UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION~~

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Form~~FORM 10-Q

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

¨		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2012
		or
¨		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

~~For~~Commission ~~the~~File ~~quarterly~~Number: ~~period ended June 30, 2012~~0-52415

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~~Name of ~~registrant~~ Registrant as ~~specified~~ Specified in ~~its~~Its ~~charter~~Charter)

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

British Virgin Islands (State of Other Jurisdiction of Incorporation or Organization)		Not Applicable (I.R.S. Employer Identification No.)

Suite 2101, 21/F, Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong (Address of Principal Executive Offices)		Not Applicable (ZIP Code)

~~Suite~~+(852) ~~2101,~~3679 ~~21/F, Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong~~3110

(~~Address~~Registrant’s ofTelephone ~~principal~~Number, ~~executive offices)(Zip~~ Including Area Code)

Indicate by check mark whether the registrant: (~~852~~1) has filed ~~3679~~all ~~3110~~reports required to be filed by Sections 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.

~~(Registrant’s telephone~~Yes ¨ No ~~number, including area code)~~¨

~~Not~~Indicate ~~applicable~~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 ~~(Former name, former~~¨ No ~~address and former fiscal year, if changed since last report)~~¨

Indicate by check mark whether the registrant ~~(1)~~ ~~has~~is ~~filed~~a ~~all~~large ~~reports~~accelerated filer, ~~required~~an toaccelerated befiler, ~~filed~~a bynon-accelerated ~~Section~~filer, 13 or ~~15(d)~~a ofsmaller ~~the~~reporting ~~Securities~~company. ~~Exchange~~See ~~Act~~the definitions of ~~1934~~“large ~~during the preceding~~accelerated 12filer,” ~~months~~“accelerated ~~(or~~filer” ~~for~~and ~~such~~“smaller ~~shorter~~reporting ~~period~~company” ~~that~~in ~~the~~Rule ~~registrant was required to file such reports), and (~~12b-2) ~~has~~of ~~been subject to such filing requirements for~~ the ~~past~~Exchange ~~90 days~~Act. (Check one):

xLarge ~~Yes o No~~accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

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~~. 16,~~000~~775,~~000~~113 ~~shares of Common Stock, $0.01 par value,~~ as of ~~August~~November 2730, 2012.

~~TITANIUM~~TABLE ~~GROUP~~OF ~~LIMITED~~CONTENTS

INDEX

		Page

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.		5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosures About Market Risk.		29
Item 4. Controls and Procedures.		30

PART II—OTHER INFORMATION
Item 1A. Risk Factors.		31
Item 6. Exhibits.		31

PART I. FINANCIAL INFORMATION			3
Item 1. Financial Statements			3
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			29
Item 1. Legal Proceedings.			29
Item 1A. Risk Factors.			29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			29
Item 3. Defaults Upon Senior Securities.			29
Item 4. Reserved.			29
Item 5. Other Information.			29
Item 6. Exhibits.

Throughout this Quarterly Report on Form 10-Q, the “Company”, “we,” “us,” and “our,” refer to Titanium Group Limited unless otherwise indicated or the context otherwise requires.

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		6
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss		7
Unaudited Condensed Consolidated Statements of Cash Flows		8
Notes to Unaudited Condensed Consolidated Financial Statements		9

~~PART~~TITANIUM I.GROUP ~~FINANCIAL~~LIMITED ~~INFORMATION~~AND SUBSIDIARIES

~~ITEM~~UNAUDITED 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~TITANIUM~~FOR ~~GROUP~~THE NINE MONTHS ENDED ~~LIMITED~~SEPTEMBER 30, 2012 AND ~~SUBSIDIARIES~~2011

~~UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS~~3

~~(Currency~~TITANIUM ~~expressed~~GROUP LIMITED inAND ~~US Dollars (“US$”))~~SUBSIDIARIES

	June 30			December 31
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	836,091		$	917,724
Accounts receivable, net		132,898			131,990
Amounts due from related parties		5,042,428			4,917,570
Inventories		588,355			744,087
Deposits and other receivables		60,852			123,611
Total current assets		6,660,624			6,834,982
Non-current assets:
Plant and equipment, net		186,239			189,170
TOTAL ASSETS	$	6,846,863		$	7,024,152
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, net	$	685,601		$	826,430
Amounts due to related parties		1,008,388			1,324,908
Short-term secured bank loan		4,438,175			4,407,852
Income tax payable		7,615			7,562
Accrued liabilities and other payables		758,017			421,011
Total current liabilities		6,897,796			6,987,763
Total liabilities		6,897,796			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)		16,514			(63,401	)
Accumulated losses		(1,067,447	)		(900,210	)
Total stockholders’ (deficit)/equity		(50,933	)		36,389
TOTAL LIABILITIES AND EQUITY	$	6,846,863		$	7,024,152

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

See accompanying notes to unaudited condensed consolidated financial statements.

		Page

Unaudited Condensed Consolidated Balance Sheets		5

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss		6

Unaudited Condensed Consolidated Statements of Cash Flows		7

Notes to Unaudited Condensed Consolidated Financial Statements		8-22

TITANIUM GROUP LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED ~~STATEMENTS~~BALANCE OFSHEETS

~~OPERATIONS~~(Currency ~~AND~~expressed ~~COMPREHENSIVE~~in ~~LOSS~~US Dollars (“US$”))

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

	September 30			December 31
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	229,957		$	917,724
Accounts receivable, net		132,686			131,990
Amounts due from related parties		4,971,617			4,917,570
Inventories		1,077,705			744,087
Deposits and other receivables		141,536			123,611

Total current assets		6,553,501			6,834,982

Non-current assets:
Plant and equipment, net		177,758			189,170

TOTAL ASSETS	$	6,731,259		$	7,024,152

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, net	$	907,962		$	826,430
Amounts due to related parties		1,207,595			1,324,908
Short-term secured bank loan		4,431,081			4,407,852
Income tax payable		7,603			7,562
Accrued liabilities and other payables		343,617			421,011

Total current liabilities		6,897,858			6,987,763

Total liabilities		6,897,858			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)		16,360			(63,401	)
Accumulated losses		(1,182,959	)		(900,210	)
Total stockholders’ (deficit)/equity		(166,599	)		36,389

TOTAL LIABILITIES AND EQUITY	$	6,731,259		$	7,024,152

	Three months ended June 30						Six months ended June 30
	2012			2011			2012			2011
REVENUE, NET
Revenue – related party, net	$	1,182,440		$	1,529,144		$	2,175,379		$	2,175,624
COST OF REVENUE
Cost of revenue (including depreciation)		(1,158,389	)		(1,501,086	)		(2,180,104	)		(2,139,229	)
GROSS (LOSS)/INCOME		24,051			28,058			(4,725	)		36,395
OPERATING EXPENSES
Selling, general and administrative		(67,251	)		(96,934	)		(142,798	)		(283,888	)
(LOSS)/INCOME FROM OPERATIONS		(43,200	)		(68,876	)		(147,523	)		(247,493	)
Other income (expense):
Sundry income		103,130			-			150,729			-
Interest expense		(85,580	)		(5,699	)		(170,445	)		(11,305	)
LOSS BEFORE INCOME TAX		(25,650	)		(74,575	)		(167,239	)		(25,898	)
Income tax expense		-			(8,116	)		-			(8,116	)
NET LOSS	$	(25,650	)	$	(82,691	)	$	(167,239	)	$	(266,914	)
Other comprehensive income
- Foreign currency translation gain		41			3,550			16,514			1,081
COMPREHENSIVE LOSS		(25,609	)		(79,141	)		(150,725	)		(265,833	)
Net loss per share - Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average common shares outstanding – basic and diluted		100,000,000			68,949,978			100,000,000			60,792,769

See accompanying notes to unaudited condensed consolidated financial statements.

~~See accompanying notes to unaudited condensed consolidated financial statements.~~5

4TITANIUM GROUP LIMITED AND SUBSIDIARIES

~~TITANIUM~~UNAUDITED ~~GROUP LIMITED~~CONDENSED ~~AND~~CONSOLIDATED ~~SUBSIDIARIES~~STATEMENTS OF

~~UNAUDITED~~OPERATIONS ~~CONDENSED~~AND ~~CONSOLIDATED~~COMPREHENSIVE ~~STATEMENTS OF CASH FLOWS~~LOSS

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

	Six months ended June 31,
	Three months ended September 30						Nine months ended September 30
	2012			2011			2012			2011
Cash flow from operating activities:
REVENUE, NET
Net (loss)/income	$	(141,587	)	$	4,071
Revenue – related party, net	$	908,295		$	2,021,438		$	3,083,674		$	4,197,062
Adjustments to reconcile net (loss)/income to net cash used in operating activities:
COST OF REVENUE
Depreciation and amortization		2,650			7,094
Cost of revenue (including depreciation)		(938,998	)		(2,048,672	)		(3,119,102	)		(4,187,901	)
Changes in operating assets and liabilities:
GROSS (LOSS)/INCOME		(30,703	)		(27,234	)		(35,428	)		9,161
Accounts receivable		(839	)		(785,422	)
OPERATING EXPENSES
Inventories		(86,402	)		(635,365	)
Selling, general and administrative		(276,313	)		(167,164	)		(419,111	)		(451,052	)
Deposits and other receivables		92,992			-
(LOSS)/INCOME FROM OPERATIONS		(307,016	)		(194,398	)		(454,539	)		(441,891	)
Amount due from related parties		(122,221	)		-
Other income (expense):
Accounts payable		(218,857	)		(178,192	)
Sundry income		36,807			-			36,807			-
Prepayments and other current assets		-			(567	)
Interest income		31,565			10,922			182,294			67
Amount due to related parties		(550,742	)		-
Gain from disposal of a subsidiary		-			555,403			-			555,403
Income tax payable		-			1,357
Interest expense		123,131						(47,314	)		(450	)
Accrued liabilities and other payables		111,348			(16,047	)
LOSS BEFORE INCOME TAX		(115,513	)		371,927			(282,752	)		113,129
Net cash used in operating activities		(913,658	)		(32,227	)
Income tax expense		-			8,116			-			-
Cash flows from investing activities
NET LOSS	$	(115,513	)	$	380,043		$	(282,752	)	$	113,129
Purchase of plant and equipment		(5,890	)		(32,414	)
Other comprehensive income
Net cash used in investing activities		(5,890	)		(32,414	)
- Foreign currency translation gain		(154	)		222,810			16,360			223,891
Cash flows from financing activities:
COMPREHENSIVE LOSS		(115,667	)		602,853			(266,392	)		337,020
Advance from the owner		-			51,751
Net loss per share - Basic and diluted	$	-		$	-		$	-		$	-
Net cash provided by financing activities		-			51,751
Weighted average common shares outstanding – basic and diluted		100,000,000			10,000,000			100,000,000			73,879,904
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~~statements.

~~NOTE~~TITANIUM ~~1 – ORGANIZATION~~GROUP LIMITED AND ~~BACKGROUND~~SUBSIDIARIES

~~Titanium~~UNAUDITED ~~Group Limited~~CONDENSED ~~(the~~CONSOLIDATED ~~“Company”~~STATEMENTS orOF ~~“TTNUF”)~~CASH 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.FLOWS

On(Currency ~~May 31, 2011, the~~expressed ~~Company closed on the transactions described~~ in aUS ~~Memorandum~~Dollars ~~of Understanding dated September 1, 2010 and amended on November 18, 2010 and March 18, 2011~~ (~~the~~ “~~MOU~~US$”)~~. 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.

	Nine months ended September 30,
	2012			2011

Cash flow from operating activities:
Net loss	$	(282,752	)	$	113,129

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of plant and equipment		24,217			-
Exchange loss		-			1,114
Gain from disposal of a subsidiary		-			(555,403	)

Changes in operating assets and liabilities:
Restricted cash		-			182,304
Accounts receivable		(696	)		(3,356,273	)
Inventories		(333,618	)		(795,873	)
Deposits and other receivables		(17,925	)		(408,151	)
Amount due from related parties		(54,047	)		-
Accounts payable		81,532			722,113
Amount due to related parties		(117,313	)		-
Income tax payable		41			7,265
Accrued liabilities and other payables		(77,394	)		771,308
Net cash used in operating activities		(777,955	)		(3,318,467	)

Cash flows from investing activities
Purchase of plant and equipment		(11,768	)		-
Net cash used in investing activities		(11,768	)		-

Cash flows from financing activities:
New Loan from third party		23,229			4,369,691
Advance from related parties		-			(40,205	)
Net cash provided by financing activities		23,229			4,329,486

Effect of exchange rate changes on cash and cash equivalent		78,727			(315,192	)

Net (decrease) /increase in cash and cash equivalents		(687,767	)		695,827

Cash and cash equivalents – beginning of period		917,724			91,834

Cash and cash equivalents – end of period	$	229,957		$	787,661

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for income taxes	$	-		$	-

Cash paid for interest	$	-		$	-

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

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.7

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

~~The~~NOTES ~~stock~~TO ~~exchange transaction~~UNAUDITED ~~has~~CONDENSED ~~been~~CONSOLIDATED ~~accounted~~FINANCIAL 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.STATEMENTS

~~Shenzhen Kanglv Technology Company Limited~~ (~~“Shenzhen~~Currency ~~Kanglv”) was registered as a limited liability company in Shenzhen City, the People’s~~expressed ~~Republic of China (the “PRC”) on June 16, 2005. Shenzhen Kanglv is mainly engaged~~ in ~~the~~US ~~manufacture~~Dollars 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~~US$”), 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.)

6NOTE 1 – ORGANIZATION AND BACKGROUND

~~Accordingly~~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 ~~accompanying~~BVI Business Companies Act (“BVIBC Act”) ~~consolidated~~on ~~financial~~January ~~statements~~1, ~~include~~2007 when the ~~following:~~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.

1.On ~~The~~May ~~balance~~31, ~~sheet~~2011, ~~consists~~the Company ofclosed on the ~~net~~transactions ~~assets~~described ofin ~~the~~a ~~accounting~~Memorandum ~~acquirer~~of atUnderstanding ~~historical~~dated ~~cost~~September 1, 2010 and ~~the~~amended ~~net~~on ~~assets~~November 18, of2010 and March 18, 2011 (the ~~accounting~~“MOU”). ~~acquiree~~Under atthe ~~historical~~terms ~~cost;~~of ~~and~~the MOU:

21. The ~~financial~~Company ~~position,~~agreed ~~results~~to ofeffect ~~operations,~~a ~~and cash flows of the accounting acquirer~~ 1-for-10 ~~all~~consolidation ~~periods presented as if the recapitalization had occurred at the beginning~~ of ~~the~~its ~~earliest~~issued ~~period presented~~ and ~~the~~outstanding ~~operations~~shares of ~~the~~common ~~accounting acquiree from the date of~~ stock ~~exchange transaction~~.

On 2. ~~September,~~The ~~2011,~~ holders of the ~~subsidiary~~Company’s outstanding convertible debentures in the aggregate principal amount of US$1,400,000 ~~Titanium~~(HK$10,920,000) ~~Technology~~agreed ~~Limited~~to accept a total of 3,500,000 ~~was~~post-consolidation ~~winding~~common upshares byas full and complete payment of the ~~Hong~~debentures ~~Kong~~and ~~Special~~all ~~Administrative~~accrued ~~Region~~and ~~Government~~unpaid interest thereon.

~~The~~3. ~~accompanying~~Zili ~~consolidated financial~~Industrial ~~statements~~Co., ~~present~~Limited, ~~the~~an ~~financial~~entity ~~position~~owned and/or ~~results~~controlled ofby ~~operations~~Mr. ofXU ~~the~~Zhigang, ~~Company.~~agreed ~~The~~to ~~Company’s~~purchase ~~functional~~38,700,000 ~~currency is~~post-consolidation ~~RMB,~~common ~~except~~shares ~~otherwise~~and ~~indicated~~deposit the purchase price of US$387,000 into escrow.

~~As of~~4. ~~June~~Huabao Asia Limited, ~~2012~~an entity owned and controlled by Mr. CHEN Tianju, ~~details~~agreed that it would transfer ownership of Shenzhen Kanglv Technology Company Limited (“Shenzhen Kanglv”) to the Company’s, ~~subsidiaries~~in ~~are~~exchange asfor ~~follows:~~52,635,560 post-consolidation common shares.

Name	Date of incorporation/ establishment	Place of incorporation/ registration and operation	Percentage of equity interestattributable 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

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.

7Shenzhen 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.

~~NOTE 2 - Summary of Significant Accounting Policies~~8

·TITANIUM ~~Basis~~GROUP LIMITED ofAND ~~presentation~~SUBSIDIARIES

~~These~~NOTES ~~accompanying~~TO ~~financial~~UNAUDITED ~~statements~~CONDENSED ~~have~~CONSOLIDATED ~~been~~FINANCIAL ~~prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).~~STATEMENTS

·(Currency ~~Use~~expressed in ofUS ~~estimates~~Dollars (“US$”))

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

·1. ~~Cash~~The balance sheet consists of the net assets of the accounting acquirer at historical cost and ~~cash~~the ~~equivalents~~net assets of the accounting acquiree at historical cost; and

~~Cash~~2. ~~and~~The ~~cash~~financial ~~equivalents are~~position, ~~carried~~results atof ~~cost~~operations, and ~~represent~~ cash onflows ~~hand,~~of ~~demand~~the ~~deposits~~accounting ~~placed~~acquirer ~~with~~for ~~banks~~all orperiods ~~other~~presented ~~financial~~as ~~institutions~~if ~~and~~the ~~all~~recapitalization ~~highly liquid~~had ~~investments~~occurred ~~with~~at anthe ~~original~~beginning ~~maturity~~ of ~~three~~the ~~months~~earliest orperiod ~~less~~presented asand the operations of the ~~purchase~~accounting acquiree from the date of ~~such~~stock ~~investments~~exchange transaction.

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

~~Accounts receivable are recorded at the invoiced amount and do not bear interest.~~ The Company ~~extends unsecured credit to its customers in the ordinary~~entered ~~course~~into ofa ~~business~~share ~~but~~exchange ~~mitigates~~agreement (“the ~~associated~~agreement”) ~~risks~~with byZili ~~performing~~Industrial ~~credit checks and actively pursuing past due accounts~~Co. ~~Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis~~Limited, ~~using~~Snow ~~historical~~Hill ~~collection~~Developments ~~trends~~ Limited and ~~aging of~~Cancare ~~receivables.~~Investment ~~Management~~Limited ~~also~~dated ~~periodically~~September ~~evaluates individual customer’s financial condition~~10, ~~credit~~2012. ~~history,~~Under ~~and~~ the ~~current~~ ~~economic~~terms ~~conditions~~of ~~to make adjustments in~~ the ~~allowance when it is considered necessary. For six months ended June 30, 2012 and 2011, the Company did not record an allowance for doubtful accounts.~~agreement:

·1. ~~Inventories~~Zili agrees to sell to Snow Hill 20,000,000 restricted shares of the common stock, $0.01 par value, representing in aggregate of 20% of the total issued and outstanding shares of Titanium owned by Zili in Titanium (the “Titanium Exchange Shares”) in exchange (the “Exchange”) for 2,500,000 shares of Cancare Investment representing in aggregate 20% of the total issued and outstanding equity securities of Cancare Investment owned by Snow Hill in Cancare Investment (the “Cancare Exchange Shares”), a Hong Kong company unrelated to Titanium.

~~Inventories~~2. ~~consist primarily~~Concurrent ofwith ~~raw~~the ~~materials,~~share ~~work-in-process~~exchange ~~and~~transaction, ~~finished~~Zili ~~goods~~transferred ofthe ~~electric~~remaining ~~wire~~17,700,000 ~~products~~shares ~~and are stated at the lower~~ of ~~cost~~common ~~or net~~stock ~~realizable~~it ~~value,~~held ~~with~~in ~~cost~~the ~~being~~Company ~~determined~~to onHuabao aAsia ~~weighted~~Limited ~~average basis. Costs include material~~(“Huabao”), ~~direct~~representing ~~labor~~in ~~and~~aggregate ~~manufacturing overhead costs~~17.7% ~~Allowance for slow-moving and obsolescence is an estimate amount based on an analysis~~ of ~~current~~the ~~business~~issued and ~~economic~~ ~~risks,~~outstanding ~~the~~shares ~~duration~~ of the ~~inventories~~Company’s ~~held~~common ~~and~~stock. ~~other~~The ~~specific~~transferred ~~identifiable~~shares ~~risks~~from ~~that~~Zili ~~may~~to ~~indicate~~Huabao aconstitutes ~~potential~~approximately ~~loss~~17. ~~The~~7% ~~allowance~~of isthe ~~reviewed~~issued ~~regularly~~and tooutstanding ~~ensure~~shares ~~that~~of itthe ~~adequately~~Company’s ~~provides~~common ~~for~~stock, ~~all~~resulting ~~reasonable~~in ~~expected~~Huabao ~~losses.~~holding ~~For~~approximately ~~six~~70.33% ~~months~~of ~~ended June 30, 2012 and 2011,~~ the Company's ~~did~~issued ~~not~~and ~~record~~outstanding anshares ~~allowance~~of ~~for~~common ~~obsolete inventories, nor have there been any write-offs~~stock.

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

~~Plant and equipment~~As ~~are~~of ~~stated~~September, ~~at cost less accumulated depreciation and accumulated impairment losses~~2012, ifdetails ~~any.~~of ~~Depreciation is calculated on~~ the ~~straight-line~~ ~~basis~~Company’s ~~over~~subsidiaries ~~the~~are ~~following~~as ~~expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values~~follows:

	Depreciable life		Residual value
Name		Date of incorporation/ establishment		Place of incorporation/ registration and operation	Percentage of equity interest attributable to the Company			Principal activities
Plant and machinery	5-12 years		5%
Hong Kong Kanglv Technology Limited		September 17, 2010		Hong Kong		100	%	Investment holding
Furniture, fittings and office equipment	9-12 years		5%
Shenzhen Kanglv Technology Limited		June 16, 2005		PRC		100	%	Manufacture and sales of electric wire products
Motor vehicles	9-12 years		5%
Kanglv Cable Technology (Hong Kong) Limited		September 17,2010		Hong Kong		100	%	Dormant

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.9

8TITANIUM GROUP LIMITED AND SUBSIDIARIES

~~NOTE~~NOTES 2TO ~~- Summary~~UNAUDITED ofCONDENSED ~~Significant~~CONSOLIDATED ~~Accounting~~FINANCIAL ~~Policies (Continued)~~STATEMENTS

·(Currency ~~Impairment~~expressed in ofUS ~~long-lived~~Dollars ~~assets~~(“US$”))

InNOTE ~~accordance~~2 ~~with ASC Topic 360~~-~~10-5,~~ ~~“Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment~~Summary ~~held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount~~ of anSignificant ~~asset~~Accounting ~~may~~Policies 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~~Basis ~~recognition~~of presentation

InThese ~~accordance~~accompanying ~~with the~~financial ~~ASC~~statements ~~Topic~~have ~~605,~~been ~~“Revenue~~prepared ~~Recognition”,~~in ~~the~~accordance ~~Company~~with ~~recognizes~~generally ~~revenue~~accepted ~~when~~accounting ~~persuasive~~principles ~~evidence~~in ~~of an arrangement exists, delivery has occurred,~~ the ~~sales~~United ~~price~~States isof ~~fixed~~America ~~or determinable and collectibility is reasonably assured~~(“US GAAP”).

~~(a)~~· ~~Sales~~Use of ~~products~~estimates

~~The~~In ~~Company~~preparing ~~has~~these ~~adopted~~financial ~~ASC Topic 605-45~~statements, ~~“Principal~~management ~~Agent~~makes ~~Considerations”~~estimates ~~(“ASC~~and ~~Topic~~assumptions ~~605-45”)~~that ~~whereby~~affect the ~~Company~~reported ~~evaluates to~~amounts ~~determine~~of ~~whether~~assets ~~the~~and ~~transaction~~liabilities 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,~~balance ~~(2)~~sheets ~~has~~and ~~general~~revenues ~~inventory risk, (3) has latitude in establishing pricing, (4) has discretion in supplier selection, (5) has credit risk~~ and ~~(6)~~expenses ~~acts~~during asthe anyears ~~agent~~reported. orActual ~~broker~~results ~~with~~may ~~compensation~~differ onfrom athese ~~commission or fixed fee basis~~estimates.

~~Based~~· onCash 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~~cash 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.equivalents

~~Revenue~~Cash ~~represents~~and ~~the invoiced~~cash ~~value of goods, net of value-added tax (“VAT”). The Company's products that~~ equivalents are ~~locally~~carried ~~sold in the PRC are subject to VAT which is levied~~ at ~~the~~cost ~~rate~~and ofrepresent ~~17%~~cash on ~~the~~hand, ~~invoiced~~demand ~~value~~deposits ofplaced ~~sales.~~with ~~Output~~banks ~~VAT~~or isother ~~borne~~financial byinstitutions ~~customers~~and inall ~~addition~~highly toliquid ~~the~~investments ~~invoiced~~with ~~value~~an oforiginal ~~sales~~maturity ~~and~~of ~~input~~three ~~VAT~~months isor ~~borne~~less byas ~~the~~of ~~Company in addition to~~ the ~~invoiced~~purchase ~~value~~date of ~~purchases~~such ~~to the extent not refunded for export sales~~investments.

~~(b)~~· ~~Interest~~Accounts ~~income~~receivable

~~Interest~~Accounts ~~income~~receivable are isrecorded ~~recognized~~at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary oncourse aof ~~time~~business ~~apportionment~~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, ~~taking~~using ~~into~~historical ~~account~~collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current ~~principal~~economic ~~amounts~~conditions ~~outstanding~~to make adjustments in the allowance when it is considered necessary. For nine months ended September 30, 2012 and 2011, the ~~interest~~Company ~~rates~~did ~~applicable~~not record an allowance for doubtful accounts.

· ~~Cost of revenue~~Inventories

~~Cost~~Inventories ~~of revenue includes~~consist ~~cost~~primarily of raw materials, ~~direct~~work-in-process ~~labor,~~and ~~packing~~finished ~~cost~~goods ~~and~~of ~~production~~electric ~~overhead~~wire ~~directly~~products ~~attributable~~and toare stated at the ~~manufacture~~lower of ~~electric~~cost or ~~wire~~net ~~products~~realizable value, with cost being determined on a weighted average basis. ~~Shipping~~Costs include material, direct labor and ~~handling~~manufacturing overhead ~~cost~~costs. ~~are~~Allowance ~~recorded~~for inslow-moving ~~cost~~and obsolescence is an estimate amount based on an analysis of ~~revenue~~current business and economic ~~are~~risks, ~~recognized~~the ~~when~~duration of the ~~related~~inventories ~~product~~held isand ~~delivered~~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 nine months ended September 30, 2012 and 2011, the ~~customer~~Company did not record an allowance for obsolete inventories, nor have there been any write-offs.

9· Plant and equipment

~~NOTE~~Plant 2and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line ~~Summary~~basis over the following expected useful lives from the date on which they become fully operational and after taking ofinto ~~Significant~~account ~~Accounting~~their ~~Policies~~estimated ~~(Continued)~~residual values:

· Advertising expenses

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

~~Advertising~~Expenditure ~~costs~~for ~~are~~maintenance and repairs is expensed as incurred. ~~under~~The ~~ASC~~gain ~~Topic~~or ~~720-35,~~loss ~~“Advertising~~on ~~Costs”.~~the ~~There~~disposal ~~was~~of noplant ~~advertising~~and ~~cost~~equipment ~~incurred~~is ~~for~~the difference between the net ~~six~~sales ~~months~~proceeds ~~ended~~and ~~June~~the ~~30,~~carrying ~~2012~~amount of the relevant assets and ~~2011~~is recognized in the statement of operations.

~~· Comprehensive income or loss~~10

~~ASC~~TITANIUM ~~Topic 220, “Comprehensive~~GROUP ~~Income”,~~LIMITED ~~establishes~~AND 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.SUBSIDIARIES

·NOTES ~~Income~~TO ~~taxes~~UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Income~~(Currency ~~taxes are determined~~expressed ~~with~~in ~~the~~US ~~provisions~~Dollars ~~of ASC Topic 740, “Income Taxes”~~ (“~~ASC Topic 740~~US$”). 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~~NOTE ~~Topic~~2 ~~740~~- ~~prescribes~~Summary 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~~Significant ~~benefit~~Accounting ~~that~~Policies ~~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.~~(Continued)

~~For~~· ~~the~~Impairment ~~six months ended June 30, 2012 and 2011, the Company did not have any interest and penalties associated with tax positions. As~~ of ~~June~~long-lived ~~30, 2012 and 2011, the Company did not have any significant unrecognized uncertain tax positions.~~assets

~~The~~In ~~Company~~accordance ~~conducts~~with ASC ~~its~~Topic ~~major~~360-10-5, ~~businesses~~“Impairment inor ~~the~~Disposal ~~PRC~~of Long-Lived Assets”, all long-lived assets such as plant and isequipment held ~~subject~~by tothe ~~tax~~Company are reviewed for impairment whenever events or changes in ~~this~~circumstances ~~jurisdiction~~indicate that the carrying amount of an asset may not be recoverable. AsRecoverability of assets to be held and used is evaluated by a ~~result~~comparison of ~~its~~the ~~business~~carrying amount ~~activities,~~of assets to estimated discounted net cash flows expected to be generated by the ~~Company files~~assets. ~~tax~~If ~~returns~~such ~~that~~assets are ~~subject~~considered to be impaired, the impairment to ~~examination~~be recognized is measured by the ~~local~~amount ~~tax~~by ~~authority~~which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the years presented.

10· Revenue recognition

~~NOTE~~In 2accordance -with ~~Summary~~the ASC Topic 605, “Revenue Recognition”, the Company recognizes revenue when persuasive evidence of ~~Significant~~an ~~Accounting~~arrangement exists, ~~Policies~~delivery ~~(Continued)~~has occurred, the sales price is fixed or determinable and collectability is reasonably assured.

·(a) ~~Foreign~~Sales ~~currencies~~of ~~translation~~products

~~Transactions~~The ~~denominated~~Company has adopted inASC ~~currencies~~Topic ~~other~~605-45, ~~than~~“Principal ~~the~~Agent ~~functional~~Considerations” ~~currency~~(“ASC ~~are~~Topic ~~translated~~605-45”) ~~into~~whereby the ~~functional~~Company ~~currency~~evaluates to atdetermine whether the ~~exchange~~transaction ~~rates~~should ~~prevailing~~be recorded on a gross basis as a principal or net basis as an agent. This evaluation atincludes, ~~the~~but ~~dates~~not oflimited to, assessing whether the ~~transaction.~~Company ~~Monetary~~(1) ~~assets~~or ~~and~~third-party ~~liabilities~~supplier ~~denominated~~is ina ~~currencies~~primary ~~other~~obligor ~~than~~in the ~~functional currency~~arrangement, ~~are~~(2) ~~translated~~has ~~into~~general ~~the~~inventory ~~functional~~risk, ~~currency~~(3) ~~using~~has ~~the~~latitude ~~applicable~~in ~~exchange~~establishing ~~rates~~pricing, at(4) ~~the~~has ~~balance~~discretion ~~sheet~~in ~~dates.~~supplier ~~The~~selection, ~~resulting~~(5) ~~exchange~~has credit ~~differences~~risk ~~are~~and ~~recorded~~(6) inacts ~~the~~as ~~statements~~an ofagent ~~operations~~or broker with compensation on a commission or fixed fee basis.

~~The~~Based ~~reporting~~on ~~currency~~its assessment of the ~~Company~~indicators islisted in the ~~United~~ASC ~~States~~Topic ~~Dollars~~605-45, ~~(“US$”) and~~ the ~~accompanying financial statements have been expressed in US$. The~~ Company ~~maintains~~has ~~its~~concluded ~~books~~that ~~and~~the ~~record~~existing inbusiness ~~its~~should ~~local~~be ~~currency,~~accounted ~~Renminbi~~for on ~~Yuan~~a ~~(“RMB”),~~gross ~~which~~basis. isThe aCompany ~~functional currency~~assumes ~~as being~~ the ~~primary~~position ~~currency~~ of ~~the~~primary ~~economic~~obligor ~~environment~~and inthus ~~which~~will ~~its~~recognize ~~operation~~revenue ison ~~conducted.~~the Ingross ~~accordance~~amount ~~with ASC~~billed ~~Topic~~to ~~830-30,~~the ~~“Translation~~customers ofwhen ~~Financial~~persuasive ~~Statement”,~~evidence ~~assets~~of ~~and~~an ~~liabilities~~arrangement ofexists, the ~~Company~~products ~~whose functional currency is not US$~~ are ~~translated into US$~~delivered, ~~using~~ the ~~exchange~~fee ~~rate~~is onfixed ~~the~~and ~~balance~~determined and ~~sheet~~the ~~date.~~collection ~~Revenues~~of ~~and~~the ~~expenses~~resulting ~~are~~receivable ~~translated at~~is ~~average~~probable. ~~rates~~Revenue ~~prevailing~~from ~~during~~ the ~~period.~~sale ~~The~~of ~~gains~~electric ~~and~~wire ~~losses~~products ~~resulting~~is ~~from~~recognized ~~translation~~when the ofproducts ~~financial~~are ~~statements~~delivered ~~are~~to ~~recorded as~~and areceived ~~separate~~by ~~component~~the ofcustomers, ~~accumulated~~collectability ~~other~~is ~~comprehensive~~reasonably ~~income~~assured ~~within~~and the ~~statements~~prices ofare ~~owners’~~fixed ~~equity~~and determinable.

~~Translation~~Revenue represents the invoiced value of ~~amounts~~goods, net of value-added tax (“VAT”). The Company's products that are locally sold in the PRC are ~~from~~subject to VAT which is levied at the ~~local~~rate ~~currency~~of 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the ~~Company~~invoiced ~~into~~value ~~US$1~~of ~~has~~sales ~~been~~and ~~made~~input atVAT is borne by the ~~following~~Company ~~exchange~~in ~~rates~~addition ~~for~~to the ~~respective~~invoiced ~~year:~~value of purchases to the extent not refunded for export sales.

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

(b)	Interest income

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

~~Contributions~~· toCost ~~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.~~revenue

·Cost ~~Related~~of ~~parties~~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.

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.11

·TITANIUM ~~Segment~~GROUP LIMITED ~~reporting~~AND SUBSIDIARIES

~~ASC~~NOTES ~~Topic~~TO ~~280, “Segment~~UNAUDITED ~~Reporting”~~CONDENSED ~~establishes~~CONSOLIDATED ~~standards~~FINANCIAL 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 six months ended June 30, 2012 and 2011, the Company operates in one reportable business segment in the PRC.STATEMENTS

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

NOTE 2 - Summary of Significant Accounting Policies (Continued)

· ~~Fair~~Advertising ~~value of financial instruments~~expenses

~~The~~Advertising ~~carrying~~costs ~~value of~~are ~~the~~expensed ~~Company’s~~as ~~financial~~incurred ~~instruments:~~under ~~cash,~~ASC ~~accounts~~Topic ~~receivable~~720-35, ~~prepayments~~“Advertising ~~and~~Costs”. ~~other~~There ~~current~~was ~~assets,~~no ~~accounts~~advertising ~~payable, amount~~cost ~~due~~incurred ~~from~~for nine ~~(to)~~months aended ~~related~~September ~~party and the owner~~30, ~~accrued~~2012 ~~liabilities~~ and ~~other payables approximate at their fair values because of the short-term nature of these financial instruments~~2011.

~~The~~· ~~Company~~Comprehensive ~~also~~income ~~follows the~~or 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:loss

~~Level~~ASC 1Topic :220, ~~Observable~~“Comprehensive Income”, ~~inputs~~establishes ~~such~~standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as ~~quoted~~defined ~~prices~~includes all changes in ~~active~~equity ~~markets;~~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.

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

~~Level~~Income 3taxes :are ~~Unobservable~~determined with ~~inputs~~the inprovisions ~~which~~of ~~there~~ASC isTopic ~~little~~740, or“Income noTaxes” ~~market~~(“ASC ~~data~~Topic 740”). Under this method, ~~which~~deferred tax ~~require~~assets and liabilities are recognized for the ~~reporting~~future ~~entity~~tax consequences attributable to ~~develop~~differences ~~its~~between ~~own~~the ~~assumptions~~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.

~~Fair~~ASC ~~value~~Topic ~~estimates~~740 prescribes ~~are~~a ~~made~~comprehensive atmodel afor ~~specific~~how ~~point~~companies should recognize, measure, present, and disclose in ~~time~~their ~~based~~financial statements uncertain tax positions taken or expected to be taken on ~~relevant~~a ~~market~~tax ~~information~~return. ~~about~~Under ASC Topic 740, tax positions must initially be recognized in the financial ~~instrument.~~statements ~~These~~when ~~estimates~~it ~~are~~is more likely than not the position will be sustained upon examination by the tax authorities. ~~subjective~~Such intax ~~nature~~positions must initially and ~~involve~~subsequently ~~uncertainties~~be ~~and~~measured ~~matters~~as the largest amount of ~~significant~~tax ~~judgment~~benefit ~~and,~~that ~~therefore,~~has ~~cannot~~a begreater ~~determined~~than 50% likelihood of being realized upon ultimate settlement with ~~precision. Changes~~the intax ~~assumptions~~authority ~~could~~assuming ~~significantly~~full ~~affect~~knowledge of the ~~estimates~~position and relevant facts.

12For the nine months ended September 30, 2012 and 2011, the Company did not have any interest and penalties associated with tax positions. As of September 30, 2012 and 2011, the Company did not have any significant unrecognized uncertain tax positions.

2The Company conducts its major businesses in the PRC and is subject to tax in this jurisdiction. ~~Summary~~As a result of ~~Significant~~its ~~Accounting~~business ~~Policies~~activities, ~~(Continued)~~the Company files tax returns that are subject to examination by the local tax authority.

~~Recently issued accounting pronouncements~~12

~~Fair~~TITANIUM ~~Value~~GROUP LIMITED ~~Measurement~~AND SUBSIDIARIES

InNOTES ~~May~~TO ~~2011, the Financial~~UNAUDITED ~~Accounting~~CONDENSED ~~Standard~~CONSOLIDATED ~~Board~~FINANCIAL ("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.STATEMENTS

~~Comprehensive~~(Currency ~~Income~~expressed in US Dollars (“US$”))

InNOTE ~~June~~2 ~~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~~Summary ~~income, the components~~ of ~~net~~Significant ~~income,~~Accounting ~~and~~Policies 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.(Continued)

~~Intangibles—Goodwill~~· ~~and~~Foreign ~~Other~~currencies translation

InTransactions ~~September 2011, the~~denominated ~~FASB~~in ~~issued~~currencies ~~ASU~~other ~~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~~the ~~that~~functional acurrency ~~reporting~~are ~~unit's~~translated ~~fair~~into ~~value~~the isfunctional ~~less~~currency ~~than~~at ~~its carrying amount before applying~~ the ~~two~~ ~~step~~exchange ~~goodwill~~rates ~~impairment test. The updated guidance requires that, if an entity concludes that it is more likely than not~~prevailing ~~that~~at the ~~fair~~dates ~~value~~ of athe ~~reporting~~transaction. ~~unit~~Monetary ~~exceeds~~assets ~~its~~and ~~carrying~~liabilities ~~amount;~~denominated itin ~~would~~currencies ~~not~~other bethan ~~required to perform~~ the ~~two-step~~functional ~~impairment~~currency ~~test~~are ~~for~~translated into the ~~reporting~~functional ~~unit.~~currency ~~The~~using ~~provisions of~~ the ~~updated~~applicable ~~guidance~~exchange ~~are~~rates ~~effective~~at ~~for annual and interim periods beginning after December 15, 2011 with early adoption permitted. The Company adopted ASU 2011-08 in~~ the ~~third~~balance ~~quarter~~sheet ~~of 2011~~dates. The ~~adoption~~resulting ofexchange ~~this~~differences ~~guidance~~are ~~did~~recorded ~~not~~in ~~affect~~ the ~~Company's~~statements ~~results~~ of operations~~, financial position or liquidity~~.

13The 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.

~~NOTE~~Translation 3of ~~– GOING~~amounts ~~CONCERN~~from ~~UNCERTAINTIES~~the local currency of the Company into US$1 has been made at the following exchange rates for the respective year:

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.

	September 30, 2012		December 31, 2011
Year-end RMB: US$1 exchange rate		6.3190		6.3523
Annual average RMB: US$1 exchange rate		6.3085		6.4544

~~For~~· ~~the~~Retirement ~~six~~plan months ended June 30, 2012, the Group incurred accumulated losses of US$ 1,067,447 and a shareholders’ deficit of US$50,933) at that date. The continuation of the Group as a going concern through June 30, 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.costs

~~These~~Contributions ~~factors~~to ~~raise~~retirement ~~substantial~~plans ~~doubt~~(which ~~about~~are ~~the~~defined ~~Company’s~~contribution ~~ability~~plans) toare ~~continue~~charged ~~as a going concern. These consolidated financial statements do not include any adjustments~~ to ~~reflect~~general ~~the~~and ~~possible~~administrative ~~future~~expenses ~~effects~~in on the ~~recoverability~~statements ~~and classification~~ of ~~assets~~ operation and ~~liabilities that~~comprehensive ~~may~~loss ~~result~~as inand when the ~~Company~~related ~~not~~employee ~~being~~service ~~able~~is ~~to continue as a going concern~~provided.

~~NOTE~~· 4Related ~~– AMOUNT DUE FROM RELATED PARTIES~~parties

~~The~~Parties, ~~amounts~~which ~~due~~can ~~from~~be a corporation or individual, are considered to be related ~~parties~~if ~~were~~the ~~unsecured~~Company has the ability, ~~interest-free~~directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and ~~repayable~~operating ondecisions. ~~demand~~Companies are also considered to be related if they are subject to common control or common significant influence.

14· Segment reporting

~~NOTE~~ASC 5Topic –280, ~~INCOME~~“Segment ~~TAXES~~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 nine months ended September 30, 2012 and 2011, the Company operates in one reportable business segment in the PRC.

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.13

~~ASC~~TITANIUM ~~740 prescribes a~~GROUP ~~comprehensive~~LIMITED ~~model~~AND 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.SUBSIDIARIES

~~For~~NOTES ~~the~~TO ~~six months ended~~UNAUDITED ~~June~~CONDENSED ~~30,~~CONSOLIDATED ~~2012~~FINANCIAL ~~and 2011, the components of loss before income taxes were comprised of the following:~~STATEMENTS

	Six months ended June 30
	2012			2011
Tax jurisdictions from:
– BVI	$	(119,289	)	$	(7,307	)
– Hong Kong		(28,408	)		(286,604	)
– The PRC		(19,542	)		35,113
Loss before income taxes	$	(167,239	)	$	(258,798	)

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

~~Pursuant~~NOTE to2 ~~the~~- ~~rules~~Summary ~~and regulations~~ of ~~the~~Significant ~~BVI,~~Accounting ~~Titanium~~Policies ~~Group Limited which is incorporated in the BVI is not subject to taxation in the BVI under the current BVI law.~~(Continued)

~~For~~· ~~the~~Fair ~~six~~value ~~months ended June, 2012, the operations in Hong Kong and the PRC incurred the aggregate net operating losses carry forward~~ of ~~US$133,210~~financial ~~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 future taxable income.~~instruments

~~During~~The ~~the~~carrying ~~six~~value ~~months~~of ~~ended~~the ~~June~~Company’s 30financial instruments: cash, ~~2011~~accounts receivable, ~~Shenshen~~prepayments ~~Kanglv~~and ~~Technology~~other ~~incurred~~current ~~income~~assets, ~~tax~~accounts ~~US$8~~payable,~~116~~ amount due from (to) a related party and the owner, accrued liabilities and other payables approximate at atheir ~~unified~~fair ~~income~~values ~~tax~~because of ~~rate~~the short-term nature of ~~25%~~these financial instruments.

15The 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:

~~NOTE~~Level 61 –: ~~INVENTORIES~~Observable inputs such as quoted prices in active markets;

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

	June 30, 2012		December 31, 2011
Raw materials	$	157,300	$	255,565
Work-in-process		56,617		46,858
Finished goods		374,438		441,664
Inventories, net	$	588,355	$	744,087

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

AsFair 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 ~~June~~significant 30judgment and, ~~2012~~therefore, ~~the~~ ~~Company~~cannot ~~recorded~~be nodetermined ~~allowance~~with ~~for~~precision. Changes ~~slow-moving~~in ~~and~~assumptions ~~obsolete~~could ~~inventories~~significantly affect the estimates.

~~NOTE 7 – AMOUNTS DUE FROM RELATED PARTIES~~14

	June 30, 2012		December 31, 2011
Jiaxing Cancare Electric Technology Company Limited		91,029		-
Cancare Electric Wire (Shenzhen) Co., Ltd		4,951,399		4,917,570
	$	5,042,428		4,917,570

TITANIUM GROUP LIMITED AND SUBSIDIARIES

AsNOTES ofTO ~~June 30, 2012,~~UNAUDITED ~~the~~CONDENSED ~~balance~~CONSOLIDATED ~~represented~~FINANCIAL the temporary advances made by the Company to Jiaxing Cancare Electric Technology Company Limited 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.STATEMENTS

~~NOTE~~(Currency ~~8 - DEPOSITS~~expressed ~~AND~~in ~~OTHER~~US ~~RECEIVABLES~~Dollars (“US$”))

~~Deposits~~2. ~~and~~Summary ~~other~~of ~~receivables consisted~~Significant ofAccounting ~~the~~Policies ~~following:~~(Continued)

	June 30, 2012		December 31, 2011
Prepayment	$	185	$	4,559
Other receivables		60,667		119,052
	$	60,852	$	123,611

Recently issued accounting pronouncements

16Fair Value Measurement

~~NOTE~~In 9May –2011, ~~PLANT~~the Financial ~~AND~~Accounting ~~EQUIPMENT~~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.

~~Plant~~Comprehensive ~~and equipment consist of the following:~~Income

	June 30, 2012			December 31, 2011
Plant and machinery	$	226,856		$	213,128
Furniture, fittings and office equipment		2,584			2,583
Motor vehicles		20,459			20,448
Foreign translation difference		13,765			13,758
		263,664			249,917
Less: accumulated depreciation		(76,782	)		(59,904	)
Less: foreign translation difference		(643	)		(843	)
	$	186,239		$	189,170

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.

~~NOTE~~Intangibles—Goodwill 10and ~~– AMOUNTS DUE TO RELATED PARTIES~~Other

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

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.

~~As of June 30, 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.~~15

~~NOTE~~TITANIUM ~~11– ACCRUED~~GROUP ~~LIABILITIES~~LIMITED ~~NAD~~AND ~~OTHER PAYABLE~~SUBSIDIARIES

~~Accrued~~NOTES ~~liabilities~~TO UNAUDITED ~~and~~CONDENSED ~~other~~CONSOLIDATED ~~payables~~FINANCIAL ~~consist of the following:~~STATEMENTS

	June 30, 2012		December 31, 2011
Accrued salaries and benefits	$	175,244	$	181,009
Accrued operating expenses		38,929		40,707
VAT payable		78,420		87,674
Other payable		465,424		111,621
	$	758,017	$	421,011

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

172. Summary of Significant Accounting Policies (Continued)

~~NOTE~~Recently ~~12–~~issued ~~SHORT-TERM~~accounting ~~SECURED~~pronouncements ~~BANK LOAN~~(continued)

~~The~~Disclosures ~~bank loan is denominated~~about inOffsetting ~~Renminbi~~Assets 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, 史蒂文服裝(堔圳)有限公司, who does not receive any compensation for the guarantee.Liabilities

~~NOTE~~In ~~13–~~December ~~RELATED~~2011, ~~PARTY~~the FASB ~~TRANSACTIONS~~issued ASU 2011-11, “Disclosures about Offsetting Assets and Liabilities”. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. This scope would include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amendments are effective for annual reporting periods beginning on or after January 1, 2013. An entity would be required to provide the disclosures required by those amendments retrospectively for all comparative periods presented. This ASU will not impact our results of operations.

~~(a)~~NOTE ~~For~~3 ~~the~~– ~~three~~GOING CONCERN 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.UNCERTAINTIES

~~(b)~~These ~~For~~consolidated ~~the~~financial statements ~~three~~have ~~months~~been ~~ended~~prepared ~~June~~assuming ~~30,~~that ~~2012~~the ~~and~~Company ~~2011~~will ~~there~~continue ~~have~~as ~~purchase from~~ a ~~related~~going ~~party totaling $518~~concern,~~192~~ ~~and~~which ~~$nil~~contemplates ~~and for~~ the ~~six~~realization ~~months~~of assets ~~ended June 30, 2012~~ and ~~2011, was totaling $1,055,640 and $nil from a related company which is controlled by~~ the ~~majority~~discharge ~~owner~~ of ~~the~~liabilities ~~Company~~ in athe normal course of business. for the foreseeable future.

~~(c)~~ For the ~~three~~nine months ended ~~June~~September 30, 2012, ~~and~~the ~~2011~~Group ~~there~~incurred ~~have~~accumulated nolosses ~~sundry~~of ~~income~~US$ ~~from~~1,182,959 and a ~~related~~shareholders’ ~~party~~deficit of US$166,599) at that date. ~~For~~The continuation of the ~~six~~Group ~~months~~as ~~ended~~a ~~June~~going concern through September 30, ~~2012~~2013 ~~and~~is ~~2011,~~dependent upon the ~~Company~~continuing ~~received~~financial support afrom ~~sundry~~its ~~income~~stockholders. ~~totaling,~~Management ~~$150,729~~believes ~~and~~the $existing ~~nil~~majority ~~from~~stockholders awill ~~related~~provide ~~party~~the additional cash to meet with the Company’s obligations as they become due.

~~NOTE~~These ~~14–~~factors ~~CONCENTRATIONS~~raise OFsubstantial ~~RISK~~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.

~~The~~NOTE ~~Company~~4 is– ~~exposed~~AMOUNT toDUE ~~the~~FROM ~~following~~RELATED ~~concentrations of risk:~~PARTIES

~~(a)~~The ~~Major~~amounts ~~customers~~due from related parties were unsecured, interest-free and repayable on demand.

For the three months ended June 30, 2012, there was a single customer who accounted for 100% of the Company’s revenue amounting to $1,182,440 with accounts receivable balance of $nil at period-end date.16

~~For~~TITANIUM ~~the six~~GROUP ~~months~~LIMITED ~~ended~~AND ~~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.~~SUBSIDIARIES

18NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~NOTE~~(Currency ~~14– CONCENTRATIONS~~expressed OFin ~~RISK~~US Dollars (~~CONTINUED~~“US$”))

~~(b)~~NOTE ~~Major~~5 ~~vendors~~– INCOME TAXES

~~For~~The ~~the~~provision ~~three~~for income ~~months~~taxes ~~and~~is ~~six~~determined ~~months~~in ~~ended~~accordance ~~June~~with 30the provisions of ASC Topic 740, ~~2012~~“Income Taxes” (“ASC 740”). Under this method, ~~the~~deferred ~~vendor~~tax ~~who~~assets ~~accounted~~and liabilities are recognized for ~~10%~~the orfuture ~~more~~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 ~~Company’s~~years ~~purchases~~in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in ~~its~~tax ~~outstanding~~rates ~~balance~~is atrecognized in income in the period~~-end~~ ~~date,~~that ~~are~~includes ~~presented~~the asenactment ~~follows:~~date.

	Three months ended June 30, 2012					June 30, 2012
	Purchases		Percentage of purchases			Accounts payable, trade
Vendor A (a related party)	$	518,192		45	%		208,764
Vendor B		108,030		10	%		193,447
Total:	$	626,222		55	%		402,211

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.

	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

For the nine months ended September 30, 2012 and 2011, the components of loss before income taxes were comprised of the following:

	Nine months ended September 30
	2012			2011
Tax jurisdictions from:

– BVI	$	(121,918	)	$	474,231
– Hong Kong		(42,260	)		(248,874	)
– The PRC		(118,574	)		(112,228	)

(Loss) / Profit before income taxes	$	(282,752	)	$	113,129

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

~~(d)~~For ~~Exchange~~the ~~rate~~nine ~~risk~~months ended September, 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 future taxable income.

~~The~~During ~~reporting currency of~~ the ~~Company~~nine ~~is US$, while the majority of the revenues and costs are denominated in RMB and a significant portion of the assets~~months ~~and~~ended ~~liabilities~~September ~~are~~30, ~~denominated in RMB. As a result~~2011, ~~the~~Shenshen ~~Company~~Kanglv isTechnology ~~exposed~~incurred toincome ~~foreign~~tax ~~exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between~~ US$8,116, ~~and~~at ~~RMB.~~a Ifunified ~~RMB~~income ~~depreciates~~tax ~~against~~rate ~~US$, the value~~ of ~~RMB revenues and assets as expressed in US$ financial statements will decline~~25%. ~~The Company does not hold any derivative or other financial instruments that expose to substantial market risk.~~

1917

~~NOTE~~TITANIUM ~~14– CONCENTRATIONS~~GROUP OFLIMITED ~~RISK~~AND ~~(CONTINUED)~~SUBSIDIARIES

~~(e)~~NOTES ~~Economic~~TO ~~and~~UNAUDITED CONDENSED ~~political~~CONSOLIDATED ~~risks~~FINANCIAL STATEMENTS

~~The~~(Currency ~~Company's operations~~expressed ~~are conducted~~ in ~~the~~US ~~PRC.~~Dollars 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.(“US$”))

~~The~~NOTE ~~Company's~~6 ~~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.INVENTORIES

~~NOTE~~Inventories ~~15– SUBSEQUENT~~consist ~~EVENTS~~of the following:

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 June 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.

	September 30, 2012		December 31, 2011

Raw materials	$	190,680	$	255,565
Work-in-process		183,355		46,858
Finished goods		702,670		441,664

Inventories, net	$	1,077,705	$	744,087

20As of September 30, 2012, the Company recorded no allowance for slow-moving and obsolete inventories.

~~ITEM~~NOTE 2.7 ~~MANAGEMENT’S~~– ~~DISCUSSION~~AMOUNTS DUE ~~AND~~FROM ~~ANALYSIS~~RELATED ~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~PARTIES

Overview

	September 30, 2012		December 31, 2011

Cancare Electric Wire (Shenzhen) Co., Ltd	$	4,971,617		4,917,570

~~Shenzhen~~As ~~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~~September ~~(the “PRC”) on June 16~~30, ~~2005. Shenzhen Kanglv is mainly engaged~~ in2012, the ~~manufacture~~balance ~~and~~represented ~~sales of electric wire products in~~ the ~~PRC,~~temporary ~~with~~advances ~~its~~made ~~principal~~by ~~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~~Shenzhen) Co., Ltd ~~(“Cancare”)~~., which is controlled by ~~the~~common ~~same~~key ~~individual~~management ofpersonnel. ~~its~~The ~~majority~~amounts ~~owner,~~were ~~Cancare provided the core components and materials to Shenzhen Kanglv for the production and Shenzhen Kanglv exclusively sold these finished products~~unsecured, ~~based~~interest-free ~~upon the required specification~~ and ~~customization~~repayable toon ~~Cancare at the current market value in the normal course of business~~demand.

OnNOTE ~~May~~8 ~~31,~~- ~~2011, Shenzhen~~DEPOSITS ~~Kanglv~~AND ~~entered~~OTHER 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.RECEIVABLES

AsDeposits ~~used herein, the “Group” refers to TTNUF~~ and ~~its~~other ~~wholly-owned subsidiaries, Hong Kong Kanglv Technology Limited, Shenzhen Kanglv Technology~~receivables ~~Limited~~consisted ~~and~~of ~~Kanglv~~the ~~Cable Technology (Hong Kong) Limited.~~following:

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.

	September 30, 2012		December 31, 2011

Prepayment	$	738	$	4,559
Other receivables		140,798		119,052

	$	141,536	$	123,611

2118

~~Pursuant~~TITANIUM ~~to the MOU,~~GROUP ~~TTNUF~~LIMITED ~~also~~AND ~~agreed the following terms:~~SUBSIDIARIES

1.NOTES ~~TTNUF~~TO ~~agreed~~UNAUDITED CONDENSED toCONSOLIDATED ~~effect~~FINANCIAL ~~a 1-for-10 consolidation of its issued and outstanding shares of common stock.~~STATEMENTS

2.(Currency ~~The holders of TTNUF’s outstanding convertible debentures~~ expressed in ~~the~~US ~~aggregate~~Dollars ~~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.~~)

3.NOTE ~~Zili~~9 ~~Industrial~~– ~~Co.,~~PLANT AND ~~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.~~EQUIPMENT

OnPlant ~~May~~and ~~31, 2011, the~~equipment ~~acquisition~~consist 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.

	September 30, 2012			December 31, 2011

Plant and machinery	$	224,896		$	213,128
Furniture, fittings and office equipment		2,583			2,583
Motor vehicles		20,448			20,448
Foreign translation difference		13,758			13,758
		261,685			249,917
Less: accumulated depreciation		(84,121	)		(59,904	)
Less: foreign translation difference		194			(843	)
	$	177,758		$	189,170

~~Shenzhen~~NOTE ~~Kanglv~~10 is– aAMOUNTS ~~subcontractor~~DUE ~~for~~TO ~~Cancare~~RELATED 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.PARTIES

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

	September 30, 2012		December 31, 2011

Amount due to a former director, Mr. Wen Jialong	$	50,641	$	50,376
Amount due to Cancare Electric Wire (Shenzhen) Co., Ltd		-		293,958
Amount due to former owner, Cancare Enterprise Co., Limited		1,042,215		980,574
Amount due to Huabao Asia Limited		25,641		-
Amount due to Cancare Group HK Limited		89,098		-
	$	1,207,595	$	1,324,908

~~Accordingly~~As of September 30, 2012, the ~~accompanying consolidated~~amounts ~~financial~~due ~~statements~~to ~~include~~related parties represented temporary advances made to the ~~following:~~Company, which were unsecured, interest-free and repayable within the next twelve months.

~~The~~NOTE ~~consolidated~~11– ~~balance~~ACCRUED ~~sheets,~~LIABILITIES ~~consolidated~~NAD ~~statements~~OTHER 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.PAYABLE

AsAccrued liabilities ofand ~~June,~~other ~~2012,~~payables ~~details~~consist of the ~~Company’s subsidiaries are as follows~~following:

Name	Date of incorporation/ establishment		Place of incorporation/ registration and operation	Percentage of equity interest attributable to the Company		Principal activities
	September 30, 2012			December 31, 2011
Hong Kong Kanglv Technology Limited	September 17, 2010		Hong Kong	100%		Investment holding
Accrued salaries and benefits	$	183,336		$	181,009
Shenzhen Kanglv Technology Limited	June 16, 2005		PRC	100%		Manufacture and sales of electric wire products
Accrued operating expenses		45,167			40,707
Kanglv Cable Technology (Hong Kong) Limited	September 17, 2010		Hong Kong	100%		Dormant
VAT payable		16,394			87,674
Other payable		78,720			111,621
	$	323,617		$	421,011

2219

~~Critical~~TITANIUM ~~Accounting~~GROUP ~~Policies~~LIMITED AND SUBSIDIARIES

~~Inventories. Inventories consist~~NOTES ~~primarily~~TO ~~of raw materials, work-in-process and finished goods of electric wire products and are stated at the lower of~~UNAUDITED ~~cost~~CONDENSED orCONSOLIDATED ~~net~~FINANCIAL 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 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 the six month ended June 30, 2012 and 2011, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.STATEMENTS

~~Revenue~~(Currency ~~Recognition. In~~expressed ~~accordance~~in ~~with~~US ~~ASC~~Dollars ~~Topic 605,~~ (“~~Revenue Recognition,~~US$” ~~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)~~NOTE ~~Sales of products~~ 12– ~~Revenue from the sales of electric wire products is recognized when the products are delivered to and received by the~~SHORT-TERM ~~customers,~~SECURED ~~collectability~~BANK ~~is reasonably assured and the prices are fixed and determinable.~~LOAN

~~Revenue represents the invoiced value of goods, net of value-added tax (“VAT”).~~ The ~~Company’s~~bank ~~products~~loan ~~that~~is ~~are locally~~denominated ~~sold~~ in ~~the~~Renminbi ~~PRC~~and ~~are~~repayable ~~subject~~within to1 ~~VAT,~~year. ~~which~~It iscarries ~~levied~~interest at ~~the~~7.544% ~~rate~~per ofannum ~~17%~~and onis ~~the~~guaranteed ~~invoiced~~by ~~value~~(i) ~~of sales~~Mr. ~~Output~~ ~~VAT~~Wen isJialong, who ~~borne~~does bynot ~~customers~~receive inany ~~addition~~compensation tofor ~~the~~acting ~~invoiced~~as ~~value~~guarantor; of(ii) ~~sales~~the ~~and~~property ~~input~~owned ~~VAT is borne~~ by the ~~Companay~~third inparty, ~~addition to the invoiced~~史蒂文服裝(堔圳)有限公司, ~~value~~who ofdoes ~~purchases~~not toreceive ~~the~~any ~~extent~~compensation ~~not refunded~~ for ~~export~~the ~~sales~~guarantee.

~~(b)~~NOTE ~~Interest income~~ 13– ~~Interest~~RELATED ~~income is~~PARTY ~~recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.~~TRANSACTIONS

~~Cost~~(a) ofFor ~~revenue. Cost of~~the ~~revenue~~three ~~includes~~months ~~cost~~ended ofSeptember ~~raw materials~~30, ~~direct~~2012 ~~labor,~~and ~~packing~~2011 ~~cost~~the ~~and~~Company ~~production~~sold ~~overhead~~its ~~directly~~products ~~attributable~~at toits ~~the~~current ~~manufacture of~~market ~~electric~~value ~~wire~~totaling ~~products. Shipping~~$908,295, $2,021,438 and ~~handling~~for ~~cost~~the ~~are~~nine ~~recorded~~months inended ~~cost~~September of30, ~~revenue~~2012 and ~~are~~2011 ~~recognized~~was ~~when~~totaling ~~the~~$3,083,674 and $4,197,062 to a related ~~product~~ company which is ~~delivered~~controlled toby the ~~customer~~majority owner of the Company in a normal course of business.

~~Comprehensive income~~(b) orFor ~~loss. ASC~~the ~~Topic~~three ~~220,~~months ~~“Comprehensive~~ended ~~Income,”~~September ~~establishes standards for reporting and display of comprehensive income or loss~~30, ~~its~~2012 ~~components~~ and ~~accumulated~~2011 ~~balances. Comprehensive~~there ~~income~~have orpurchase ~~loss as~~from ~~defined includes all changes in equity during~~ a ~~period~~related ~~from~~party ~~non-owner~~totaling ~~sources. Accumulated~~$582,346 ~~comprehensive~~and ~~income, as~~$nil ~~presented~~and infor the ~~statements~~nine ofmonths ~~owners’~~ended ~~equity~~September ~~consists~~30, of2012 ~~changes~~and in2011, ~~unrealized~~was ~~gains~~totaling $1,637,986 and ~~losses~~$nil onfrom ~~foreign~~a ~~currency translation. This~~related ~~comprehensive~~company ~~income~~which oris ~~loss~~controlled isby ~~not~~the ~~included~~majority inowner of the ~~computation~~Company ofin ~~income~~a ~~tax~~normal ~~expense~~course orof ~~benefit~~business. .

~~Income taxes. Income taxes are determined with the provisions of ASC Topic 740, “Income Taxes”~~ (~~“ASC 740”~~c)~~. Under this~~ ~~method,~~For ~~deferred tax assets and liabilities are recognized for~~ the ~~future~~three ~~tax~~months ~~consequences~~ended ~~attributable~~September to30, ~~differences~~2012 ~~between the financial statement carrying amounts of existing assets~~ and ~~liabilities~~2011 ~~and~~there ~~their~~have ~~respective~~no ~~tax~~interest ~~basis. Deferred tax assets and liabilities are measured using enacted~~ income ~~tax~~from ~~rates~~a ~~expected~~related toparty. ~~apply~~For ~~to taxable income in~~ the ~~years~~nine inmonths ~~which those~~ended ~~temporary~~September ~~differences~~30, ~~are~~2012 ~~expected to be recovered or settled. Any effect on deferred tax assets~~ and ~~liabilities of~~2011, athe ~~change~~Company inreceived ~~tax~~an ~~rates~~interest ~~is recognized in~~ income intotaling, ~~the~~$182,294 ~~period~~and ~~that~~$ ~~includes~~nil ~~the~~from ~~enactment~~a ~~date~~related party.

~~ASC~~NOTE ~~740~~14– ~~prescribes a~~CONCENTRATIONS ~~comprehensive~~OF 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.RISK

23The Company is exposed to the following concentrations of risk:

~~For~~(a) ~~the~~Major 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.customers

~~The~~For ~~Company~~the ~~conducts its major businesses~~three inmonths ~~the~~ended ~~PRC~~September ~~and~~30, is2012, ~~subject~~there towas ~~tax~~a insingle ~~this~~customer ~~jurisdiction. As~~who aaccounted ~~result~~for 100% of ~~its business activities~~ the Company’s ~~files~~revenue ~~tax~~amounting ~~returns~~to ~~that~~$908,295 ~~are~~with ~~subject~~accounts toreceivable ~~examination~~balance byof ~~the~~$nil ~~local~~at ~~tax~~period-end ~~authority~~date.

~~Foreign~~For ~~currencies translation. Transactions denominated in currencies other than~~ the ~~functional~~nine months ~~currency~~ended ~~are~~September ~~translated~~30, ~~into the~~2012, ~~functional~~there ~~currency~~was ata ~~the~~single ~~exchange~~customer ~~rates~~who ~~prevailing~~accounted atfor ~~the~~100% ~~dates~~ of the ~~transaction. Monetary~~Company’s ~~assets~~revenue ~~and liabilities~~amounting ~~denominated~~to in$3,083,674 ~~currencies~~with ~~other~~accounts ~~than~~receivable ~~the~~balance ~~functional~~of ~~currency~~$nil ~~are translated into the functional currency using the applicable exchange rates~~ at ~~the~~period-end ~~balance sheet dates~~date. ~~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.20

~~Translation~~TITANIUM ~~of amounts~~GROUP ~~from~~LIMITED ~~the~~AND ~~local currency of the Company into US$1 has been made at the following exchange rates for the respective periods:~~SUBSIDIARIES

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Related~~(Currency ~~Parties. Parties,~~expressed 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~~US ~~financial~~Dollars ~~and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.~~(“US$”))

~~Results~~NOTE of14– ~~Operations~~CONCENTRATIONS OF RISK (CONTINUED)

~~Comparison~~(b) ~~of three~~Major ~~months ended June 30, 2012 and June 30, 2011.~~ vendors

~~Net~~For ~~revenue~~the ~~for~~ three months ~~ended~~and ~~June~~nine ~~30, 2012 were US$1,182,440 compared to US$1,528,144 for the three~~ months ended ~~June~~September 30, ~~2011~~2012, athe ~~decrease~~vendor ~~of 22.61%.~~who ~~The~~accounted ~~decrease in net revenue~~ for ~~the~~10% ~~three~~or ~~months~~more ~~ended~~of ~~June, 2012 over~~ the ~~three~~Company’s ~~month ended June 30, 2011 was mainly~~purchases ~~due~~and toits ~~worldwide~~outstanding ~~economic~~balance ~~slow~~at ~~down~~period-end indate, ~~2012~~are ~~and~~presented ~~customers~~as ~~demand decreased.~~follows:

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.

	Three months ended September 30, 2012					September 30, 2012
	Purchases		Percentage of purchases			Accounts payable, trade

Vendor A (a related party)	$	582,346		55	%		145,093
Vendor B		128,905		14	%		203,397

Total:	$	711,251		69	%		348,490

Gross profit for the three months ended June 30, 2012 was US$24,051, or 2.03% of net revenue, compared to gross profit of US$28,058, or 1.83% of net revenue, respectively, for the comparable period in 2011.

	Nine months ended September 30, 2012					September 30, 2012
	Purchases		Percentage of purchases			Accounts payable, trade

Vendor A (a related party)	$	1,637,986		53	%		145,093
Vendor B		354,285		11	%		203,397

Total:	$	1,992,271		64	%		348,490

24(c) Credit risk

~~Selling,~~Financial ~~general and~~instruments ~~administrative~~that ~~expenses~~are ~~were~~potentially ~~US$67,251,~~subject orto ~~5.69%~~credit risk consist principally of ~~net~~accounts ~~revenue,~~receivable. ~~for~~The Company believes the ~~three~~concentration of ~~months~~credit ~~ended~~risk ~~June~~in ~~30,~~its ~~2012,~~accounts ~~compared~~receivable tois ~~US$96,934,~~substantially mitigated by its ongoing credit evaluation process and relatively short orcollection 6terms.~~34%~~ ofThe ~~net~~Company ~~revenue,~~does ~~for~~not ~~the~~generally ~~comparable~~require ~~period~~collateral infrom ~~2011~~customers. The ~~decrease~~Company ~~was~~evaluates ~~mainly~~the ~~attributable~~need tofor ~~better~~an ~~control~~allowance for ondoubtful ~~expenses~~accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

~~During~~(d) ~~the~~Exchange ~~three~~rate ~~months period ended June 30, 2012, there was a sundry income of US$103,130 received compared to US$nil for the comparable period in 2011.~~risk

~~Interest~~The ~~expenses~~reporting ~~increased~~currency ~~significantly~~of tothe Company is US$85,~~580~~ ~~for~~while the ~~three~~majority ~~months~~of ~~ended~~the ~~June~~revenues ~~30,~~and ~~2012~~costs are denominated in RMB and a significant portion of the assets and liabilities are denominated in RMB. As a result, asthe ~~compared~~Company is exposed to ~~interest~~foreign ~~expenses~~exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$~~5,699~~ ~~for~~and RMB. If RMB depreciates against US$, the ~~respective~~value ~~comparable~~of ~~period~~RMB revenues and assets as expressed in ~~2011~~US$ financial statements will decline. The ~~increase~~Company ~~was~~does ~~primarily~~not ~~due~~hold toany ~~bank~~derivative ~~loan~~or other ~~drawdown~~financial byinstruments ~~end~~that ofexpose ~~2011~~to substantial market risk.

~~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.~~21

~~Net~~TITANIUM ~~revenue for six~~GROUP ~~months~~LIMITED ~~ended~~AND 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.SUBSIDIARIES

~~Cost~~NOTES ofTO ~~revenue was~~UNAUDITED ~~US$~~CONDENSED ~~2,180,104 for~~CONSOLIDATED ~~the~~FINANCIAL six months ended June 30, 2012 as compared to US$ 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.STATEMENTS

~~There~~(Currency ~~was a gross loss~~expressed ofin US~~$4,725~~ ~~for~~Dollars ~~the six months ended June 30, 2012, compared to gross profit of~~ (“US$~~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,~~NOTE ~~general~~14– ~~and~~CONCENTRATIONS ~~administrative~~OF ~~expenses~~RISK 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.(CONTINUED)

~~During~~(e) ~~the~~Economic ~~six~~and ~~months period~~political ~~ended June 30, 2012, there was a sundry income of US$150,729 received compared to US$nil for the comparable period in 2011.~~risks

~~Interest~~The ~~expenses~~Company's ~~increased~~operations ~~significantly~~are toconducted ~~US$170,445~~in ~~for~~ the ~~six~~PRC. ~~months~~Accordingly, ~~ended~~the ~~June~~Company's 30business, ~~2012,~~financial ascondition ~~compared~~and toresults ~~interest expenses~~ of ~~US$11,305~~operations ~~for~~may ~~the~~be ~~respective~~influenced ~~comparable~~by ~~period~~the inpolitical, ~~2011.~~economic ~~The~~and ~~increase~~legal ~~was~~environment ~~primarily~~in ~~due~~the toPRC ~~bank~~and ~~loan~~by ~~drawdown~~the bygeneral ~~end~~state of ~~2011~~the PRC economy.

~~Net~~The ~~loss~~Company's ~~for~~operations in the ~~six~~PRC are subject to special considerations and significant risks not typically associated with companies in North America ~~months~~and ~~ended~~Western ~~June~~Europe. 30These include risks associated with, ~~2012~~among ~~was~~others, ~~US$167~~the political,~~239~~ 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 ~~compared~~by changes in governmental policies with respect to alaws ~~net~~and ~~loss~~regulations, ofanti-inflationary ~~US$266~~measures,~~914~~ ~~for~~currency ~~the~~conversion, remittances ~~comparable~~abroad, ~~period~~and inrates ~~2011~~and methods of taxation.

~~Going~~NOTE ~~Concern~~15– SUBSEQUENT EVENTS

~~For~~In ~~the~~accordance ~~six~~with ~~months ended~~ASC ~~June~~Topic 30855, ~~2012~~“Subsequent Events”, ~~the~~which ~~Company~~establishes ~~incurred~~general anstandards ~~accumulated~~of ~~deficit~~accounting offor ~~HK$1,067,447~~and atdisclosure of events that occur after the balance sheet date. ~~The~~but ~~continuation~~before offinancial ~~the~~statements ~~Company~~are asissued, aWe have evaluated significant events and transactions ~~going~~that ~~concern~~occurred ~~through~~after ~~June~~September 30, 2012 isthrough ~~dependent~~the ~~upon~~date of the ~~continuing~~condensed consolidated financial ~~support~~statements ~~from~~were ~~its~~issued ~~stockholders.~~and ~~Management believes,~~filed ~~the~~with ~~existing~~this ~~stockholders~~Form ~~will~~10-Q. ~~provide~~During the ~~additional~~period, ~~cash~~the toCompany ~~meet~~did ~~with~~not ~~the~~have ~~Company’s~~any ~~obligations~~material asrecognizable ~~they~~subsequent ~~become due~~events.

2522

~~Liquidity~~ ITEM 2. ~~and~~MANAGEMENT’S ~~Capital Resources~~ DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

AtThe ~~June~~following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the unaudited condensed consolidated financial statements of the Company for the nine months ended September 30, 2012 and 2011, weand ~~had~~should ~~cash~~be ofread ~~US$836,091,~~in asconjunction ~~compared~~with tosuch ~~cash~~financial ofstatements ~~US$917,724~~and atrelated ~~December~~notes ~~31,~~included ~~2011~~in this report. Those ~~Amounts~~statements ~~owed~~in the following discussion that are not historical in nature should be considered to ~~related~~be ~~parties~~forward atlooking ~~June~~statements ~~30,~~that ~~2012~~are inherently ~~were~~uncertain. ~~US$~~Actual ~~1,008,388~~results asand ~~compared~~the timing of the events may differ materially from those contained in these forward looking statements due to ~~that~~a number of ~~US$1~~factors,~~324,908~~ atincluding ~~December,~~those ~~2011~~discussed in the “Forward-Looking Statements” set forth elsewhere in this Quarterly Report on Form 10-Q.

~~We used cash of US$178,769 in our operating activities during the six months ended June 30, 2012, largely due to the net loss of US$167,239 for the period.~~Overview

~~PART~~Shenzhen IIKanglv 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 ~~OTHER~~to ~~INFORMATION~~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 specification and customization to Cancare at the current market value in the normal course of business.

~~Item~~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. ~~Legal~~TTNUF, ~~Proceedings~~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.

InAs ~~July~~used ~~2010~~herein, ~~Hong~~the ~~Kong Communications Company~~“Group” ~~Limited~~refers ~~initiated~~to ~~proceedings~~TTNUF inand ~~High~~its ~~Court~~wholly-owned ofsubsidiaries, ~~the~~ Hong Kong ~~SAR~~Kanglv ~~to wind up Titanium~~ Technology~~. ELM~~ ~~Computer Technologies~~ Limited, aShenzhen ~~creditor~~Kanglv ~~of Titanium~~ Technology, ~~has~~Limited ~~made a claim for a sum of US$292,393 (HK$2,280,666)~~ and ~~has applied to substitute~~ asKanglv ~~the~~Cable ~~petitioner~~Technology in(Hong ~~this~~Kong) ~~action~~Limited. ~~Its application was to be heard on April 8, 2011, but has been extended to September 9, 2011.~~

InPursuant ~~August~~to ~~2010~~the MOU, ~~ELM~~TTNUF ~~Computer~~agreed ~~Technologies~~to issue 52,635,560 common shares to Huabao Asia Limited, ~~initiated~~an ~~proceedings~~entity inowned ~~High~~and ~~Court~~controlled by Mr. CHEN Tianju, in exchange of the ~~Hong~~ownership of ~~Kong~~Shenzhen ~~SAR~~Kanglv. ~~against~~Although ~~Titanium~~Shenzhen ~~Technology~~Kanglv became TTNUF’s wholly-owned subsidiary, the transaction was accounted for ~~wrongful~~as a ~~repudiation~~recapitalization in the form of a ~~subcontractor~~reverse merger of Shenzhen Kanglv, whereby Shenzhen Kanglv was deemed to be the accounting ~~agreement~~acquirer and ~~default~~was indeemed ato ~~maintenance~~have ~~service~~retroactively ~~agreement,~~adopted ~~claiming~~the ~~damages~~capital structure of ~~US$407,983 (HK$3,182,266)~~TTNUF. ~~Titanium~~ ~~Technology has~~Since ~~applied~~the transaction was accounted for as a ~~stay~~reverse ofmerger, ~~all~~the ~~further~~accompanying ~~proceedings~~consolidated infinancial ~~this~~statements ~~action. The~~reflect ~~application~~the ~~was~~historical ~~due~~consolidated tofinancial bestatements ~~heard~~of Shenzhen onKanglv ~~May~~for ~~11,~~all ~~2011~~periods presented, ~~but~~ ~~has~~and ~~been~~do ~~extended~~not toinclude ~~September~~the 9,historical ~~2011~~financial statements of TTNUF.

~~Titanium Technology received the winding-up notification from High Court of the Hong Kong SAR dated September 16, 2011.~~23

~~Item~~Pursuant ~~1A.~~to ~~Risk~~the ~~Factors~~MOU, TTNUF also agreed the following terms:

~~There~~1. ~~has~~TTNUF ~~been~~agreed ~~no material change~~ to ~~our Risk~~effect ~~Factors~~a ~~from~~1-for-10 ~~those~~consolidation ~~presented~~of inits ~~our~~issued ~~Form~~and ~~10-K~~outstanding ~~for~~shares ~~the~~of ~~fiscal~~common ~~year ended December 31, 2010~~stock.

~~Item~~ 2. ~~Unregistered~~The ~~Sales~~holders of ~~Equity~~TTNUF’s ~~Securities~~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 ~~Use~~complete payment of ~~Proceeds~~the debentures and all accrued and unpaid interest thereon.

~~None~~3. 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.

~~Item~~On 3May 31, 2011, the acquisition of Shenzhen Kanglv was completed, and the business of Shenzhen Kanglv was adopted as the Company’s business. As ~~Defaults~~such, ~~Upon~~the following ~~Senior~~discussion ~~Securities~~is focused on the current and historical operations of Shenzhen Kanglv, and excludes prior operations of Titanium Group Limited.

~~None~~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.

~~Item~~Shenzhen 4Kanglv is a subcontractor for Cancare Electric Wire (Shenzhen) Co., Ltd., an affiliate (~~Removed~~“Cancare Electric”), and ~~Reserved)~~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 Lida Company limited.

~~None~~On 2 September, 2011, the subsidiary, Titanium Technology Limited, was winding up by the Hong Kong Special Administrative Region Government.

~~Item~~The 5Company entered into a share exchange agreement (“the agreement”) with Zili Industrial Co. ~~Other~~Limited, ~~Information~~Snow Hill Developments Limited and Cancare Investment Limited dated September 10, 2012. Under the terms of the agreement:

~~None~~3. Zili agrees to sell to Snow Hill 20,000,000 restricted shares of the common stock, $0.01 par value, representing in aggregate of 20% of the total issued and outstanding shares of Titanium owned by Zili in Titanium (the “Titanium Exchange Shares”) in exchange (the “Exchange”) for 2,500,000 shares of Cancare Investment representing in aggregate 20% of the total issued and outstanding equity securities of Cancare Investment owned by Snow Hill in Cancare Investment (the “Cancare Exchange Shares”), a Hong Kong company unrelated to Titanium.

~~Item~~4. 6Concurrent with the share exchange transaction, Zili transferred the remaining 17,700,000 shares of common stock it held in the Company to Huabao Asia Limited (“Huabao”), representing in aggregate 17.7% ~~Exhibits~~of the issued and outstanding shares of the Company’s common stock. The transferred shares from Zili to Huabao constitutes approximately 17.7% of the issued and outstanding shares of the Company’s common stock, resulting in Huabao holding approximately 70.33% of the Company's issued and outstanding shares of common stock.

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.

26Accordingly, the accompanying condensed consolidated financial statements include the following:

~~SIGNATURES~~The condensed consolidated balance sheets, consolidated statements of operations and comprehensive loss, and condensed 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.

~~Pursuant~~As ~~to the requirements~~ of ~~the Securities~~ ~~Exchange~~June, ~~Act~~2012, details of ~~1934,~~ the ~~registrant~~Company’s ~~has~~subsidiaries ~~duly~~are ~~caused~~as ~~this report to be signed on its behalf by the undersigned thereunto duly authorized.~~follows:

	TITANIUM GROUP LIMITED
Name		Date of incorporation/ establishment	Place of incorporation/ registration and operation	Percentage of equity interest attributable to the Company	Principal activities
August 27, 2012	By:	/s/ Huaming LAI
Hong Kong Kanglv Technology Limited		September 17, 2010	Hong Kong	100%	Investment holding
		LAI Huamin
Shenzhen Kanglv Technology Limited		June 16, 2005	PRC	100%	Manufacture and sales of electric wire products
		Chief Executive Officer and President (principal executive officer)
Kanglv Cable Technology (Hong Kong) Limited		September 17, 2010	Hong Kong	100%	Dormant

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

Critical Accounting Policies

27Inventories. 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 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 the nine month ended September 30, 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 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.

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 nine months period ended September 30, 2012 and 2011, the Company did not have any interest and penalties associated with tax positions. As of September 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:

	September 30, 2012		December 31, 2011
Year-end RMB: US$1 exchange rate		6.3190		6.3523
Annual average RMB: US$1 exchange rate		6.3085		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 September 30, 2012 and September 30, 2011.

Net revenue for three months ended September 30, 2012 were US$908,295 compared to US$2,021,438 for the three months ended September 30, 2011, a decrease of 55.1%. The decrease in net revenue for the three months ended September, 2012 over the three month ended September 30, 2011 was mainly due to worldwide economic slow down in 2012 and customers demand decreased.

Cost of revenue was US$938,998 for the three months ended September 30, 2012 as compared to US$2,048,672 for the comparable period ended September 30, 2011, a decrease of 54.2% which was in line with the decrease of revenue of the period.

Gross loss for the three months ended September 30, 2012 was US$30,703 compared to gross loss of US$27,234 for the comparable period in 2011.

Selling, general and administrative expenses were US$42,768, or 4.7%% of net revenue, for the three months ended June 30, 2012, compared to US$167,164, or 8.3% of net revenue, for the comparable period in 2011. The decrease was mainly attributable to better control on expenses.

Net interest expenses increased significantly to US$41,0050 for the three months ended September 30, 2012, as compared to net interest income of US$10,922 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 September 30, 2012 was US$115,510 compared to a net income of US$380,043 for the comparable period in 2011 which was mainly due to US$555,403 gain on disposal of a subsidiary in 2011.

Comparison of nine months ended September 30, 2012 and September 30, 2011.

Net revenue for nine months ended September 30, 2012 were US$3,083,674 compared to US$4,197,062 for the nine months ended September 30, 2011, a decrease of 26.5%. The decrease in net revenue for the nine months ended September, 2012 over the nine month ended September 30, 2011 was mainly due to decrease in customer demand in 2012 as a result of worldwide economic slow down.

Cost of revenue was US$3,119,102 for the nine months ended September 30, 2012 as compared to that of US$4,187,901 for nine months ended September 30, 2011, a decrease of 25.5% which was in line with the decrease in net revenue.

There was a gross loss of US$35,428 for the nine months ended September 30, 2012, compared to gross income of US$9,161 for the comparable period in 2011. The gross loss was mainly due to the significant decrease in revenue and increase of raw material cost in 2012.

Selling, general and administrative expenses were US$223407, or 7.3% of net revenue, for the nine months ended September 30, 2012, compared to US$451,052, or 10.7% of net revenue, for the comparable period in 2011. The decrease was mainly attributable to better control on expenses.

Net interest expenses increased significantly to US$60,721 for the nine months ended September 30, 2012, as compared to net interest expenses of US$383 for the respective comparable period in 2011. The increase was primarily due to bank loan drawdown by end of 2011.

Net loss for the nine months ended September 30, 2012 was US$282,749, compared to a net income of US$113,129 for the comparable period in 2011 which was mainly attributable to US$555,403 gain on disposal of a subsidiary in 2001.

Going Concern

As at September 30, 2012, the Company recorded an accumulated deficit of US$166,599. The continuation of the Company as a going concern 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 September 30, 2012, the company had cash of US$229,957, as compared to cash of US$917,724 at December 31, 2011. Amounts owed to related parties at September 30, 2012 were US$1,077,705 as compared to that of US$1,324,908 at December 31, 2011.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures as required under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of September 30, 2012, the Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on the foregoing, its Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of September 30, 2012. The Company does not have a Chief Financial Officer that is familiar with the accounting and reporting requirements of a U.S. publicly-listed company, nor does it have a financial staff with accounting and financial expertise in U.S. generally accepted accounting principles (“US GAAP”) reporting. In addition, the Company does not believe it has sufficient documentation concerning its existing financial processes, risk assessment and internal controls. There are also certain deficiencies in the design or operation of the Company’s internal control over financial reporting that has adversely affected its disclosure controls that may be considered to be “material weaknesses.”

We plan to designate individuals responsible for identifying reportable developments and to implement procedures designed to remediate the material weakness by focusing additional attention and resources on our internal accounting functions. However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.

OTHER INFORMATION

Item 1A. Risk Factors

The purchase of our common stock involves a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “2011 Form 10-K”), our Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 2 of Part I of this report, and our consolidated financial statements and related notes included in Item 1 of Part I of this report. Readers should carefully review those risks, as well as additional risks described in other documents we file from time to time with the Securities and Exchange Commission.

Item 6 - Exhibits

The following exhibits are filed with this report:

31.1		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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.

	CHINA ELECTRONICS HOLDINGS, INC.

	By:	/s/ Huaming Lai
	Name:	Huaming Lai
	Title:	Chief Executive Officer and President (principal executive officer) & Chief Financial Officer (principal financial officer and principal accounting officer)

Date: December 4, 2012

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