UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended ~~March~~June 3130, 2012

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

For the transition period from __________________ to _____________________

Commission file number 0-52415

TITANIUM GROUP LIMITED

(Exact name of registrant as specified in its charter)

British Virgin Islands ~~Not Applicable~~ (State or other jurisdiction of ~~(IRS Employer~~ incorporation or organization) Not Applicable (IRS Employer Identification No.)

Suite 2101, 21/F, Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong

(Address of principal executive offices)(Zip Code)

(852) 3679 3110

(Registrant’s telephone number, including area code)

Not applicable

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

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

x Yes ¨o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨o Yes ¨o No (Not required)

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

Large accelerated filer ¨o Accelerated filer ¨o Non-accelerated filer ¨o Smaller reporting company x

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

¨ o Yes x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 100,000,000 shares of Common Stock, $0.01 par value, as of ~~May~~August 2027, 2012

TITANIUM GROUP LIMITED

INDEX

PART I. FINANCIAL INFORMATION			23
Item 1. Financial Statements			23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk.			28
Item 4. Controls and Procedures.			28
PART II. OTHER INFORMATION			2329
Item 1. Legal Proceedings.			2329
Item 1A. Risk Factors.			2429
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			2429
Item 3. Defaults Upon Senior Securities.			2429
Item 4. Reserved.			2429
Item 5. Other Information.			2429
Item 6. Exhibits.			24

FORWARD-LOOKING STATEMENTS

This report includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “believe,” or “continue” or the negative thereof or variations thereon or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove to have been correct.

TITANIUM GROUP LIMITED AND SUBSIDIARIES

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page
Unaudited Condensed Consolidated Balance Sheets		36
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss		47
Unaudited Condensed Consolidated Statements of Cash Flows		58
Notes to Unaudited Condensed Consolidated Financial Statements		69

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TITANIUM GROUP LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Currency expressed in US Dollars (“US$”))

	March 31			December 31
	June 30			December 31
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	~~110~~836,~~194~~091		$	917,724
Accounts receivable, net		132,~~829~~898			131,990
Amounts due from related parties		5,~~039~~042,~~791~~428			4,917,570
Inventories		~~830~~588,~~489~~355			744,087
Deposits and other receivables		3060,~~619~~852			123,611
Total current assets		6,~~143~~660,~~922~~624			6,834,982
Non-current assets:
Plant and equipment, net		~~188~~186,~~317~~239			189,170
TOTAL ASSETS	$	6,~~332~~846,~~239~~863		$	7,024,152
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, net	$	~~607~~685,~~573~~601		$	826,430
Amounts due to related parties		~~774~~1,~~166~~008,388			1,324,908
Short-term secured bank loan		4,~~435~~438,~~854~~175			4,407,852
Income tax payable		7,~~611~~615			7,562
Accrued liabilities and other payables		~~532~~758,~~359~~017			421,011
Total current liabilities		6,~~357~~897,~~563~~796			6,987,763
Total liabilities		6,~~357~~897,~~563~~796			6,987,763
Commitments and contingencies
Equity
Stockholders’ equity:
Common stock, US$0.01 par value, 100,000,000 shares authorized, 100,000,000 shares issued and outstanding	$	1,000,000		$	1,000,000
Accumulated other comprehensive loss/ (income)		16,~~473~~514			(63,401	)
Accumulated losses		(1,~~041~~067,~~797~~447	)		(900,210	)
Total stockholders’ equity		(25,324	)		36,389
Total stockholders’ (deficit)/equity		(50,933	)		36,389
TOTAL LIABILITIES AND EQUITY	$	6,~~332~~846,~~239~~863		$	7,024,152

See accompanying notes to unaudited condensed consolidated financial statements.

T TITANIUM GROUP ~~LIMITED~~ LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE LOSS

(Currency expressed in US Dollars (“US$”))

	Three months ended March 31
	Three months ended June 30						Six months ended June 30
	2012			2011			2012			2011
REVENUE, NET
Revenue – related party, net	$	~~992~~1,~~939~~182,440		$	~~537~~1,~~864~~529,144		$	2,175,379		$	2,175,624
Revenue – net		-			108,616
COST OF REVENUE
Total revenues, net		992,939			646,480
Cost of revenue (including depreciation)		(1,158,389	)		(1,501,086	)		(2,180,104	)		(2,139,229	)
COST OF REVENUE
GROSS (LOSS)/INCOME		24,051			28,058			(4,725	)		36,395
Cost of revenue (including of depreciation)		(1,021,716	)		(638,143	)
OPERATING EXPENSES
GROSS (LOSS)/INCOME		(28,777	)		8,337
Selling, general and administrative		(67,251	)		(96,934	)		(142,798	)		(283,888	)
OPERATING EXPENSES
(LOSS)/INCOME FROM OPERATIONS		(43,200	)		(68,876	)		(147,523	)		(247,493	)
Selling, general and administrative		(75,547	)		(2,955	)
Other income (expense):
(LOSS)/INCOME FROM OPERATIONS		(104,324	)		5,382
Sundry income		103,130			-			150,729			-
Other income (expense):
Interest expense		(85,580	)		(5,699	)		(170,445	)		(11,305	)
Interest (expense)/income		(37,263	)		46
LOSS BEFORE INCOME TAX		(25,650	)		(74,575	)		(167,239	)		(25,898	)
(LOSS)/INCOME BEFORE INCOME TAX		(141,587	)		5.428
Income tax expense		-			(8,116	)		-			(8,116	)
Income tax expense		-			(1,357	)
NET LOSS	$	(25,650	)	$	(82,691	)	$	(167,239	)	$	(266,914	)
NET (LOSS)/INCOME	$	(141,587	)	$	4,071
Other comprehensive income
Other comprehensive income (loss)/income
- Foreign currency translation gain		41			3,550			16,514			1,081
- Foreign currency translation gain/(loss)		87,159			(1,357	)
COMPREHENSIVE LOSS		(25,609	)		(79,141	)		(150,725	)		(265,833	)
COMPREHENSIVE (LOSS)/INCOME		(54,428	)		5,389
Net loss per share - Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Net (loss)/income per share - Basic and diluted	$	(0.05	)	$	0.01
Weighted average common shares outstanding – basic and diluted		100,000,000			68,949,978			100,000,000			60,792,769
Weighted average common shares outstanding – basic and diluted		1,000,000			481,457

See accompanying notes to unaudited condensed consolidated financial statements.

TITANIUM GROUP LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Currency expressed in US Dollars (“US$”))

	Three months ended March 31,
	Six months ended June 31,
	2012			2011
Cash flow from operating activities:
Net (loss)/income	$	(141,587	)	$	4,071
Adjustments to reconcile net (loss)/income to net cash used in operating activities:
Depreciation and amortization		2,650			7,094
Changes in operating assets and liabilities:
Accounts receivable		(839	)		(785,422	)
Inventories		(86,402	)		(635,365	)
Deposits and other receivables		92,992			-
Amount due from related parties		(122,221	)		-
Accounts payable		(218,857	)		(178,192	)
Prepayments and other current assets		-			(567	)
Amount due to related parties		(550,742	)		-
Income tax payable		-			1,357
Accrued liabilities and other payables		111,348			(16,047	)
Net cash used in operating activities		(913,658	)		(32,227	)
Cash flows from investing activities
Purchase of plant and equipment		(5,890	)		(32,414	)
Net cash used in investing activities		(5,890	)		(32,414	)
Cash flows from financing activities:
Advance from the owner		-			51,751
Net cash provided by financing activities		-			51,751
Effect of exchange rate changes on cash and cash equivalent		112,018			164
Net decrease in cash and cash equivalents		(807,530	)		(12,726	)
Cash and cash equivalents – beginning of year		917,724			31,698
Cash and cash equivalents – end of year	$	110,194		$	18,972
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	84,900		$	-

See accompanying notes to unaudited condensed consolidated financial statement

NOTE 1 – ORGANIZATION AND BACKGROUND

Titanium Group Limited (the “Company” or “TTNUF”) was incorporated as an International Business Company with limited liability in the British Virgin Islands (“BVI”) under the International Business Companies Act (“IBC Act”) of the British Virgin Islands on May 17, 2004 and subsequently registered under the BVI Business Companies Act (“BVIBC Act”) on January 1, 2007 when the IBC Act was repealed and replaced with the BVIBC Act. The Company, through its subsidiaries, mainly engages in the manufacture and sales of electric wire products in the PRC, with its principal place of business in Shenzhen City, the PRC.

On May 31, 2011, the Company closed on the transactions described in a Memorandum of Understanding dated September 1, 2010 and amended on November 18, 2010 and March 18, 2011 (the “MOU”). Under the terms of the MOU:

1. The Company agreed to effect a 1-for-10 consolidation of its issued and outstanding shares of common stock.

2. The holders of the Company’s outstanding convertible debentures in the aggregate principal amount of US$1,400,000 (HK$10,920,000) agreed to accept a total of 3,500,000 post-consolidation common shares as full and complete payment of the debentures and all accrued and unpaid interest thereon.

3. Zili Industrial Co., Limited, an entity owned and/or controlled by Mr. XU Zhigang, agreed to purchase 38,700,000 post-consolidation common shares and deposit the purchase price of US$387,000 into escrow.

4. Huabao Asia Limited, an entity owned and controlled by Mr. CHEN Tianju, agreed that it would transfer ownership of Shenzhen Kanglv Technology Company Limited (“Shenzhen Kanglv”) to the Company, in exchange for 52,635,560 post-consolidation common shares.

The stock exchange transaction has been accounted for as a reverse acquisition and recapitalization of the Company whereby Shenzhen Kanglv is deemed to be the accounting acquirer (legal acquiree) and the Company to be the accounting acquiree (legal acquirer). The accompanying condensed consolidated financial statements are in substance those of Shenzhen Kanglv, with the assets and liabilities, and revenues and expenses, of the Company being included effective from the date of stock exchange transaction. The Company is deemed to be a continuation of the business of Shenzhen Kanglv.

Shenzhen Kanglv Technology Company Limited (“Shenzhen Kanglv”) was registered as a limited liability company in Shenzhen City, the People’s Republic of China (the “PRC”) on June 16, 2005. Shenzhen Kanglv is mainly engaged in the manufacture and sales of electric wire products in the PRC, with its principal place of business in Shenzhen City, the PRC, which was commenced in August 2010. The Company is a sub-contractor to manufacture and sells the electric wire products to its single customer. Under the sub-contracting agreement between Shenzhen Kanglv and Cancare Electric Wire (Shanzhen) Co., Ltd (“Cancare”), which is controlled by the same individual of its majority owner, Cancare provided the core components and materials to Shenzhen Kanglv for the production and Shenzhen Kanglv exclusively sold these finished products, based upon the reauired specification and customization to Cancare at the current market value in the normal course of business.

Accordingly, the accompanying consolidated financial statements include the following:

The balance sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the accounting acquiree at historical cost; and

The financial position, results of operations, and cash flows of the accounting acquirer for all periods presented as if the recapitalization had occurred at the beginning of the earliest period presented and the operations of the accounting acquiree from the date of stock exchange transaction.

On 2 September, 2011, the subsidiary, Titanium Technology Limited, was winding up by the Hong Kong Special Administrative Region Government.

The accompanying consolidated financial statements present the financial position and results of operations of the Company. The Company’s functional currency is RMB, except otherwise indicated.

As of ~~March~~June, 2012, details of the Company’s subsidiaries are as follows:

Name	Date of incorporation/ establishment	Place of incorporation/ registration and operation	Percentage of equity ~~interest~~interestattributable ~~attributable~~ to the Company	Principal activities
Hong Kong Kanglv Technology Limited	September 17, 2010	Hong Kong	100%	Investment holding
Shenzhen Kanglv Technology Limited	June 16, 2005	PRC	100%	Manufacture and sales of electric wire products
Kanglv Cable Technology (Hong Kong) Limited	September 17,2010	Hong Kong	100%	Dormant

NOTE 2 - Summary of Significant Accounting Policies

·	Basis of presentation

These accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

·	Use of estimates

In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates.

·	Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

·	Accounts receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. For ~~three~~six months ended ~~March 31,~~June 30, 2012 and 2011, the Company did not record an allowance for doubtful accounts.

·	Inventories

Inventories consist primarily of raw materials, work-in-process and finished goods of electric wire products and are stated at the lower of cost or net realizable value, with cost being determined on a weighted average basis. Costs include material, direct labor and manufacturing overhead costs. Allowance for slow-moving and obsolescence is an estimate amount based on an analysis of current business and economic risks, the duration of the inventories held and other specific identifiable risks that may indicate a potential loss. The allowance is reviewed regularly to ensure that it adequately provides for all reasonable expected losses. For ~~three~~six months ended June ~~March 31~~30, 2012 and 2011, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.

·	Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

	Depreciable life	~~Depreciable life~~	Residual value	~~Residual value~~
Plant and machinery	5-12 years		5~~-12 years~~%		5	%
Furniture, fittings and office equipment	9-12 years		~~9-12 years~~5%		5	%
Motor vehicles	9-12 years		~~9-12 years~~5%		5	%

Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.

NOTE 2 - Summary of Significant Accounting Policies (Continued)

·	Impairment of long-lived assets

In accordance with ASC Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to estimated discounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the years presented.

·	Revenue recognition

In accordance with the ASC Topic 605, “Revenue Recognition”, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured.

(a)	Sales of products

The Company has adopted ASC Topic 605-45, “Principal Agent Considerations” (“ASC Topic 605-45”) whereby the Company evaluates to determine whether the transaction should be recorded on a gross basis as a principal or net basis as an agent. This evaluation includes, but not limited to, assessing whether the Company (1) or third-party supplier is a primary obligor in the arrangement, (2) has general inventory risk, (3) has latitude in establishing pricing, (4) has discretion in supplier selection, (5) has credit risk and (6) acts as an agent or broker with compensation on a commission or fixed fee basis.

Based on its assessment of the indicators listed in the ASC Topic 605-45, the Company has concluded that the existing business should be accounted for on a gross basis. The Company assumes the position of primary obligor and thus will recognize revenue on the gross amount billed to the customers when persuasive evidence of an arrangement exists, the products are delivered, the fee is fixed and determined and the collection of the resulting receivable is probable. Revenue from the sale of electric wire products is recognized when the products are delivered to and received by the customers, collectibility is reasonably assured and the prices are fixed and determinable.

Revenue represents the invoiced value of goods, net of value-added tax (“VAT”). The Company's products that are locally sold in the PRC are subject to VAT which is levied at the rate of 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales.

(b)	Interest income

Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.

·	Cost of revenue

Cost of revenue includes cost of raw materials, direct labor, packing cost and production overhead directly attributable to the manufacture of electric wire products. Shipping and handling cost are recorded in cost of revenue and are recognized when the related product is delivered to the customer.

NOTE 2 - Summary of Significant Accounting Policies (Continued)

·	Advertising expenses

Advertising costs are expensed as incurred under ASC Topic 720-35, “Advertising Costs”. There was no advertising cost incurred for ~~three~~six months ended ~~March~~June 3130, 2012 and 2011.

·	Comprehensive income or loss

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying statements of owners’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income or loss is not included in the computation of income tax expense or benefit.

·	Income taxes

Income taxes are determined with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC Topic 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC Topic 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the ~~three~~six months ended June ~~March 31~~30, 2012 and 2011, the Company did not have any interest and penalties associated with tax positions. As of ~~March 31~~June 30, 2012 and 2011, the Company did not have any significant unrecognized uncertain tax positions.

The Company conducts its major businesses in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority.

NOTE 2 - Summary of Significant Accounting Policies (Continued)

·	Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.

The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. The Company maintains its books and record in its local currency, Renminbi Yuan (“RMB”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of owners’ equity.

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective year:

	March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Year-end RMB: US$1 exchange rate		6.~~3122~~3089		6.3523
Annual average RMB: US$1 exchange rate		6.~~2946~~3027		6.4544

·	Retirement plan costs

Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the statements of operation and comprehensive loss as and when the related employee service is provided.

·	Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

·	Segment reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the ~~three~~six months ended ~~March~~June 3130, 2012 and 2011, the Company operates in one reportable business segment in the PRC.

NOTE 2 - Summary of Significant Accounting Policies (Continued)

·	Fair value of financial instruments

The carrying value of the Company’s financial instruments: cash, accounts receivable, prepayments and other current assets, accounts payable, amount due from (to) a related party and the owner, accrued liabilities and other payables approximate at their fair values because of the short-term nature of these financial instruments.

The Company also follows the guidance of ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1 : Observable inputs such as quoted prices in active markets;

Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Summary of Significant Accounting Policies (Continued)

Recently issued accounting pronouncements

Fair Value Measurement

In May 2011, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU 2011-04 generally provides a uniform framework for fair value measurements and related disclosures between U.S. GAAP and International Financial Reporting Standards ("IFRS"). Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation process used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity's use of a nonfinancial asset that is different from the asset's highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. This update is effective for annual and interim periods beginning on or after December 15, 2011. The effect of ASU 2011-04 on the consolidated financial statements and related disclosures is not expected to be significant.

Comprehensive Income

In June 2011, the FASB issued ASU 2011-05,Comprehensive Income (Topic 220). ASU 2011-05 gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements; the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity was eliminated. The items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income were not changed. Additionally, no changes were made to the calculation and presentation of earnings per share. This update is effective for annual and interim periods beginning on or after December 15, 2011. The effect of ASU 2011-05 on the consolidated financial statements and related disclosures is not expected to be significant.

Intangibles—Goodwill and Other

In September 2011, the FASB issued ASU No. 2011-08, Intangibles—Goodwill and Other (Topic 350) that permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying amount before applying the two step goodwill impairment test. The updated guidance requires that, if an entity concludes that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount; it would not be required to perform the two-step impairment test for the reporting unit. The provisions of the updated guidance are effective for annual and interim periods beginning after December 15, 2011 with early adoption permitted. The Company adopted ASU 2011-08 in the third quarter of 2011. The adoption of this guidance did not affect the Company's results of operations, financial position or liquidity.

NOTE 3 – GOING CONCERN UNCERTAINTIES

These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

For the ~~three~~six months ended June ~~March 31~~30, 2012, the Group incurred an accumulated ~~deficit~~losses of US$ 1,~~041~~067,~~797~~447 and a shareholders’ deficit of US$50,933) at that date. The continuation of the Group as a going concern through ~~March~~June 3130, 2013 is dependent upon the continuing financial support from its stockholders. Management believes, the existing majority stockholders will provide the additional cash to meet with the Company’s obligations as they become due.

These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

NOTE 4 – AMOUNT DUE FROM RELATED PARTIES

The amounts due from related parties were unsecured, interest-free and repayable on demand.

NOTE 5 – INCOME TAXES

The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the ~~three~~six months ended June ~~March 31~~30, 2012 and 2011, the components of (loss~~)/income~~ before income taxes were comprised of the following:

	Three months ended March 31
	Six months ended June 30
	2012			2011
Tax jurisdictions from:
– BVI	$	(88119,~~271~~289	)	$	-(7,307	)
– Hong Kong		(1528,~~702~~408	)		-(286,604	)
– The PRC		(3719,~~614~~542	)		535,~~428~~113
(Loss)/ income before income taxes	$	(141,587	)	$	5,428
Loss before income taxes	$	(167,239	)	$	(258,798	)

Pursuant to the rules and regulations of the BVI, Titanium Group Limited which is incorporated in the BVI is not subject to taxation in the BVI under the current BVI law.

AsFor ofthe ~~March~~six months ended June, 2012, the operations in Hong Kong and the PRC incurred the aggregate net operating losses carry forward of US$ 133,210 that may be used to offset future taxable income. The Company has provided for a valuation allowance in full amount of deferred tax assets as there is no assurance of ~~further~~ future taxable income.

AsDuring ofthe ~~March~~six 31months ended June 30, 2011, Shenshen Kanglv Technology incurred income tax US$ 18,~~357~~116, at a unified income tax rate of 25%.

NOTE 6 – INVENTORIES

Inventories consist of the following:

	March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Raw materials	$	~~168~~157,~~927~~300	$	255,565
Work-in-process		~~194~~56,~~313~~617		46,858
Finished goods		~~467~~374,~~249~~438		441,664
Inventories, net	$	~~830~~588,~~489~~355	$	744,087

As of ~~March~~June 3130, 2012, the Company recorded no allowance for slow-moving and obsolete inventories.

NOTE 7 – AMOUNTS DUE FROM RELATED PARTIES

	March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Jiaxing Cancare Electric Technology Company Limited		9091,~~981~~029		-
Cancare Electric Wire (Shenzhen) Co., Ltd		4,~~948~~951,~~810~~399		4,917,570
	$	5,~~039~~042,~~791~~428		4,917,570

As of ~~March~~June 3130, 2012, the balance represented the temporary advances made by the Company to ~~Cancare Enterprise Co., Limited,~~ Jiaxing Cancare Electric Technology Company Limited ~~and~~ and Cancare Electric Wire (Shenzhen) Co., Ltd., which are controlled by common key management personnel. The amounts were unsecured, interest-free and repayable on demand.

NOTE 8 - DEPOSITS AND OTHER RECEIVABLES

Deposits and other receivables consisted of the following:

	March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Prepayment	$	~~1,397~~185	$	4,559
Other receivables		2960,~~222~~667		119,052
	$	3060,~~619~~852	$	123,611

NOTE 9 – PLANT AND EQUIPMENT

Plant and equipment consist of the following:

	March 31, 2012			December 31, 2011
	June 30, 2012			December 31, 2011
Plant and machinery	$	~~220~~226,~~847~~856		$	213,128
Furniture, fittings and office equipment		2,~~583~~584			2,583
Motor vehicles		20,~~448~~459			20,448
Foreign translation difference		13,~~758~~765			13,758
		257,636			249,917
		263,664			249,917
Less: accumulated depreciation		(6276,~~554~~782	)		(59,904	)
Less: foreign translation difference		(~~6,765~~643	)		(843	)
	$	~~188~~186,~~317~~239		$	189,170

NOTE 10 – AMOUNTS DUE TO RELATED PARTIES

	March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Amount due to a former director, Mr. Wen Jialong	$	50,~~695~~722	$	50,376
Amount due to Cancare Electric Wire (Shenzhen) Co., Ltd		~~614~~829,~~982~~160		293,958
Amount due to former owner, Cancare Enterprise Co., Limited		~~108~~128,~~489~~506		980,574
	$	~~774~~1,~~166~~008,388	$	1,324,908

As of ~~March~~June 3130, 2012, the amounts due to related parties represented temporary advances made to the Company, which were unsecured, interest-free and repayable within the next twelve months.

NOTE 11– ACCRUED LIABILITIES NAD OTHER PAYABLE

Accrued liabilities and other payables consist of the following:

	March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Accrued salaries and benefits	$	~~187~~175,~~865~~244	$	181,009
Accrued operating expenses		6938,~~218~~929		40,707
VAT payable		8078,~~014~~420		87,674
Other payable		~~195~~465,~~262~~424		111,621
	$	~~532~~758,~~359~~017	$	421,011

NOTE 12– SHORT-TERM SECURED BANK LOAN

The bank loan is denominated in Renminbi and repayable within 1 year. It carries interest at 7.544% per annum and is guaranteed by (i) Mr. Wen Jialong, who does not receive any compensation for acting as guarantor; (ii) the property owned by the third party, ~~Steven Clothes~~ 史蒂文服裝(~~Shenzhen~~堔圳) ~~Limited~~有限公司, who does not receive any compensation for the guarantee.

NOTE 13– ~~CONCENTRATIONS~~RELATED OFPARTY ~~RISK~~TRANSACTIONS

(a)

For the three months ended June 30, 2012 and 2011 the Company sold its products at its current market value totaling $1,182,440, $1,529,144 and for the six months ended June 30, 2012 and 2011 was totaling $2,175,379 and $2,175,624 to a related company which is controlled by the majority owner of the Company in a normal course of business.

(b)

For the three months ended June 30, 2012 and 2011 there have purchase from a related party totaling $518,192 and $nil and for the six months ended June 30, 2012 and 2011, was totaling $1,055,640 and $nil from a related company which is controlled by the majority owner of the Company in a normal course of business. .

(c)	For the three months ended June 30, 2012 and 2011 there have no sundry income from a related party. For the six months ended June 30, 2012 and 2011, the Company received a sundry income totaling, $150,729 and $ nil from a related party.

NOTE 14– CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a)

Major customers

For the three months ended ~~March~~June 3130, 2012, there was a single customer who accounted for 100% of the Company’s revenue amounting to US$ ~~992~~1,~~939~~182,440 with accounts receivable balance of US$nil ~~512,956~~ at period-end date.

For the six months ended June 30, 2012, there was a single customer who accounted for 100% of the Company’s revenue amounting to $2,175,379 with accounts receivable balance of $nil at period-end date.

NOTE 14– CONCENTRATIONS OF RISK (CONTINUED)

(b)

Major vendors

For the three months and six months ended ~~March~~June 3130, 2012, the vendor who accounted for 10% or more of the Company’s purchases and its outstanding balance at period-end date, are presented as follows:

	Three months ended March 30, 2012					March 30, 2012
	Three months ended June 30, 2012					June 30, 2012
	Purchases		Percentage of purchases			Accounts payable, trade
Vendor A (a related party)	$	3518,~~384,631~~192		6145	%		2208,~~173,327~~764
Vendor B		~~623~~108,~~914~~030		1310	%		1193,~~088,775~~447
Vendor C		739,025		11	%		1,009,147
Total:	$	626,222		55	%		402,211
Total:	$	4,747,570		85	%		4,271,249

	Six months ended June 30, 2012					June 30, 2012
	Purchases		Percentage of purchases			Accounts payable, trade

Vendor A (a related party)	$	1,055,640		49	%		208,764
Vendor B		225,380		10	%		193,447

Total	$	1,281,020		59	%		402,211

(c)

Credit risk

Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its accounts receivable is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

(d)

Exchange rate risk

The reporting currency of the Company is US$, while the majority of the revenues and costs are denominated in RMB and a significant portion of the assets and liabilities are denominated in RMB. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates against US$, the value of RMB revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.

NOTE 14– CONCENTRATIONS OF RISK (CONTINUED)

(e)

Economic and political risks

The Company's operations are conducted in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC and by the general state of the PRC economy.

The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

NOTE 1415– SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, We have evaluated significant events and transactions that occurred after ~~March~~ 31June 30, 2012 through the date of the condensed consolidated financial statements were issued and filed with this Form 10-Q. During the period, the Company did not have any material recognizable subsequent events.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Shenzhen Kanglv Technology Company Limited (“Shenzhen Kanglv” and the “Company”) was registered as a limited liability company in Shenzhen City, the People’s Republic of China (the “PRC”) on June 16, 2005. Shenzhen Kanglv is mainly engaged in the manufacture and sales of electric wire products in the PRC, with its principal place of business in Shenzhen City, the PRC, which was commenced in August 2010. The Company is a sub-contractor to manufacture and sells the electric wire products to its single customer. Under the sub-contracting agreement between Shenzhen Kanglv and Cancare Electric Wire (Shanzhen) Co., Ltd (“Cancare”), which is controlled by the same individual of its majority owner, Cancare provided the core components and materials to Shenzhen Kanglv for the production and Shenzhen Kanglv exclusively sold these finished products, based upon the required ~~reauired~~ specification and customization to Cancare at the current market value in the normal course of business.

On May 31, 2011, Shenzhen Kanglv entered into a Memorandum of Understanding dated September 1, 2010 and amended on November 18, 2010 and March 18, 2011 (the “ MOU ”) with Titanium Group Limited (“TTNUF”), which was incorporated as an International Business Company with limited liability in the British Virgin Islands (“BVI”) under the International Business Companies Act (“IBC Act”) of the British Virgin Islands on May 17, 2004 and subsequently registered under the BVI Business Companies Act (“BVIBC Act”) on January 1, 2007 when the IBC Act was repealed and replaced with the BVIBC Act. TTNUF, through its subsidiaries, mainly engages in the manufacture and sales of electric wire products in the PRC, with its principal place of business in Shenzhen City, the PRC.

As used herein, the “Group” refers to TTNUF and its wholly-owned subsidiaries, Hong Kong Kanglv Technology Limited, Shenzhen Kanglv Technology Limited and Kanglv Cable Technology (Hong Kong) Limited.

Pursuant to the MOU, TTNUF agreed to issue 52,635,560 common shares to Huabao Asia Limited, an entity owned and controlled by Mr. CHEN Tianju, in exchange of the ownership of Shenzhen Kanglv. Although Shenzhen Kanglv became TTNUF’s wholly-owned subsidiary, the transaction was accounted for as a recapitalization in the form of a reverse merger of Shenzhen Kanglv, whereby Shenzhen Kanglv was deemed to be the accounting acquirer and was deemed to have retroactively adopted the capital structure of TTNUF. Since the transaction was accounted for as a reverse merger, the accompanying consolidated financial statements reflect the historical consolidated financial statements of Shenzhen Kanglv for all periods presented, and do not include the historical financial statements of TTNUF.

Pursuant to the MOU, TTNUF also agreed the following terms:

TTNUF agreed to effect a 1-for-10 consolidation of its issued and outstanding shares of common stock.

The holders of TTNUF’s outstanding convertible debentures in the aggregate principal amount of US$1,400,000 (HK$10,920,000) agreed to accept a total of 3,500,000 common shares as full and complete payment of the debentures and all accrued and unpaid interest thereon.

Zili Industrial Co., Limited, an entity owned and/or controlled by Mr. XU Zhigang, agreed to purchase 38,700,000 common shares and deposit the purchase price of US$387,000 into escrow.

On May 31, 2011, the acquisition of Shenzhen Kanglv was completed, and the business of Shenzhen Kanglv was adopted as the Company’s business. As such, the following discussion is focused on the current and historical operations of Shenzhen Kanglv, and excludes prior operations of Titanium Group Limited.

Shenzhen Kanglv is engaged in the manufacture and sales of electronic cable products in the PRC, with its principal place of business in Shenzhen City, the PRC. Its principal products are various types of computer cables, such as HDMI, DVI, VGA and USB cables, as well as electric power cables.

Shenzhen Kanglv is a subcontractor for Cancare Electric Wire (Shenzhen) Co., Ltd., an affiliate (“Cancare Electric”), and manufactures the products for Cancare Electric to its specifications and customization requirements. Cancare Electric provides the core components and materials to Shenzhen Kanglv. Cancare Electric sells the products to companies in the PRC, such as Great Wall Tech, Chi- Yuan Technology Limited, and Ya Lid A company limited.

On 2 September, 2011, the subsidiary, Titanium Technology Limited, was winding up by the Hong Kong Special Administrative Region Government.

Accordingly, the accompanying consolidated financial statements include the following:

The consolidated balance sheets, consolidated statements of operations and comprehensive loss, and consolidated statements of cash flows of the accounting acquirer for all periods presented as if the recapitalization had occurred at the beginning of the earliest period presented and the operations of the accounting acquiree from the date of stock exchange transaction.

20As of June, 2012, details of the Company’s subsidiaries are as follows:

As of March, 2012, details of the Company’s subsidiaries are as follows:

Name	Date of incorporation/ establishment	Place of incorporation/ registration and operation	Percentage of equity interest attributable to the Company	Principal activities

Hong Kong Kanglv Technology Limited	September 17, 2010	Hong Kong	100%	Investment holding

Shenzhen Kanglv Technology Limited	June 16, 2005	PRC	100%	Manufacture and sales of electric wire products

Kanglv Cable Technology (Hong Kong) Limited	September 17, 2010	Hong Kong	100%	Dormant

Name

Date of incorporation/ establishment

Place of incorporation/ registration and operation

Percentage of equity interest attributable to the Company

Principal activities

Hong Kong Kanglv Technology Limited

September 17, 2010

Hong Kong

100

Investment holding

Shenzhen Kanglv Technology Limited

June 16, 2005

PRC

100

Manufacture and sales of electric wire products

Kanglv Cable Technology (Hong Kong) Limited

September 17, 2010

Hong Kong

100

Dormant

Critical Accounting Policies

Inventories. Inventories consist primarily of raw materials, work-in-process and finished goods of electric wire products and are stated at the lower of cost or net realizable value, with cost being determined on a weighted average basis. Costs include material, direct labor and manufacturing overhead costs. Allowance for slow-moving and obsolescence is an estimated amount based on an an analysis of current business and economic risks, the duration of the inventories held and other specific identifiable risks ~~that~~ that may indicate a potential loss. The allowance is reviewed regularly to ensure that it adequately provides for all ~~reasonable~~ reasonable expected losses. For the ~~three~~six month ended ~~March~~June 3130, 2012 and 2011, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.

Revenue Recognition. In accordance with ASC Topic 605, “Revenue Recognition,” the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured.

(a) Sales of products – Revenue from the sales of electric wire products is recognized when the products are delivered to and received by the customers, collectability is reasonably assured and the prices are fixed and determinable.

Revenue represents the invoiced value of goods, net of value-added tax (“VAT”). The Company’s products that are locally sold in the PRC are subject to VAT, which is levied at the rate of 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Companay in addition to the invoiced value of purchases to the extent not refunded for export sales.

(b) Interest income – Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.

Cost of revenue. Cost of revenue includes cost of raw materials, direct labor, packing cost and production overhead directly attributable to the manufacture of electric wire products. Shipping and handling cost are recorded in cost of revenue and are recognized when the related product is delivered to the customer.

Comprehensive income or loss. ASC Topic 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the statements of owners’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income or loss is not included in the computation of income tax expense or benefit.

Income taxes. Income taxes are determined with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

For the years ended December 31, 2011 and 2010, the Comapny did not have any interest and penalties associated with tax positions. As of December 31, 2011 and 2010, the Comapny did not have any significant unrecognized uncertain tax positions.23

For the years ended June 30, 2012 and 2011, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2012 and 2011, the Company did not have any significant unrecognized uncertain tax positions.

The Company conducts its major businesses in the PRC and is subject to tax in this jurisdiction. As a result of its business activities the Company files tax returns that are subject to examination by the local tax authority.

Foreign currencies translation. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.

The reporting currency of the Company is the United States Dollar (“US$”) and the financial statements of the Company have been expressed in US$. The Company maintains its books and records in its local currency, Renminbi Yuan (“RMB”), which is a functional currency as being the primary currency of the economic environment in which its operations are conducted. In accordance with ASC Topic 830-30, “Translation of Financial Statement,” assets and liabilities of a company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of owners’ equity.

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective periods:

		March 31, 2012		December 31, 2011
	June 30, 2012	December 31, 2011
Year-end RMB: US$1 exchange rate	6.3089	6.3523	~~6.3122~~		~~6.3523~~
Annual average RMB: US$1 exchange rate	6.3027	6.4544	~~6.2946~~		~~6.4544~~

Related Parties. Parties, which can be a corporation or individual, are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Results of Operations

Comparison of three months ended ~~March~~ 31June 30, 2012 and ~~March~~June 3130, 2011.

Net revenue for three months ended ~~March 31~~June 30, 2012 were US$ ~~992~~1,~~939~~182,440 compared to US$ ~~646~~1,~~480~~528,144 for the three months ended ~~March~~June 3130, 2011, ana ~~increase~~decrease of 54 22.661%. The ~~increase~~ decrease in net revenue for the three ~~month~~months ended ~~March~~June, 2012 over the three month ended ~~March~~June 3130, 2011 was mainly due to ~~the~~worldwide ~~full~~economic ~~commitments of~~slow ~~businesses~~down ofin ~~the~~2012 ~~Company~~and ~~since~~customers ~~2011~~demand decreased.

Cost of revenue was US$1,158,389 for the three months ended June 30, 2012 as compared to US$1,501,086 for the comparable period ended June 30, 2011, a decrease of 22.83% which was in line with the decrease of revenue of the period.

~~Cost~~Gross ofprofit ~~revenue was US$ 1,021,716~~ for ~~the~~ the three months ended ~~March~~June 3130, 2012 aswas ~~compared to~~ US$ ~~638~~24,~~143~~051, ~~for~~or ~~the~~2.03% ~~comparable~~of ~~for~~net ~~three~~revenue, ~~months~~compared ~~ended~~to ~~March~~gross ~~31,~~profit ~~2011~~of US$28,058, anor ~~increase of 60%~~1.83% ~~This~~of ~~was~~net revenue, ~~mainly~~respectively, ~~due~~for to the ~~full~~comparable ~~commitments~~period ofin ~~businesses of the Company since~~ 2011.

Gross loss for the three months ended March 31, 2012 was US$28,777, or 2.8% of net revenue, compared to gross profit of US$8,337, or 1.3% of net revenue, respectively, for the comparable period in 2011.24

Selling, general and administrative expenses were US$7567,~~547~~251, or 75.669% of net revenue, for the three months ended ~~March~~June 3130, 2012, compared to US$296,~~955~~934, or 06.534% of net revenue, for the comparable period in 2011. The ~~increase~~decrease ofwas ~~the expenses were~~ mainly ~~attributed~~attributable to ~~the~~better ~~cost~~control ofon ~~recapitalization~~expenses.

~~Interest~~During ~~expense was US$84,900 for~~ the three months period ended ~~March~~June 3130, 2012, asthere ~~compared to US$nil for the respective comparable period in 2011. The increase~~ was ~~primarily due~~a tosundry ~~bank~~income ~~borrowings. We obtained bank loan~~ of US$~~4.4~~103,130 ~~million~~received ~~at the last quarter 2011 as~~ compared to US$nil for the ~~three~~comparable ~~months ended~~period ~~March~~in ~~31,~~ 2011.

~~Net~~Interest ~~loss~~expenses increased significantly to US$85,580 for the three months ended ~~March 31~~June 30, 2012 ~~was US$141~~,~~587,~~ as compared to ainterest ~~net~~expenses ~~profit~~ of US$45,~~071~~699 for the respective comparable period in 2011. The increase was primarily due to bank loan drawdown by end of 2011.

Net loss for the three months ended June 30, 2012 was US$25,650, compared to a net loss of US$82,691 for the comparable period in 2011.

Net revenue for six months ended June 30, 2012 were US$2,175,379 compared to US$2,175,624 for the six months ended June 30, 2011, a slight decrease of 0.01%. The slight decrease in net revenue for the six months ended June, 2012 over the six month ended June 30, 2011 was mainly due decrease in customer demand in the second quarter of 2012 as a result of worldwide economic slow down.

Cost of revenue was US$ 2,180,104 for the six months ended June 30, 2012 as compared to US$ 2,139,229 for the comparable for six months ended June 30, 2011, an increase of 1.9%. The slight increase was mainly due to the increase of raw material prices and cost during the first quarter of 2012.

There was a gross loss of US$4,725 for the six months ended June 30, 2012, compared to gross profit of US$36,395 for the comparable period in 2011. The gross loss was mainly due to the soaring cost during the first quarter of 2012.

Selling, general and administrative expenses were US$142,798, or 6.56% of net revenue, for the six months ended June 30, 2012, compared to US$283,888, or 13% of net revenue, for the comparable period in 2011. The decrease was mainly attributable to better control on expenses.

During the six months period ended June 30, 2012, there was a sundry income of US$150,729 received compared to US$nil for the comparable period in 2011.

Interest expenses increased significantly to US$170,445 for the six months ended June 30, 2012, as compared to interest expenses of US$11,305 for the respective comparable period in 2011. The increase was primarily due to bank loan drawdown by end of 2011.

Net loss for the six months ended June 30, 2012 was US$167,239, compared to a net loss of US$266,914 for the comparable period in 2011.

Going Concern

For the ~~three~~six months ended June ~~March 31~~30, 2012, the Company incurred an accumulated deficit of USHK$1,~~041~~067,~~797~~447 at that date. The continuation of the Company as a going concern through ~~March~~ 31June 30, 2012 is dependent upon the continuing financial support from its stockholders. Management believes, the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due.

Liquidity and Capital Resources

At ~~March~~June 3130, 2012, we had cash of US$~~110~~836,~~194~~091, as compared to cash of US$917,724 at December 31, 2011. Amounts owed to related parties at June 30, 2012 were US$ 1,008,388 as compared to that of US$1,324,908 at December, 2011.

We used cash of US$~~913~~178,~~658~~ 769 in our operating activities during the ~~three~~six months ended ~~March~~June 3130, 2012, largely due to the net loss of US$~~141~~167,~~587~~239 for the period. ~~Amounts owed to related parties at March 31, 2012 were US$ 776,305~~

For the three months ended March 31, 2011, we used cash of US$32,227 in our operating activities and advances to related parties provided cash of US$1,324,908.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In July 2010, Hong Kong Communications Company Limited initiated proceedings in High Court of the Hong Kong SAR to wind up Titanium Technology. ELM Computer Technologies Limited, a creditor of Titanium Technology, has made a claim for a sum of US$292,393 (HK$2,280,666) and has applied to substitute as the petitioner in this action. Its application was to be heard on April 8, 2011, but has been extended to September 9, 2011.

In August 2010, ELM Computer Technologies Limited initiated proceedings in High Court of the Hong Kong SAR against Titanium Technology for wrongful repudiation of a subcontractor agreement and default in a maintenance service agreement, claiming damages of US$407,983 (HK$3,182,266). Titanium Technology has applied for a stay of all further proceedings in this action. The application was due to be heard on May 11, 2011, but has been extended to September 9, 2011.

Titanium Technology received the winding-up notification from High Court of the Hong Kong SAR dated September 16, 2011.

Item 1A. Risk Factors

There has been no material change to our Risk Factors from those presented in our Form 10-K for the fiscal year ended December 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

None

Item 5. Other Information

None.

Item 6. Exhibits

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
32.1	Section 1350 Certification of the Chief Executive Officer
32.2	Section 1350 Certification of the Chief Financial Officer.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TITANIUM GROUP LIMITED
May 21, 2012	By:	/s/ LAI Huamin
August 27, 2012	By:	/s/ Huaming LAI
		LAI Huamin
		Chief Executive Officer and
		Chief Executive Officer and President (principal executive officer)
		President (principal executive officer)

	TITANIUM GROUP LIMITED
May 21, 2012	By:	/s/ Tianju Chen
August 27, 2012	By:	/s/ Tianju Chen
		Tianju Chen
		Chief Financial Officer
		Chief Financial Officer (principal financial officer and principal accounting officer)
		(principal financial officer and
		principal accounting officer)

2527

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