,000, which consisted of $1,946,000 in current liabilities and $4,255,000 in long-term liabilities. Long-term liabilities were all liabilities due to shareholders.

Capital Resources

For the nine months ended December 31, 2010, before the suspension of our operations in September 2010, we were principally engaged in provision of design solutions of wireless communication devices and sales of mobile phone components. We did not declare or pay dividends for the nine months ended December 31, 2010.

For the nine months ended December 31, 2010, $722,000 was used in operating activities and $30,000 was provided by financing activities. Cash and cash equivalents decreased by $685,000 to $18,000 as of December 31, 2010 from $703,000 as of March 31, 2010.

We used $722,000 in operating activities for the nine months ended December 31, 2010. Net cash used in operating activities for the nine months ended December 31, 2010 related to net loss adjusted for items not involving movement of cash for the period, augmented mainly by an increase in accounts receivable of $4,451,000, but offset mainly by the decrease in prepayments, deposits and other receivables of $2,026,000 and an increase in accounts payable of $1,779,000.

In arriving at the net loss, we made an allowance of $33,273,000 for doubtful debts for the nine months ended December 31, 2010, which did not involve any outflow of cash.

There was no cash flow relating to investing activities for the nine months ended December 31, 2010.

For the nine months ended December 31, 2010, net cash provided by financing activities was approximately $30,000, which related primarily to the increase in advances from a shareholder and the repayment of cash advance to the minority shareholder.

As of December 31, 2010, we had capital commitments of $40,000 in relation to acquisition of intangible assets.

We believe that proceeds from the collection of our long-outstanding receivables are necessary to support our operations and capital commitments, as well as to meet our working capital needs for the next twelve months. While we believe that adequate provisions on our receivables have been made, we cannot assure investors that their carrying amount (net of provision) will be received in full within the anticipated time frame. A failure to collect the anticipated amount within the anticipated time frame would adversely affect our liquidity and capital resources.

Off-Balance Sheet arrangements

The Company has not engaged in any off-balance sheet transactions since its inception.

Going concern statement

We suspended operations in September 2010 and have negative working capital and recurring losses from operations. The continuation of our Company as a going concern is dependent upon the Company achieving profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities as and when they fall due. The financial statements do not include any adjustments relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might result from this uncertainty.

Employees

As of December 31, 2010, we had approximately 8 full-time employees employed in Greater China.

Web Site Access to Our Periodic SEC Reports

You may read and copy any public reports we filed with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site http://www.sec.gov that contains reports and information statements, and other information that we filed electronically.


ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The majority the assets and liabilities in Shanghai Sunplus Communication Technology Co., Ltd., a subsidiary of ours which is based in China, is denominated in Chinese Renminbi (“RMB”). Thus, the amounts of the assets and liabilities presented in United States dollars (“US$” or “$”) in our consolidated financial statements may be impacted by exchange rate fluctuations in the currency of China. We have not tried to reduce our exposure to exchange rate fluctuations by using hedging transactions. However, we may choose to do so in the future. The availability and effectiveness of any hedging transactions may be limited and we may not be able to successfully hedge our exchange rate risks. Accordingly, we may experience negative impacts on equity as a result of foreign exchange rate fluctuations.


ITEM 4.		CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are controls and other procedures that are designed to provide reasonable assurance that the information that we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as appropriate to allow timely decisions regarding required disclosure.

In connection with the preparation of this Quarterly Report on Form 10-Q for the third quarter ended December 31, 2010, an evaluation was performed by our management, with the participation of the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report.

As previously disclosed under Item 9A (T) “Controls and Procedures” in our Annual Report on Form 10-K for fiscal year ended March 31, 2010, our management concluded that our disclosure controls and procedures were not effective at a reasonable assurance level because of certain material weaknesses in our internal controls over financial reporting, including the lack of (i) effective communication of the importance of internal controls over financial reporting throughout the structure of the Company, (ii) an adequate tone set by management around control consciousness, (iii) sufficient in-house capacity to review and supervise the accounting operations, (iv) knowledge of U.S. GAAP and SEC reporting requirements, (v) anti-fraud program designed to detect and prevent fraud (vi) effective risk assessment and management mechanism, and (vii) personnel with an appropriate level of experience, training in our internal audit department. In addition, on September 2, 2009, the two independent directors who comprised the audit committee resigned from their positions as independent directors of the Company effective September 2, 2009. There is no audit committee since that date. Our management considers that the absence of an audit committee constitutes a material weakness in our internal controls over financial reporting.

As a result of the foregoing material weaknesses in our internal controls over financial reporting, our management has concluded that our disclosure controls and procedures were not effective as of December 31, 2010.

Each of the control deficiencies described here could result in a misstatement of the aforementioned accounts or disclosures that might result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. However, giving full consideration to these material weaknesses, we performed adequate analyses and procedures, including among other things, transaction reviews and account reconciliations in order to provide assurance that our unaudited consolidated financial statements included in this Quarterly Report were prepared in accordance with generally accepted accounting principles (“GAAP”) and present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP. As a result of these procedures, we concluded that the unaudited consolidated financial statements included in this Quarterly Report present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

Change in Internal Controls

There were no changes in the Company’s internal controls over financial reporting during the quarter ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II — OTHER INFORMATION


ITEM 6.		EXHIBITS

INDEX TO EXHIBITS
OF
T-BAY HOLDINGS, INC.


	31.1			Rule 13a-14 (a)/15d-14 (a) Certification of Chief Executive Officer

	31.2			Rule 13a-14 (a)/15d-14 (a) Certification of Chief Financial Officer

	32			Section 1350 Certification of Chief Executive Officer and Chief Financial Officer

SIGNATURES

Pursuant to the requirements of Section 13 of 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	T-BAY HOLDINGS, INC. (Registrant)
Date: February 14, 2011	By:	/s/ Li Xiaofeng
		Li Xiaofeng, Chief Executive Officer

Date: February 14, 2011	By:	/s/ Qin Xiangning
		Qin Xiangning, Chief Financial Officer

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T BAY HOLDINGS INC 10-Q