UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, ~~2012~~2013

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

Commission file number 000-51824

COMPUTER GRAPHICS INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

Nevada		9830-~~0400189~~0715357
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Room 01B, 02/F, Podium Building, Guodu Golf Garden, North of Xinsha Road Futian District, Shenzhen People’s Republic of China		518048

(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: + (86)-755-22211114

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: Common stock, $0.0001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act: Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 day. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨x

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

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

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

Yes ¨ No x

The aggregate market value of the Registrant’s voting and non-voting common equity held by non-affiliates as of ~~March~~November 316, ~~2012~~2013 was $32,~~649~~587,~~506~~941, based on 7,~~299~~394,~~012~~118 shares of common stock held by non-affiliates valued at $0.5035 per share, the last known sale price of the Registrant’s common stock.

As of ~~November~~Dec 3031, ~~2012~~2013, the registrant had 16,331,854 shares of common stock outstanding.

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Business.	4
Item 1A.	Risk Factors.	1314
Item 1B.	Unresolved Staff Comments.	2324
Item 2.	Properties.	2324
Item 3.	Legal Proceedings.	2324
Item 4.	Mine Safety Disclosures.	2324
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.	24
	Issuer Purchases of Equity Securities.	23
Item 6.	Selected Financial Data.	25
Item 6.	Selected Financial Data.	24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	25
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	24
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	31
Item 8.	Financial Statements and Supplementary Data.	32
Item 8.	Financial Statements and Supplementary Data.	31
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	32
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	31
Item 9A.	Controls and Procedures.	32
Item 9A.	Controls and Procedures.	31
Item 9B.	Other Information.	34
Item 9B.	Other Information.	32
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	3335
Item 11.	Executive Compensation.	3436
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	3638
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	3739
Item 14.	Principal Accountant Fees and Services.	3840
	PART IV
Item 15.	Exhibits and Financial Statement Schedules.	3941

FORWARD LOOKING STATEMENTS

This report contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements include, among other things, statements relating to:

· our ability to expand domestically and internationally in ~~2013~~2014; · our ability to create standardized and centralized production procedures and standards; · our ability to attract key technology and management personnel; · our ability to strengthen our existing technology in efficiency and technology integration, and create a high-standard internal procedure and quality monitoring system; · the market for 3D technology and our ability to achieve market share and develop new sales channels or other industry sales opportunities; · our ability to obtain additional capital in future years to fund our planned expansion; · economic, political, regulatory, legal and foreign exchange risks associated with our operations; or · the loss of key members of our senior management and our qualified sales personnel.

· our ability to create standardized and centralized production procedures and standards;

· our ability to attract key technology and management personnel;

· our ability to strengthen our existing technology in efficiency and technology integration, and create a high-standard internal procedure and quality monitoring system;

· the market for 3D technology and our ability to achieve market share and develop new sales channels or other industry sales opportunities;

· our ability to obtain additional capital in future years to fund our planned expansion;

· economic, political, regulatory, legal and foreign exchange risks associated with our operations; or

· the loss of key members of our senior management and our qualified sales personnel.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report and the documents that we reference and filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except where the context otherwise requires and for the purposes of this report only:

· the “Company,” “we,” “us,” and “our” refer to the combined business of (i) Computer Graphics International Inc. or “CGII”, a Nevada corporation, (ii) China Digital Image Organization Co., Limited, or “China Digital,” a Hong Kong limited company and wholly-owned subsidiary of CGII, (iii) Shenzhen Digital Image Technologies Co., Ltd, or “Shenzhen Holding Company,” a Chinese limited company and wholly-owned subsidiary of China Digital, (iv) ~~Shenzhen Digital Image 3D Design and Development Co., Ltd, or “Shenzhen 3D Design”, (v)~~ Guangzhou Digital Image Technologies Co., Ltd. “Guangzhou” ~~and~~ (~~vi) our four branches in~~ the ~~PRC, including our Xi’an office, Guangzhou office, Yun’nan office and Xiamen office and, together with Shenzhen Holding Company, Guangzhou and Shenzhen 3D Design, the~~ “Operating ~~Subs,~~Sub” ~~Chinese limited companies wholly-owned by Shenzhen Holding Company~~);

2· “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; · “Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China; · “PRC,” “China,” and “Chinese,” refer to the People’s Republic of China (excluding Hong Kong and Taiwan); · “Renminbi” and “RMB” refer to the legal currency of China; · “SEC” refers to the United States Securities and Exchange Commission; · “Securities Act” refers to the Securities Act of 1933, as amended; and · “U.S. dollars,” “dollars” and “$” refer to the legal currency of the United States.

· “Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

· “Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;

· “PRC,” “China,” and “Chinese,” refer to the People’s Republic of China (excluding Hong Kong and Taiwan);

· “Renminbi” and “RMB” refer to the legal currency of China;

· “SEC” refers to the United States Securities and Exchange Commission; and

· “Securities Act” refers to the Securities Act of 1933, as amended; and

· “U.S. dollars,” “dollars” and “$” refer to the legal currency of the United States.

In this current report we are relying on and we refer to information and statistics regarding our industry and economy in China and that we have obtained from various cited government and institute research publications. Much of this information is publicly available for free and has not been specifically prepared for us for use or incorporation in this annual report on Form 10-K or otherwise. We have not independently verified such information.

	3

PART I.

ITEM 1. BUSINESS.

Business Overview

We are a 3D digital visual service provider founded in 2006 based in China, specialized in providing one-stop-shop service and systems based on 3D image technology to domestic governments, real estate developers, game developers, the automotive industry and other commercial customers. We operate through our wholly-owned subsidiaries Shenzhen Digital Image Technologies Co., Limited and Guangzhou Digital Image Technologies Co., Ltd.

Our headquarters are located in Shenzhen, China. We operate domestically with ~~four~~one ~~branches~~branch in ~~the PRC, including our Xi’an office,~~ Guangzhou ~~office~~, ~~Yun’nan office and Xiamen office~~PRC. . Through our 3D imaging technology, we participate in the visual expression of construction-related industries and help our customers complete visual technological changes from hand painting to computer-aided visual displays. We endeavor to provide our customers with the most cost-effective 3D digital visual communication products and services through the combination of the latest visual technology and terminal display equipment.

Our revenues have decreased from $105,~~068~~795,~~752~~503 in fiscal year ~~2011~~ 2012 to $53,~~795~~701,~~503~~783 in fiscal year ~~2012~~2013, representing a decrease of approximately 4236% year-over-year.

Our Corporate History and Background

Computer Graphics International Inc., or “CGII”, was incorporated under the laws of the State of Nevada on February 27, 2003 under the name AMP Productions, Ltd. (“AMP”), with the business purpose of developing, producing, marketing, and distributing low-budget feature-length films to movie theaters and ancillary markets. From inception until the reverse acquisition transaction described below, AMP earned no revenue and suffered recurring losses and net cash outflows from operations.

On July 30, 2010, the controlling shareholders of AMP consented to a proposed 1-for-10 reverse split of AMP's issued and outstanding common stock, an increase in AMP's authorized common stock to 900,000,000 shares, and the authorization of 100,000,000 shares of preferred stock. The corporate action was approved by FINRA on September 17, 2010 and effective in the State of Nevada on September 23, 2010.

Acquisition of China Digital

On March 31, 2011, we completed a reverse acquisition transaction through a share exchange (the “Share Exchange”) with China Digital and its shareholders, whereby we acquired 100% of the issued and outstanding capital stock of China Digital in exchange for (i) 31,528,~~651shares~~651 shares of our Common Stock, which collectively constituted approximately 97% of our issued and outstanding capital stock as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement and (ii) payment (the “Cash Component”) of $2,368,471.35. The Cash Component was payable in full within 12 months after the Closing.

As a result of the reverse acquisition, China Digital became our wholly-owned subsidiary and the former shareholders of China Digital became our controlling stockholders. The share exchange transaction with China Digital and the Shareholders was treated as a reverse acquisition, with China Digital as the acquirer and AMP as the acquired party. Unless the context suggests otherwise, when we refer in this report to business and financial information for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial information of China Digital and its consolidated subsidiaries.

In connection the closing of the reverse acquisition, Thomas E. Mills, AMP’s former CEO, President, CFO, Secretary, Treasurer and a director, resigned from all offices that he held effective on March 31, 2011 and from his position as AMP’s director effective on April 25, 2011. In addition, AMP increased the size of its board of directors to three directors and appointed Hua Zeng (Chairman of the Board), Jing Wang and Yongqing Ma as the directors of AMP effective on April 25, 2011. In addition, AMP’s executive officer was replaced by the Operating ~~Subs~~ Sub’s executive officers upon the closing of the reverse acquisition as indicated in more detail below.

	4

As a result of our acquisition of China Digital, we now own all of the issued and outstanding capital stock of China Digital, which in turn owns all of the issued and outstanding capital stock of Shenzhen Holding Company. Shenzhen Holding Company in turn owns our ~~two additional~~ Operating ~~Subs~~Sub, ~~Shenzhen Digital Image 3D Design and Development Co., Ltd. (“Shenzhen 3D Design”) and~~ Guangzhou Digital Image Technologies Co., Ltd..

China Digital was established in Hong Kong on August 5, 2009 to serve as an intermediate holding company. Shenzhen Holding Company was established in the PRC in 2007. ~~Shenzhen 3D Design and Shenzhen Xi’an Branch were established in the PRC in 2004 and 2009, respectively.~~ On November 18, 2010, the local government of the PRC issued a certificate of approval regarding the foreign ownership of Shenzhen Holding Company by China Digital, a Hong Kong entity.

Because of the common control between China Digital and the Operating ~~Subs~~Sub, for accounting purposes, the acquisition of these entities has been treated as a recapitalization with no adjustment to the historical basis of their assets and liabilities.

On May 31, 2011, we filed a certificate of amendment with the Secretary of State of Nevada changing our name to “Computer Graphics International Inc.” and effecting a 1-for-2.18 reverse stock split of its common stock (the “Reverse Stock Split”). The Reverse Stock Split took effect when approved by FINRA on June 7, 2011. As a result of the Reverse Stock Split, the number of our shares outstanding was reduced from 35,428,981 shares immediately before the Reverse Stock Split to 16,251,846 shares immediately after the Reverse Stock Split.

On September 26, 2011, the Company’s wholly owned subsidiary Shenzhen Holding Company entered into a Letter of Intent for Share Purchase (the “Acquisition Agreement”) with Li Dongxiang and Zeng Xianguang (together, the “Sellers”) with respect to the shares of Guangzhou Fanyutuo 3D Technology Co., Ltd. (“Guangzhou ”). Pursuant to the terms of the Acquisition Agreement, the Sellers agreed to sell all of the capital stock of Guangzhou to Shenzhen Holding Company in exchange for RMB six million (approximately $937,236). Guangzhou is was a recently formed start-up company involved in three dimensional technology. On December 27, 2011, the parties closed the purchase and sale of shares of Guangzhou pursuant to terms of the Acquisition Agreement. In connection with the closing, Guangzhou's name was changed to "Guangzhou Digital Image Technologies Co., Ltd."

~~Our~~ A ~~Corporate~~Supplemental ~~Structure~~Letter of Intent for Share Purchase Agreement (“Supplemental Agreement”) was entered into between Li Dongxiang and ZengXianguang (together, the “Sellers”) and three non-shareholder employees of Guangzhou Fanyutuo 3D Technology and Shenzhen Holding Company on September 26, 2011.

~~All of our business operations are conducted through our Hong~~ ~~Kong~~Extracts ~~and~~to ~~Chinese~~the ~~subsidiaries.~~Supplemental ~~The~~Agreement ~~chart below presents our corporate structure.~~are:

i) The Sellers and three non-shareholder employees of Guangzhou guarantee themselves to work for Shenzhen Holding Company; ii) 5 working days after execution of the Supplemental Agreement 50% of the amount of $937,236 (CNY6,000,000) shall be paid to the Sellers through the legal firm witnessing the transaction; iii) 5 working days after completion of two years employment by the Sellers and the three non-shareholder employees with Shenzhen Holding Company, 30% of the amount of $937,236 (CNY6,000,000) shall be paid to the Sellers through the legal firm witnessing the transaction; iv) 5 working days after completion of three years employment by the Sellers and the three non-shareholder employees with Shenzhen Holding Company, 20% of the amount $937,236 (CNY6,000,000) shall be paid to the Sellers through the legal firm witnessing the transaction; v) As the Supplemental Agreement forms part and parcel of the Acquisition Agreement, in accordance with the terms of the Acquisition Agreement, any dispute arising from the Agreement, both parties shall resolve by mutual negotiations or in the event of such negotiations fail, the dispute should be resolved by arbitrations or by Court Action in PRC; vi) In the event that any one of the Sellers and the three non-shareholder employees left employment with Shenzhen Holding Company during the three years Agreement period, the acquisition price shall not establish.

~~Our~~ The ~~Industry~~acquisition of Guangzhou was in essence to secure the long term employment of the Sellers and ~~Principal~~the ~~Market:~~three non-shareholder employees to work for Shenzhen Holding Company.

~~We operate principally in the PRC domestic 3D digital technology~~ ~~and~~On ~~equipment~~August ~~market. Our~~22, ~~target~~2012, ~~customers are in~~ the ~~PRC's~~Company ~~major~~filed ~~metropolitan~~dissolution ~~cities~~for ~~and~~Shenzhen ~~the~~Digital ~~rapidly~~Image ~~developing~~3D ~~second~~Design and ~~third~~ ~~tier~~Development ~~cities~~Co., ~~We aim to provide top level quality products and services at an affordable price~~Ltd. ~~We provide 3D digital animation videos~~ and ~~effects~~discontinued asits ~~well as integrated software and hardware systems and projects, mainly for business promotion and government display use~~operation.

~~The market for 3D digital services is growing rapidly in the~~ ~~PRC~~Our ~~market.~~Corporate With the rapid accumulation of national wealth, domestic purchasing power is now experiencing a spectacular expansion. As a result, we believe today’s Chinese consumers will gradually put more and more weight on branding, design, function and other presentation and marketing characteristics when making their purchase decisions. In addition, with the advent of advanced digital visual technology, specifically 3D technology, companies, including real estate developers, auto-makers, game designers, and other commercial and consumer goods companies, can take advantage of those technologies to more effectively show and promote their products and relevant unique visual and interactive experience. The use of advanced digital visual technology is especially popular among large, international and well-known companies. In addition, screens are almost everywhere, in hand held devices, in buildings, in cars, and outdoors, forming an extremely solid basis for further development of video content. Lastly, through the rapid growth of 3G networks, 3D visual content may be delivered to people in a more rapid and explicit manner.Structure

~~China's 3D digital technology and animation industry is just~~ ~~emerging,~~All ~~and we believe the market for such services is capable~~ of ~~reaching~~our atbusiness ~~least~~operations ~~RMB~~are ~~100~~conducted ~~billion~~through ~~annually. 3D~~our ~~technology has~~Hong ~~been~~Kong ~~used in government planning, building performance,~~ and 3DChinese ~~versions of new business publishing~~subsidiaries. ~~Generally~~ ~~speaking, today’s~~The 3Dchart ~~digital~~below ~~animation~~presents ~~technology~~our ~~industry~~corporate ~~includes animation, 3D virtual digital city display/rendering, 3D games, 3D product display and other uses~~structure.

In 2009, the demand for 3D digital video – the industry that owns a type output that we help create for our customers — was more than one million minutes with more than RMB 40 billion market value alone. Taking additional value from related hardware construction, education and training, publications and exhibitions etc., the potential market value can be more than RMB 60 billion. The demands of overall commercial 3D digital vision market can be more than RMB 100 billion annually with a growth rate of 20% to 50% each year.5

6 Our Industry and Principal Market:

~~Currently,~~ We ~~among~~operate ~~the~~principally ~~larger 3D digital service players~~ in the PRC, ~~the~~domestic ~~principal~~3D ~~strategy~~digital ~~for~~technology ~~ones~~and ~~with~~equipment amarket. Our ~~recognized~~target ~~brand~~customers isare ~~to survive~~ in the ~~first~~PRC's ~~tier~~major metropolitan cities and ~~through~~ the ~~established brand~~rapidly todeveloping ~~expand~~second toand ~~the~~third ~~surrounding~~tier cities ~~and nationwide~~. ~~Branded~~We ~~players~~aim ~~basically adhere~~ to ~~the~~provide ~~strategy~~top oflevel ~~product~~quality ~~diversification, multimedia,~~products 3Dand ~~digital~~services ~~production,~~at ~~virtual~~an ~~reality~~affordable ~~and other products~~price. ~~Many~~We ofprovide ~~these~~3D ~~companies~~digital ~~have~~animation ~~large-scale~~videos ~~production facilities~~ and ~~are~~effects as well ~~known~~as ~~from~~integrated ~~their~~software ~~technology~~ and ~~have~~hardware ~~their~~systems ~~own technical teams~~ and ~~service teams. These firms also tend to charge a high price. Also~~projects, ~~there~~mainly ~~are~~for ~~some~~business ~~companies~~promotion ~~that specialize in niche markets with a focus on marketing strategy~~ and ~~outsourcing~~ ~~their~~government ~~technology~~display use.

On The ~~the~~market ~~other~~for ~~hand, the commercial~~ 3D digital ~~market~~services is ~~still~~ growing rapidly in ~~its~~the ~~infancy~~PRC inmarket. ~~China~~With ~~and~~the rapid accumulation of national wealth, domestic purchasing power is ~~very~~now ~~segmented~~experiencing a spectacular expansion. ~~The~~As ~~largest~~a ~~player~~result, inwe ~~this~~believe ~~sector~~today’s ~~has~~Chinese ~~less~~consumers ~~than~~will 1%gradually ofput ~~domestic~~more ~~market~~and ~~share.~~more ~~Currently~~weight on branding, 3D ~~digital~~design, ~~technology~~function ~~has~~and ~~entered~~other presentation and marketing characteristics when making their purchase decisions. In addition, with the ~~stage~~advent of ~~rapid~~advanced ~~development~~digital ~~with~~visual notechnology, ~~absolute~~specifically ~~market~~3D ~~leader~~technology, ~~and~~companies, ~~the~~including ~~market~~real ~~price~~estate developers, ~~quality~~auto-makers, ~~service~~ game designers, and ~~products~~other ~~are~~commercial ~~uneven.~~and ~~The~~consumer ~~market~~goods ~~prices~~companies, ~~are~~can ~~also~~take ~~different~~advantage ~~among~~of ~~regions~~those ~~for~~technologies ~~construction~~to more effectively show and ~~real~~promote ~~estate~~their 3Dproducts ~~rendering~~ and ~~animation~~relevant unique visual and interactive experience. The ~~With~~use ~~the~~of ~~competition~~advanced digital visual technology is especially popular among large, international and ~~rising~~well-known ~~customer~~companies. ~~requirements~~In addition, ~~there~~screens are ~~more~~almost ~~complicated~~everywhere, in hand held devices, in buildings, in cars, and ~~practical~~outdoors, 3Dforming ~~digital~~an ~~systems such~~extremely assolid ~~interactive~~basis ~~virtual~~for ~~board~~further ~~room~~development of video content. Lastly, through the ~~digital~~rapid ~~sand~~growth ~~table,~~of ~~virtual~~3G ~~communities~~networks, ~~and~~3D ~~other~~visual ~~new~~content ~~digital~~may ~~marketing~~be ~~techniques~~delivered to people in a more rapid and explicit manner.

~~Our~~ China's ~~Growth~~3D ~~Strategy~~digital technology and animation industry is just emerging, and we believe the market for such services is capable of reaching at least RMB 100 billion annually. 3D technology has been used in government planning, building performance, and 3D versions of new business publishing. Generally speaking, today’s 3D digital animation technology industry includes animation, 3D virtual digital city display/rendering, 3D games, 3D product display and other uses.

~~Currently~~ In 2009, ~~we are focusing on~~ the ~~domestic~~demand ~~real~~for ~~estate~~3D ~~sector, which~~digital ~~accounts~~video ~~for~~- ~~more~~the ~~than~~industry ~~half~~that ofowns ~~our~~a ~~total~~type ~~revenue,~~output ~~which~~that we ~~expect~~help tocreate ~~continue~~for atour ~~that~~customers ~~pace~~- ~~for~~was ~~the~~more ~~near~~than ~~future. In addition~~one wemillion ~~have~~minutes ~~expanded~~with ~~our~~more 3Dthan ~~digital~~RMB ~~technologies~~40 ~~into~~billion ~~other~~market ~~commercial~~value ~~sectors~~alone. Taking ~~For~~additional ~~the~~value ~~year~~from ~~ended~~related ~~September~~hardware 30construction, ~~2011,~~education ~~sales from~~and ~~real~~training, ~~estate~~publications ~~industry~~ and ~~sales~~exhibitions ~~from~~etc., ~~other~~the ~~industries~~potential ~~accounted~~market ~~for~~value ~~92%~~can ~~and~~be 8%more ofthan ~~our~~RMB ~~total~~60 ~~sales, respectively~~billion. The ~~For~~demands ~~the~~of ~~year ended~~overall ~~September~~commercial ~~30,~~3D ~~2012,~~digital ~~sales~~vision ~~from~~market ~~the~~can ~~real~~be ~~estate~~more ~~industry~~than ~~and~~RMB ~~sales~~100 ~~from~~billion ~~other~~annually ~~industries~~with ~~sector~~a ~~accounted~~growth ~~for~~rate 61of 20% ~~and~~to 3950% of ~~total~~each ~~sales, respectively~~year.

We Currently, ~~intend~~among the larger 3D digital service players in the PRC, the principal strategy for ones with a recognized brand is to ~~pursue~~survive in the ~~following~~first ~~strategies:~~tier cities and through the established brand to expand to the surrounding cities and nationwide. Branded players basically adhere to the strategy of product diversification, multimedia, 3D digital production, virtual reality and other products. Many of these companies have large-scale production facilities and are well known from their technology and have their own technical teams and service teams. These firms also tend to charge a high price. Also, there are some companies that specialize in niche markets with a focus on marketing strategy and outsourcing their technology.

· Domestic and international expansion: We plan to expand our network rapidly all over China, and establish branch offices in all provinces in China by 2013 for effective market penetration. In 2013, we plan to expand into international markets by establishing key global representative offices.6

· On ~~Standardized~~the ~~and~~other ~~centralized~~hand, ~~production~~the ~~procedures~~commercial ~~and~~3D ~~standards:~~digital Wemarket ~~will~~is ~~create~~still in its infancy in China and ~~establish~~is avery ~~centralized~~segmented. ~~platform~~The ~~for~~largest ~~all~~player ~~our~~in ~~international~~this ~~and~~sector has less than 1% of domestic ~~project~~market ~~orders~~share. Currently, ~~which~~3D ~~will~~digital ~~conform~~technology tohas ~~our~~entered ~~internal~~the ~~standards~~stage of rapid development with no absolute market leader and ~~procedures~~the ~~for~~market ~~high-~~price, quality, service and ~~efficient~~products ~~production~~are uneven. The market prices are also different among regions for construction and real estate 3D rendering and animation. With the competition and rising customer ~~service~~requirements, there are more complicated and practical 3D digital systems such as interactive virtual board room, the digital sand table, virtual communities, and other new digital marketing techniques.

· Our ~~Invest~~Growth in talent: We will continue to invest heavily to attract and retain key technology and management personnel to maintain our leadership position in product quality, technology, services, and customer retention.Strategy

· Currently, ~~Continue~~we toare ~~focus~~focusing on ~~R&D:~~the Wedomestic ~~will~~real ~~strengthen~~estate sector, which accounts for more than half of our ~~existing~~total ~~technology~~revenue, inwhich ~~efficiency~~we expect to continue at that pace for the near future. In addition we have expanded our 3D digital technologies into other commercial sectors. For the year ended September 30, 2012, sales from the real estate industry and ~~technology~~sales ~~integration~~from other industries sector accounted for 61% and 39% of total sales, respectively. For the year ended September 30, 2013, sales from the real estate industry and ~~create~~sales afrom ~~high-standard~~other ~~internal~~industries ~~procedure~~sector accounted for 83% and ~~quality~~17% ~~monitoring~~of ~~system~~total sales, respectively.

~~· Heavily invest in marketing and new customer sector exploration:~~ We ~~believe~~intend ~~3D technology is a market with vast amount of possible applications in almost every sector of life. We plan~~ to ~~launch~~pursue ~~marketing~~the ~~campaigns~~following ~~into possible new sales channels including online customized ordering, mainstream media and transportation hubs advertising or all other industry sales opportunities.~~strategies:

~~Our~~· ~~Products~~Make the transition from product manufacturing direction to the market applications direction: We will develop new business model, which focus on the third generation of cultural, and technological tourism industry. · Invest in talent: We will continue to invest heavily to attract and retain key technology and management personnel to maintain our leadership position in product quality, technology, services, and customer retention. · Continue to focus on R&D: We will strengthen our existing technology in efficiency and technology integration, and create a high-standard internal procedure and quality monitoring system. · Heavily invest in marketing and new customer sector exploration: We believe 3D technology is a market with vast amount of possible applications in almost every sector of life. We plan to launch marketing campaigns into possible new sales channels including online customized ordering, mainstream media and transportation hubs advertising or all other industry sales opportunities.

~~Product~~ Our ~~categories~~Products

~~We provide services to architects, real estate developers, and~~ ~~government~~Product planners. We focus on commercial 3D digital vision manufacturers with the basis of 3D image technology, visual performance, visual packaging, film, television, film, games, industrial design, interactive program development, and the Internet. We offer those customers dozens of final products and services to meet the different needs of customers, mainly including two categories:

7 We provide services to architects, real estate developers, and government planners. We focus on commercial 3D digital vision manufacturers with the basis of 3D image technology, visual performance, visual packaging, film, television, film, games, industrial design, interactive program development, and the Internet. We offer those customers dozens of final products and services to meet the different needs of customers, mainly including two categories:

1. Digital video technical products: This service is handled by the company’s specific one to one group. This group will provide digital visual development and production based on the customers’ specific needs. It includes:7

·1. 3DDigital video technical products: This service is handled by the company’s specific one to one group. This group will provide digital ~~renderings~~visual development and production based on the customers’ specific needs. It includes:

o· ~~Perspective~~3D ~~and~~digital ~~aerial view planning for buildings and architecture o Building images and architecture vision~~renderings:

·o 3DPerspective ~~videos:~~and aerial view planning for buildings and architecture o Building images and architecture vision

o· ~~Real~~3D ~~estate development o City planning~~videos:

·o ~~Digital~~Real ~~virtual~~estate ~~interactive~~development ~~systems~~o City planning

o· ~~Interactive~~Digital ~~digital~~virtual ~~architecture~~interactive ~~o Interactive digital template room o Real estate self-sales system o Interior decoration self-fix system~~systems

~~Payment~~o ~~terms~~Interactive indigital ~~our~~architecture ~~customer~~o ~~contracts~~Interactive ~~generally~~digital ~~provide~~template ~~for a~~room ~~significant~~o ~~portion~~Real ofestate ~~the~~self-sales ~~payment~~system ~~due~~o ~~upon~~Interior ~~delivery~~decoration ofself-fix ~~a rough product and the balance due upon completion and approval of the product.~~system

2. Payment ~~Digital~~terms ~~visual~~in ~~hardware~~our ~~products:~~customer ~~This~~contracts ~~part~~generally isprovide ~~based~~for ona ~~the~~significant ~~customers’~~portion ~~need~~of in the ~~first~~payment ~~part~~due toupon ~~create~~delivery of a ~~customized~~rough ~~hardware~~product ~~project.~~and ~~The~~the ~~Company’s~~balance ~~service~~due ~~includes~~upon ~~purchase,~~completion ~~installment, adjustment, after-sale system~~ and ~~other~~approval ~~highly~~of ~~effective~~the ~~and standard services~~product. ~~It includes:~~

·2. Digital ~~sand table~~ visual ~~display~~hardware ~~system~~products: ·This ~~Digital~~part ~~audio~~is ~~optical~~based ~~property~~on regional sand table display system · Digital audio optical planning sand table display system · 0 to 360 degree multi projector stitching theater · Real estate projections in three 150 degree stitching theater · Real estate projections in four 180 degree stitching theater · Real estate projects in the ~~five~~customers’ ~~210~~need ~~degree stitching theater · Real estate projects~~ in the ~~five~~first ~~210~~part ~~degree~~to ~~stitching~~create ~~theater~~a ·customized ~~Real~~hardware ~~estate~~project. ~~projects~~The inCompany’s ~~the~~service ~~six~~includes ~~270~~purchase, ~~degree~~installment, ~~stitching~~adjustment, ~~theater~~after-sale ·system ~~Real~~and ~~estate~~other ~~projects~~highly ineffective ~~the~~and ~~eight~~standard ~~360~~services. ~~degree~~It ~~stitching theater · Digital audio optical comprehensive exhibition hall~~includes:

o· ~~The~~Digital ~~government’s~~sand table visual display system: · Digital audio optical ~~comprehensive~~property ~~exhibition~~regional ~~hall~~sand otable display system · Digital audio optical planning sand table display system · 0 to 360 degree multi projector stitching theater · Real estate projections in three 150 degree stitching theater · Real estate projections in four 180 degree stitching theater · Real estate projects in the five 210 degree stitching theater · Real estate projects in the six 270 degree stitching theater · Real estate projects in the eight 360 degree stitching theater · Digital audio optical comprehensive exhibition hall

~~Payment~~o ~~terms~~The ingovernment’s ~~our~~audio ~~customer~~optical ~~contracts~~comprehensive ~~generally~~exhibition ~~provide~~hall ~~for a~~o ~~significant~~Real ~~portion~~estate ofexhibition ~~the payment due upon delivery of the hardware to the customer’s site and the balance due upon installation.~~hall

~~Revenue~~ Payment ~~Breakdown~~terms byin ~~Product~~our customer contracts generally provide for a significant portion of the payment due upon delivery of the hardware to the customer’s site and the balance due upon installation.

By product categories	2012			2011
Digital video technical products		78	%		76	%
Digital visual hardware products		22	%		24	%
Total		100	%		100	%

Revenue Breakdown by Product

By product categories	2013			2012
Digital video technical products		69	%		78	%
Digital visual hardware products		31	%		22	%
Total		100	%		100	%

~~Supplier relationships~~8

~~We outsource our hardware product needs to fulfill the customer~~ ~~project~~Supplier ~~orders to reduce our overhead cost and seek the highest quality hardware components. The major categories include projectors, screens, display tables, audio devices, etc.~~relationships

~~Our~~ We outsource our hardware product needs to fulfill the customer project orders to reduce our overhead cost and seek the highest quality hardware components. The major ~~suppliers~~categories ~~are~~include asprojectors, ~~following:~~screens, display tables, audio devices, etc.

· Our ~~Guangzhou~~major ~~Fengying~~suppliers ~~Electronic~~are ~~Technology~~as ~~Co., Ltd. · Shenzhen Kanghuajia Trade Co., Ltd. · Qingdao Daqi Information Engineering Co., Ltd. · Shenzhen Wanghuasheng Trade Co., Ltd. · Shenzhen Weite Technology Co., Ltd.~~following:

~~One~~· ofGuangzhou ~~our~~Fengying ~~suppliers~~Electronic ~~accounted~~Technology ~~for more than 10% of our total supplier cost for the year ending September 30~~Co., ~~2012,~~Ltd. ~~compared~~· toShenzhen ~~three~~SEG ofElectronics ~~our~~Market ~~suppliers~~Taidaying ~~accounted~~Computer ~~for~~Business ~~more~~· ~~than~~Shenzhen ~~10%~~Xingchangrui ofTechnology ~~our total supplier cost for the year ending September 30~~Co., ~~2011~~Ltd. We· doQingdao ~~not~~Daqi ~~enter~~Information ~~into~~Engineering ~~long-term contracts with our suppliers~~Co., ~~We maintain good relationships with them and select the most appropriate suppliers according to the specific needs for every customer order~~Ltd. ~~We usually receive 30 day credit terms from our suppliers~~. ~~For~~· ~~the~~Shenzhen ~~fiscal~~Sanming ~~years~~Technology ~~ending September 30, 2012 and September 30, 2011, our hardware cost accounted for approximately 24~~Co.~~2% and~~, 27Ltd.~~7%respectively, of our total cost of goods sold.~~

~~Sales~~ Two ~~Channels~~of our suppliers accounted for more than 10% of our total supplier cost for the year ending September 30, 2013, compared to one of our suppliers accounted for more than 10% of our total supplier cost for the year ending September 30, 2012. We do not enter into long-term contracts with our suppliers. We maintain good relationships with them and ~~Pricing~~select the most appropriate suppliers according to the specific needs for every customer order. We usually receive 30 day credit terms from our suppliers. For the fiscal years ending September 30, 2013 and September 30, 2012, our hardware cost accounted for approximately 52% and 24%, respectively, of our total cost of goods sold.

~~Currently,~~ Sales weChannels ~~mainly~~and ~~rely on three sales channels:~~Pricing

· Currently, ~~Existing~~we ~~customer~~mainly ~~retention:~~rely Weon ~~successfully~~three ~~retain~~sales ~~most of our customers through our continued pursuit of product and service quality and efficiency. · Networking activities from exhibition events and product presentation fairs~~channels: We take every advantage to leverage our customer and industry relationships to connect to potential new customers and partners. · Market development through telemarketing and branch offices: We are expanding into all domestic provinces in China and plan to enter key international markets in the near future.

~~All~~· ofExisting ~~the~~customer ~~above~~retention: ~~sales~~We ~~channels~~successfully ~~have~~retain ~~been~~most aof ~~great~~our ~~success~~customers ~~in the~~through ~~past~~our ~~years~~continued pursuit of product and weservice ~~will~~quality ~~continue~~and toefficiency. ~~focus~~· onNetworking ~~all~~activities offrom ~~the~~exhibition ~~above~~events ~~efforts.~~and Inproduct ~~addition,~~presentation wefairs: ~~believe~~We ~~that~~take inevery ~~this~~advantage ~~industry~~to ~~with~~leverage ~~vast market~~our ~~opportunity~~customer and ~~applications,~~industry werelationships ~~won’t~~to ~~hesitate~~connect to ~~explore~~potential ~~every possible~~ new ~~sales~~customers ~~channel~~and ~~including~~partners. ~~online~~· ~~customized ordering,~~Market ~~mainstream~~development ~~media~~through telemarketing and ~~transportation~~branch ~~hubs~~offices: ~~advertising~~We orare expanding into all ~~other~~domestic ~~industry~~provinces ~~sales~~in ~~opportunities~~China and plan to enter key international markets in the near future.

~~For~~ All of the ~~fiscal~~above ~~year~~sales ~~ending~~channels ~~September~~have ~~30,~~been ~~2012,~~a ~~one~~great ofsuccess ~~our~~in ~~customers accounted~~the ~~for~~past ~~more~~years ~~than~~and ~~10%~~we ofwill ~~our~~continue ~~total~~to ~~revenue,~~focus ~~compared~~on toall ~~fiscal~~of ~~year~~the ~~ending~~above ~~September~~efforts. ~~30,~~In ~~2011~~addition, ~~none~~we ofbelieve ~~our~~that ~~customers~~in ~~accounted for~~this ~~more~~industry ~~than~~with ~~10%~~vast ofmarket ~~our~~opportunity ~~total~~and ~~revenue~~applications, ~~while~~we ~~the~~won’t ~~largest~~hesitate ~~five~~to ~~customers~~explore ~~accounted~~every ~~for~~possible ~~31.25%~~new ~~and 9.6%of our total~~ sales ~~for~~channel ~~the years~~including ~~ended~~online ~~September~~customized 30ordering, ~~2012~~mainstream media and ~~2011,~~transportation ~~respectively,~~hubs ~~indicating~~advertising aor ~~significant~~all ~~development~~other onindustry ansales ~~extensive client base~~opportunities.

~~Our~~ For ~~major~~the fiscal year ending September 30, 2013, one of our customers ~~include:~~accounted for more than 10% of our total revenue, compared to fiscal year ending September 30, 2012, one of our customers accounted for more than 10% of our total revenue, while the largest five customers accounted for 37% and 31%of our total sales for the years ended September 30, 2013 and 2012, respectively, indicating a significant development on an extensive client base.

~~· Beijing Beiao Grand Ceremony International Culture development Co., Ltd. · Hisense Electric Co., Ltd.~~9

· Our ~~Shiyan~~major ~~Dayang~~customers ~~Wuzhou Real Estate Development Co., Ltd · Wenzhou Greenbelt Real Estate Development Co., Ltd. · Shenzhen Zhongzhou Baocheng Properties Ltd~~include:

We· ~~typically~~Yida(Fujian) ~~fulfill~~Tourism ~~our~~GroupCo., ~~customer~~Ltd. ~~orders~~· ~~within~~Guizhou 30Colorful ~~days~~Vientiane ~~for both~~Tourism ~~our~~City ~~digital~~Development ~~technical~~Properties ~~products and hardware projects~~Co., ~~which~~Ltd we· ~~believe~~JiangyinHailan isInvestment ~~30%~~Holdings ~~more~~Limited ~~efficient~~· ~~than~~ShiyanDayangWuzhou ~~typical~~Real ~~industry~~Estate ~~peers~~Development Co. We, ~~intend~~Ltd to· ~~keep~~Shenzhen ~~the~~Shenfang ~~pricing~~Group ofLonggang ~~our~~Development ~~products at a very competitive level in the foreseeable future~~Co., Ltd

9 We typically fulfill our customer orders within 30 days for both our digital technical products and hardware projects, which we believe is 30% more efficient than typical industry peers. We intend to keep the pricing of our products at a very competitive level in the foreseeable future.

~~Intellectual Property Rights~~10

~~We are recognized as a software company by Economic Trade and~~ ~~Information~~Intellectual ~~Technology~~Property Commission of Shenzhen, China. We own six computer software copyrights currently We are developing and applying for our multi-channel projection splicing system technology and dimensional sense image offset pixel value obtain technology We protect our intellectual property primarily by maintaining strict control over the use of production processes. All our employees, including key employees and engineers, have signed our standard form of labor contracts, pursuant to which they are obligated to hold in confidence any of our trade secrets, know-how or other confidential information and not to compete with us. In addition, for each project, only the personnel associated with the project have access to the related intellectual property. Access to proprietary data is limited to authorized personnel to prevent unintended disclosure or otherwise using our intellectual property without proper authorization. We will continue to take steps to protect our intellectual property.Rights

~~Our~~ We ~~Advertising~~are recognized as a software company by Economic Trade and ~~Marketing~~Information ~~Efforts~~Technology Commission of Shenzhen, China. We own six computer software copyrights currently. We are developing and applying for our multi-channel projection splicing system technology and dimensional sense image offset pixel value obtain technology. We protect our intellectual property primarily by maintaining strict control over the use of production processes. All our employees, including key employees and engineers, have signed our standard form of labor contracts, pursuant to which they are obligated to hold in confidence any of our trade secrets, know-how or other confidential information and not to compete with us. In addition, for each project, only the personnel associated with the project have access to the related intellectual property. Access to proprietary data is limited to authorized personnel to prevent unintended disclosure or otherwise using our intellectual property without proper authorization. We will continue to take steps to protect our intellectual property.

Our ~~sales~~Advertising and ~~marketing~~Marketing department is responsible for the organization of branch office sales activities, industry exhibitions, potential customer networking etc. We are investing heavily on marketing and sales efforts, as well as striving for excellent customer services to keep our current level of high customer retention ratio. Our marketing efforts mainly include:Efforts

· Our ~~All~~sales ~~the~~and marketing ~~teams~~department ~~respond~~is ~~directly~~responsible tofor the ~~marketing~~organization ~~director~~of ~~and~~branch ~~the~~office ~~marketing~~sales ~~director~~activities, ~~reports~~industry toexhibitions, ~~the~~potential ~~general~~customer ~~manager~~networking etc. We ~~attempt~~are toinvesting ~~balance~~heavily ~~the~~on marketing ~~teams’~~and ~~workload~~sales inefforts, ~~order~~as towell ~~strengthen~~as ~~the~~striving ~~marketing~~for ~~teams’~~excellent ~~spirit~~customer ~~and~~services to ~~improve~~keep ~~the~~our ~~quality~~current level of ~~marketing~~high ~~staff.~~customer Weretention ~~actively respond to market fluctuations~~ratio. Our ~~For the~~ marketing ~~problems,~~efforts ~~our~~mainly ~~goal is to resolve the issue on the same day.~~include:

· All the marketing teams respond directly to the marketing director and the marketing director reports to the general manager. We attempt to balance the marketing teams’ workload in order to strengthen the marketing teams’ spirit and to improve the quality of marketing staff. We actively respond to market fluctuations. For the marketing problems, our goal is to resolve the issue on the same day. · We report marketing activity daily, weekly, monthly, and in our quarterly report system. Also, we analyze the data and attempt to correct our system for the rise and fall of sales and timely hold daily, weekly, monthly and quarterly meetings to adjust marketing objectives and measures. · We focus on after-sales service strategy implementation. Our image is not only deeply rooted in the minds of real estate industry participants, but also expanded into other commercial industries where we establish ourselves as customer responsive. Therefore, when using this strategy, we carefully determine the service, service content and service targets, and respond according to the industry trend our after-sales service strategy timely. · We have implemented an incentive plan for our sales team. We provide commissions, bonus, car and other incentives to our marketing staff. In addition to material rewards, we also pay attention to the families of our marketing staff, who usually spend a lot of time away from home on business travel.

· We focus on after-sales service strategy implementation. Our image is not only deeply rooted in the minds of real estate industry participants, but also expanded into other commercial industries where we establish ourselves as customer responsive. Therefore, when using this strategy, we carefully determine the service, service content and service targets, and respond according to the industry trend our after-sales service strategy timely. Competition

· The We3D ~~have~~digital ~~implemented~~technology anindustry ~~incentive~~is ~~plan~~still ~~for~~very ~~our~~fragmented ~~sales~~but ~~team~~competitive. WeOur ~~provide~~competitors ~~commissions,~~are ~~bonus,~~a ~~car~~number ~~and~~of ~~other~~international ~~incentives~~and todomestic ~~our~~enterprises ~~marketing~~that ~~staff.~~offer Insimilar ~~addition~~products toand ~~material~~services. ~~rewards,~~During 2013 we ~~also~~have ~~pay~~faced ~~attention~~strong tocompetition ~~the~~from ~~families~~domestic ofsmall ~~our~~companies ~~marketing~~with ~~staff,~~lower ~~who~~operating ~~usually spend a lot of time away from home on business travel~~costs.

~~Competition~~ Research and Development Team

~~The~~ All 3Dof ~~digital~~our ~~technology~~R&D ~~industry~~and isproduction ~~still~~staff ~~very fragmented but competitive. Our competitors~~ are ainvolved ~~number~~in ofour ~~international~~new ~~and~~product ~~domestic~~research ~~enterprises that offer similar products~~ and ~~services~~development. ~~Despite~~ ~~the~~After ~~competition~~each project, ~~our~~we ~~ability~~produce toa ~~integrate~~summary ~~technology,~~for ~~high~~what ~~efficiency,~~we ~~competitive~~learned ~~pricing~~ and ~~first~~what ~~–tier~~we ~~product quality~~can ~~have~~improve ~~enabled~~for usgoing toforward. Generally bespeaking, ~~one~~we ofbelieve ~~the~~a ~~market~~new ~~leaders.~~product Weusually ~~are~~has ~~especially~~a ~~proud~~two-year intime ~~our~~period ~~service~~during ~~efficiency~~ which weit ~~believe~~ is ~~normally~~ ~~30%~~able ~~faster,~~to inmaintain ~~terms~~a ofhigh ~~turnaround~~profit ~~time~~margin, ~~than~~as ~~our~~new ~~competitors~~products are continuously introduced. In ~~the~~We ~~meantime,~~improve weour ~~are~~product ~~expanding rapidly~~and inproject ~~real~~procedures ~~estate~~periodically ~~and~~to ~~government~~retain ~~sectors~~our incustomers ~~the~~for ~~PRC~~longer-term ~~market,~~business relationships as well as ~~actively~~to ~~exploring~~attract new ~~industry sectors~~customers. ~~We believe that we are highly competitive in all these areas.~~

~~Research and Development Team~~11

~~All of our R&D and production staff are involved in our~~ new product research and development. After each project, we produce a summary for what we learned and what we can improve for going forward. Generally speaking, we believe a new product usually has a two-year time period during which it is able to maintain a high profit margin, as new products are continuously introduced. We improve our product and project procedures periodically to retain our customers for longer-term business relationships as well as to attract new customers.Regulation

10 Because our principal operating subsidiary, Shenzhen Digital Image Technology Co., Ltd., is located in the PRC, our business is regulated by the national and local laws of the PRC. We believe our conduct of business complies with existing PRC laws, rules and regulations.

General Regulation of Businesses

~~Because~~ We ~~our~~believe ~~principal~~we ~~operating~~are ~~subsidiary,~~in ~~Shenzhen~~material ~~Digital Image~~compliance ~~Technology~~with ~~Co.,~~all ~~Ltd.,~~applicable islabor ~~located~~and safety laws and regulations in the PRC, ~~our~~including ~~business~~the isPRC ~~regulated~~Labor byContract Law, the ~~national~~PRC ~~and~~Production ~~local~~Safety ~~laws~~Law, ofthe PRC Regulation for Insurance for Labor Injury, the PRC. WeUnemployment ~~believe our~~Insurance ~~conduct~~Law, the PRC Provisional Insurance Measures for Maternity of ~~business~~Employees, ~~complies~~PRC ~~with~~Interim ~~existing~~Provisions on Registration of Social Insurance, PRC ~~laws~~Interim Regulation on the Collection and Payment of Social Insurance Premiums and other related regulations, rules and ~~regulations~~provisions issued by the relevant governmental authorities from time to time, for our operations in the PRC.

~~General~~ According ~~Regulation~~to the PRC Labor Contract Law, we are required to enter into labor contracts with our employees. We are required to pay no less than local minimum wages to our employees. We are also required to provide employees with labor safety and sanitation conditions meeting PRC government laws and regulations and carry out regular health examinations of ~~Businesses~~our employees engaged in hazardous occupations.

~~We believe we are in material compliance with all applicable~~ ~~labor~~Foreign ~~and~~Currency safety laws and regulations in the PRC, including the PRC Labor Contract Law, the PRC Production Safety Law, the PRC Regulation for Insurance for Labor Injury, the PRC Unemployment Insurance Law, the PRC Provisional Insurance Measures for Maternity of Employees, PRC Interim Provisions on Registration of Social Insurance, PRC Interim Regulation on the Collection and Payment of Social Insurance Premiums and other related regulations, rules and provisions issued by the relevant governmental authorities from time to time, for our operations in the PRC.Exchange

~~According~~ The toprincipal regulation governing foreign currency exchange in China is the ~~PRC~~Foreign ~~Labor~~Currency ~~Contract~~Administration ~~Law~~Rules (1996), weas ~~are~~amended ~~required~~(2008). ~~to enter~~Under ~~into~~these ~~labor~~Rules, ~~contracts~~RMB ~~with~~is ~~our~~freely ~~employees.~~convertible Wefor ~~are~~current ~~required~~account toitems, ~~pay~~such noas ~~less~~trade ~~than~~and ~~local~~service-related ~~minimum~~foreign ~~wages~~exchange totransactions, ~~our~~but ~~employees.~~not Wefor ~~are also~~capital ~~required~~account toitems, ~~provide~~such ~~employees~~as ~~with~~direct ~~labor~~investment, ~~safety~~loan ~~and~~or ~~sanitation~~investment ~~conditions~~in ~~meeting~~securities ~~PRC~~outside ~~government~~China ~~laws~~unless ~~and~~the ~~regulations~~prior approval of, and ~~carry~~/or ~~out~~registration ~~regular~~with, ~~health~~the ~~examinations~~State Administration of ~~our~~Foreign ~~employees~~Exchange ~~engaged~~of inthe ~~hazardous~~People’s ~~occupations~~Republic of China, or SAFE, or its local counterparts (as the case may be) is obtained.

Pursuant to the Foreign Currency ~~Exchange~~Administration Rules, foreign invested enterprises, or FIEs, in China may purchase foreign currency without the approval of SAFE for trade and service-related foreign exchange transactions by providing commercial documents evidencing these transactions. They may also retain foreign exchange (subject to a cap approved by SAFE) to satisfy foreign exchange liabilities or to pay dividends. In addition, if a foreign company acquires a company in China, the acquired company will also become an FIE. However, the relevant PRC government authorities may limit or eliminate the ability of FIEs to purchase and retain foreign currencies in the future. In addition, foreign exchange transactions for direct investment, loan and investment in securities outside China are still subject to limitations and require approvals from, and/or registration with, SAFE.

~~The principal regulation governing foreign currency exchange~~ inRegulation China is the Foreign Currency Administration Rules (1996), as amended (2008). Under these Rules, RMB is freely convertible for current account items, such as trade and service-related foreign exchange transactions, but not for capital account items, such as direct investment, loan or investment in securities outside China unless the prior approval of, ~~and/or~~Income ~~registration with, the State Administration of Foreign Exchange of the People’s Republic of China, or SAFE, or its local counterparts (as the case may be) is obtained.~~Taxes

~~Pursuant~~ On toMarch ~~the~~16, ~~Foreign Currency Administration Rules~~2007, ~~foreign invested~~the ~~enterprises,~~National orPeople’s ~~FIEs,~~Congress inof China ~~may~~passed ~~purchase foreign currency without~~ the ~~approval~~Enterprise ofIncome ~~SAFE~~Tax ~~for~~Law, trade and service-related foreign exchange transactions by providing commercial documents evidencing these transactions. They may also retain foreign exchange (subject to a cap approved by SAFE) to satisfy foreign exchange liabilities or tothe ~~pay~~EIT ~~dividends. In addition~~Law, ifand aits ~~foreign~~implementing ~~company acquires a company in China~~rules, ~~the~~both ~~acquired~~of ~~company~~which ~~will~~became ~~also~~effective ~~become~~on anJanuary ~~FIE. However~~1, ~~the~~2008. ~~relevant~~The ~~PRC~~EIT ~~government~~Law ~~authorities may limit or eliminate the ability of FIEs to purchase~~ and ~~retain~~its ~~foreign~~implementing ~~currencies~~rules inimpose ~~the~~a ~~future.~~unified InEIT ~~addition,~~rate ~~foreign~~of ~~exchange~~25% ~~transactions for~~on ~~direct~~all ~~investment,~~domestic-invested ~~loan~~enterprises and ~~investment~~FIEs, inunless ~~securities~~they ~~outside~~qualify ~~China~~under ~~are~~certain ~~still~~limited ~~subject to limitations and require approvals from, and/or registration with, SAFE~~exceptions.

~~Regulation~~ Under the EIT Law, companies designated as High- and New-Technology Enterprises may enjoy a reduced national EIT rate of ~~Income~~15%. ~~Taxes~~The Administrative Measures for Assessment of High-New Tech Enterprises and Catalogue of High/New Tech Domains Strongly Supported by the State (2008), jointly issued by the Ministry of Science and Technology and the Ministry of Finance and State Administration of Taxation set forth general guidelines regarding criteria as well as application procedures for qualification as a High- and New-Tech Enterprise under the EIT Law.

On March 16, 2007, the National People’s Congress of China passed the Enterprise Income Tax Law, or the EIT Law, and its implementing rules, both of which became effective on January 1, 2008. The EIT Law and its implementing rules impose a unified EIT rate of 25.0% on all domestic-invested enterprises and FIEs, unless they qualify under certain limited exceptions.12

~~Under~~ In addition to the changes to the current tax structure, under the EIT Law, ~~companies~~an ~~designated~~enterprise asestablished ~~High-~~outside ~~and~~of ~~New-Technology Enterprises~~China ~~may~~with ~~enjoy~~“de facto management bodies” within China is considered a ~~reduced~~resident ~~national~~enterprise ~~EIT~~and ~~rate~~will normally be subject to an EIT of 1525% on its global income. The ~~Administrative~~implementing ~~Measures~~rules ~~for~~define ~~Assessment~~the ofterm ~~High-New~~“de ~~Tech~~facto ~~Enterprises and~~management ~~Catalogue~~bodies” ofas ~~High/New~~“an ~~Tech~~establishment ~~Domains~~that ~~Strongly~~exercises, ~~Supported~~in bysubstance, overall management and control over the ~~State~~production, ~~(2008)~~business, ~~jointly~~personnel, ~~issued~~accounting, byetc., of a Chinese enterprise.” If the ~~Ministry~~PRC oftax ~~Science~~authorities ~~and~~subsequently ~~Technology and~~determine ~~the~~that ~~Ministry~~we ofshould ~~Finance~~be ~~and~~classified ~~State~~as ~~Administration~~a resident enterprise, then our organization’s global income will be subject to PRC income tax of ~~Taxation~~25%. ~~set~~For ~~forth~~detailed ~~general~~discussion ~~guidelines~~of ~~regarding~~PRC ~~criteria~~tax asissues ~~well~~related asto ~~application procedures~~resident ~~for~~enterprise ~~qualification~~status, assee a“Risk ~~High-~~Factors ~~and~~– ~~New-Tech~~Risks ~~Enterprise~~Related ~~under~~to Our Business – Under the EIT Law, we may be classified as a ‘resident enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.”

11 Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income and non-tax deductible expenses incurred. Our management carefully monitors these legal developments and will timely adjust our effective income tax rate when necessary.

~~In addition to the changes to the current tax structure, under~~ ~~the~~Dividend EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” If the PRC tax authorities subsequently determine that we should be classified as a resident enterprise, then our organization’s global income will be subject to PRC income tax of 25%. For detailed discussion of PRC tax issues related to resident enterprise status, see “Risk Factors – Risks Related to Our Business – Under the EIT Law, we may be classified as a ‘resident enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.”Distribution

~~Our~~ Under ~~future~~applicable ~~effective~~PRC ~~income~~regulations, ~~tax~~FIEs ~~rate~~in ~~depends~~China onmay ~~various~~pay ~~factors~~dividends only out of their accumulated profits, ~~such~~ asif ~~tax~~any, ~~legislation~~determined in accordance with PRC accounting standards and regulations. In addition, ~~the~~an ~~geographic~~FIE ~~composition~~in China is required to set aside at least 10% of ~~our~~its ~~pre~~after-tax ~~income~~profit ~~and~~based ~~non-tax~~on ~~deductible~~PRC ~~expenses~~accounting ~~incurred~~standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registered capital. ~~Our~~These ~~management carefully~~reserves ~~monitors~~are ~~these~~not ~~legal~~distributable ~~developments~~as ~~and~~cash ~~will~~dividends. ~~timely~~The ~~adjust~~board ~~our~~of ~~effective~~directors ~~income~~of a FIE has the discretion to allocate a portion of its after-tax ~~rate~~profits ~~when~~to ~~necessary~~staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.

~~Dividend~~ The ~~Distribution~~EIT Law and its implementing rules generally provide that a 10% withholding tax applies to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes unless the jurisdiction of incorporation of such enterprises’ shareholder has a tax treaty with China that provides for a different withholding arrangement. Shenzhen Digital Image Technologies Co., Ltd is considered a FIE and is directly held by our subsidiary in Hong Kong, China Digital. According to a 2006 tax treaty between the Mainland and Hong Kong, dividends payable by an FIE in China to the company in Hong Kong who directly holds at least 25% of the equity interests in the FIE will be subject to a no more than 5% withholding tax. We expect that such 5% withholding tax will apply to dividends paid to China Digital by Shenzhen Digital Image Technologies Co., Ltd, but this treatment will depend on our status as a non-resident enterprise.

~~Under applicable PRC regulations, FIEs in China may pay dividends~~ ~~only~~Environmental out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, a FIE in China is required to set aside at least 10.0% of its after-tax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50.0% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Matters

~~The EIT Law and its implementing rules generally provide that~~ aOur ~~10%~~operations ~~withholding~~are ~~tax~~not applies to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes unless the jurisdiction of incorporation of such enterprises’ shareholder has a tax treaty with China that provides for a different withholding arrangement. Shenzhen Digital Image Technologies Co., Ltd is considered a FIE and is directly held by our subsidiary in Hong Kong, China Digital. According to a 2006 tax treaty between the Mainland and Hong Kong, dividends payable by an FIE in China to the company in Hong Kong who directly holds at least 25% of the equity interests in the FIE will be subject to ~~a no more than 5% withholding tax. We expect that such 5% withholding tax will apply~~ to ~~dividends~~any ~~paid~~environmental ~~to China Digital by Shenzhen Digital Image Technologies Co~~regulations.~~, Ltd, but this treatment will depend on our status as a non-resident enterprise.~~

~~Environmental Matters~~ Insurance

Insurance companies in China offer limited business insurance products. While business interruption insurance is available to a limited extent in China, we have determined that the risks of interruption, cost of such insurance and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, we could face liability from the interruption of our business as summarized under “Risk Factors - Risks Related to Our ~~operations~~Business ~~are~~- We do not ~~subject~~carry tobusiness ~~any~~interruption ~~environmental~~insurance ~~regulations~~so we could incur unrecoverable losses if our business is interrupted.”

~~Insurance~~13

~~Insurance companies in China offer limited business insurance~~ products. While business interruption insurance is available to a limited extent in China, we have determined that the risks of interruption, cost of such insurance and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, we could face liability from the interruption of our business as summarized under “Risk Factors – Risks Related to Our Business – We do not carry business interruption insurance so we could incur unrecoverable losses if our business is interrupted.” Employees

12 The table below details the various departments and number of employees in each.

Employees

Senior Management		3
Finance		6
Human Resources and office		9
Research & Development		7
Production		47
Sales and Marketing		29
Operations		3
Total		104

~~The~~ We ~~table~~believe ~~below~~we ~~details~~are in material compliance with all applicable labor and safety laws and regulations in the ~~various~~PRC, ~~departments~~including the PRC Labor Contract Law, the PRC Unemployment Insurance Law, the PRC Provisional Insurance Measures for Maternity of Employees, PRC Interim Provisions on Registration of Social Insurance, PRC Interim Regulation on the Collection and ~~number~~Payment of ~~employees~~ Social Insurance Premiums and other related regulations, rules and provisions issued by the relevant governmental authorities for our operations in ~~each~~the PRC. According to the PRC Labor Contract Law, we are required to enter into labor contracts with our employees and to pay them no less than local minimum wage.

Senior Management		3
Finance		7
Human Resources and office		18
Research & Development		13
Production		54
Sales and Marketing		63
Operations		4
Total		162

Where You Can Find Us

We ~~believe~~presently wemaintain ~~are~~our inmailing ~~material~~address ~~compliance~~at ~~with~~Room ~~all applicable labor and safety laws and regulations in the PRC~~01B, ~~including the PRC Labor Contract Law~~02/F, ~~the~~Podium ~~PRC Unemployment Insurance Law~~Building, ~~the PRC~~Guodu ~~Provisional~~Golf ~~Insurance Measures for Maternity of Employees~~Garden, ~~PRC~~North ~~Interim Provisions on Registration~~ of ~~Social~~Xinsha ~~Insurance~~Road, ~~PRC Interim~~Futian ~~Regulation~~District, onShenzhen, ~~the~~518048, ~~Collection~~People’s ~~and~~Republic ~~Payment~~ of ~~Social Insurance Premiums and other related regulations, rules and provisions issued by the relevant governmental authorities for our operations in the PRC~~China. ~~According~~ toOur ~~the~~telephone ~~PRC~~number ~~Labor~~is ~~Contract Law, we are required to enter into labor contracts with our employees and to pay them no less than local minimum wage~~(86)-755-22211114.

~~Where~~ ITEM ~~You~~1A. RISK ~~Can Find Us~~FACTORS.

We An ~~presently~~investment ~~maintain~~in our ~~mailing~~common ~~address~~stock atinvolves ~~Room~~a ~~01B,~~high ~~02/F, Podium~~degree ~~Building~~of risk. You should carefully consider the risks described below, ~~Guodu~~together ~~Golf~~with ~~Garden~~all of the other information included in this report, ~~North~~before making an investment decision. If any of ~~Xinsha~~the ~~Road~~following risks actually occurs, ~~Futian~~our ~~District~~business, ~~Shenzhen~~financial condition or results of operations could suffer. In that case, ~~518048~~the trading price of our common stock could decline, ~~People’s~~and ~~Republic~~you may lose all or part of ~~China~~your investment. ~~Our~~ ~~telephone~~You ~~number~~should isread ~~(86)~~the section entitled “Forward Looking Statements” above for a discussion of what types of statements are forward-~~755-22211114~~looking statements, as well as the significance of such statements in the context of this report.

~~ITEM~~ RISKS ~~1A.RISK~~RELATED ~~FACTORS.~~TO OUR BUSINESS

~~An investment in our common stock involves a high degree~~ ofWe ~~risk.~~have You should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should read the section entitled “Forward Looking Statements” above for a ~~discussion~~short ofoperating ~~what types of statements are forward-looking statements, as well as the significance of such statements in the context of this report~~history.

~~RISKS~~ We ~~RELATED~~were TOfounded ~~OUR~~in ~~BUSINESS~~2006. We may not succeed in implementing our business plan successfully because of competition from domestic and foreign market entrants, failure of the market to accept our 3D products and services, or other reasons. Therefore, you should not place undue reliance on our past performance, including our revenue growth, as it may not be indicative of our future results.

We ~~have~~face arisks ~~short~~related ~~operating~~to ~~history~~general domestic and global economic conditions and to the current credit crisis.

We Our ~~were~~current ~~founded~~operating incash ~~2006. We~~flows ~~may~~provide ~~not~~us ~~succeed~~with instable ~~implementing our~~funding ~~business~~capacity. ~~plan~~However, ~~successfully~~the ~~because~~current ofuncertainty ~~competition~~arising ~~from~~out of domestic and ~~foreign~~global ~~market~~economic ~~entrants~~conditions, ~~failure~~including of the ~~market~~recent todisruption ~~accept our~~in 3Dcredit ~~products~~markets, ~~and~~poses ~~services,~~a orrisk ~~other~~to ~~reasons.~~the ~~Therefore~~PRC economy, ~~you~~and ~~should~~may ~~not~~impact ~~place~~our ~~undue~~ability ~~reliance~~to onmanage normal relationships with our ~~past~~customers, ~~performance~~suppliers and creditors. If the current situation deteriorates significantly, ~~including~~ our ~~revenue~~business ~~growth~~could be materially negatively impacted, as itdemand for our products and services may ~~not~~decrease befrom ~~indicative~~a ofslow-down ~~our~~in ~~future~~the ~~results~~real estate markets in the PRC, or supplier or customer disruptions may result from tighter credit markets.

We Our ~~face~~business ~~risks~~is ~~related~~subject to ~~general~~the ~~domestic~~health ~~and~~of ~~global~~the ~~economic conditions~~PRC real estate markets and toour growth may be inhibited by the ~~current~~inability ~~credit~~of ~~crisis~~potential customers to fund purchases of our products and services.

Our ~~current~~products ~~operating~~and ~~cash~~services ~~flows~~are ~~provide~~dependent uson ~~with stable funding capacity. However,~~ the ~~current~~continued ~~uncertainty~~growth ~~arising out~~ of ~~domestic and global economic conditions, including~~ the ~~recent~~real ~~disruption in~~estate ~~credit~~ markets, ~~poses~~in ~~a risk to~~ the PRC ~~economy, and may impact our ability to manage normal relationships with our customers, suppliers and creditors~~. There Ifis ~~the~~no ~~current~~guarantee ~~situation~~that ~~deteriorates significantly, our business could be materially negatively impacted, as demand for our products and services may decrease from a slow-down in~~ the PRC real estate markets inwill ~~the~~continue ~~PRC,~~to orgrow ~~supplier~~at orhistorical ~~customer disruptions may result from tighter credit markets~~rates.

~~Our business is subject to the health of the PRC real estate markets and our growth may be inhibited by the inability of potential customers to fund purchases of our products and services.~~14

~~Our~~ We ~~products~~rely ~~and~~on ~~services~~third ~~are~~party ~~dependent~~technologies onand ~~the~~if ~~continued~~we ~~growth of~~are ~~the~~unable ~~real~~to ~~estate~~use ~~markets~~or inintegrate ~~the~~these ~~PRC. There~~technologies, isour noproduct ~~guarantee~~and ~~that~~service ~~the~~development ~~PRC~~may ~~real~~be ~~estate~~delayed ~~markets~~and ~~will~~our ~~continue~~operating toresults ~~grow~~negatively ~~at historical rates~~impacted.

13 We rely on certain software and hardware that we acquire from third parties, including software that is used to perform key functions. These third-party software licenses and hardware may not continue to be available on commercially reasonable terms, and the software or hardware may not be appropriately supported, maintained or enhanced by the licensors or manufacturers. The loss of licenses or access to, or inability to support, maintain and enhance any such software or hardware could result in increased costs, or in delays or reductions in product shipments until equivalent products can be developed, identified, licensed and integrated, which would likely harm our business.

We In ~~rely~~order onto ~~third~~grow ~~party~~at ~~technologies~~the ~~and~~pace ifexpected by management, we will require additional capital to support our long-term growth strategies. If we are unable to ~~use~~obtain oradditional ~~integrate~~capital ~~these~~in ~~technologies~~future years, we may be unable to proceed with our ~~product~~plans and ~~service~~we ~~development~~ may be ~~delayed~~forced ~~and~~to curtail our ~~operating results negatively impacted~~operations.

We ~~rely~~will onrequire ~~certain~~additional ~~software~~working ~~and~~capital ~~hardware~~to ~~that~~support weour ~~acquire~~long-term ~~from third~~growth ~~parties~~strategies, ~~including~~which ~~software~~includes ~~that~~identifying issuitable ~~used~~points of market entry for expansion growing the number of points of sale for our products, so as to ~~perform~~enhance ~~key~~our ~~functions~~product offerings and benefit from economies of scale. ~~These~~Our ~~third-party~~working ~~software~~capital ~~licenses~~requirements and ~~hardware~~the cash flow provided by future operating activities, if any, may ~~not continue~~vary greatly from quarter to bequarter, ~~available~~depending on ~~commercially~~the ~~reasonable~~volume ~~terms,~~of ~~and~~business during the ~~software~~period. orWe ~~hardware~~ may not be ~~appropriately~~able ~~supported~~to obtain adequate levels of additional financing, ~~maintained or~~whether ~~enhanced~~through byequity ~~the~~financing, ~~licensors~~debt financing or ~~manufacturers~~other sources. ~~The~~Additional ~~loss~~financings ofcould ~~licenses~~result orin ~~access~~significant dilution to, our earnings per share or ~~inability~~the issuance of securities with rights superior to ~~support,~~our ~~maintain~~current ~~and~~outstanding ~~enhance any~~securities. ~~such~~In ~~software~~addition, orwe ~~hardware~~may ~~could~~grant ~~result~~registration inrights ~~increased~~to ~~costs,~~investors orpurchasing inour ~~delays~~equity or ~~reductions~~debt securities in ~~product~~the ~~shipments~~future. ~~until~~If ~~equivalent products~~we ~~can~~are beunable ~~developed~~to raise additional financing, ~~identified~~we may be unable to implement our long-term growth strategies, ~~licensed~~develop or enhance our products and ~~integrated~~services, ~~which~~take ~~would~~advantage ~~likely~~of ~~harm~~future ~~our~~opportunities ~~business~~or respond to competitive pressures on a timely basis.

~~In order to grow at the pace expected by management, we~~ ~~will require additional capital to support our long-term growth strategies.~~ If we are unable to ~~obtain~~attract ~~additional~~and ~~capital~~retain insenior ~~future years,~~management weand ~~may~~qualified betechnical ~~unable~~and tosales ~~proceed~~personnel, ~~with~~ our ~~plans~~operations, financial condition and weprospects ~~may~~will be ~~forced~~materially toadversely ~~curtail our operations~~affected.

We Our ~~will~~future ~~require~~success ~~additional~~depends ~~working~~in ~~capital~~part toon ~~support~~the ~~our~~contributions ~~long-term growth strategies, which includes identifying suitable points~~ of ~~market~~our ~~entry~~management ~~for~~team ~~expansion~~and ~~growing~~key ~~the~~technical ~~number~~and ofsales ~~points~~personnel ofand ~~sale for~~ our ~~products,~~ability ~~so as~~ to ~~enhance~~attract ~~our product offerings~~ and ~~benefit~~retain ~~from~~qualified ~~economies~~new ~~of scale~~personnel. In ~~Our~~particular, ~~working~~our ~~capital~~success ~~requirements and~~depends on the ~~cash~~continuing ~~flow~~employment ~~provided~~of byour ~~future operating activities~~Chairman, ifHua ~~any~~Zeng, ~~may~~our ~~vary~~Chief ~~greatly~~Executive ~~from~~Officer, ~~quarter~~Jing ~~to quarter~~Wang, ~~depending~~and onour ~~the~~Chief ~~volume of~~Financial ~~business~~Officer, ~~during~~Xiaohong ~~the period~~Peng. There Weis ~~may~~significant ~~not~~competition bein ~~able~~our toindustry ~~obtain~~for ~~adequate~~qualified ~~levels of additional financing~~managerial, ~~whether~~technical ~~through~~and ~~equity~~sales ~~financing, debt~~personnel ~~financing~~and orwe ~~other~~cannot ~~sources.~~assure ~~Additional~~you ~~financings~~that ~~could~~we ~~result~~will inbe ~~significant~~able ~~dilution~~ to retain our ~~earnings~~key ~~per~~senior ~~share~~managerial, ortechnical ~~the~~and ~~issuance of~~sales ~~securities~~personnel ~~with~~or ~~rights~~that ~~superior~~we towill ~~our~~be ~~current~~able ~~outstanding~~to ~~securities. In addition~~attract, weintegrate ~~may~~and ~~grant~~retain ~~registration~~other ~~rights~~such topersonnel ~~investors purchasing~~that ~~our~~we ~~equity~~may orrequire ~~debt securities~~ in the future. If we are unable to ~~raise~~attract ~~additional~~and ~~financing,~~retain wekey ~~may~~personnel bein ~~unable~~the tofuture, ~~implement~~ our ~~long-term~~business, ~~growth strategies~~operations, ~~develop~~financial ~~or enhance our products and services~~condition, ~~take~~results ~~advantage~~ of ~~future~~operations ~~opportunities~~and orprospects ~~respond to~~could ~~competitive~~be ~~pressures~~materially onadversely ~~a timely basis~~affected.

If We wedo ~~are~~not ~~unable~~carry tobusiness ~~attract~~interruption ~~and~~or ~~retain~~other ~~senior management and qualified technical and sales personnel~~insurance, ~~our~~so ~~operations,~~we ~~financial~~have ~~condition~~to ~~and~~bear ~~prospects~~losses ~~will be materially adversely affected~~ourselves.

~~Our~~ We ~~future~~are ~~success~~subject ~~depends~~to inrisk ~~part~~inherent onto ~~the~~our ~~contributions~~business, ofincluding ~~our management~~equipment ~~team~~failure, ~~and~~theft, ~~key~~natural ~~technical~~disasters, ~~and~~industrial ~~sales~~accidents, ~~personnel~~labor ~~and~~disturbances, ~~our~~business ~~ability~~interruptions, toproperty ~~attract~~damage, ~~and~~product ~~retain~~liability, ~~qualified~~personal ~~new~~injury ~~personnel~~and death. In ~~particular, our~~We ~~success~~do ~~depends~~not oncarry ~~the~~any ~~continuing~~business ~~employment~~interruption ofinsurance ~~our~~or ~~Chairman,~~third-party ~~Hua~~liability ~~Zeng,~~insurance ~~our~~or ~~Chief~~other ~~Executive~~insurance ~~Officer,~~to ~~Jing~~cover ~~Wang,~~risks ~~and~~associated with our ~~Chief Financial~~business. ~~Officer~~As a result, ~~Yongqing~~if ~~Ma. There~~we issuffer ~~significant~~losses, ~~competition~~damages inor ~~our~~liabilities, ~~industry~~including ~~for~~those ~~qualified~~caused ~~managerial,~~by ~~technical~~natural ~~and sales~~disasters ~~personnel~~or ~~and~~other weevents ~~cannot~~beyond ~~assure~~our ~~you~~control ~~that~~and we ~~will~~are beunable ~~able~~ to ~~retain~~make ~~our~~a ~~key~~claim ~~senior~~again ~~managerial,~~a ~~technical~~third ~~and~~party, ~~sales personnel or that~~ we will be ~~able~~required to ~~attract,~~bear ~~integrate~~all ~~and retain other~~ such ~~personnel~~losses ~~that~~from weour ~~may~~own ~~require~~funds, inwhich ~~the~~could ~~future.~~have Ifa wematerial ~~are~~adverse ~~unable to~~effect ~~attract~~on ~~and retain key personnel in the future,~~ our business, ~~operations,~~ financial condition, and results of operations ~~and prospects could be materially adversely affected~~.

We Our doquarterly ~~not~~operating ~~carry~~results ~~business~~are ~~interruption~~likely orto ~~other insurance~~fluctuate, so wewhich ~~have~~may toaffect ~~bear~~our ~~losses~~stock ~~ourselves~~price.

~~We are subject to risk inherent to our business, including equipment~~ ~~failure,~~Our ~~theft,~~quarterly ~~natural disasters~~revenues, ~~industrial accidents~~expenses, ~~labor~~operating ~~disturbances,~~results ~~business interruptions, property damage, product liability, personal injury~~ and ~~death.~~gross Weprofit domargins ~~not~~vary ~~carry~~from ~~any~~quarter ~~business interruption insurance or third-party liability insurance or other insurance~~ to ~~cover risks associated with our business~~quarter. As a result, ifour weoperating ~~suffer~~results ~~losses,~~may ~~damages~~fall orbelow ~~liabilities,~~the ~~including~~expectations ~~those~~of ~~caused~~securities ~~by natural~~analysts ~~disasters or other events beyond our control~~ and weinvestors ~~are~~in ~~unable~~some toquarters, ~~make~~which acould ~~claim~~result ~~again~~in a ~~third~~decrease ~~party,~~in wethe ~~will~~market beprice ~~required to~~of ~~bear all such losses from~~ our ~~own~~common ~~funds,~~stock. ~~which~~The ~~could~~reasons ~~have a material adverse effect on~~ our ~~business,~~quarterly ~~financial condition and~~ results ofmay ~~operations.~~fluctuate include:

~~Our quarterly operating results are likely to fluctuate, which may affect our stock price.~~15

~~Our~~· ~~quarterly~~variations ~~revenues,~~in ~~expenses,~~the ~~operating~~price ~~results~~of ~~and~~hardware ~~gross profit~~or ~~margins~~software ~~vary~~ from ~~quarter to quarter. As a result,~~ our ~~operating~~suppliers; ~~results~~· ~~may~~changes ~~fall~~in ~~below~~ the ~~expectations~~general ofcompetitive ~~securities analysts~~ and ~~investors~~economic inconditions; ~~some~~and ~~quarters,~~· ~~which~~delays ~~could result~~ in, aor ~~decrease~~uneven timing in the ~~market~~delivery ~~price~~ of, ~~our~~customer ~~common stock~~orders. ~~The reasons our quarterly results may fluctuate include:~~

14 Period to period comparisons of our results should not be relied on as indications of future performance.

· Our ~~variations~~limited inability to protect our intellectual property, and the ~~price~~possibility ofthat ~~hardware~~our ortechnology ~~software~~could ~~from~~inadvertently infringe technology owned by others, may adversely affect our ~~suppliers;~~ability to compete.

· We ~~changes~~rely inon a combination of trade secret laws and confidentiality procedures to protect the ~~general~~technological ~~competitive~~know-how that comprise much of our intellectual property. We protect our technological know-how pursuant to non-disclosure and ~~economic~~non-competition ~~conditions;~~provisions contained in our employment agreements, and agreements with them to keep confidential all information relating to our customers, methods, business and trade secrets during and after their employment with us. Our employees are also required to acknowledge and recognize that all inventions, trade secrets, works of authorship, developments and other processes made by them during their employment are our property.

· A ~~delays~~successful ~~in,~~challenge to the ownership of our intellectual property could materially damage our business prospects. Our competitors may assert that our technologies or ~~uneven~~products ~~timing~~infringe inon their patents or proprietary rights. We may be required to obtain from others licenses that may not be available on commercially reasonable terms, if at all. Problems with intellectual property rights could increase the ~~delivery~~cost of our products or delay or preclude our new product development and commercialization. If infringement claims against us are deemed valid, ~~customer~~we ~~orders~~may not be able to obtain appropriate licenses on acceptable terms or at all. Litigation could be costly and time-consuming but may be necessary to defend against infringement claims.

~~Period~~ We torely ~~period~~on ~~comparisons~~the approval certificates and business license held by Shenzhen Holding Company and any deterioration of the relationship between Shenzhen Holding Company and our ~~results~~Operating ~~should~~Sub ~~not~~could bematerially ~~relied on~~and asadversely ~~indications~~affect ofour ~~future~~business ~~performance~~operations.

~~Our~~ We ~~limited~~operate ~~ability~~our tobusiness ~~protect~~in ~~our~~China ~~intellectual~~on ~~property, and~~the basis of the ~~possibility~~approval ~~that~~certificates, ~~our~~business ~~technology~~license ~~could~~and ~~inadvertently~~other ~~infringe~~requisite ~~technology~~licenses ~~owned~~held by ~~others,~~Shenzhen ~~may~~Holding ~~adversely~~Company ~~affect~~and our ~~ability~~ other Operating Sub. There is no assurance that Shenzhen Holding Company and our Operating Sub will be able to ~~compete~~renew their licenses or certificates when their terms expire with substantially similar terms as the ones they currently hold.

~~We rely on a combination of trade secret laws and confidentiality~~ ~~procedures~~RISKS toRELATED ~~protect~~TO ~~the~~DOING ~~technological~~BUSINESS ~~know-how~~IN that comprise much of our intellectual property. We protect our technological know-how pursuant to non-disclosure and non-competition provisions contained in our employment agreements, and agreements with them to keep confidential all information relating to our customers, methods, business and trade secrets during and after their employment with us. Our employees are also required to acknowledge and recognize that all inventions, trade secrets, works of authorship, developments and other processes made by them during their employment are our property.CHINA

~~A successful challenge to the ownership of our intellectual~~ ~~property~~Changes ~~could~~in ~~materially~~China's ~~damage~~political ~~our business prospects. Our competitors may assert that our technologies~~ or ~~products~~economic ~~infringe on~~situation ~~their patents or proprietary rights. We may be required to obtain from others licenses that may not be available on commercially reasonable terms, if at all. Problems with intellectual property rights~~ could ~~increase~~harm ~~the cost of our products or delay or preclude our new product development and commercialization. If infringement claims against~~ us ~~are deemed valid, we may not be able to obtain appropriate licenses on acceptable terms or at all. Litigation could be costly~~ and ~~time-consuming~~our ~~but~~operating ~~may be necessary to defend against infringement claims~~results.

We Economic ~~rely~~reforms onadopted by the ~~approval~~Chinese ~~certificates~~government ~~and~~have ~~business~~had ~~license held~~a bypositive ~~Shenzhen~~effect ~~Holding~~on ~~Company~~the ~~and~~economic ~~any~~development ~~deterioration~~ of the ~~relationship~~country, ~~between~~but ~~Shenzhen~~the ~~Holding~~government ~~Company~~could ~~and~~change ~~our~~these ~~other~~economic ~~Operating Subs~~reforms or any of the legal systems at any time. This could ~~materially~~either ~~and~~benefit ~~adversely~~or ~~affect~~damage our ~~business~~ operations and profitability. Some of the things that could have this effect are:

We· ~~operate~~Level ~~our~~of ~~business~~government involvement in ~~China~~the oneconomy; ~~the~~· ~~basis~~Control of ~~the~~foreign ~~approval certificates,~~exchange; ~~business~~· ~~license~~Methods ~~and~~of ~~other~~allocating ~~requisite~~resources; ~~licenses~~· ~~held~~Balance byof ~~Shenzhen~~payments ~~Holding~~position; ~~Company~~· ~~and~~International ~~our~~trade ~~other~~restrictions; ~~Operating Subs. There is no assurance that Shenzhen Holding Company~~ and ~~our other Operating Subs will be able to renew their licenses or certificates when their terms expire with substantially similar terms as the ones they currently hold.~~

~~RISKS RELATED TO DOING BUSINESS IN CHINA~~16

~~Changes~~· inInternational ~~China's political or economic situation could harm us and our operating results~~conflict.

~~Economic~~ The ~~reforms~~Chinese ~~adopted~~economy bydiffers from the ~~Chinese~~economies ~~government~~of ~~have~~most ~~had a~~countries ~~positive~~belonging ~~effect~~to on the ~~economic~~Organization ~~development~~for ofEconomic ~~the~~Cooperation ~~country~~and Development, ~~but~~or ~~the~~OECD, ~~government~~in ~~could~~many ~~change~~ways. ~~these~~For ~~economic~~example, ~~reforms~~state-owned orenterprises ~~any~~still constitute a large portion of the ~~legal~~Chinese ~~systems~~economy atand ~~any~~weak ~~time.~~corporate ~~This~~governance ~~could~~and ~~either~~a ~~benefit~~lack orof ~~damage~~flexible ~~our~~currency ~~operations~~exchange ~~and~~policy ~~profitability~~still prevail in China. ~~Some~~As a result of these differences, we may not develop in the ~~things~~same ~~that~~way ~~could have~~or ~~this~~at ~~effect~~the ~~are:~~same rate as might be expected if the Chinese economy was similar to those of the OECD member countries.

· Uncertainties ~~Level~~with ofrespect ~~government~~to ~~involvement~~the inPRC legal system could limit the ~~economy;~~legal protections available to you and us.

· We ~~Control~~conduct substantially all of our business through our operating subsidiaries in the PRC. Our operating subsidiaries are subject to laws and regulations applicable to foreign ~~exchange;~~investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have limited precedential value. Since 1979, a series of new PRC laws and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. In addition, most of our executive officers and directors are residents of China and not of the United States, and substantially all the assets of these persons are located outside the United States. As a result, it could be difficult for investors to effect service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations and subsidiaries.

· You ~~Methods~~may ofhave ~~allocating~~difficulty ~~resources;~~enforcing judgments against us.

· We ~~Balance~~are a Nevada holding company, but China Digital is a Hong Kong company, and our operating subsidiaries are located in the PRC. Most of ~~payments~~our ~~position;~~assets are located outside the United States and most of our current operations are conducted in the PRC. In addition, most of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments predicated on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and the substantial majority of whose assets are located outside the United States. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts. The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. Courts in China may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other arrangements that provide for the reciprocal recognition and enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic principles of PRC law or national sovereignty, security or the public interest. So it is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States.

· The ~~International~~PRC ~~trade~~government ~~restrictions;~~exerts ~~and~~substantial influence over the manner in which we must conduct our business activities.

15 The PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

~~· International conflict.~~17

~~The~~ Accordingly, ~~Chinese~~government ~~economy~~actions ~~differs~~in ~~from~~ the ~~economies~~future, ofincluding ~~most~~any ~~countries belonging~~decision not to ~~the~~continue ~~Organization~~to ~~for~~support ~~Economic~~recent ~~Cooperation~~economic reforms and ~~Development,~~to orreturn ~~OECD,~~to ina ~~many~~more ~~ways.~~centrally ~~For~~planned ~~example,~~economy ~~state-owned~~or ~~enterprises still~~regional ~~constitute~~or alocal ~~large~~variations ~~portion~~in of the ~~Chinese~~implementation ~~economy~~of ~~and~~economic ~~weak~~policies, ~~corporate~~could ~~governance~~have ~~and~~ a ~~lack~~significant ofeffect ~~flexible~~on ~~currency~~economic ~~exchange policy~~conditions ~~still prevail~~ in China. Asor aparticular ~~result~~regions ofthereof ~~these~~and ~~differences,~~could werequire ~~may~~us ~~not~~to ~~develop~~divest inourselves ~~the~~of ~~same~~any ~~way~~interest orwe atthen ~~the~~hold ~~same~~in ~~rate as might be expected if the~~ Chinese ~~economy~~properties ~~was~~or ~~similar~~joint ~~to those of the OECD member countries~~ventures.

~~Uncertainties~~ Future ~~with~~inflation ~~respect~~in toChina ~~the~~may ~~PRC~~inhibit ~~legal~~our ~~system~~ability ~~could limit the legal protections available~~ to ~~you~~conduct ~~and~~business usin China.

~~We conduct substantially all of our business through our operating~~ ~~subsidiaries~~In inrecent years, the ~~PRC. Our~~Chinese ~~operating~~economy ~~subsidiaries~~has ~~are~~experienced ~~subject~~periods toof ~~laws~~rapid ~~and~~expansion ~~regulations applicable to foreign investments in China~~ and, inhighly ~~particular,~~fluctuating ~~laws~~rates ~~applicable~~of ~~to foreign-invested enterprises~~inflation. ~~The~~During ~~PRC~~the ~~legal~~past ~~system~~ten ~~is based on written statutes~~years, ~~and~~ ~~prior~~the ~~court~~rate ~~decisions~~of ~~may~~inflation bein ~~cited~~China ~~for~~has ~~reference~~been ~~but~~as ~~have~~high ~~limited~~as ~~precedential value~~5.97% ~~Since~~and ~~1979,~~as alow ~~series~~as of0.72%. ~~new~~These ~~PRC~~factors ~~laws and regulations~~ have ~~significantly~~led ~~enhanced~~to the ~~protections~~adoption ~~afforded~~by tothe ~~various~~Chinese ~~forms of foreign investments in China. However~~government, ~~since~~ ~~the~~from ~~PRC~~time ~~legal system continues~~ to ~~evolve rapidly~~time, ~~the interpretations~~ of ~~many~~various ~~laws,~~corrective ~~regulations~~measures ~~and~~designed ~~rules~~to ~~are~~restrict ~~not~~the ~~always uniform~~availability ~~and enforcement~~ of ~~these~~credit ~~laws,~~or ~~regulations~~regulate ~~and~~growth ~~rules involves uncertainties, which may limit legal protections available to you~~ and uscontain inflation. InHigh ~~addition,~~inflation ~~any litigation in China~~ may ~~be protracted and result~~ in ~~substantial~~the ~~costs~~future ~~and~~cause ~~diversion~~the ofChinese ~~resources and~~government ~~management~~to ~~attention.~~impose Incontrols ~~addition,~~on ~~most~~credit ~~of our executive officers~~ and/or ~~directors are residents of China and not of the United States~~prices, ~~and~~or ~~substantially~~to ~~all~~take ~~the~~other ~~assets of these persons are located outside the United States. As a result~~action, itwhich could ~~be difficult~~inhibit ~~for~~economic ~~investors~~activity ~~to effect service of process~~ in ~~the~~China, ~~United~~and ~~States~~thereby orharm ~~to enforce a judgment obtained in~~ the ~~United~~market ~~States against~~for our ~~Chinese~~products ~~operations~~ and ~~subsidiaries~~our company.

~~You~~ Restrictions on currency exchange may ~~have~~limit ~~difficulty~~our ~~enforcing~~ability ~~judgments~~to ~~against~~receive usand use our revenues effectively.

~~We are a Nevada holding company, but China Digital is a Hong~~ ~~Kong~~The ~~company,~~majority ~~and~~of our ~~operating~~revenues ~~subsidiaries~~will ~~are~~be ~~located~~settled in ~~the~~RMB ~~PRC. Most of our assets are located outside the United States~~ and ~~most of our current operations are conducted in the PRC~~U.S. ~~In addition~~dollars, ~~most of our directors~~ and ~~officers~~any ~~are~~future ~~nationals~~restrictions ~~and residents~~on ofcurrency ~~countries~~exchanges ~~other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it~~ may belimit ~~difficult~~our ~~for~~ability ~~you~~ to ~~effect~~use ~~service~~revenue ofgenerated ~~process~~in ~~within~~RMB ~~the~~to ~~United~~fund ~~States~~any ~~upon~~future ~~these~~business ~~persons. It~~activities ~~may~~outside ~~also~~China beor ~~difficult~~to ~~for~~make ~~you~~dividend toor ~~enforce~~other payments in U.S. ~~courts~~dollars. ~~judgments~~Although ~~predicated on~~ the ~~civil~~Chinese ~~liability~~government ~~provisions~~introduced ofregulations ~~the~~in ~~U.S.~~1996 ~~federal securities~~to ~~laws~~allow ~~against~~greater usconvertibility ~~and our officers and directors, most~~ of ~~whom are not residents in~~ the ~~United~~RMB ~~States~~for ~~and~~current ~~the~~account ~~substantial majority~~transactions, ofsignificant ~~whose~~restrictions ~~assets~~still ~~are~~remain, ~~located~~including ~~outside~~primarily the ~~United~~restriction ~~States.~~that Inforeign-invested ~~addition,~~enterprises ~~there~~may isonly ~~uncertainty~~buy, assell ~~to whether the courts of the PRC would recognize~~ or ~~enforce~~remit ~~judgments of U.S. courts. The recognition and enforcement of~~ foreign ~~judgments~~currencies ~~are~~after ~~provided~~providing ~~for under~~valid ~~the~~commercial ~~PRC~~documents, ~~Civil~~at ~~Procedures~~those ~~Law.~~banks ~~Courts~~ in China ~~may~~authorized ~~recognize~~to ~~and~~conduct ~~enforce~~ foreign ~~judgments~~exchange inbusiness. ~~accordance~~In ~~with~~addition, ~~the~~conversion ~~requirements~~ of ~~the~~RMB ~~PRC~~for ~~Civil~~capital ~~Procedures~~account ~~Law~~items, ~~based~~including ondirect ~~treaties~~investment ~~between China~~ and ~~the~~loans, ~~country where the judgment~~ is ~~made~~subject orto ongovernmental ~~reciprocity~~approval ~~between jurisdictions.~~in China, ~~does not have any treaties or other arrangements that provide for the reciprocal recognition~~ and ~~enforcement of~~companies ~~foreign~~are ~~judgments~~required ~~with the United States. In addition, according~~ to ~~the~~open ~~PRC~~and ~~Civil~~maintain ~~Procedures~~separate ~~Law, courts in the PRC will not enforce a~~ foreign ~~judgment~~exchange ~~against~~accounts usfor orcapital ~~our~~account ~~directors~~items. ~~and~~We ~~officers~~cannot ifbe ~~they~~certain ~~decide~~ that the ~~judgment~~Chinese ~~violates~~regulatory ~~basic~~authorities ~~principles of~~will ~~PRC~~not ~~law~~impose ormore ~~national~~stringent ~~sovereignty,~~restrictions ~~security~~on or the ~~public~~convertibility ~~interest.~~of ~~So it is uncertain whether a PRC court would enforce a judgment rendered by a court in~~ the ~~United States~~RMB.

~~The~~ Fluctuations ~~PRC~~in ~~government~~exchange ~~exerts~~rates ~~substantial~~could ~~influence~~adversely ~~over~~affect ~~the manner~~our inbusiness ~~which~~and wethe ~~must~~value ~~conduct~~of our ~~business activities~~securities.

The ~~PRC~~value ~~government~~of ~~has~~our ~~exercised~~common ~~and~~stock ~~continues~~will tobe ~~exercise~~indirectly ~~substantial control~~affected ~~over~~by ~~virtually~~the ~~every~~foreign ~~sector~~exchange ofrate ~~the~~between ~~Chinese~~U.S. ~~economy~~dollars ~~through~~and ~~regulation~~RMB and ~~state~~between ~~ownership.~~those ~~Our~~currencies ~~ability~~and toother ~~operate~~currencies in ~~China~~ which our sales may be ~~harmed~~denominated. byAppreciation ~~changes~~or depreciation in ~~its~~the ~~laws~~value ~~and~~of ~~regulations,~~the ~~including~~RMB ~~those~~relative ~~relating~~ to ~~taxation,~~the ~~import~~U.S. ~~and~~dollar ~~export~~would ~~tariffs,~~affect ~~environmental regulations,~~our ~~land~~financial ~~use~~results ~~rights,~~reported ~~property~~in ~~and other matters~~U.S. Wedollar ~~believe~~terms ~~that~~without ~~our~~giving ~~operations~~effect into ~~China~~any ~~are~~underlying change in ~~material~~our ~~compliance~~business ~~with all~~or ~~applicable~~results ~~legal~~of ~~and regulatory requirements~~operations. ~~However,~~Fluctuations in the ~~central~~exchange orrate ~~local~~will ~~governments~~also ofaffect the ~~jurisdictions~~relative invalue ~~which~~of weany ~~operate may~~dividend ~~impose~~we ~~new,~~issue ~~stricter~~that ~~regulations~~will orbe ~~interpretations~~exchanged ofinto ~~existing~~U.S. ~~regulations~~dollars ~~that~~as ~~would~~well ~~require~~as ~~additional~~earnings ~~expenditures~~from, and ~~efforts~~ onthe ~~our~~value ~~part~~of, toany ~~ensure~~U.S. ~~our~~dollar-denominated ~~compliance~~investments ~~with~~we ~~such~~make ~~regulations~~in orthe ~~interpretations~~future.

16 Since July 2005, the RMB is no longer pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

~~Accordingly,~~ Very ~~government~~limited ~~actions~~hedging transactions are available in ~~the~~China ~~future,~~to ~~including~~reduce ~~any decision~~our ~~not~~exposure to ~~continue~~exchange torate ~~support~~fluctuations. ~~recent~~To ~~economic~~date, ~~reforms~~we ~~and~~have tonot ~~return~~entered tointo aany ~~more~~hedging ~~centrally~~transactions. ~~planned~~While ~~economy~~we ormay ~~regional~~enter orinto ~~local variations~~hedging transactions in the ~~implementation~~future, the availability and effectiveness of ~~economic~~these ~~policies~~transactions may be limited, ~~could~~and ~~have~~we amay ~~significant~~not ~~effect~~be onable ~~economic~~to ~~conditions~~successfully inhedge ~~China~~our orexposure ~~particular regions~~at ~~thereof~~all. ~~and~~In ~~could~~addition, ~~require~~our usforeign tocurrency ~~divest~~exchange ~~ourselves~~losses ofmay ~~any~~be ~~interest~~magnified weby ~~then~~PRC ~~hold~~exchange incontrol ~~Chinese~~regulations ~~properties~~that orrestrict ~~joint~~our ~~ventures~~ability to convert RMB into foreign currencies.

~~Future~~ Restrictions ~~inflation~~under inPRC ~~China~~law ~~may~~on ~~inhibit~~our PRC subsidiaries’ ability to make dividends and other distributions could materially and adversely affect our ability to ~~conduct~~ grow, make investments or acquisitions that could benefit our business, inpay ~~China~~dividends to you, and otherwise fund and conduct our businesses.

In Substantially ~~recent~~all ~~years,~~of our revenues are earned by our operating subsidiaries in the ~~Chinese~~PRC. PRC ~~economy~~regulations ~~has~~restrict ~~experienced~~the ~~periods~~ ability of ~~rapid~~Shenzhen ~~expansion~~Holding Company to make dividends and ~~highly~~other ~~fluctuating~~payments ~~rates~~to ofits ~~inflation~~offshore parent company. PRC ~~During~~legal ~~the~~restrictions ~~past~~permit ~~ten~~payments ~~years,~~of ~~the~~dividends ~~rate~~by our PRC subsidiaries only out of ~~inflation~~their accumulated after-tax profits, if any, determined in ~~China~~accordance ~~has~~with ~~been as~~PRC ~~high~~accounting asstandards 20and regulations.7% Our PRC subsidiaries are also required under PRC laws and asregulations ~~low~~to asallocate ~~-2.2~~at least 10%. ~~These~~of ~~factors~~their ~~have~~annual ~~led~~after-tax profits determined in accordance with PRC GAAP to ~~the~~a ~~adoption~~statutory bygeneral reserve fund until the ~~Chinese~~amounts ~~government,~~in ~~from~~said ~~time~~fund toreaches ~~time,~~50% of ~~various corrective~~our ~~measures~~registered ~~designed~~capital. Allocations to ~~restrict~~these ~~the~~statutory ~~availability~~reserve offunds ~~credit~~can oronly ~~regulate~~be ~~growth~~used for specific purposes and ~~contain~~are ~~inflation.~~not ~~High~~transferable ~~inflation~~to ~~may~~ us in the ~~future~~form ~~cause~~of ~~the~~loans, ~~Chinese~~advances ~~government~~or tocash ~~impose~~dividends. Any ~~controls~~limitations on ~~credit~~the ~~and/or~~ability ~~prices,~~of orour PRC subsidiaries to ~~take~~transfer ~~other~~funds ~~action,~~to ~~which~~us could ~~inhibit economic~~materially ~~activity~~and inadversely ~~China~~limit our ability to grow, ~~and~~make ~~thereby~~investments ~~harm~~or ~~the~~acquisitions ~~market~~that ~~for~~could be beneficial to our ~~products~~business, pay dividends and otherwise fund and conduct our ~~company~~business.

~~Restrictions on currency exchange may limit our ability to receive and use our revenues effectively.~~18

~~The majority of our revenues will be settled in RMB and U.S.~~ ~~dollars,~~Failure ~~and any future restrictions on currency exchanges may limit our ability~~ to ~~use~~comply ~~revenue~~with ~~generated~~PRC inregulations ~~RMB~~relating to ~~fund any future business activities outside China or to make dividend or other payments in U.S. dollars. Although~~ the ~~Chinese~~establishment ~~government introduced regulations in 1996 to allow greater convertibility~~ of ~~the~~offshore ~~RMB~~special ~~for~~purpose ~~current~~companies ~~account~~by ~~transactions,~~PRC ~~significant~~residents ~~restrictions still remain, including primarily the restriction that foreign-invested enterprises~~ may ~~only~~subject ~~buy,~~our ~~sell~~PRC orresident ~~remit~~shareholders ~~foreign currencies after providing valid commercial documents, at those banks in China authorized~~ to ~~conduct~~personal ~~foreign exchange business. In addition~~liability, ~~conversion of~~limit ~~RMB~~our ~~for~~ability ~~capital account items, including direct investment and loans, is subject~~ to ~~governmental~~acquire ~~approval~~PRC ~~in China, and~~ companies ~~are~~ ~~required~~or to ~~open~~inject ~~and maintain separate foreign exchange accounts for~~ capital ~~account~~into ~~items.~~our WePRC ~~cannot~~subsidiaries, belimit ~~certain~~our ~~that~~PRC ~~the~~subsidiaries’ ~~Chinese regulatory~~ability ~~authorities~~to ~~will~~distribute ~~not~~profits ~~impose~~to ~~more~~us ~~stringent~~or ~~restrictions~~otherwise onmaterially ~~the~~adversely ~~convertibility~~affect ~~of the RMB~~us.

~~Fluctuations~~ In October 2005, SAFE, issued the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, generally referred to as Circular 75, which required PRC residents to register with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing outside of China on the strength of domestic PRC assets originally held by those residents. Internal implementing guidelines issued by SAFE, which became public in June 2007 (known as Notice 106), expanded the reach of Circular 75 by (1) purporting to cover the establishment or acquisition of control by PRC residents of offshore entities which merely acquire “control” over domestic companies or assets, even in the absence of legal ownership; (2) adding requirements relating to the source of the PRC resident’s funds used to establish or acquire the offshore entity; covering the use of existing offshore entities for offshore financings; (3) purporting to cover situations in which an offshore SPV establishes a new subsidiary in China or acquires an unrelated company or unrelated assets in China; and (4) making the domestic affiliate of the SPV responsible for the accuracy of certain documents which must be filed in connection with any such registration, notably, the business plan which describes the overseas financing and the use of proceeds. Amendments to registrations made under Circular 75 are required in connection with any increase or decrease of capital, transfer of shares, mergers and acquisitions, equity investment or creation of any security interest in any assets located in China to guarantee offshore obligations, and Notice 106 makes the offshore SPV jointly responsible for these filings. In the case of an SPV which was established, and which acquired a related domestic company or assets, before the implementation date of Circular 75, a retroactive SAFE registration was required to have been completed before March 31, 2006; this date was subsequently extended indefinitely by Notice 106, which also required that the registrant establish that all foreign exchange ~~rates~~transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations. Failure to comply with the requirements of Circular 75, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties under PRC laws for evasion of applicable foreign exchange restrictions. Any such failure could ~~adversely~~also ~~affect our~~result ~~business~~in the SPV’s affiliates being impeded or prevented from distributing their profits and the ~~value~~proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of ~~our~~funds ~~securities~~into or out of China.

~~The~~ We ~~value~~have ofadvised our ~~common~~shareholders ~~stock~~who ~~will~~are bePRC ~~indirectly~~residents, ~~affected~~as by defined in Circular 75, to register with the ~~foreign~~relevant ~~exchange~~branch ~~rate~~of ~~between~~SAFE, Uas currently required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiaries.S However, we cannot provide any assurances that their existing registrations have fully complied with, and they have made all necessary amendments to their registration to fully comply with, all applicable registrations or approvals required by Circular 75. ~~dollars~~Moreover, because of uncertainty over how Circular 75 will be interpreted and ~~RMB~~implemented, and ~~between~~how ~~those~~or ~~currencies~~whether ~~and~~SAFE ~~other~~will ~~currencies~~apply init ~~which~~to us, we cannot predict how it will affect our ~~sales~~business ~~may be~~operations ~~denominated~~or future strategies. ~~Appreciation~~For orexample, ~~depreciation~~our inpresent and prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as the ~~value~~remittance of ~~the~~dividends ~~RMB~~and ~~relative~~foreign currency-denominated borrowings, may be subject to ~~the~~compliance ~~U.S.~~with ~~dollar~~Circular ~~would~~75 ~~affect~~by our ~~financial~~PRC ~~results reported~~resident inbeneficial Uholders.S. ~~dollar~~In ~~terms~~addition, ~~without~~such ~~giving~~PRC ~~effect~~residents may not always be able to ~~any~~complete ~~underlying~~the ~~change~~necessary inregistration procedures required by Circular 75. We also have little control over either our ~~business~~present or ~~results~~prospective ofdirect ~~operations.~~or ~~Fluctuations in~~indirect shareholders or the ~~exchange~~outcome ~~rate~~of ~~will~~such ~~also~~registration ~~affect~~procedures. ~~the~~A ~~relative~~failure ~~value~~by ofour ~~any~~PRC ~~dividend~~resident webeneficial ~~issue~~holders ~~that~~or ~~will~~future bePRC ~~exchanged~~resident ~~into~~shareholders ~~U.S.~~to ~~dollars~~comply aswith ~~well as~~Circular ~~earnings~~75, ~~from~~if SAFE requires it, ~~and~~could ~~the~~subject ~~value~~these ofPRC resident beneficial holders to fines or legal sanctions, ~~any~~restrict ~~U.S.~~our ~~dollar~~overseas or cross-~~denominated~~border ~~investments~~investment weactivities, limit our subsidiaries’ ability to make indistributions ~~the~~or ~~future~~pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

Since July 2005, the RMB is no longer pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.19

~~Very limited hedging transactions are available in China~~ toOur ~~reduce~~business ~~our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions. While we may enter into hedging transactions in the future, the availability~~ and ~~effectiveness~~financial ofperformance ~~these transactions~~ may be ~~limited,~~materially ~~and~~adversely ~~we may~~affected ~~not~~if bethe ~~able~~PRC toregulatory ~~successfully~~authorities ~~hedge~~determine ~~our~~that ~~exposure at all. In addition,~~ our ~~foreign~~acquisition ~~currency~~of ~~exchange~~the ~~losses~~Operating ~~may~~Sub beconstitutes ~~magnified~~a ~~by PRC~~Round-trip ~~exchange~~Investment ~~control~~without ~~regulations~~MOFCOM ~~that restrict our ability to convert RMB into foreign currencies~~approval.

~~Restrictions~~ On ~~under~~August 8, 2006, six PRC ~~law~~regulatory agencies promulgated the Regulation on ~~our~~Mergers ~~PRC~~and ~~subsidiaries’ ability~~Acquisitions toof ~~make~~Domestic ~~dividends~~Companies ~~and~~by ~~other~~Foreign ~~distributions~~Investors, ~~could~~or ~~materially~~the ~~and~~2006 ~~adversely~~M&A ~~affect~~Rule, ~~our~~which ~~ability~~became effective on September 8, 2006. According to ~~grow~~the 2006 M&A Rule, ~~make~~when ~~investments~~a ~~or acquisitions~~PRC business that ~~could~~is ~~benefit~~owned ~~our~~by ~~business,~~PRC ~~pay~~individual(s) ~~dividends~~is sold to ~~you~~a non-PRC entity that is established or controlled, ~~and~~directly ~~otherwise~~or ~~fund~~indirectly, by those same PRC individual(s) it must be approved by the Ministry of Commerce, or MOFCOM, and ~~conduct~~any ~~our~~indirect ~~businesses~~arrangement or series of arrangements which achieves the same end result without the approval of MOFCOM is a violation of PRC law.

~~Substantially all of our revenues are earned by our operating~~ ~~subsidiaries~~Pursuant ~~in the PRC. PRC regulations restrict the ability of Shenzhen Holding Company~~ to ~~make~~a ~~dividends~~series ~~and other payments to its offshore parent company. PRC legal restrictions permit payments~~ of ~~dividends~~transactions bycompleted ~~our~~in ~~PRC~~October ~~subsidiaries only out of their accumulated after-tax profits~~2010, ifChina ~~any,~~Digital ~~determined~~acquired ~~in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are also required under PRC laws and regulations to allocate at least 10~~100% of ~~their annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until~~ the ~~amounts~~equity ininterests ~~said fund reaches 50%~~ of ~~our~~Shenzhen ~~registered~~Holding ~~capital. Allocations to~~Company ~~these~~(which ~~statutory~~directly ~~reserve~~wholly ~~funds~~owns ~~can only be used for specific purposes and are not transferable to us in~~ the ~~form~~Operating ~~of loans, advances or cash dividends~~Sub). ~~Any~~ Prior ~~limitations on the ability of our PRC subsidiaries~~ to ~~transfer funds to us could materially~~ and ~~adversely limit~~after ~~our~~this ~~ability~~acquisition, toboth ~~grow,~~China ~~make~~Digital ~~investments~~and orShenzhen ~~acquisitions~~Holding ~~that~~Company ~~could~~were becontrolled ~~beneficial~~by tothe ~~our~~same ~~business~~party, ~~pay dividends and otherwise fund and conduct our business~~HuaZeng.

17 The PRC regulatory authorities may take the view that the reverse acquisition transaction was part of an overall series of arrangements which constituted a Round-trip Investment, because at the end of these transactions, Mr. HuaZeng, individually and though Truth Giver Group Limited, became a major owner and effective controlling party of a foreign entity that acquired ownership of our Chinese subsidiaries. The PRC regulatory authorities may also take the view that the registration of the acquisition of Shenzhen Holding Company with the relevant AIC and the filings with the SAFE may not be evidence that the acquisition has been properly approved because the relevant parties did not fully disclose to the AIC, SAFE or MOFCOM the overall restructuring arrangements, the existence of the Share Exchange Agreement and its link with the acquisition. If the PRC regulatory authorities take the view that the acquisition constitutes a Round-trip Investment under the 2006 M&A Rules, we cannot assure you we may be able to obtain the approval required from MOFCOM.

~~Failure~~ If tothe ~~comply~~PRC ~~with~~regulatory authorities take the view that the acquisition constitutes a Round-trip Investment without MOFCOM approval, they could invalidate our acquisition and ownership of our Chinese subsidiaries. Additionally, the PRC ~~regulations~~regulatory ~~relating~~authorities tomay take the ~~establishment~~ view that the acquisition constitutes a transaction that requires the prior approval of ~~offshore~~the ~~special~~China ~~purpose~~Securities ~~companies~~Regulatory byCommission, ~~PRC~~or ~~residents~~CSRC, before MOFCOM approval is obtained. We believe that if this takes place, we may ~~subject~~be ~~our~~able ~~PRC~~to ~~resident~~find ~~shareholders~~a way to ~~personal~~re-establish ~~liability, limit~~control of our ~~ability~~Chinese tosubsidiaries’ ~~acquire~~business operations through a series of contractual arrangements rather than outright ownership of our Chinese subsidiaries. But we cannot assure you that such contractual arrangements will be protected by PRC ~~companies~~law or tothat ~~inject~~the ~~capital~~registrant ~~into~~can receive as complete or effective economic benefit and overall control of our ~~PRC~~Chinese subsidiaries,’ ~~limit~~business than if the Company had direct ownership of our ~~PRC~~Chinese subsidiaries’. In ~~ability to~~addition, ~~distribute~~we ~~profits~~cannot assure you that such contractual arrangements can be successfully effected under PRC law. If we cannot obtain MOFCOM or CSRC approval if required by the PRC regulatory authorities to usdo so, and if we cannot put in place or ~~otherwise~~enforce relevant contractual arrangements as an alternative and equivalent means of control of our Chinese subsidiaries, our business and financial performance will be materially adversely ~~affect us~~affected.

~~In October 2005, SAFE, issued the Notice on Relevant Issues~~ inUnder the ~~Foreign~~EIT ~~Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China~~Law, ~~generally~~ ~~referred~~we tomay asbe ~~Circular~~classified 75, which required PRC residents to register with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing outside of China on the strength of domestic PRC assets originally held by those residents. Internal implementing guidelines issued by SAFE, which became public in June 2007 (known as ~~Notice~~a ~~106), expanded the reach of Circular 75 by (1) purporting to cover the establishment or acquisition of control by PRC residents of offshore entities which merely acquire~~ “~~control” over domestic companies or assets, even in the absence of legal ownership; (2) adding requirements relating to the source of the PRC~~ resident~~’s funds~~ ~~used~~enterprise” ~~to establish or acquire the offshore entity; covering the use~~ of ~~existing offshore entities for offshore financings; (3) purporting to cover situations in which an offshore SPV establishes a new subsidiary in~~ China or acquires an unrelated company or unrelated assets in China; and (4) making the domestic affiliate of the SPV responsible for the accuracy of certain documents which must be filed in connection with any such registration, notably, the business plan which describes the overseas financing and the use of proceeds. ~~Amendments~~ toSuch ~~registrations~~classification ~~made~~will ~~under~~likely ~~Circular~~result ~~75 are required~~ in ~~connection~~unfavorable ~~with~~tax ~~any~~consequences ~~increase or decrease of capital, transfer of shares, mergers and acquisitions, equity investment or creation of any security interest in any assets located in China~~ to ~~guarantee~~us ~~offshore obligations,~~ and ~~Notice~~our 106 makes the offshore SPV jointly responsible for these filings. In the case of an SPV which was established, and which acquired a related domestic company or assets, before the implementation date of Circular 75, a retroactive SAFE registration was required to have been completed before March 31, 2006; this date was subsequently extended indefinitely by Notice 106, which also required that the registrant establish that all foreign exchange transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations. Failure to comply with the requirements of Circular 75, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties under non-PRC ~~laws for evasion of applicable foreign exchange restrictions~~shareholders. Any such failure could also result in the SPV’s affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of funds into or out of China.

~~We have advised our shareholders who are PRC residents, as defined~~ inUnder ~~Circular 75, to register with~~ the ~~relevant~~EIT ~~branch~~Law ofeffective ~~SAFE,~~on asJanuary ~~currently required~~1, ~~in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiaries. However~~2008, wean ~~cannot~~enterprise ~~provide~~established ~~any~~outside ~~assurances~~China ~~that their existing registrations have fully complied~~ with, ~~and~~“de ~~they~~facto ~~have~~management ~~made~~bodies” ~~all~~within ~~necessary~~China ~~amendments~~is toconsidered ~~their~~a ~~registration~~“resident ~~to fully comply with~~enterprise, ~~all~~” ~~applicable~~meaning ~~registrations~~that orit ~~approvals~~can ~~required by Circular 75. Moreover, because of uncertainty over how Circular 75 will~~ be ~~interpreted~~ ~~and~~treated ~~implemented,~~in ~~and~~a ~~how~~manner orsimilar ~~whether SAFE will apply it~~ to ~~us,~~a weChinese ~~cannot~~enterprise ~~predict~~for ~~how~~enterprise itincome ~~will~~tax ~~affect our business operations or future strategies~~purposes. ~~For~~The ~~example,~~implementing ~~our~~rules ~~present~~of ~~and~~the ~~prospective~~EIT ~~PRC~~Law ~~subsidiaries’~~define ~~ability~~de tofacto ~~conduct~~management ~~foreign exchange activities, such~~ as ~~the~~“substantial ~~remittance~~and ofoverall ~~dividends~~management and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 75. We also have little control over ~~either our present or prospective direct or indirect shareholders or~~ the ~~outcome~~production ofand ~~such registration procedures. A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with Circular 75~~operations, ~~if SAFE requires it~~personnel, ~~could subject these PRC resident beneficial holders to fines or legal sanctions~~accounting, ~~restrict~~ ~~our~~and ~~overseas~~properties” orof ~~cross-border~~the ~~investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects~~enterprise.

18 On April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice, further interpreting the application of the EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management often resident in China. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends to its non-PRC shareholders. However, it remains unclear as to whether the Notice is applicable to an offshore enterprise incorporated by a Chinese natural person. Nor are detailed measures on imposition of tax from non-domestically incorporated resident enterprises are available. Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.

Our business and financial performance may be materially adversely affected if the PRC regulatory authorities determine that our acquisition of the Operating Subs constitutes a Round-trip Investment without MOFCOM approval.20

On We ~~August~~may 8,be ~~2006,~~deemed ~~six~~to ~~PRC~~be ~~regulatory~~a ~~agencies~~resident ~~promulgated~~enterprise by Chinese tax authorities. If the ~~Regulation~~ onPRC ~~Mergers~~tax ~~and~~authorities ~~Acquisitions~~determine ofthat ~~Domestic~~we ~~Companies~~are bya ~~Foreign~~“resident ~~Investors,~~enterprise” orfor ~~the~~PRC ~~2006~~enterprise ~~M&A~~income ~~Rule~~tax purposes, ~~which~~a ~~became~~number ~~effective on~~of ~~September~~unfavorable 8,PRC ~~2006~~tax consequences could follow. ~~According~~First, we may be subject to the ~~2006~~enterprise ~~M&A~~income ~~Rule,~~tax ~~when~~at a ~~PRC~~rate ~~business~~of ~~that~~25% ison ~~owned~~our byworldwide taxable income as well as PRC ~~individual(s)~~enterprise isincome ~~sold~~tax toreporting aobligations. In our case, this would mean that income such as interest on financing proceeds and non-China source income would be subject to PRC ~~entity~~ ~~that~~enterprise isincome ~~established~~tax orat ~~controlled,~~a ~~directly~~rate orof ~~indirectly~~25%. Second, byalthough ~~those~~under ~~same~~the EIT Law and its implementing rules dividends paid to us from our PRC ~~individual(s)~~subsidiary itwould ~~must~~qualify as “tax-exempt income,” we cannot guarantee that such dividends will not be ~~approved~~subject byto a 10% withholding tax, as the ~~Ministry of~~PRC ~~Commerce~~foreign exchange control authorities, orwhich ~~MOFCOM~~enforce the withholding tax, ~~and~~have ~~any~~not ~~indirect~~yet ~~arrangement~~issued orguidance ~~series~~with respect to the processing of ~~arrangements~~outbound ~~which~~remittances ~~achieves~~to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that future guidance issued with respect to the ~~same~~new ~~end~~“resident enterprise” classification could result ~~without~~in ~~the~~a ~~approval of~~situation ~~MOFCOM~~in iswhich a ~~violation~~10% ofwithholding tax is imposed on dividends we pay to our non-PRC ~~law~~shareholders and with respect to gains derived by our non-PRC shareholders from transferring our shares. We are actively monitoring the possibility of “resident enterprise” treatment for the 2012 tax year.

~~Pursuant~~ If towe awere ~~series~~treated ofas ~~transactions~~a ~~completed~~“resident inenterprise” ~~October~~by ~~2010, China~~PRC ~~Digital~~tax ~~acquired~~authorities, ~~100%~~we ofwould ~~the~~be ~~equity~~subject ~~interests~~to oftaxation ~~Shenzhen~~in ~~Holding~~both ~~Company (which directly wholly owns~~ the ~~other Operating Subs)~~U. ~~Prior~~S. to and ~~after this acquisition~~China, ~~both China Digital~~ and ~~Shenzhen~~our ~~Holding~~PRC ~~Company~~tax ~~were~~may ~~controlled~~not bybe ~~the~~creditable ~~same party,~~against ~~Hua~~our ~~Zeng~~U.S. tax.

~~The~~ We ~~PRC regulatory authorities~~ may ~~take~~be ~~the~~exposed ~~view~~to ~~that~~liabilities ~~the~~under ~~reverse acquisition transaction was part of an overall series of arrangements which constituted a Round-trip Investment, because at~~ the ~~end~~ ofForeign ~~these~~Corrupt ~~transactions,~~Practices ~~Mr.~~Act ~~Hua Zeng, individually~~ and ~~though Truth Giver Group Limited, became a major owner and effective controlling party of a foreign entity that acquired ownership of our~~ Chinese ~~subsidiaries. The~~anti-corruption PRC regulatory authorities may also take the view that the registration of the acquisition of Shenzhen Holding Company with the relevant AIC and the filings with the SAFE may not be evidence that the acquisition has been properly approved because the relevant parties did not fully disclose to the AIClaws, ~~SAFE or MOFCOM the overall restructuring arrangements, the existence of the Share Exchange Agreement~~ and ~~its~~any ~~link~~determination ~~with the acquisition. If the PRC regulatory authorities take the view~~ that ~~the acquisition constitutes a Round-trip Investment under the 2006 M&A Rules,~~ we ~~cannot~~violated ~~assure~~these ~~you~~laws wecould ~~may~~have bea ~~able~~material toadverse ~~obtain~~effect ~~the~~on ~~approval~~our ~~required from MOFCOM~~business.

If We are subject to the ~~PRC~~Foreign ~~regulatory~~Corrupt ~~authorities~~Practice ~~take~~Act, ~~the~~or ~~view~~FCPA, and other laws that ~~the~~prohibit ~~acquisition constitutes~~improper apayments ~~Round-trip~~or ~~Investment~~offers ~~without~~of ~~MOFCOM~~payments ~~approval,~~to ~~they~~foreign ~~could~~governments ~~invalidate~~and ~~our~~their ~~acquisition~~officials and ~~ownership~~political ofparties ~~our~~by ~~Chinese subsidiaries~~U. ~~Additionally,~~S. ~~the~~persons ~~PRC~~and ~~regulatory~~issuers ~~authorities~~as ~~may~~defined ~~take~~by the ~~view~~statute, ~~that~~for the ~~acquisition~~purpose ~~constitutes~~of aobtaining ~~transaction that~~or ~~requires~~retaining ~~the~~business. ~~prior~~We ~~approval~~have ofoperations, ~~the~~agreements ~~China~~with ~~Securities~~third ~~Regulatory~~parties ~~Commission,~~and orwe ~~CSRC,~~make ~~before~~the ~~MOFCOM~~majority ~~approval~~of isour ~~obtained.~~sales ~~We believe~~in ~~that~~China. ifPRC ~~this~~also ~~takes~~strictly ~~place,~~prohibits webribery ~~may~~of begovernment ~~able~~officials. toOur ~~find~~activities ain ~~way~~China tocreate ~~re-establish~~the ~~control~~risk of ~~our~~unauthorized ~~Chinese~~payments ~~subsidiaries’~~or ~~business operations~~offers ~~through~~of apayments ~~series~~by ofthe ~~contractual~~employees, ~~arrangements~~consultants, ~~rather~~sales ~~than~~agents ~~outright~~or ~~ownership~~distributors of our ~~Chinese~~Company, ~~subsidiaries. But~~even ~~we cannot~~though ~~assure~~they ~~you~~may ~~that~~not ~~such~~always ~~contractual~~be ~~arrangements~~subject ~~will~~to beour ~~protected~~control. byIt ~~PRC~~is ~~law~~our orpolicy ~~that~~to ~~the~~implement ~~registrant~~safeguards ~~can~~to ~~receive~~discourage asthese ~~complete or~~practices ~~effective~~by ~~economic~~our ~~benefit~~employees. However, our existing safeguards and ~~overall~~any ~~control~~future ofimprovements ~~our~~may ~~Chinese~~prove ~~subsidiaries’~~to ~~business~~be less than ifeffective, and the ~~Company~~employees, ~~had~~consultants, ~~direct~~sales ~~ownership of~~agents ~~our~~or ~~Chinese~~distributors ~~subsidiaries. In~~of ~~addition,~~our weCompany ~~cannot~~may ~~assure~~engage ~~you~~in ~~that~~conduct ~~such~~for ~~contractual~~which ~~arrangements~~we ~~can~~might be ~~successfully~~held ~~effected under PRC law~~responsible. If weViolations ~~cannot~~of ~~obtain~~the ~~MOFCOM~~FCPA or ~~CSRC~~Chinese ~~approval~~anti-corruption iflaws ~~required~~may byresult ~~the~~in ~~PRC~~severe ~~regulatory~~criminal ~~authorities~~or tocivil ~~do so~~sanctions, and if we ~~cannot~~may ~~put~~be insubject ~~place~~to orother ~~enforce~~liabilities, ~~relevant~~which ~~contractual~~could ~~arrangements~~negatively asaffect anour ~~alternative~~business, operating results and ~~equivalent~~financial ~~means~~condition. ofIn ~~control~~addition, ofthe ~~our~~U.S. ~~Chinese subsidiaries,~~government may seek to hold our ~~business~~Company ~~and~~liable ~~financial~~for ~~performance~~successor ~~will~~liability beFCPA ~~materially~~violations ~~adversely~~committed ~~affected~~by companies in which we invest or that we acquire.

~~Under~~ Because ~~the~~our ~~EIT~~business ~~Law~~is located in the PRC, we may behave ~~classified~~difficulty asestablishing aadequate ~~“resident enterprise”~~management, oflegal ~~China.~~and ~~Such~~financial ~~classification~~controls, ~~will~~which ~~likely~~we ~~result~~are inrequired ~~unfavorable~~to ~~tax~~do ~~consequences~~in order to uscomply ~~and~~with ~~our~~U.S. ~~non-PRC~~securities ~~shareholders~~laws.

~~Under~~ PRC ~~the~~companies ~~EIT~~have ~~Law~~historically ~~effective~~not onadopted ~~January~~a 1Western style of management and financial reporting concepts and practices, ~~2008~~which includes strong corporate governance, aninternal ~~enterprise established~~controls ~~outside~~and, ~~China~~computer, ~~with~~financial ~~“de~~and ~~facto~~other control systems. Most of our middle and top management ~~bodies”~~staff ~~within~~are ~~China~~not iseducated ~~considered~~and atrained ~~“resident~~in ~~enterprise~~the Western system,~~” meaning~~ ~~that~~and itwe ~~can~~may behave ~~treated~~difficulty hiring new employees in athe ~~manner~~PRC ~~similar~~with tosuch training. As a ~~Chinese~~result ~~enterprise~~of ~~for~~these ~~enterprise~~factors, ~~income~~we ~~tax~~may ~~purposes~~experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards. ~~The~~Therefore, we may, in turn, experience difficulties in implementing ~~rules~~ and maintaining adequate internal controls as required under Section 404 of the ~~EIT~~Sarbanes-Oxley ~~Law~~Act ~~define~~of de2002. ~~facto~~This ~~management~~may asresult ~~“substantial~~in ~~and~~significant ~~overall~~deficiencies ~~management~~or ~~and~~material ~~control~~weaknesses ~~over~~in our internal controls, which could impact the ~~production~~reliability of our financial statements and ~~operations,~~ ~~personnel,~~prevent ~~accounting,~~us from complying with Commission rules and ~~properties”~~regulations and the requirements of the ~~enterprise~~Sarbanes-Oxley Act of 2002. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business.

On April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice, further interpreting the application of the EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management often resident in China. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends to its non-PRC shareholders. However, it remains unclear as to whether the Notice is applicable to an offshore enterprise incorporated by a Chinese natural person. Nor are detailed measures on imposition of tax from non-domestically incorporated resident enterprises are available. Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.21

19 RISKS RELATED TO THE MARKET FOR OUR STOCK GENERALLY

~~We may be deemed to be a resident enterprise by Chinese tax~~ ~~authorities.~~Our Ifcommon ~~the~~stock ~~PRC~~is ~~tax~~quoted authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as interest on financing proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the ~~EIT~~OTC ~~Law~~Bulletin ~~and its implementing rules dividends paid to us from our PRC subsidiary would qualify as “tax-exempt income~~Board,” ~~we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities,~~ which ~~enforce~~may ~~the withholding tax,~~ have ~~not~~an ~~yet~~unfavorable ~~issued~~impact guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on ~~dividends we pay to~~ our ~~non-PRC~~stock ~~shareholders~~price and ~~with respect to gains derived by our non-PRC shareholders from transferring our shares~~liquidity. ~~We are actively monitoring the possibility of “resident enterprise” treatment for the 2012 tax year.~~

If Our wecommon ~~were~~stock ~~treated~~is asquoted aon ~~“resident~~the ~~enterprise”~~OTC ~~by PRC~~Bulletin ~~tax~~Board. The ~~authorities,~~OTC weBulletin ~~would~~Board beis ~~subject~~a tosignificantly ~~taxation~~more inlimited ~~both~~market than established trading markets such as the UNew York Stock Exchange or NASDAQ.S. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and ~~China~~potential shareholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ~~PRC~~ability ~~tax~~to ~~may~~raise ~~not~~capital bein ~~creditable~~the ~~against~~ future. We plan to list our Ucommon stock as soon as practicable.S. However, ~~tax~~we cannot assure you that we will be able to meet the initial listing standards of any stock exchange, or that we will be able to maintain any such listing.

We may be ~~exposed~~subject to ~~liabilities~~penny ~~under~~stock ~~the~~regulations ~~Foreign Corrupt Practices Act~~ and ~~Chinese~~restrictions ~~anti-corruption laws,~~ and ~~any~~you ~~determination~~may ~~that we violated these laws could~~ have adifficulty ~~material~~selling ~~adverse effect~~shares onof our ~~business~~common stock.

~~We are subject to the Foreign Corrupt Practice Act, or FCPA,~~ ~~and~~The ~~other~~SEC ~~laws~~has ~~that~~adopted ~~prohibit~~regulations ~~improper~~which ~~payments~~generally ordefine ~~offers~~so-called of“penny ~~payments~~stocks” to ~~foreign~~be ~~governments~~an ~~and~~equity ~~their~~security ~~officials~~that ~~and~~has ~~political~~a ~~parties by~~market ~~U.S.~~price ~~persons~~less ~~and~~than ~~issuers~~$5.00 asper ~~defined~~share byor ~~the~~an ~~statute,~~exercise ~~for~~price ~~the purpose~~ of ~~obtaining~~less orthan ~~retaining business~~$5.00 Weper ~~have operations~~share, ~~agreements~~ ~~with~~subject ~~third~~to ~~parties~~certain ~~and~~exemptions. weOur ~~make~~common ~~the~~stock ~~majority~~is ofa ~~our~~“penny ~~sales~~stock” inand ~~China.~~is ~~PRC~~subject ~~also~~to ~~strictly~~Rule ~~prohibits~~15g-9 ~~bribery~~under ~~of government officials. Our activities in China create~~ the ~~risk~~Exchange ofAct, ~~unauthorized payments~~ or ~~offers of payments by~~ the ~~employees,~~Penny ~~consultants, sales~~Stock ~~agents~~Rule. orThis ~~distributors~~rule ofimposes ~~our~~additional ~~Company,~~sales ~~even~~practice ~~though~~requirements ~~they~~on ~~may~~broker-dealers ~~not~~that ~~always~~sell besuch ~~subject~~securities to ~~our~~persons ~~control.~~other Itthan isestablished ~~our~~customers ~~policy~~and to“accredited ~~implement safeguards~~investors” to(generally, ~~discourage~~individuals ~~these~~with ~~practices~~a bynet ~~our~~worth ~~employees.~~in ~~However~~excess of $1,000,000 ~~our~~or ~~existing~~annual ~~safeguards~~incomes ~~and~~exceeding ~~any~~$200,000, ~~future~~or ~~improvements~~$300,000 ~~may~~together ~~prove to~~with betheir ~~less~~spouses). ~~than~~For ~~effective,~~transactions ~~and~~covered ~~the~~by ~~employees,~~Rule ~~consultants~~15g-9, ~~sales~~a ~~agents~~broker-dealer ormust ~~distributors~~make ofa ~~our~~special ~~Company~~suitability ~~may~~determination ~~engage in conduct~~ for ~~which~~ wethe ~~might~~purchaser beand ~~held~~have ~~responsible.~~received ~~Violations of~~ the ~~FCPA~~purchaser's orwritten ~~Chinese~~consent ~~anti-corruption~~to ~~laws~~the ~~may~~transaction ~~result~~prior into ~~severe~~sale. ~~criminal~~As ora ~~civil sanctions~~result, ~~and~~this werule may beaffect ~~subject~~the toability ~~other~~of ~~liabilities,~~broker-dealers ~~which~~to ~~could~~sell ~~negatively affect~~ our ~~business,~~securities ~~operating results~~ and ~~financial condition.~~may Inaffect ~~addition,~~ the ~~U.S.~~ability ~~government~~of ~~may~~purchasers ~~seek~~ to ~~hold~~sell any of our ~~Company~~securities ~~liable~~in ~~for~~the ~~successor~~secondary ~~liability~~market, ~~FCPA~~thus ~~violations~~possibly ~~committed by~~making ~~companies~~it inmore ~~which~~difficult wefor ~~invest~~us orto ~~that~~raise weadditional ~~acquire~~capital.

~~Because~~ For ~~our~~any ~~business~~transaction isinvolving ~~located~~a inpenny stock, unless exempt, the ~~PRC~~rules require delivery, weprior ~~may~~to ~~have~~any ~~difficulty establishing~~transaction ~~adequate~~in ~~management~~penny stock, ~~legal~~of a disclosure schedule required by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and ~~financial~~the ~~controls~~registered representative and current quotations for the securities. Finally, ~~which~~monthly westatements are required to dobe sent disclosing recent price information for the penny stock held in ~~order~~the toaccount ~~comply~~and ~~with~~information ~~U.S.~~on ~~securities laws~~the limited market in penny stock.

~~PRC companies have historically not adopted a Western style~~ ofThere ~~management~~can ~~and~~be ~~financial~~no ~~reporting~~assurance ~~concepts~~that ~~and practices, which includes strong corporate governance, internal controls and, computer, financial and other control systems. Most of~~ our ~~middle~~common ~~and~~stock ~~top~~will ~~management~~qualify ~~staff~~for ~~are~~exemption ~~not~~from ~~educated and trained in~~ the ~~Western~~ ~~system,~~Penny ~~and~~Stock ~~we may have difficulty hiring new employees in the PRC with such training~~Rule. As aIn ~~result~~any ~~of these factors~~event, we ~~may~~even ~~experience~~if ~~difficulty~~our incommon ~~establishing~~stock ~~management,~~were ~~legal~~exempt ~~and~~from ~~financial~~the ~~controls,~~Penny ~~collecting~~Stock ~~financial data and preparing financial statements~~Rule, ~~books of account and corporate records and instituting business practices that meet Western standards. Therefore,~~ we ~~may,~~would inremain ~~turn,~~subject ~~experience~~to ~~difficulties in implementing and maintaining adequate internal controls as required under~~ Section ~~404~~ 15(b)(6) of the ~~Sarbanes-Oxley~~Exchange Act ~~of 2002. This may result in significant deficiencies or material weaknesses in our internal controls~~, which ~~could~~gives ~~impact~~ the ~~reliability~~SEC ofthe ~~our~~authority ~~financial~~to ~~statements~~restrict ~~and~~any ~~prevent~~person us from ~~complying~~participating ~~with~~in ~~Commission~~a ~~rules~~distribution ~~and~~of ~~regulations and~~penny ~~the~~stock, ~~requirements~~if of the ~~Sarbanes-Oxley~~SEC ~~Act~~finds ofthat ~~2002. Any~~ such ~~deficiencies, weaknesses or lack of compliance could have~~ a ~~materially~~restriction ~~adverse~~would ~~effect~~be onin ~~our~~the ~~business~~public interest.

20 Provisions in our Articles of Incorporation and Bylaws or Nevada law might discourage, delay or prevent a change of control of us or changes in our management and, therefore depress the trading price of the common stock.

~~RISKS~~ Our ~~RELATED~~Articles TOof ~~THE~~Incorporation ~~MARKET~~authorizes ~~FOR~~our ~~OUR~~board ~~STOCK GENERALLY~~of directors to issue up to 100,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the board of directors without further action by stockholders. These terms may include preferences as to dividends and liquidation, voting rights, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

~~Our common stock is quoted on the OTC Bulletin Board, which may have an unfavorable impact on our stock price and liquidity.~~22

~~Our common stock is quoted on the OTC Bulletin Board.~~ ~~The~~In ~~OTC~~addition, ~~Bulletin~~Nevada ~~Board~~corporate islaw aand ~~significantly~~our ~~more~~Articles ~~limited market than established trading markets such as the New York Stock Exchange or NASDAQ. The quotation~~ of ~~our~~Incorporation ~~shares on the OTC Bulletin Board may result in a less liquid market available for existing~~ and ~~potential~~Bylaws ~~shareholders~~also tocontain ~~trade~~other ~~shares~~provisions ofthat ~~our~~could ~~common stock~~discourage, ~~could~~delay ~~depress~~or ~~the~~prevent ~~trading price of our common stock and could have~~ a ~~long-term~~change ~~adverse~~in ~~impact~~control onof our ~~ability~~Company toor ~~raise~~changes ~~capital~~ in ~~the~~its ~~future.~~management Wethat ~~plan to list~~ our ~~common~~stockholders ~~stock~~may asdeem ~~soon as practicable~~advantageous. ~~However,~~ weOne ~~cannot~~of ~~assure~~these ~~you~~provisions ~~that~~allows weany ~~will~~vacancy beon ~~able to meet~~ the ~~initial~~board ~~listing standards~~ of ~~any stock exchange~~directors, orhowever ~~that~~the wevacancy ~~will be~~occurs, ~~able~~ to ~~maintain~~be ~~any~~filled ~~such~~by ~~listing~~the directors.

We ~~may~~do benot ~~subject~~intend to ~~penny~~pay ~~stock~~dividends ~~regulations~~for ~~and~~the ~~restrictions and~~foreseeable ~~you may have difficulty selling shares of our common stock~~future.

~~The~~ For ~~SEC~~the ~~has~~foreseeable ~~adopted~~future, ~~regulations~~we ~~which~~intend ~~generally~~to ~~define~~retain ~~so-called “penny~~any ~~stocks”~~earnings to befinance anthe ~~equity~~development ~~security~~and ~~that~~expansion ~~has~~of aour ~~market~~business, ~~price~~and ~~less~~we ~~than~~do ~~$5.00~~not ~~per~~anticipate ~~share~~paying orany ancash ~~exercise~~dividends ~~price~~on ofour ~~less than~~common $5stock.00 ~~per share~~Accordingly, ~~subject~~investors tomust ~~certain~~be ~~exemptions.~~prepared ~~Our common stock is a “penny stock” and is subject~~ to ~~Rule~~rely ~~15g-9 under~~on ~~the Exchange Act, or the Penny Stock Rule. This rule imposes additional~~ sales ~~practice~~of ~~requirements~~their oncommon ~~broker-dealers~~stock ~~that sell~~after ~~such~~price ~~securities~~appreciation to ~~persons~~earn ~~other~~an ~~than~~investment ~~established customers and “accredited investors” (generally~~return, ~~individuals with~~which amay ~~net~~never ~~worth~~occur. Investors inseeking ~~excess~~cash ofdividends ~~$1,000,000~~should ornot ~~annual~~purchase ~~incomes~~our ~~exceeding~~common ~~$200,000, or $300,000 together with their spouses)~~stock. ~~For~~Any ~~transactions covered by Rule 15g-9, a broker-dealer must make a special suitability~~ determination ~~for~~to ~~the~~pay ~~purchaser~~dividends ~~and~~in ~~have received~~ the ~~purchaser's written~~future ~~consent~~will tobe ~~the~~made ~~transaction~~at ~~prior to sale. As a result, this rule may affect~~ the ~~ability~~discretion of ~~broker-dealers~~our toboard ~~sell~~of ~~our~~directors ~~securities~~ and ~~may~~will ~~affect~~depend ~~the~~on ~~ability~~our ofresults ~~purchasers to sell any~~ of ~~our~~operations, ~~securities~~financial incondition, ~~the~~contractual ~~secondary market~~restrictions, ~~thus~~restrictions ~~possibly~~imposed ~~making~~by itapplicable ~~more~~law ~~difficult for~~and usother tofactors ~~raise~~our ~~additional~~board ~~capital~~deems relevant.

~~For~~ Our ~~any~~controlling ~~transaction~~stockholders ~~involving~~hold a ~~penny~~significant ~~stock,~~percentage ~~unless exempt, the rules require delivery, prior to any transaction in penny stock,~~ of aour ~~disclosure~~outstanding ~~schedule~~voting required by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities~~. Finally~~, ~~monthly~~which ~~statements~~could ~~are~~hinder ~~required~~our ability to beengage ~~sent disclosing recent price information for the penny stock held~~ in ~~the~~significant ~~account~~corporate ~~and~~transactions ~~information~~without ontheir ~~the limited market in penny stock~~approval.

~~There~~ Mr. ~~can~~Hua beZeng, noour ~~assurance~~Chairman ~~that~~of ~~our~~the ~~common~~Board, ~~stock~~and ~~will~~Jing ~~qualify for~~Wang, ~~exemption~~our ~~from~~CEO, individually and as the ~~Penny~~owners ~~Stock~~of ~~Rule.~~Truth InGiver ~~any~~Group ~~event~~Limited, ~~even~~are ifthe beneficial owners of approximately 55% of our ~~common~~outstanding ~~stock~~voting ~~were~~securities. ~~exempt~~As ~~from~~a ~~the~~result, ~~Penny~~they ~~Stock~~possess ~~Rule~~significant influence, wegiving ~~would remain~~them ~~subject~~the ability, among other things, to ~~Section~~elect ~~15(b)(6)~~a majority of ~~the~~our ~~Exchange~~board ~~Act,~~of ~~which~~directors ~~gives~~and ~~the~~to ~~SEC~~authorize or prevent proposed significant corporate transactions. Their ownership and control may also have the ~~authority~~effect toof ~~restrict~~delaying ~~any~~or ~~person~~preventing ~~from~~a ~~participating~~ future change in acontrol, ~~distribution~~impeding ofa ~~penny~~merger, ~~stock~~consolidation, iftakeover ~~the~~or ~~SEC~~other ~~finds~~business ~~that~~combination ~~such~~or discourage a ~~restriction~~potential ~~would~~acquirer befrom inmaking ~~the~~a ~~public~~tender ~~interest~~offer.

Provisions in our Articles of Incorporation and Bylaws or Nevada law might discourage, delay or prevent a change of control of us or changes in our management and, therefore depress the trading price of the common stock.23

~~Our Articles of Incorporation authorizes our board of directors~~ toITEM ~~issue up to 100,000,000 shares of preferred stock~~1B. UNRESOLVED ~~The~~STAFF ~~preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the board of directors without further action by stockholders~~COMMENTS. These terms may include preferences as to dividends and liquidation, voting rights, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

21 Not applicable.

~~In addition, Nevada corporate law and our Articles of Incorporation~~ ~~and~~ITEM ~~Bylaws also contain other provisions that could discourage, delay or prevent a change in control of our Company or changes in its management that our stockholders may deem advantageous~~2. ~~One of these provisions allows any vacancy on the board of directors, however the vacancy occurs, to be filled by the directors~~ PROPERTIES.

On April 6, 2011, our subsidiary Shenzhen Digital Image Technologies Co., Limited entered into a lease agreement for the lease of a new main office of approximately 2,082 square meters in Shenzhen City. The term of the lease began on April 16, 2011 and ends on April 30, 2016. The monthly rent payable under the lease is RMB 93,673 (approximately $15,200), until the beginning of the third year of the lease, at which point the monthly rent shall be increased 5% per year. We dohave ~~not~~one ~~intend~~branch office in Guangzhou. We lease all our office space pursuant to ~~pay~~lease ~~dividends~~agreements, ~~for~~which have expiration dates ranging from March 2016 to April 2016. We believe we can renew these leases on comparable terms to our existing leases. The leased premises totals approximately 2,550 square meters. We believe that all leased space is in good condition and that the ~~foreseeable future~~property is adequately insured by the owner.

~~For the foreseeable future, we intend to retain any earnings~~ toITEM ~~finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock~~3. ~~Accordingly,~~ LEGAL ~~investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur~~PROCEEDINGS. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.

~~Our~~ From ~~controlling~~time ~~stockholders~~to ~~hold~~time, awe ~~significant~~may ~~percentage of~~become ~~our~~involved ~~outstanding~~in ~~voting~~various ~~securities,~~lawsuits and legal proceedings which ~~could~~may ~~hinder~~arise ~~our~~in ~~ability~~the ordinary course of business. However, litigation is subject to ~~engage~~inherent uncertainties, and an adverse result in ~~significant~~these ~~corporate~~or ~~transactions~~other ~~without~~matters ~~their approval~~may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

~~Mr. Hua Zeng, our Chairman of the Board, and Jing Wang, our~~ ~~CEO,~~ITEM ~~individually and as the owners of Truth Giver Group Limited, are the beneficial owners of approximately 55% of our outstanding voting securities~~4. AsMINE aSAFETY result, they possess significant influence, giving them the ability, among other things, to elect a majority of our board of directors and to authorize or prevent proposed significant corporate transactionsDISCLOSURES. Their ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

22 Not applicable.

~~ITEM~~ PART ~~1B.UNRESOLVED STAFF COMMENTS.~~II

~~Not~~ ITEM ~~applicable~~5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

~~ITEM~~ Our 2common stock is quoted on the OTC Bulletin Board under the symbol "CGII".~~PROPERTIES~~ Trading of our stock has been sporadic and does not constitute an established public market for our shares. As a result, we are unable to provide high and low bid prices for our common stock over the prior two years.

~~On April 6, 2011, our subsidiary Shenzhen Digital Image Technologies~~ ~~Co.,~~Holders ~~Limited entered into a lease agreement for the lease~~ of aOur ~~new~~Common main office of approximately 2082 square meters in Shenzhen City. The term of the lease began on April 16, 2011 and ends on April 30, 2016. The monthly rent payable under the lease is 93,673 RMB (approximately $14,259), until the beginning of the third year of the lease, at which point the monthly rent shall be increased 5% per year. We have four branch offices in Xi’an, Guangzhou, Yun’nan and Xiamen We lease all our office space pursuant to lease agreements, which have expiration dates ranging from March 2013 to April 2016. We believe we can renew these leases on comparable terms to our existing leases. The leased premises totals approximately 2897 square meters. We believe that all leased space is in good condition and that the property is adequately insured by the owner.Stock

~~ITEM~~ As ~~3.LEGAL~~of ~~PROCEEDINGS~~December 31, 2013, we had 49 registered shareholders.

~~From time to time, we may become involved in various lawsuits~~ and legal proceedings which may arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.Dividends

~~ITEM~~ In 4the past, we have not distributed earnings to shareholders. Any ~~MINE~~future ~~SAFETY~~decisions ~~DISCLOSURES~~regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

~~Not applicable.~~24

~~PART~~ Substantially IIall of our revenues are earned by the Operating Sub. PRC regulations restrict the ability of our PRC subsidiaries to make dividends and other payments to their offshore parent company. PRC legal restrictions permit payments of dividend by our PRC subsidiaries only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are also required under PRC laws and regulations to allocate at least 10% of their annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of its registered capital. Allocations to this statutory reserve fund can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. Any limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

~~ITEM~~ Securities 5.Authorized ~~MARKET~~for ~~FOR~~Issuance ~~REGISTRANT’S~~Under ~~COMMON~~Equity ~~EQUITY,~~Compensation ~~RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.~~Plans

~~Our~~ We ~~common~~do ~~stock~~not ishave ~~quoted~~in oneffect ~~the~~any ~~OTC~~compensation ~~Bulletin~~plans ~~Board~~ under ~~the symbol~~which ~~"CGII". Trading of~~ our ~~stock~~equity ~~has~~securities ~~been~~are ~~sporadic~~authorized ~~and does not constitute an established public market~~ for ~~our~~issuance ~~shares. As~~and ~~a result,~~ we ~~are~~do ~~unable~~not tohave ~~provide~~any ~~high~~outstanding ~~and low bid prices for our common~~ stock ~~over the prior two years~~options.

~~Holders~~ Recent sales of ~~Our~~unregistered ~~Common Stock~~securities

As None ofnot ~~November~~previously ~~30, 2012, we had approximately 49 registered shareholders~~disclosed.

~~Dividends~~ ITEM 6. SELECTED FINANCIAL DATA

~~In the past, we have not distributed earnings to shareholders.~~ ~~Any~~Not ~~future decisions regarding dividends will be made by our board of directors~~applicable. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

23 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

~~Substantially all of our revenues are earned by the Operating~~ ~~Subs.~~Forward ~~PRC~~Looking regulations restrict the ability of our PRC subsidiaries to make dividends and other payments to their offshore parent company. PRC legal restrictions permit payments of dividend by our PRC subsidiaries only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are also required under PRC laws and regulations to allocate at least 10% of their annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of its registered capital. Allocations to this statutory reserve fund can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. Any limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.Statements

~~Securities~~ The ~~Authorized~~following discussion and analysis of the results of operations and financial condition of Computer Graphics International Inc. for ~~Issuance~~the ~~Under~~years ~~Equity~~ended ~~Compensation Plans~~September 30, 2012 and 2013 should be read in conjunction with the Company’s financial statements, and the notes to those financial statements that are included elsewhere in this annual report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors and Business sections in this annual report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

~~We do not have in effect any compensation plans under which~~ ~~our~~Our equity securities are authorized for issuance and we do not have any outstanding stock options. Pursuant to the terms of our employment agreement with our Chief Financial Officer, she is entitled to receive a future grant of 40,000 shares of the Company~~’s common stock on June 30, 2013 in consideration for her service to the Company. Such award was approved by the board of directors of the Company.~~

~~Recent~~ Business ~~sales of unregistered securities~~Overview

~~None~~ We ~~not~~are ~~previously~~a ~~disclosed~~3D digital visual service provider founded in 2006 based in China, specialized in providing one-stop-shop service and systems based on 3D image technology to domestic governments, real estate developers, game developers, the automotive industry and other commercial customers. We operate through our wholly-owned subsidiaries Shenzhen Digital Image Technology Co., Limited and Guangzhou Digital Image Technologies Co., Ltd.

~~ITEM~~ Our 6headquarters are located in Shenzhen, China. ~~SELECTED~~We ~~FINANCIAL~~operate ~~DATA~~domestically with one branch Guangzhou office in the PRC. Through our 3D imaging technology, we participate in the visual expression of construction-related industries and help our customers complete visual technological changes from hand painting to computer-aided visual displays. We endeavor to provide our customers with the most cost-effective 3D digital visual communication products and services through the combination of the latest visual technology and terminal display equipment.

~~Not~~ Our ~~applicable~~revenues have decreased to $3,701,783 in fiscal year 2013 from $ 5,795,503 in fiscal year 2012, representing a decline rate of approximately 36%.

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~25

~~Forward~~ Our ~~Looking~~Corporate ~~Statements~~History and Background

~~The following discussion and analysis of the results of operations~~ ~~and financial condition of~~ Computer Graphics International Inc., ~~for~~or the ~~years ended September 30~~“Company”, ~~2011~~was ~~and~~incorporated ~~2012~~under ~~should be read in conjunction with~~ the ~~Company’s~~laws ~~financial~~of ~~statements, and~~ the ~~notes~~State toof ~~those~~Nevada ~~financial~~on ~~statements~~February ~~that~~27, ~~are~~2003 ~~included~~under ~~elsewhere in~~the ~~this~~name ~~annual~~AMP ~~report~~Productions, Ltd. ~~Our~~(“AMP”), ~~discussion~~with ~~includes~~the ~~forward-looking~~business ~~statements~~purpose ~~based~~of ~~upon current expectations that involve risks and uncertainties~~developing, ~~such as our plans~~producing, ~~objectives~~marketing, ~~expectations~~ and ~~intentions.~~distributing ~~Actual results and the timing of events could differ materially from those anticipated in these forward~~low-~~looking~~budget feature-length films ~~statements~~to asmovie atheaters ~~result of a number of factors, including those set forth under the Risk Factors~~ and ~~Business~~ancillary ~~sections in this annual report~~markets. From Weinception ~~use~~until ~~words~~the ~~such~~reverse asacquisition ~~“anticipate,”~~transaction ~~“estimate,” “plan,”~~described ~~“project~~below,” ~~“continuing,”~~AMP ~~“ongoing,”~~earned ~~“expect,”~~no ~~“believe,” “intend,”~~revenue ~~“may,”~~and ~~“will,”~~suffered ~~“should,”~~recurring ~~“could,”~~losses and ~~similar~~net ~~expressions to~~cash ~~identify~~outflows ~~forward-looking~~from ~~statements~~operations.

~~Our~~ On ~~Company~~July 30, 2010, the controlling shareholders of AMP consented to a proposed 1-for-10 reverse split of AMP's issued and outstanding common stock, an increase in AMP's authorized common stock to 900,000,000 shares, and the authorization of 100,000,000 shares of preferred stock. The corporate action was approved by FINRA on September 17, 2010 and effective in the State of Nevada on September 23, 2010.

~~Business~~ Acquisition ~~Overview~~of China Digital

We On ~~are~~March 31, 2011, we completed a 3Dreverse ~~digital~~acquisition ~~visual~~transaction ~~service~~through ~~provider~~a ~~founded~~share inexchange ~~2006 based~~(the in“Share Exchange”) with China Digital and its shareholders, ~~specialized~~whereby inwe ~~providing~~acquired ~~one-stop-shop~~100% ~~service~~of the issued and ~~systems~~outstanding ~~based~~capital onstock 3Dof ~~image~~China ~~technology~~Digital toin ~~domestic~~exchange ~~governments, real~~for ~~estate~~(i) ~~developers~~31,528,651 ~~game~~shares ~~developers~~of our Common Stock, ~~the~~which ~~automotive~~collectively ~~industry~~constituted approximately 97% of our issued and ~~other~~outstanding ~~commercial~~capital ~~customers. We~~stock ~~operate~~as ~~through our~~of ~~wholly-owned~~and ~~subsidiaries~~immediately ~~Shenzhen~~after ~~Digital~~the ~~Image~~consummation ~~Technology~~of ~~Co.,~~the ~~Limited~~transactions contemplated by the Share Exchange Agreement and ~~Guangzhou~~(ii) ~~Digital~~payment ~~Image~~(the ~~Technologies~~“Cash ~~Co.~~Component”) of $2,368,471.35. The ~~Ltd~~Cash Component was payable in full within 12 months after the Closing.

~~Our~~ As ~~headquarters~~a ~~are~~result ~~located~~of inthe ~~Shenzhen~~reverse acquisition, China. WeDigital ~~operate domestically~~became ~~with~~our ~~four~~wholly-owned ~~branches~~subsidiary inand the ~~PRC,~~former ~~including~~shareholders of China Digital became our ~~Xi’an~~controlling ~~office,~~stockholders. The ~~Guangzhou~~share ~~office,~~exchange ~~Yun’nan~~transaction ~~office~~with China Digital and ~~Xiamen office.~~the ~~.Through~~Shareholders ~~our~~was 3Dtreated ~~imaging~~as ~~technology~~a reverse acquisition, wewith ~~participate~~China inDigital as the ~~visual~~acquirer ~~expression~~and ofAMP ~~construction-related~~as ~~industries~~the ~~and~~acquired ~~help our~~party. ~~customers~~Unless ~~complete~~the ~~visual~~context ~~technological~~suggests ~~changes~~otherwise, ~~from~~when ~~hand~~we ~~painting~~refer in this report to ~~computer-aided~~business ~~visual~~and ~~displays.~~financial Weinformation ~~endeavor~~for periods prior to ~~provide our~~the ~~customers~~consummation ~~with~~of the ~~most~~reverse ~~cost-effective~~acquisition, 3Dwe ~~digital~~are ~~visual~~referring ~~communication~~to ~~products~~the business and ~~services~~financial ~~through~~information ~~the combination~~ of ~~the latest~~China ~~visual~~Digital ~~technology~~ and ~~terminal~~its ~~display~~consolidated ~~equipment~~subsidiaries.

~~Our~~ As ~~revenues~~a ~~have~~result ~~decreased~~of toour $acquisition 5of China Digital,~~795,503~~ inwe ~~fiscal~~now ~~year~~own ~~2012 from~~all ~~$10~~of the issued and outstanding capital stock of China Digital,~~068,752~~ which in ~~fiscal~~turn ~~year~~owns ~~2011,~~all ~~representing~~of athe ~~decline~~issued ~~rate~~and outstanding capital stock of ~~approximately~~Shenzhen ~~42%~~Holding Company. Shenzhen Holding Company in turn owns our Operating Sub, Guangzhou Digital Image Technologies Co., Ltd.

24 On May 31, 2011, AMP filed a certificate of amendment with the Secretary of State of Nevada changing its name to “Computer Graphics International Inc.” and effecting a 1-for-2.18 reverse stock split of its common stock (the “Reverse Stock Split”). The Reverse Stock Split took effect when approved by FINRA on June 7, 2011. As a result of the Reverse Stock Split, the number of our shares outstanding was reduced from 35,428,981 shares immediately before the Reverse Stock Split to 16,251,846 shares immediately after the Reverse Stock Split.

~~Our~~ On ~~Corporate~~September ~~History~~26, 2011, the Company’s wholly owned subsidiary Shenzhen Holding Company entered into a Letter of Intent for Share Purchase (the “Acquisition Agreement”) with Li Dongxiang and ~~Background~~ZengXianguang (together, the “Sellers”) with respect to the shares of Guangzhou Fanyutuo 3D Technology Co., Ltd. (“Guangzhou”). Pursuant to the terms of the Acquisition Agreement, the Sellers agreed to sell all of the capital stock of Guangzhou to Shenzhen Holding Company in exchange for RMB six million (approximately US$937,236). Guangzhou is a recently formed start-up company involved in three dimensional technology. On December 27, 2011, the parties closed the purchase and sale of shares of Guangzhou pursuant to terms of the Acquisition Agreement. In connection with the closing, Guangzhou's name was changed to "Guangzhou Digital Image Technologies Co., Ltd."

Computer Graphics International Inc., or the “Company”, was incorporated under the laws of the State of Nevada on February 27, 2003 under the name AMP Productions, Ltd. (“AMP”), with the business purpose of developing, producing, marketing, and distributing low-budget feature-length films to movie theaters and ancillary markets. From inception until the reverse acquisition transaction described below, AMP earned no revenue and suffered recurring losses and net cash outflows from operations.26

~~On July 30, 2010, the controlling shareholders of AMP consented~~ toPrincipal aFactors ~~proposed~~Affecting ~~1-for-10~~Our ~~reverse~~Financial split of AMP's issued and outstanding common stock, an increase in AMP's authorized common stock to 900,000,000 shares, and the authorization of 100,000,000 shares of preferred stock. The corporate action was approved by FINRA on September 17, 2010 and effective in the State of Nevada on September 23, 2010.Performance

~~Acquisition~~ We ofbelieve ~~China~~our ~~Digital~~operating results will be primarily affected by the following factors:

On· ~~March~~Our ~~31,~~ability ~~2011,~~to weexpand ~~completed~~our apresence ~~reverse~~in ~~acquisition~~the ~~transaction through~~PRC amarket ~~share~~as ~~exchange~~we ~~(the~~plan, ~~“Share~~including ~~Exchange”)~~the ~~with~~client ~~China~~base, ~~Digital~~ and ~~its~~our ~~shareholders,~~industry ~~whereby~~presence. we· ~~acquired~~Our ~~100%~~ability ~~of the~~to ~~issued~~maintain ~~and~~a ~~outstanding~~good ~~capital~~relationship ~~stock~~with ofour ~~China~~suppliers ~~Digital in exchange~~ for ~~(i)~~continued ~~31,528,651~~supply ~~shares~~ of ~~our~~hardware ~~Common~~equipment ~~Stock,~~at ~~which~~a ~~collectively constituted~~competitive ~~approximately~~price ~~97%~~and ofquality ~~our~~in ~~issued~~order ~~and~~to ~~outstanding~~continue ~~capital~~carrying ~~stock~~out asour ofcurrent ~~and~~pricing ~~immediately~~strategy. ~~after~~· ~~the~~Our ~~consummation~~ability ofto ~~the~~attract ~~transactions contemplated~~and byretain ~~the~~key ~~Share~~management ~~Exchange~~personnel ~~Agreement~~as ~~and~~well ~~(ii)~~as ~~payment~~technical ~~(the~~staff ~~“Cash~~for ~~Component”)~~technology ofintegration ~~$2,368,471.35. The Cash~~and ~~Component~~new ~~was~~product ~~payable~~development in ~~full~~this ~~within~~competitive ~~12 months after the Closing~~market.

~~As a result of the reverse acquisition, China Digital became~~ our wholly-owned subsidiary and the former shareholders of China Digital became our controlling stockholders. The share exchange transaction with China Digital and the Shareholders was treated as a reverse acquisition, with China Digital as the acquirer and AMP as the acquired party. Unless the context suggests otherwise, when we refer in this report to business and financial information for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial information of China Digital and its consolidated subsidiaries.Taxation

~~As a result of our acquisition of China Digital, we now own~~ ~~all~~United ofStates ~~the issued~~ and ~~outstanding~~Hong capital stock of China Digital, which in turn owns all of the issued and outstanding capital stock of Shenzhen Holding Company. Shenzhen Holding Company in turn owns our two additional Operating Subs, Shenzhen Digital Image 3D Design and Development Co., Ltd. (“Shenzhen 3D Design”) and Guangzhou Digital Image Technologies Co., Ltd.Kong

On We ~~May~~are ~~31,~~subject ~~2011,~~to ~~AMP~~United ~~filed~~States afederal ~~certificate~~income oftax ~~amendment~~at ~~with~~a ~~the Secretary~~tax ofrate ~~State~~ranging offrom ~~Nevada~~15% ~~changing its name~~ to ~~“Computer Graphics International Inc~~35%.” ~~and~~No ~~effecting~~provision ~~a 1-~~for~~-2.18 reverse~~ ~~stock~~income ~~split~~taxes ofin ~~its common stock (~~the ~~“Reverse~~United ~~Stock~~States ~~Split”). The~~has ~~Reverse~~been ~~Stock~~made ~~Split~~as ~~took~~we ~~effect when~~have ~~approved~~no bytaxable ~~FINRA~~income onderived ~~June 7, 2011. As a result of the Reverse Stock Split, the number of our shares outstanding was reduced~~ from ~~35,428,981~~business ~~shares~~effectively ~~immediately~~connected ~~before the Reverse Stock Split~~ to ~~16,251,846 shares immediately after~~ the ~~Reverse Stock~~United ~~Split~~States.

On China ~~September~~Digital ~~26,~~is ~~2011,~~incorporated ~~the~~in ~~Company’s~~Hong ~~wholly~~Kong ~~owned~~and ~~subsidiary Shenzhen~~is ~~Holding~~subject ~~Company~~to ~~entered~~Hong ~~into~~Kong aprofits ~~Letter~~tax. In ofaccordance ~~Intent~~with ~~for Share Purchase (~~the ~~“Acquisition~~relevant ~~Agreement”)~~tax ~~with~~laws ~~Li Dongxiang~~ and ~~Zeng~~regulations ~~Xianguang~~of ~~(together~~Hong Kong, ~~the~~a ~~“Sellers”)~~company, ~~with~~irrespective ~~respect to the shares~~ of ~~Guangzhou~~its ~~Fanyutuo~~residential ~~3D Technology Co.~~status, ~~Ltd. (“Guangzhou~~is ~~”). Pursuant~~subject to ~~the~~tax ~~terms~~on ofall ~~the~~profits ~~Acquisition~~(excluding ~~Agreement,~~profits ~~the~~arising ~~Sellers~~from ~~agreed~~the tosale ~~sell all~~ of ~~the~~ capital ~~stock~~assets) ofarising ~~Guangzhou~~in toor ~~Shenzhen~~derived ~~Holding~~from ~~Company~~Hong inKong. No ~~exchange~~tax ~~for~~is ~~RMB~~levied ~~six~~on ~~million~~profits ~~(approximately~~arising ~~US$937~~abroad,~~236). Guangzhou is~~ aeven ~~recently~~if ~~formed~~they ~~start-up~~are ~~company~~remitted ~~involved~~to inHong ~~three~~Kong. Therefore, ~~dimensional~~China ~~technology.~~Digital Onis ~~December~~exempt ~~27,~~from ~~2011,~~Hong ~~the~~Kong ~~parties~~income ~~closed~~tax since all the ~~purchase and~~profits ~~sale~~were ofderived ~~shares~~from ofsubsidiaries ~~Guangzhou~~in ~~pursuant~~the toPRC ~~terms~~and ofthere ~~the~~were ~~Acquisition~~no ~~Agreement. In~~assessable ~~connection~~profits ~~with~~generated ~~the~~in ~~closing,~~Hong ~~Guangzhou's name~~Kong. The ~~was~~income ~~changed~~tax torate ~~"Guangzhou~~in ~~Digital~~Hong ~~Image~~Kong ~~Technologies~~is Co16.~~, Ltd~~5%."

25 People’s Republic of China

~~Principal~~ Because ~~Factors~~all ~~Affecting~~of ~~Our~~our ~~Financial~~operations ~~Performance~~are conducted in the PRC, we are governed by the Enterprise Income Tax Law of the PRC (the "EIT Law"). This law and its implementing rules impose a unified EIT rate of 25% on all enterprises, unless they qualify for certain limited exceptions.

We Under ~~believe~~the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” If the PRC tax authorities subsequently determine that we should be classified as a resident enterprise, then our ~~operating~~organization’s ~~results~~global income will be ~~primarily~~subject ~~affected by~~to PRC income tax at the ~~following~~rate ~~factors:~~of 25%. Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders.

· Since ~~Our~~2008, ~~ability~~we have been subject to ~~expand~~tax at a statutory rate of 25% on income reported in our ~~presence~~statutory financial statements filed after appropriate tax adjustments in the ~~PRC~~relevant ~~market~~periods. asOur wefuture ~~plan~~effective income tax rate depends on various factors, ~~including~~such ~~the~~as ~~client~~tax ~~base~~legislation, ~~and~~the geographic composition of our ~~industry~~pre-tax ~~presence~~income and non-tax deductible expenses incurred.

· On ~~Our~~April ~~ability~~6, to2012, ~~maintain~~the Company obtained the approval from the tax authority of PRC that it fulfills certain tax requirements of a ~~good~~company ~~relationship~~engaging ~~with~~in ~~our~~the ~~suppliers~~design of software and integrated circuit and thereby it is entitled to preferential tax relief for ~~continued~~EIT. ~~supply~~The Company is exempted from EIT in the first two profitable financial years of ~~hardware~~operation ~~equipment~~and atis further granted a ~~competitive~~50% ~~price~~relief ~~and~~from ~~quality~~the inEIT ~~order~~for the following three financial years. As the approval is officially given to ~~continue~~the ~~carrying~~Company ~~out~~in ~~our~~April, ~~current~~2012, ~~pricing~~no ~~strategy~~refund of tax would be made in respect of the EIT paid by the Company for the fiscal years ended December 31, 2009 and 2010, with the 50% relief from EIT became effective from the financial year commencing on January 1, 2011.

~~· Our ability to attract and retain key management personnel as well as technical staff for technology integration and new product development in this competitive market.~~27

~~Taxation~~ Value Added Taxes- We are also subject to value added tax, or VAT, on the sale of our products. The applicable VAT rate is 17% for products sold in the PRC. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice in the PRC, we pay VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event that the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty, which can range from zero to five times the amount of the taxes which are determined to be late or deficient. Any tax penalty assessed is expensed as a period expense if and when a determination has been made by the taxing authorities that a penalty is due. As of September 30, 2013 and 2012, we accrued $9,591 of Unpaid VAT and $35,362 of Unpaid VAT, respectively.

~~United~~ Results ~~States~~of ~~and Hong Kong~~Operations

We The ~~are~~following ~~subject~~tables toset ~~United~~forth ~~States~~key ~~federal~~components ~~income~~of ~~tax~~our atresults aof ~~tax rate~~operations ~~ranging from 15% to 35%. No provision~~ for ~~income taxes in~~ the ~~United~~years ~~States~~ended ~~has~~September ~~been~~30, ~~made~~2013 asand weSeptember ~~have~~30, no2012, ~~taxable~~both ~~income~~in ~~derived from~~dollars ~~business~~and ~~effectively~~as ~~connected~~a topercentage ~~the~~of ~~United~~our ~~States~~net sales.

China Digital is incorporated in Hong Kong and is subject to Hong Kong profits tax. In accordance with the relevant tax laws and regulations of Hong Kong, a company, irrespective of its residential status, is subject to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong. No tax is levied on profits arising abroad, even if they are remitted to Hong Kong. Therefore, China Digital is exempt from Hong Kong income tax since all the profits were derived from subsidiaries in the PRC and there were no assessable profits generated in Hong Kong. The income tax rate in Hong Kong is 16.5%.

	The year ended					The year ended
	September 30, 2012					September 30, 2013					Change
			% of Net					% of Net
	Amount		Sales			Amount		Sales			Amount		%
Net Sales	$	5,795,503		100	%	$	3,701,783		100	%	$	(2,093,720)		(36)	%
Cost of Sales		2,895,566		50	%		2,502,025		68	%		(393,541)		(14)	%
Gross profit		2,899,937		50	%		1,199,758		32	%		(1,700,179)		(59)	%
Selling, General and Administrative Expenses		4,419,803		76	%		2,928,051		79	%		(1,491,752)		(34)	%
Operating Income		(1,519,866)		(26)	%		(1,728,293)		(47)	%		(208,427)		14	%
Other Income and Interest Expense		145,998		2	%		91,601		3	%		(54,397)		(37)	%
Loss Before Income Taxes		(1,373,868)		(24)	%		(1,636,692)		(44)	%		(262,824)		(19)	%
Income Tax Credit		237,055		4	%		-		-	%		(237,055)		(100)	%
Net Loss	$	(1,136,813)		(20)	%	$	(1,636,692)		(44)	%	$	(499,879)		(44)	%

~~People’s~~ Net ~~Republic~~Sales. ofOur ~~China~~net sales decreased to $3,701,783 for the year ended September 30, 2013 from $5,795,503 for the year ended September 30, 2012, representing a 36% decrease. The decrease is primarily due to strong competition from many small companies with low operating costs in the market.

~~Because~~ Cost ~~all~~of Sales. Our cost of ~~our~~sales ~~operations~~decreased ~~are~~to ~~conducted~~$2,502,025 infor the ~~PRC~~year ended September 30, we2013 ~~are governed~~from by$2,895,566 for the ~~Enterprise~~year ~~Income~~ended ~~Tax~~September ~~Law~~30, of2012, ~~the~~representing ~~PRC~~a (14% decrease, which is mainly due to the ~~"EIT~~decreased ~~Law")~~sales. ~~This~~The ~~law~~cost ~~and~~of ~~its~~goods ~~implementing~~sold ~~rules~~per ~~impose~~sales aratio ~~unified EIT~~increased ~~rate~~to ~~of 25~~68% onfor ~~all~~the ~~enterprises~~year ended September 30, ~~unless~~2013 ~~they~~from ~~qualify~~50% for ~~certain~~the ~~limited~~year ~~exceptions~~ended September 30, 2012, mainly due to the increased hardware purchase cost which was partially offset by a decrease in the salary payment on production staff due to a reduction in staff.

~~Under the EIT Law, an enterprise established outside of China~~ ~~with~~Gross ~~“de~~Profit. Our ~~facto~~gross ~~management~~profit ~~bodies”~~decreased ~~within China is considered a resident enterprise and will normally be subject~~ to an ~~EIT~~$1,199,758 offor ~~25% on its global income. The implementing rules define~~ the ~~term~~year ~~“de~~ended ~~facto~~September ~~management~~30, ~~bodies”~~2013 asfrom ~~“an establishment that exercises~~$2, ~~in substance~~899,937 ~~overall~~for ~~management~~the ~~and~~year ~~control~~ended ~~over~~September ~~the production~~30, ~~business~~2012, ~~personnel,~~representing ~~accounting, etc., of~~ a ~~Chinese~~59% ~~enterprise~~decrease.” IfThis ~~the~~decrease ~~PRC~~was ~~tax~~primarily ~~authorities~~due ~~subsequently determine that we should be classified as a resident enterprise, then our organization’s global income will be subject~~ to ~~PRC~~the ~~income~~decreased ~~tax~~sales atand the ~~rate~~increased cost of ~~25%~~sales. ~~Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders.~~

~~Since 2008~~ Selling, weGeneral ~~have~~and ~~been~~Administrative ~~subject~~Expenses. toOur ~~tax~~selling, atgeneral aand ~~statutory~~administrative ~~rate of~~expenses ~~25%~~decreased onto ~~income~~$2,928,051 ~~reported~~for inthe ~~our~~year ~~statutory~~ended ~~financial~~September ~~statements~~30, ~~filed~~2013 ~~after~~from ~~appropriate~~$4,419,803 ~~tax~~for ~~adjustments in~~ the ~~relevant~~year ~~periods. Our~~ended ~~future~~September ~~effective~~30, ~~income~~2012, ~~tax~~representing ~~rate~~a ~~depends~~34% ondecrease. ~~various~~The ~~factors,~~changes ~~such~~are asmainly ~~tax~~due ~~legislation,~~to ~~the~~decreased ~~geographic~~cost ~~composition~~related ofto ~~our~~fewer ~~pre-tax income~~employees ~~and~~than ~~non-tax~~last ~~deductible expenses incurred.~~period

On April 6, 2012, the Company obtained the approval from the tax authority of PRC that it fulfills certain tax requirements of a company engaging in the design of software and integrated circuit and thereby it is entitled to preferential tax relief for EIT. The Company is exempted from EIT in the first two profitable financial years of operation and is further granted a 50% relief from the EIT for the following three financial years. As the approval is officially given to the Company in April, 2012, no refund of tax would be made in respect of the EIT paid by the Company for the fiscal years ended December 31, 2009 and 2010, with the 50% relief from EIT becomes effective from the financial year commencing on January 1, 2011.28

26 Other Income. Other income decreased to $91,601 for the year ended September 30, 2013 from $145,998 for the year ended September 30, 2012. This decrease was mainly due to the amount recovered from a sundry debtor decreased to zero for the year ended September 30, 2013 from $140,511 for the year ended September 30,2012, which was partially offset by increased subsidy income from the government,.

~~Value Added Taxes – We are also subject to value~~ ~~added~~Loss ~~tax,~~Before orIncome ~~VAT, on the sale of our products~~Taxes. ~~The~~Our ~~applicable~~loss ~~VAT~~before ~~rate~~income istaxes ~~17%~~increased ~~for products sold in the PRC. The amount of VAT liability is determined by applying the applicable tax rate~~ to ~~the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice in the PRC~~$1, ~~we pay VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized~~636,692 and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event that the PRC tax authorities dispute the date on which revenue is recognized for ~~tax purposes,~~ the ~~PRC~~year ~~tax~~ended ~~office~~September ~~has the right to assess a penalty~~30, ~~which~~2013 ~~can range~~ from ~~zero~~$1,373,868 tofor ~~five times~~ the ~~amount~~year ofended ~~the~~September ~~taxes~~30, ~~which~~2012, ~~are~~representing ~~determined~~a to19% ~~be late or deficient~~increase. The ~~Any~~increase ~~tax penalty~~was ~~assessed~~mainly isdue ~~expensed~~to ~~as a period expense if and when a determination has been made by~~ the ~~taxing~~decrease ~~authorities~~in ~~that~~gross ~~a penalty is due~~profit. ~~As of September 30, 2012 and 2011, we accrued $35,362, and prepaid $5,908 respectively, of unpaid VAT~~.

~~Results~~ Income ofTax ~~Operations~~Credit. Our income Tax Credit was $Nil for the year ended September 30, 2013, compared to income tax credit $237,055 for the year ended September 30, 2012. This change was mainly due to the loss before income taxed for the year ended September 30, 2013.

~~The following tables set forth key components of our results~~ ofLiquidity ~~operations for the years ended September 30, 2012~~ and ~~September~~Capital ~~30, 2011, both in dollars and as a percentage of our net sales.~~Resources

	The year ended						The year ended
	September 30, 2012						September 30, 2011
				% of Net						% of Net
	Amount			Sales			Amount			Sales
Net Sales	$	5,795,503			100	%	$	10,068,752			100	%
Cost of sales		2,895,566			50	%		3,858,809			38	%
Gross profit		2,899,937			50	%		6,209,943			62	%
Selling, General and Administrative Expenses		4,419,803			76	%		2,268,288			23	%
Operating Income		(1,519,866	)		(26	)%		3,941,655			39	%
Other income and interest expense		145,998			2	%		(7,648	)		0	%
(Loss)/Income Before Income Taxes		(1,373,868	)		(24	)%		3,934,007			39	%
Income tax credit/(expense)		237,055			4	%		(1,132,175	)		11	%
Net income		(1,136,813	)		(20	)%		2,801,832			28	%

As of September 30, 2013 and September 30, 2012, we had cash and cash equivalents of $290,038 and $263,228, respectively, primarily consisting of cash on hand and demand deposits. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report. To date, we have financed our operations primarily through cash flows from operations and equity contributions by our shareholders.

~~Net Sales. Our net sales decreased to $5,795,503~~ ~~for the year ended September 30, 2012 from $10,068,752 for the year ended September 30, 2011, representing a 42% decrease.~~ The ~~decrease~~ isfollowing ~~primarily~~table ~~due~~sets toforth ~~the overall market decline in the current Chinese real estate industry. The company’s business is in transition from~~ a ~~majority~~summary of ~~the real estate market to a full commercial CG industry, while also expanding~~ our ~~client~~cash ~~base beyond~~flows real estate industry clients. Also, we were focused on developing high-end and prestigious clients such as culture and media industry. The portion of our revenue derived from industry clients beyond real estate increase to 39% of total sales for the ~~year ended~~periods ~~September 30, 2012 from 8% of total sales for the year ended September 30, 2011.~~indicated:

~~Cost of Sales. Our~~ ~~cost~~Cash of sales decreased to $2,895,566 for the year ended September 30, 2012 from $3,858,809 for the year ended September 30, 2011, mainly due to the decreased sales. The cost of goods sold per sales ratio increased to 50% for the year ended September 30, 2012 from 38% for the year ended September 30, 2011, mainly due to the increased hardware purchase cost , and increase in production cost due to salaries increased to $1,468,432 for the year ended September 30, 2012 from $756,502 for the year ended September 30,2011.Flows

~~Gross Profit. Our~~ ~~gross~~(All ~~profit~~amounts ~~decreased~~in ~~to $2,899,937 for the year ended September 30, 2012 from $6,209,943 for the year ended September 30, 2011, representing a 53% decrease~~U. ~~This decrease was primarily due to the decreased sales and the increased cost of production~~S. dollars)

Selling, General and Administrative Expenses. Our selling, general and administrative expenses increased to $4,419,803 for the year ended September 30, 2012 from $2,268,288 for the year ended September 30, 2011. The Selling, General and Administrative Expense per sales ratio changed to 76% for the year ended September 30, 2012 from 23% for the year ended September 30, 2011, mainly due to employee benefits related to the Company’s acquisition of our Guangzhou Subsidiary and increased market promotion expense, also increased salaries for selling and administrative staff which increased to $1,252,996 for the year ended September ,2012 from $472,081 for the year ended September 30,2011.

	The Year Ended
	September 30,
	2012		2013
Net cash used in operating activities	$	(246,562)	$	(502,027)
Net cash provided by (used in) investing activities		833,065		(45,445)
Net cash (used in) provided by financing activities		(1,098,435)		547,480
Effects of Exchange Rate change in cash		(3,972)		26,802
Net (decrease) increase in cash and cash equivalents		(515,904)		26,810
Cash and cash equivalent at beginning of the period		779,132		263,228
Cash and cash equivalent at end of the period	$	263,228	$	290,038

27 Operating activities

~~Other~~ Net ~~Income.~~cash ~~Other~~used ~~income increased~~in tooperating activities was $~~145~~502,~~998~~027 for the year ended September 30, ~~2012~~2013, ~~from~~as compared to net cash used in operating activities of $(7246,~~648)~~ 562 for the year ended September 30, ~~2011~~2012. ~~This~~The ~~increase was~~change ~~mainly~~is ~~due~~attributable to ~~amount~~the ~~recovered~~decrease ~~from~~in anet ~~sundry~~income ~~debtor~~of $499,879, the increase of $45,620 in accounts receivable, the decrease of $69,145 in other receivables and deposits, the decrease of $4,246 in rental deposits, the increase of $37,800 in accounts payable, the increase of $27,195 in accrued expenses and other payable, the increase of $35,932 in value-added tax liability, and the increase of $55,118 in deferred revenue.

~~(Loss)/Income Before Income Taxes.~~ ~~Our~~Investing income before income taxes decreased to $(1,136,813) for the year ended September 30, 2012 from $2,801,832 for the year ended September 30, 2011, representing a 141% decrease. The decrease was mainly due to the decrease in sales and increase in cost of sales and selling, general and administrative expensesactivities

~~Income tax credit/(expenses).~~ ~~Our~~Net ~~income~~cash ~~tax~~used ~~credit~~in ~~was~~investing ~~$(237,055)~~activities for the year ended September 30, ~~2012~~2013 was $45,445, as compared to ~~income~~$833,065 ~~tax~~net ~~expense~~cash ~~$1,132,175~~provided by investing activities for the year ended September 30, ~~2011~~2012. ~~This~~The change was mainly ~~due~~attributable to ~~the~~acquisition ~~loss~~of ~~before~~property ~~income~~and ~~taxed~~equipment, ~~for~~and ~~the~~disposal ~~year~~of ~~ended~~property ~~September~~and ~~30, 2012~~equipment.

~~Liquidity and Capital Resources~~29

~~As of September 30, 2012 and September 30, 2011, we had cash~~ ~~and~~Financing cash equivalents of 263,228 and $779,132 , respectively, primarily consisting of cash on hand and demand deposits. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report. To date, we have financed our operations primarily through cash flows from operations and equity contributions by our shareholders.activities

~~The~~ Net ~~following~~cash ~~table~~provided ~~sets~~by ~~forth~~financing aactivities ~~summary~~for ofthe ~~our~~year ended September 30, 2013 was $547,480, as compared to $1,098,435 net cash ~~flows~~used in investing activities for the ~~periods~~year ~~indicated:~~ended September 30, 2012. The change was due to net proceeds from a short-term loan of $464,700 and proceeds from a shareholder of $82,780.

~~Cash Flow~~ Inflation

~~(all~~ Inflation ~~amounts~~and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in Uthe foreseeable future.S. ~~dollars)~~However, our management will closely monitor price changes in the digital video service industry and strives to continually maintain effective cost control in operations.

	The year Ended
	September 30,
	2012			2011
Net cash (used in)/provided by operating activities	$	(246,562	)	$	3,390,765
Net cash provided by (used in) investing activities		833,065			(2,469,238	)
Net cash used in financing activities		(1,098,435	)		(1,140,202	)
Effects of Exchange Rate Change in Cash		(3,972	)		41,405
Net Decrease in Cash and Cash Equivalents		(515,904	)		(177,270	)
Cash and Cash Equivalent at Beginning of the Period		779,132			956,402
Cash and Cash Equivalent at End of the Period		263,228			779,132

Off-Balance Sheet Arrangements

~~Operating~~ We ~~activities~~do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

~~Net cash used in operating activities was~~ ~~$246,562~~Critical ~~for~~Accounting the year ended September 30, 2012, as compared to net cash provided by operating activities of $3,390,765 for the year ended September 30, 2011. The change is attributable to the decrease in net income of $3,938,645, the increase of $51,131 in accounts receivable, the increase of $161,363 in other receivables and deposits, the increase of $2,450 in rental deposits, the decrease of $2,101 in inventory, the increase of $159,556 in amount due to a shareholder, the decrease of $15,949 in accounts payable, the increase of $269,872 in accrued expenses and other payable, the decrease of $29,447 in value-added tax liability, and the decrease of $265,988 in income tax payable.Policies

~~Investing~~ The ~~activities~~Company’s revenue recognition policies are in compliance with SEC Staff Accounting bulletin (“SAB”) 104 (codified in FASB ASC Topic 605). Sales revenue is recognized at the completion of delivery to customers when a formal arrangement exists, the price is fixed or determinable, no other significant obligations of the Company exist and collectability is reasonably assured at the date of completion of delivery. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

~~Net cash provided by investing activities~~ ~~for~~Use ~~the year ended September 30, 2012 was $833,065, as compared to $2,469,238 net cash used in investing activities for the year ended September 30, 2011. The change was mainly attributable to acquisition~~ of ~~property and equipment, amount recovered from a sundry debtor and the refund of deposit for acquisition of a leasehold property.~~Estimates

28 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Financing~~ Accounts ~~activities~~Receivable

~~Net~~ The ~~cash~~Company ~~used~~maintains inreserves ~~financing~~for ~~activities~~potential ~~for~~ credit losses on accounts receivable. Management reviews the ~~year~~composition ~~ended~~of ~~September~~accounts ~~30,~~receivable ~~2012~~and ~~was~~analyzes $1historical bad debts,~~098,435,~~ ascustomer ~~compared~~concentrations, tocustomer $1credit worthiness,~~140,202~~ ~~net~~current ~~cash~~economic ~~used~~trends and changes in ~~investing~~customer ~~activities~~payment ~~for~~patterns to evaluate the ~~year ended~~adequacy ~~September~~of ~~30,~~these ~~2011~~reserves. Reserves ~~The~~are ~~change~~recorded ~~was~~based ~~due~~on tothe aCompany’s ~~repayment~~historical collection history. Allowance for doubtful accounts as of $1September 30,~~098,435~~ ~~made~~2013 toand a2012 ~~shareholder~~were $235,499 and $91,577, respectively.

~~Inflation~~ Impairment of Long-Lived Assets

~~Inflation~~ The Company adopted the Property, Plant and ~~changing~~Equipment ~~prices~~Topic ~~have~~of ~~not~~the ~~had~~Codification, awhich ~~material~~addresses ~~effect on~~financial ~~our~~accounting ~~business~~and reporting for the impairment or disposal of long-lived assets and wesupersedes doprevious ~~not~~accounting ~~expect~~guidance, ~~that~~“Accounting ~~inflation~~for orthe ~~changing~~Impairment ~~prices~~of ~~will~~Long-Lived ~~materially~~Assets ~~affect~~and ~~our~~for ~~business~~Long-Lived inAssets to be Disposed Of,” and “Reporting the ~~foreseeable~~Results ~~future~~of Operations for a Disposal of a Segment of a Business. ~~However~~” The Company periodically evaluates the carrying value of long-lived assets to be held and used, ~~our~~which ~~management~~requires ~~will~~impairment ~~closely~~losses ~~monitor~~to ~~price~~be ~~changes~~recorded on long-lived assets used in ~~the~~operations ~~digital~~when ~~video~~indicators ~~service~~of ~~industry~~impairment are present and ~~strives~~the undiscounted cash flows estimated to ~~continually~~be ~~maintain effective~~generated ~~cost~~by ~~control~~those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in ~~operations~~a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company believes that, as of September 30, 2013, there were no impairments of its long-lived assets.

~~Off-Balance Sheet Arrangements~~30

~~We do not have any off balance sheet arrangements that have~~ orComprehensive are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.Income

~~Critical~~ The ~~Accounting~~Company ~~Policies~~uses SFAS 130 “Reporting Comprehensive Income” (codified in FASB ASC Topic 220). Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive income for the years ended September 30, 2013 and 2012 included net income and foreign currency translation adjustments.

~~The Company’s revenue recognition policies are in compliance~~ ~~with~~Foreign ~~SEC~~Currency Staff Accounting bulletin (“SAB”) 104 (codified in FASB ASC Topic 605). Sales revenue is recognized at the completion of delivery to customers when a formal arrangement exists, the price is fixed or determinable, no other significant obligations of the Company exist and collectability is reasonably assured at the date of completion of delivery. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.Translation

~~Use~~ As of ~~Estimates~~September 30, 2013 and 2012, the accounts of the Company were maintained, and its financial statements were expressed, in Chinese Yuan Renminbi (“CNY”). Such financial statements were translated into U.S. Dollars (“USD”) in accordance with Statement of Financial Accounting Standards (SFAS) No. 52, “Foreign Currency translation”, included in the Codification as ASC830, Foreign Currency Matters, with the CNY as the functional currency. According to the Codification, all assets and liabilities were translated at the current exchange rate, stockholders’ equity are translated at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with the Comprehensive Income Topic of the Codification, as a component of shareholders’ equity. Transaction gains and losses are reflected in the income statement.

~~The preparation of financial statements in conformity with generally~~ ~~accepted~~Recent ~~accounting~~Accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.Pronouncements

~~Accounts~~ In ~~Receivable~~February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This ASU does not change the current requirements for reporting net income or other comprehensive income in financial statements. However, this guidance requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. For public entities, the guidance is effective prospectively for reporting periods beginning after December 15, 2012. For nonpublic entities, the guidance is effective prospectively for reporting periods beginning after December 15, 2013. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

~~The~~ In ~~Company~~July ~~maintains~~2012, ~~reserves~~FASB ~~for~~issued ~~potential~~an ~~credit~~amendment ~~losses~~(ASU ~~on accounts~~No. ~~receivable~~2012-02) to Intangibles–Goodwill and Other (ASC Topic 350). ~~Management~~ ~~reviews~~In accordance with the ~~composition~~amendments in this update, an entity has the option first to assess qualitative factors to determine whether the existence of ~~accounts~~events ~~receivable~~and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and ~~analyzes~~circumstances, ~~historical~~an ~~bad~~entity ~~debts~~concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, ~~customer~~ ~~concentrations~~then the entity is not required to take further action. However, ~~customer~~if ~~credit~~an ~~worthiness~~entity concludes otherwise, ~~current~~then ~~economic~~it ~~trends~~is required to determine the fair value of the indefinite-lived intangible asset and ~~changes~~perform the quantitative impairment test by comparing the fair value with the carrying amount in ~~customer~~accordance ~~payment~~with ~~patterns~~Subtopic 350-30. An entity also has the option to ~~evaluate~~ bypass the ~~adequacy~~qualitative ofassessment ~~these~~for ~~reserves~~any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. ~~Reserves~~ ~~are~~An ~~recorded~~entity ~~based~~will onbe able to resume performing the ~~Company’s~~qualitative ~~historical~~assessment ~~collection~~in ~~history~~any subsequent period. ~~Allowance~~ The amendments are effective for ~~doubtful~~annual ~~accounts~~and asinterim ofimpairment tests performed for fiscal years beginning after September 3015, 2012, ~~and~~with ~~2011~~early ~~were~~adoption ~~both~~permitted. ~~nil~~The adoption of this guidance had no impact on our consolidated financial position or results of operations.

~~Impairment~~ The ofCompany ~~Long~~does not believe any other recently issued but not yet effective accounting standards from ASU 2013-~~Lived~~01 ~~Assets~~to ASU 2013-12 , if currently adopted, would have a material effect of the consolidated financial position, results of operation and cash flows.

The Company adopted the Property, Plant and Equipment Topic of the Codification, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes previous accounting guidance, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” and “Reporting the Results of Operations for a Disposal of a Segment of a Business.” The Company periodically evaluates the carrying value of long-lived assets to be held and used, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company believes that, as of September 30, 2012, there were no impairments of its long-lived assets.31

29 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Comprehensive~~ Not ~~Income~~applicable.

~~The Company uses SFAS 130 “Reporting Comprehensive Income”~~ ~~(codified~~ITEM ~~in FASB ASC Topic 220)~~8. FINANCIAL ~~Comprehensive~~STATEMENTS ~~income~~AND isSUPPLEMENTARY ~~comprised of net income and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders~~DATA. ~~Comprehensive income for the years ended September 30, 2012 and 2011 included net income and foreign currency translation adjustments.~~

~~Foreign~~ Financial ~~Currency Translation~~Statements

As The offull ~~September~~text ~~30, 2012 and 2011, the accounts~~ of ~~the~~our ~~Company were~~audited ~~maintained, and its~~ financial statements ~~were~~as ~~expressed, in Chinese Yuan Renminbi (“CNY”). Such financial statements were translated into U.S. Dollars (“USD”) in accordance with Statement~~ of ~~Financial~~September ~~Accounting Standards (SFAS) No. 52~~30, ~~“Foreign~~2012 ~~Currency translation”, included in the Codification as ASC830, Foreign Currency Matters, with the CNY as the functional currency. According to the Codification, all assets~~ and ~~liabilities~~2013 ~~were~~begins ~~translated~~on atpage ~~the current~~F-1 exchange rate, stockholders’ equity are translated at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with the Comprehensive Income Topic of ~~the~~this ~~Codification, as a component of shareholders’ equity~~Report. ~~Transaction gains and losses are reflected in the income statement.~~

~~Recent~~ ITEM ~~Accounting~~9. ~~Pronouncements~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

~~The following pronouncements have become effective during the~~ ~~period~~Not ~~covered by our financial statements or will become effective after the end of the period covered by our financial statements:~~applicable.

Pronouncement	Issued	Title
ASC 605	October 2009	Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force
ASC 860	December 2009	Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets
ASC 505	January 2010	Accounting for Distributions to Shareholders with Components of Stock and Cash – a consensus of the FASB Emerging Issues Task Force
ASC 810	January 2010	Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification
ASC 718	January 2010	Compensation – Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption of Compensation
ASC 820	January 2010	Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements
ASC 810	February 2010	Consolidation (Topic 810): Amendments for Certain Investment Funds
ASC 815	March 2010	Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives
ASC-310 Receivables	July 2010	For public entities, the disclosure as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. For nonpublic entities, the disclosures are effective for annual reporting period ending on or after December 15, 2011.

ITEM 9A. CONTROLS AND PROCEDURES.

~~Management does not anticipate that the adoption of these standards~~ ~~will have~~ (a) ~~material~~Evaluation ~~impact~~of onDisclosure ~~the~~Controls ~~financial~~and ~~statements.~~Procedures

Our management, with the participation of our principal executive officer and principal financial officer, Jing Wang and Xiaohong Peng, respectively, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, Ms. Wang and Ms. Peng concluded that as of September 30, 2013, our disclosure controls and procedures were not effective

~~ITEM~~ (b) ~~7A.~~Management’s ~~QUANTITATIVE~~annual ~~AND~~report ~~QUALITATIVE~~on ~~DISCLOSURES~~internal ~~ABOUT~~control ~~MARKET~~over ~~RISK.~~financial reporting

~~Not~~ Management ~~applicable~~is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting refers to the process designed by, or under the supervision of, our chief executive officer and chief financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP, and includes those policies and procedures that:

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

(1)	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

(2)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and

(3)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

~~Financial Statements~~32

~~The~~ Management ~~full~~assessed ~~text~~the effectiveness of our ~~audited~~internal control over financial ~~statements~~reporting as of September 30, ~~2011~~2013. ~~and~~In ~~2012~~making ~~begins~~this onassessment, ~~page~~management Fused the framework set forth in the report entitled Internal Control -1 Integrated Framework issued by the Committee of ~~this~~Sponsoring ~~Report~~Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting is not effective, as of September 30, 2013.

~~ITEM~~ Our 9.management ~~CHANGES~~identified INthe ~~AND~~following ~~DISAGREEMENTS~~material ~~WITH~~weaknesses ~~ACCOUNTANTS~~in ONour ~~ACCOUNTING~~internal ~~AND~~control ~~FINANCIAL~~over ~~DISCLOSURE.~~financial reporting as of September 30, 2013:

Not applicable.

	·	Lack of full-time CFO. Our CFO was appointed in June 2013 on a part time basis. Accordingly, she may not have sufficient oversight of the financial reporting process. In addition, our CFO lacks the requisite expertise in U.S. GAAP.

	·	Lack of sufficient complement of personnel. In addition to our CFO, we did not maintain a sufficient complement of personnel with an appropriate level of accounting knowledge, experience and training in the selection, application and implementation of U.S. GAAP commensurate with our financial reporting requirements under the Exchange Act. This material weakness could result in a material misstatement of our consolidated financial statements due to misapplication of accounting principles. This lack of expertise to prepare, evaluate and review our financial statements in accordance with U.S. GAAP constitutes a material weakness in our internal control over financial reporting. Until such time as we hire the proper internal accounting staff with the requisite U.S. GAAP experience, it is unlikely we will be able to remediate the material weakness in our internal control over financial reporting

~~ITEM 9A. CONTROLS AND PROCEDURES.~~33

~~(a)~~· ~~Evaluation~~Lack of ~~Disclosure~~independent ~~Controls~~Audit Committee. Additionally, we do not have an independent audit committee. Until such time as we appoint qualified independent directors to the Board of Directors and ~~Procedures~~audit committee, it is unlikely we will be able to remediate the material weakness in our internal control over financial reporting · Lack of controls over the financial close and reporting process. We did not maintain effective controls, including monitoring, over our financial close and reporting process. Specifically, we do not have adequately designed controls to ensure the completeness, accuracy and restricted access to spreadsheets used in the period-end financial closing process. This control deficiency could result in errors in the performance of consolidations and the preparation of U.S. GAAP financial statements. Our CFO, and accounting personnel do not have sufficient knowledge, experience and training in maintaining books and records and preparing financial statements in accordance with US GAAP standards and SEC rules and regulations. The accounting skills and understanding necessary to fulfill the requirements of US GAAP-based reporting, including the skills of US GAAP-based period end closing, consolidation of financial statements, and US GAAP conversion, are inadequate and were inadequately supervised.

Our management, ~~with~~has ~~the~~identified ~~participation of our principal executive officer and principal financial officer, Jing Wang and Yongqing Ma, respectively, evaluated~~ the ~~effectiveness~~following ofsteps our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ~~ensure~~address ~~that information required to be disclosed by a company in~~ the ~~reports,~~above such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, Ms. Wang and Ms. Ma concluded that as of September 30, 2012, our disclosure controls and procedures were effective to satisfy the objectives for which they are intended.weaknesses:

(b1) ~~Management’s~~We ~~annual~~will ~~report~~hire, onas ~~internal~~needed, ~~control over~~key ~~financial~~accounting ~~reporting~~personnel with technical accounting expertise and reorganize the finance department to ensure that accounting personnel with adequate experience, skills and knowledge relating to complex, non-routine transactions are directly involved in the review and accounting evaluation of our complex, non-routine transactions.

~~Management is responsible for establishing and maintaining adequate~~ ~~internal~~(2) ~~control~~We ~~over~~will ~~financial reporting for the Company. Internal control over financial reporting refers to the process designed by~~employ, oras ~~under the supervision of~~needed, ~~our~~outside ~~chief~~professionals ~~executive officer and chief financial officer, and effected by our Board of Directors, management and other personnel,~~ to provide ~~reasonable~~key ~~assurance~~accounting ~~regarding~~personnel ~~the~~ongoing ~~reliability~~technical oftrainings ~~our~~to ~~financial~~ensure ~~reporting~~their ~~and~~proper ~~the~~understanding ~~preparation~~ of ~~financial~~newly ~~statements~~announced ~~for~~accounting ~~external purposes in accordance with U~~standards.~~S. GAAP, and includes those policies and procedures that:~~

~~(1)~~ This ~~pertain~~annual toreport ~~the~~does ~~maintenance~~not ofinclude ~~records~~an ~~that~~attestation inreport ~~reasonable~~of ~~detail~~the ~~accurately~~Company’s ~~and~~registered ~~fairly~~public ~~reflect~~accounting ~~the~~firm ~~transactions~~regarding ~~and~~internal ~~dispositions~~control ofover ~~our~~financial ~~assets;~~reporting.

~~(2)~~ Management's ~~provide~~report ~~reasonable~~was ~~assurance~~not ~~that~~subject ~~transactions~~to ~~are~~attestation ~~recorded~~by asthe ~~necessary~~Company's toregistered ~~permit~~public ~~preparation~~accounting offirm ~~financial~~as ~~statements~~we inare ~~accordance~~a ~~with~~smaller ~~U.S.~~reporting ~~GAAP,~~company and ~~that~~not ~~our~~required ~~receipts~~to ~~and~~provide ~~expenditures are being made only in accordance with~~ the ~~authorization of our management and directors; and~~report.

(3c) ~~provide~~Changes ~~reasonable~~in ~~assurance~~internal ~~regarding~~control ~~prevention~~over ~~or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the~~ financial ~~statements.~~reporting

31 During the fiscal year ended September 30, 2013, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~Management assessed the effectiveness of our internal control~~ ~~over~~ITEM ~~financial reporting as of September 30, 2012~~9B. OTHER In making this assessment, management used the framework set forth in the report entitled Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway CommissionINFORMATION. ~~Based on that evaluation, our management concluded that our internal control over financial reporting is effective, as of September 30, 2012.~~

~~(c) Changes in internal control over financial reporting~~ None.

During the fiscal year ended September 30, 2012, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.34

~~ITEM~~ PART ~~9B. OTHER INFORMATION.~~III

~~None~~ ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

32 Executive Officers and Directors

~~PART~~ The ~~III~~following sets forth information about our directors and executive officers as of the date of this report:

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

NAME	AGE	POSITION
Hua Zeng	32	Director (Chairman)
Jing Wang	38	Chief Executive Officer, President and a Director
Xiaohong Peng	42	Chief Financial Officer, Treasurer, Secretary and a Director

Hua Zeng Mr. Zeng has served as Chairman of the Board of Directors of CGII since April 2011 and as Executive ~~Officers~~Director of China Digital since its incorporation in August 2009 and ~~Directors~~was one of the co-founders of China Digital. He has served as the Chief Executive Officer of Shenzhen Holding Company since April 2009. From June 2004 to April 2009 he served as the Chief Executive Officer of Shenzhen Digital Image 3D Design and Development Co., Ltd, one of our former operating subsidiaries. From 2003 to 2004, he served as national brand promotion manager in Huipu (China). In 2004, he started to launch his own business and entered into 3D animation industry in 2006. He graduated from the School of Arts and Crafts in Hangzhou and majored in decoration design. Mr. Zeng was selected to serve as Chairman because of his experience in management and the digital graphics business.

~~The~~ Jing ~~following~~Wang Ms. ~~sets~~Wang ~~forth~~was ~~information~~elected ~~about~~as ~~our~~the ~~directors~~Chief Executive Officer and ~~executive~~ ~~officers~~President of the Company in March 2011 and has served as the General Vice President of Shenzhen Digital Image Technology Co., Ltd., our Operating Sub, since August 2006. From June 2004 to August 2006, she served as a General Manager of the ~~date~~operations department within that company. Her duties with Shenzhen Digital Image Technology Co., Ltd. began in customer service and she was ultimately promoted to General Manager of ~~this~~the ~~report:~~operations department in April 2006. She graduated from Hubei Huangshi College. Ms. Wang was selected to serve as a director because of her experience in marketing and customer relations.

NAME	AGE	POSITION
Hua Zeng	31	Director (Chairman)
Jing Wang	37	Chief Executive Officer, President and a Director
Yongqing Ma	42	Chief Financial Officer, Treasurer, Secretary and a Director

Xiaohong Peng Effective June 1, 2013, the Company appointed Xiaohong Peng as a temporary Chief Financial Officer and a director. Ms. Peng has nearly 10 years working experience in finance. She is a qualified intermediate accountant in China. She is familiar with accounting, financial management, tax and local policies and regulations. Before joining the company, Ms. Peng worked as the finance manager in Shenzhen Dianlifang Technology Co., Ltd. and before that she worked at Guilin Changhe Agricultural Development Co., Ltd. as financial controller. Ms. Peng graduated from Zhongnan University of Economics and Law.

~~Hua Zeng Mr. Zeng has served as Chairman of the~~ ~~Board~~Family of Directors of CGII since April 2011 and as Executive Director of China Digital since its incorporation in August 2009 and was one of the co-founders of China Digital. He has served as the Chief Executive Officer of Shenzhen Holding Company since April 2009. From June 2004 to April 2009 he served as the Chief Executive Officer of Shenzhen Digital Image 3D Design and Development Co., Ltd, one of our Operating Subs. From 2003 to 2004, he served as national brand promotion manager in Huipu (China). In 2004, he started to launch his own business and entered into 3D animation industry in 2006. He graduated from the School of Arts and Crafts in Hangzhou and majored in decoration design. Mr. Zeng was selected to serve as Chairman because of his experience in management and the digital graphics business.relationships

~~Jing Wang Ms. Wang was elected as the Chief Executive~~ ~~Officer~~There ~~and~~is ~~President~~no offamily ~~the~~relationship ~~Company~~among inany ~~March 2011 and has served as the General Vice President~~ of ~~Shenzhen Digital Image Technology Co., Ltd., one of~~ our ~~Operating~~officers ~~Subs,~~or ~~since August 2006~~directors. From June 2004 to August 2006, she served as a General Manager of the operations department within that company. Her duties with Shenzhen Digital Image Technology Co., Ltd. began in customer service and she was ultimately promoted to General Manager of the operations department in April 2006. She graduated from Hubei Huangshi College. Ms. Wang was selected to serve as a director because of her experience in marketing and customer relations.

~~Yongqing Ma Ms. Ma was elected as the Chief~~ ~~Financial~~Involvement ~~Officer of the Company~~ in ~~March~~certain ~~2011. From~~legal January 2009 to September 2010 she served as the Chief Financial Officer of Sino Green Land Corporation, a U.S. public company. From January 2006 to August 2007 she served as Vice president of finance of PacificNet Inc. She has served as a director of Shenzhen Longtou Investment Limited & Longtou Investment (China) Limited, a private financial advisory company, since February 2004. Ms. Ma received her MBA from American Kennedy Western University, and bachelor degree from Jinan University in China. Ms. Ma was selected to serve as a director because of her experience in finance management and investment.proceedings

~~Family~~ To ~~relationships~~the best of our knowledge, none of our directors, executive officers or control persons has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws (except where not subsequently dismissed without sanction or settlement), or from engaging in any type of business practice, or a finding of any violation of federal or state securities laws. To the best of our knowledge, no petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of any of our directors, officers or control persons, or any partnership in which any of our directors, officers or control persons was a general partner at or within two years before the time of such filing, or any corporation or business association of which any of our directors, officers or control persons was an executive officer at or within two years before the time of such filing.

~~There is no family relationship among any of our officers or directors.~~35

~~Involvement~~ Section in16(A) ~~certain~~Beneficial ~~legal~~Ownership ~~proceedings~~Reporting Compliance

To Under ~~the~~U.S. ~~best~~securities ~~of our knowledge~~laws, ~~none of our~~ directors, certain executive officers orand ~~control~~ persons ~~has~~holding ~~been~~more ~~convicted~~than in10% aof ~~criminal~~our ~~proceeding,~~common ~~excluding~~stock ~~traffic~~must ~~violations~~report ortheir ~~similar~~initial ~~misdemeanors, or~~ownership ~~has~~of ~~been~~the acommon ~~party~~stock, toand any ~~judicial~~changes orin ~~administrative proceeding during the past ten years~~ that ~~resulted in a judgment~~ownership, ~~decree or~~to ~~final order enjoining~~ the ~~person~~SEC. ~~from~~The ~~future~~SEC ~~violations~~has ~~of,~~designated orspecific ~~prohibiting~~due ~~activities~~dates ~~subject~~for ~~to,~~these ~~federal~~reports. orBased ~~state~~solely ~~securities laws~~on ~~(except~~our ~~where~~review ~~not subsequently dismissed without sanction or settlement), or from engaging in any type~~ of ~~business~~copies ~~practice, or a finding~~ of ~~any~~such ~~violation~~reports offiled ~~federal~~with ~~or state securities laws. To~~ the ~~best~~SEC ~~of our knowledge, no petition under the federal bankruptcy laws or any state insolvency law was filed~~ by orand ~~against,~~written orrepresentations ~~a receiver, fiscal agent or similar officer was appointed by a court for the business or property~~ of ~~any of~~ our directors, ~~officers~~and orexecutive ~~control persons~~offers, orwe ~~any~~believe ~~partnership~~that ~~in which any of~~ our directors, ~~officers~~and orexecutive ~~control~~offers ~~persons~~filed ~~was a general partner at or within two years before~~ the ~~time~~required ofreports ~~such~~on ~~filing, or any corporation or business association of which any of our directors, officers or control persons was an executive officer at or within two years before the~~ time ofin ~~such~~fiscal ~~filing~~year 2013.

33 Audit Committee

~~Section~~ Our 16board of directors functions as an audit committee and performs some of the same functions as an audit committee including: (A1) ~~Beneficial~~selection ~~Ownership~~and ~~Reporting~~oversight ~~Compliance~~of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; and (3) engaging outside advisors. We are not a "listed company" under SEC rules and are therefore not required to have an audit committee comprised of independent directors.

~~Under U.S. securities laws, directors, certain executive officers~~ ~~and~~Code ~~persons holding more than 10%~~ of our common stock must report their initial ownership of the common stock, and any changes in that ownership, to the SEC. The SEC has designated specific due dates for these reports. Based solely on our review of copies of such reports filed with the SEC by and written representations of our directors and executive offers, we believe that our directors and executive offers filed the required reports on time in fiscal year 2012,.Ethics

~~Audit~~ As ~~Committee~~of September 30, 2013, we have not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Because of our relatively small size and because we have only three officers and directors, we believe a code of ethics would have limited utility at this time.

~~Our board of directors functions as an audit committee and performs~~ ~~some~~ITEM of the same functions as an audit committee including: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; and (3) engaging outside advisors11. EXECUTIVE ~~We are not a "listed company" under SEC rules and are therefore not required to have an audit committee comprised of independent directors~~COMPENSATION.

~~Code~~ Summary ofCompensation ~~Ethics~~Table — Fiscal Years Ended September 30, 2012 and 2013

As The offollowing ~~September~~table ~~30,~~sets ~~2012,~~forth weinformation ~~have~~concerning ~~not~~all ~~adopted~~cash aand ~~Code~~non-cash ofcompensation ~~Ethics for~~awarded ~~Financial Executives~~to, ~~which~~earned ~~would~~by ~~include~~or ~~our~~paid ~~principal~~to ~~executive~~the ~~officer,~~named ~~principal~~persons ~~financial~~for ~~officer,~~services ~~principal~~rendered ~~accounting officer~~in orall ~~controller,~~capacities orduring ~~persons~~the ~~performing~~noted ~~similar functions~~periods. ~~Because~~No ofother ~~our~~executive ~~relatively~~officer ~~small~~received ~~size~~total ~~and~~annual ~~because~~salary ~~we have only three officers~~ and ~~directors,~~bonus wecompensation ~~believe~~in aexcess ~~code~~ of ~~ethics~~$100,000 ~~would~~during ~~have~~the ~~limited~~fiscal ~~utility~~year atended ~~this~~September ~~time~~30, 2013.

~~ITEM 11. EXECUTIVE COMPENSATION.~~ Summary Compensation Table

~~Summary~~ Non-Equity Nonqualified Stock Option Incentive Plan Deferred All Other Name and principal Salary Bonus Awards Awards Compensation ~~Table~~ Compensation — Compensation ~~Fiscal~~ Total ~~Years~~ position ~~Ended~~ Year ~~September~~ 30 ($) ($) ($) ($) ($) Earnings ($) ($) ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Hua Zeng, ~~2011~~Chairman 2012 $ 18,504 $ 18,504 2013 $ 29,278 $ 29,278 Jing Wang, Chief Executive 2012 $ 18,196 Nil Nil Nil Nil Nil Nil $ 18,196 Officer 2013 $ 27,326 Nil Nil Nil Nil Nil Nil $ 27,326 Xiaohong Peng, Chief Financial Officer, Treasurer and Secretary 2013 Nil Nil Nil Nil Nil Nil Nil Yongqing Ma, former Chief Financial 2012 $ 92,400 $ 92,400 Officer, Treasurer and Secretary (1) 2013 $ 22,500 $ 22,500

~~The following table sets forth information concerning all cash~~ ~~and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods~~(1) Ms. NoMa ~~other~~resigned ~~executive~~her ~~officer~~positions ~~received~~with ~~total~~Company ~~annual~~effective ~~salary~~June ~~and bonus compensation in excess of $100~~1,~~000~~ ~~during the fiscal year ended September 30, 2012~~2013.

Summary Compensation Table

Name and principal position

Year

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compensation ($)

Nonqualified Deferred Compensation Earnings ($)

All Other Compensation ($)

Total ($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Hua Zeng, Chairman

2012

18,504

2011

11,523

Jing Wang, Chief Executive

2012

18,196

Nil

18,196

Officer

2011

14,809

Nil

14,809

Yongqing Ma, Chief Financial

2012

92,400

Nil

92,400

Officer, Treasurer and Secretary

2011

42,000

Nil

42,000

	36

~~On March 31, 2011, we acquired China Digital in a reverse acquisition~~ ~~transaction~~Summary ~~that was structured as a share exchange and in connection with that transaction Jing Wang became our Chief Executive Officer. Prior to the effective date~~ of ~~the~~Employment ~~reverse~~Agreements ~~acquisition, Thomas E. Mills served as the Chief Executive Officer~~ and ~~President~~ ofMaterial ~~AMP. The compensation shown in this table includes the amounts Jing Wang received from the Operating Subs prior to the consummation of the reverse acquisition.~~Terms

34 On June 24, 2011, we entered into an employment agreement (the “CFO Agreement”) with Yongqing Ma, our former Chief Financial Officer (the “Executive”). The term of the CFO Agreement is from April 1, 2011 to March 31, 2014. This employment agreement was terminated on June 1, 2013.

~~Summary~~ Also pursuant to the agreement, the Executive received grants of ~~Employment~~40,000 ~~Agreements~~shares ~~and~~of ~~Material~~the ~~Terms~~Company’s common stock on July 26, 2011and July 25, 2012. (such grants, the “Equity Grants”).An additional grant of 40,000 shares that was to be received in 2013 was forfeited as of September 30, 2013.

On None ~~June~~of ~~24,~~our ~~2011,~~other ~~CGII~~officers ~~entered~~and ~~into~~directors has an employment agreement ~~(the~~ ~~“CFO Agreement”)~~ with ~~Yongqing Ma, its Chief Financial Officer (~~the ~~“Executive”)~~company. ~~The term of the CFO Agreement is from April 1, 2011 to March 31, 2014.~~

~~Pursuant~~ The toOperating ~~the~~Sub, ~~CFO~~our ~~Agreement~~operating affiliates, ~~the~~are ~~Executive~~private ~~will~~limited ~~receive~~companies ~~an annual~~organized ~~base~~under ~~salary~~the laws of ~~$84~~the PRC,~~000~~ ~~for~~and ~~the~~in ~~first~~accordance ~~year~~with PRC regulations, the salary of the ~~CFO~~Operating ~~Agreement,~~Sub’s ~~$100,800~~executives ~~for~~is ~~the~~determined ~~second~~by ~~year~~their shareholders. In addition, each employee of the ~~CFO~~Operating ~~Agreement~~Sub ~~and~~is ~~$120~~required to enter into an employment agreement. Accordingly,~~960 for~~ ~~the~~all ~~third~~our ~~year~~Operating ofSub’s ~~the~~employees, ~~CFO~~including ~~Agreement~~management, ~~subject~~have toexecuted ~~annual~~our ~~review~~employment byagreement. Our Operating Sub’s employment agreements with their executives provide the ~~compensation~~amount ~~committee~~of each executive officer’s salary and establish their eligibility to receive a bonus. Jing Wang’s employment agreement provides for an annual salary of ~~the~~RMB ~~Company~~80,000 (approximately $13,000).

~~Also~~ Other ~~pursuant~~than to the ~~CFO~~salary ~~Agreement,~~and ~~the~~necessary ~~Executive~~social ~~received~~benefits ~~grants of~~required ~~40,000~~by ~~shares~~the ofgovernment, ~~the~~which ~~Company’s~~are ~~common~~defined ~~stock~~in onthe ~~July~~employment 26agreements, ~~2011~~our ~~and~~Operating ~~July~~Sub ~~25,~~currently ~~2012~~does ~~and~~not ~~will~~provide ~~receive~~other abenefits ~~grant~~to ofthe ~~40,000~~officers ~~shares of~~at ~~the~~this ~~Company’s~~time. ~~common~~Our ~~stock~~executive onofficers ~~June~~are ~~30,~~not ~~2013~~entitled ~~(such~~to ~~grants,~~severance payments upon the ~~“Equity~~termination ~~Grants”)~~of their employment agreements or following a change in control.

In We ~~addition~~have tonot ~~base~~provided ~~salary~~retirement ~~and~~benefits ~~stock~~(other ~~grants~~than ~~disclosed~~a ~~above, the~~state ~~CFO~~pension ~~Agreement~~scheme ~~includes~~in ~~the~~which ~~following~~all ~~material~~of ~~provisions:~~our employees in China participate) or severance or change of control benefits to our named executive officers.

· Outstanding ~~The~~Equity ~~CFO~~Awards ~~Agreement~~at ~~may~~Fiscal beYear ~~terminated by the Company with 30 days prior written notice or by the Executive for personal reasons with three months prior notice, or for cause or disability;~~End

· The ~~Discretionary~~following ~~bonus~~table atsets forth the ~~end~~status of ~~each~~all ~~calendar~~outstanding ~~year~~equity asawards ~~determined by the compensation committee~~ of the Company inas ~~its discretion based on the Executive’s performance for the prior year and the results~~ of ~~the~~September ~~Company’s~~30, ~~operations for the prior year;~~2013.

· In the event employment is terminated by the Company other than for cause, or for death or disability, the Executive is entitled to receive the remaining stock grants provided for in the CFO Agreement;37

· Outstanding Equity Awards at September ~~Covenants regarding non-solicitation of customers~~30, ~~suppliers or employees after termination for a period of one year, and confidentiality provisions.~~2013

~~None~~Option Awards Stock Awards Equity Equity Incentive Incentive Plan Plan Awards: Value Awards: Market Number of ~~CGII’s~~Number ~~other~~or ~~officers~~Payout ~~and~~Equity ~~directors~~of ~~has~~Shares anof ~~employment agreement~~Value ~~with~~of ~~CGII.~~Incentive Shares or Unearned Unearned Plan or Units Units Shares, Shares, Awards: of of Units or Units or Number of Number of Number of Stock Stock Other Other Securities Securities Securities That That Rights Rights Underlying Underlying Underlying Have Have That That Unexercised Unexercised Unexercised Option Option Not Not Have Not Have Not Options (#) Options (#) Unearned Exercise Expiration Vested Vested Vested Vested Name Exercisable Unexercisable Options (#) Price ($) Date (#) ($) (#) (#) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Jing Wang Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Xiaohong Peng Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Yongqing Ma Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil

~~The Operating Subs, our operating affiliates, are private limited~~ ~~companies~~For ~~organized under~~ the ~~laws~~year ofended ~~the~~September ~~PRC~~30, ~~and~~2013, inno ~~accordance~~director ~~with~~or ~~PRC~~executive ~~regulations,~~officer ~~the~~has ~~salary~~received ofcompensation ~~the~~from ~~Operating~~us ~~Subs’ executives~~pursuant isto ~~determined~~any bycompensatory ~~their~~or ~~shareholders.~~benefit ~~In addition~~plan, ~~each~~there ~~employee of the Operating Subs~~ is ~~required~~no toplan ~~enter~~or ~~into~~understanding, anexpress ~~employment agreement.~~or ~~Accordingly~~implied, ~~all~~to ~~our~~pay ~~Operating~~any ~~Subs’~~compensation ~~employees,~~to ~~including~~any ~~management,~~director ~~have~~or ~~executed~~executive ~~our~~officer ~~employment~~pursuant ~~agreement. Our~~to ~~Operating~~any ~~Subs’~~compensatory ~~employment~~or ~~agreements~~benefit ~~with~~plan, ~~their~~although ~~executives~~we ~~provide~~anticipate ~~the~~that ~~amount~~we ofwill ~~each~~compensate ~~executive~~our ~~officer’s~~officers ~~salary~~ and ~~establish~~directors ~~their~~for ~~eligibility~~services to ~~receive~~us awith ~~bonus.~~stock ~~Jing~~or ~~Wang’s~~options ~~employment~~to ~~agreement~~purchase ~~provides~~stock, ~~for~~in anlieu ~~annual salary~~ of ~~RMB 80,000 (approximately $11,765)~~cash.

~~Other~~ Option ~~than~~Exercises ~~the salary~~ and ~~necessary~~Stock social benefits required by the government, which are defined in the employment agreements, our Operating Subs currently do not provide other benefits to the officers at this time. Other than as described with respect to the CFO Agreement, our executive officers are not entitled to severance payments upon the termination of their employment agreements or following a change in control.Vested

We No ~~have~~stock ~~not~~options ~~provided~~were ~~retirement~~exercised ~~benefits~~by ~~(other~~any ~~than~~officers aor ~~state pension~~directors ~~scheme~~during in2012 ~~which~~and ~~all~~2013. We ofdid ~~our~~not ~~employees~~adjust inor ~~China~~amend ~~participate)~~the orexercise ~~severance~~price orof ~~change~~any ofstock ~~control~~options ~~benefits~~previously awarded to ~~our~~any named executive officers, ~~other~~during ~~than~~2012 asand ~~described with respect to possible severance payments of Equity Grants under the CFO Agreement~~2013.

~~Outstanding Equity Awards at Fiscal Year End~~ Option Exercises and Stock Vested

~~The~~Option ~~following~~Awards ~~table~~Stock ~~sets~~Awards ~~forth~~Name ~~the~~Number ~~status~~ of ~~all~~Shares ~~outstanding equity~~Acquired ~~awards~~on ofExercise ~~the~~(#) ~~Company~~Value asRealized on Exercise ($) Number of ~~September~~Shares ~~30,~~Acquired ~~2012.~~on Vesting (#) Value Realized on Vesting ($) (a) (b) (c) (d) (e) Jing Wang Nil Nil Nil Nil Xiaohong Peng Nil Nil Nil Nil Yongqing Ma Nil Nil Nil Nil

35 Compensation of Directors

Outstanding Equity Awards at Fiscal Year-End

Option Awards

Stock Awards

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Option Expiration Date

Number of Shares or Units of Stock That Have Not Vested (#)

Value of Shares or Units of Stock That Have Not Vested ($)

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Jing Wang

Nil

Yongqing Ma

Nil

40,000

40,400

Nil

No member of our board of directors received any compensation for his services as a director during the year ended September 30, 2013 and currently no compensation arrangements are in place for the compensation of directors.

~~For the year ended September 30, 2012, no director or executive~~ ~~officer has received compensation from us pursuant to any compensatory or benefit plan other than the Equity Grants pursuant to~~ ~~the CFO Agreement. Other than the Equity Grants pursuant to the CFO Agreement, there is no plan or understanding, express or implied,~~ ~~to pay any compensation to any director or executive officer pursuant to any compensatory or benefit plan, although we anticipate~~ ~~that~~ITEM we12. SECURITY ~~will~~OWNERSHIP ~~compensate~~OF ~~our~~CERTAIN ~~officers~~BENEFICIAL ~~and~~OWNERS ~~directors~~AND ~~for~~MANAGEMENT ~~services~~AND toRELATED usSTOCKHOLDER ~~with stock or options to purchase stock, in lieu of cash~~MATTERS.

~~Option~~ The ~~Exercises~~following table sets forth information regarding beneficial ownership of our common stock as of November 30, 2013 by (i) any person or group with more than 5% of any class of our voting stock, (ii) each director, (iii) our chief executive officer and ~~Stock~~each ~~Vested~~other executive officer whose cash compensation for the most recent fiscal year exceeded $100,000 and (iv) all such executive officers and directors as a group. Unless otherwise specified, the address of each of the persons set forth below is in care of the Company, Room 01B, 02/F, Podium Building, Guodu Golf Garden, North of Xinsha Road, Futian District, Shenzhen, 518048, People’s Republic of China. Except as indicated in the footnotes to this table and subject to applicable community property laws, the persons named in the table to our knowledge have sole voting and investment power with respect to all shares of securities shown as beneficially owned by them. The information in this table is as of December 31, 2013 based upon 16,331,854 shares of common stock outstanding.

No stock options were exercised by any officers or directors during 2011 and 2012. We did not adjust or amend the exercise price of any stock options previously awarded to any named executive officers during 2011 and 2012.38

Option Exercises and Stock Vested Option Awards Stock Awards Name Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) Number of Shares Acquired on Vesting (#) Value Realized on Vesting ($) (a) (b) (c) (d) (e) Jing Wang Nil Nil Nil Nil Yongqing Ma Nil Nil Nil Nil

Name and Address of Beneficial Owner	Office, If Any		Amount and Nature of Beneficial Ownership			Percent Common Stock

Hua Zeng		Chairman		4,685,706	(1)		28.7	%

Jing Wang		Chief Executive Officer and a Director		4,512,154	(1)		27.6	%

Xiaohong Peng		Chief Financial
		Officer, Treasurer, Secretary and Director		-			-
All officers and directors as a group (three persons named above)				8,937,736	(1)		54.73	%

Well Trend Consultants Limited and Yueh Jen Chau⁽²⁾ Room 1704, Fu Fai Commercial Center, 27 Hillier Street, Hong Kong				1,341,895			8.2	%

~~Compensation~~ * ofLess ~~Directors~~than 1%

~~No member of our board of directors received any compensation~~ ~~for~~- ~~his services as a director during the year ended September 30, 2012 and currently no compensation arrangements are in place for the compensation of directors.~~N/A

~~ITEM~~ (1) 12260,124 of such shares are indirectly owned through control and ownership of Truth Giver Group Limited, a company incorporated under the laws of the British Virgin Islands. ~~SECURITY~~Hua ~~OWNERSHIP~~Zeng, OFour ~~CERTAIN~~Chairman, ~~BENEFICIAL~~and ~~OWNERS~~Jing ~~AND~~Wang, ~~MANAGEMENT~~our ~~AND~~CEO ~~RELATED~~and ~~STOCKHOLDER~~director, ~~MATTERS~~are the owners of Truth Giver Group Limited. Therefore, the 260,124 shares are reflected in the ownership of both Hua Zeng and Jing Wang; however the 260,124 shares are reflected only once in the total ownership of all officers and directors as a group.

~~The following table sets forth information regarding beneficial~~ ~~ownership of our common stock as of November 30, 2012 by~~ (i2) ~~any~~The ~~person or group with more than 5% of any class of our voting stock~~1, ~~(ii) each director~~341,895 ~~(iii)~~shares ~~our~~are ~~chief~~held ~~executive~~by ~~officer~~Well ~~and~~Trend ~~each~~Consultants ~~other executive officer whose cash compensation for the most recent fiscal year exceeded $100~~Limited,~~000~~ ~~and~~of ~~(iv)~~which ~~all such executive officers and directors as a group~~Mr. ~~Unless~~ ~~otherwise~~Yueh ~~specified, the~~Jen ~~address~~Chau ~~of each of the persons set forth below~~ is ~~in care of~~ the ~~Company,~~sole ~~Room~~director ~~01B,~~and ~~02/F, Podium Building, Guodu Golf Garden, North of Xinsha Road, Futian District, Shenzhen, 518048, People’s Republic of China~~owner. ~~Except~~ asAs ~~indicated~~a ~~in the footnotes to this table and subject to applicable community property laws~~result, ~~the persons named in the table to our knowledge have sole voting and investment power with respect to all shares of securities shown as beneficially owned by them~~Mr. ~~The~~Yueh ~~information~~Jen inChau ~~this~~may ~~table is~~also asbe ofconsidered ~~November~~a ~~30,~~beneficial ~~2012~~owner ~~based upon 16,331,854 shares~~ of ~~common~~such ~~stock outstanding~~shares.

36 Change in Control

Name and Address of Beneficial Owner	Office, If Any	Amount and Nature of Beneficial Ownership			Percent Common Stock
Hua Zeng	Chairman		4,685,706	(1)		28.7	%
Jing Wang	Chief Executive Officer and a Director		4,512,154	(1)		27.6	%
Yongqing Ma	Chief Financial Officer and a Director		80,000			*
Thomas E. Mills 1440-3044 Bloor Street West Toronto, Ontario M8X 2Y8 Canada	Former Chief Executive Officer		15,106			*
All officers and directors as a group (four persons named above)			9,032,842			55.3	%
Well Trend Consultants Limited and Yueh Jen Chau(2) Room 1704, Fu Fai Commercial Center, 27 Hillier Street, Hong Kong			1,341,895			8.2	%

The Company does not have any change of control or retirement arrangements with its executive officers.

* ITEM ~~Less~~13. CERTAIN ~~than~~RELATIONSHIPS 1%AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

- Transactions ~~N/A~~with Related Persons

( There have been no transactions since October 1), ~~260~~2011,~~124~~ ofor ~~such~~any ~~shares~~currently proposed transaction, in which we were or are ~~indirectly~~to ~~owned through~~be ~~control~~a participant and ~~ownership~~the ofamount ~~Truth~~involved ~~Giver~~exceeded ~~Group~~or ~~Limited~~exceeds the lesser of $120,000 aor ~~company~~one ~~incorporated~~percent ~~under~~of the ~~laws~~average of ~~the~~our ~~British~~total ~~Virgin~~assets ~~Islands. Hua~~at ~~Zeng,~~year ~~our~~end ~~Chairman~~for the last two completed fiscal years, and ~~Jing~~in ~~Wang,~~which ~~our~~any ~~CEO~~related ~~and~~person ~~director,~~had ~~are~~or ~~the~~will ~~owners~~have ofa ~~Truth~~direct ~~Giver~~or ~~Group~~indirect ~~Limited~~material interest (other than compensation described under “Executive Compensation”).

(2) The 1,341,895 shares are held by Well Trend Consultants Limited, of which Mr. Yueh Jen Chau is the sole director and owner. As a result, Mr. Yueh Jen Chau may also be considered a beneficial owner of such shares.39

~~Change~~ Insider inTransactions ~~Control~~Policies and Procedures

The Company does not currently have ~~any~~an ~~change~~insider oftransaction ~~control or retirement arrangements with its executive officers~~policy.

~~ITEM~~ Director ~~13.~~Independence ~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.~~

~~Transactions~~ Under ~~with~~the ~~Related~~independence ~~Persons~~standard set forth in Rule 4200(a) (15) of the Market Place Rules of the Nasdaq Stock Market, which is the independence standard that we have chosen to report under, none of the members of the Board of Directors are independent.

~~The following includes a summary of transactions since October~~ 1,ITEM 2010, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Executive Compensation”)14. PRINCIPAL WeACCOUNTING ~~believe~~FEES ~~the~~AND terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.SERVICES

37 De Joya Griffith, LLC served as our principal independent accountants for the audit of the fiscal year ended September 30, 2013. Clement C.W. Chan & Co. served as our principal independent accountants for the audit of the fiscal year ended September 30, 2012.

~~Reverse~~ During ~~Merger~~the fiscal years ended September 30, 2013, fees for services provided by De Joya Griffith, LLC were as follows:

On March 31, 2011, we entered into and closed a share purchase and exchange agreement, or the “Share Exchange Agreement”, with China Digital Image Organization Co., Limited, or “China Digital,” the shareholders of China Digital and Thomas E. Mills, pursuant to which we acquired 100% of the issued and outstanding capital stock of China Digital in exchange for (i) 31,528,651 shares of our Common Stock, which collectively constituted approximately 97.0% of our issued and outstanding capital stock as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement and (ii) payment (the “Cash Component”) of $2,368,471.35. The Cash Component was payable in full within 12 months after the Closing.

	2013
Audit fees(1)	$	62,000
Audit-related fees		-
Tax fees		-
All other fees		-
Total	$	62,000

In(1) ~~connection~~Consists ~~with~~of fees billed for the ~~share~~audit ~~exchange,~~of ~~Thomas~~our E.annual ~~Mills~~financial ~~sold 567~~statements,~~070~~ ~~shares~~review of ~~AMP~~financial ~~common~~statements ~~stock~~included toin ~~Truth~~our ~~Giver~~Quarterly ~~Group~~Reports ~~Limited~~on inForm ~~exchange~~10-Q ~~for~~and anservices ~~aggregate~~that ~~payment~~are ofnormally ~~$300,000. Thomas Mills~~provided ~~was~~by athe ~~director~~accountant ~~and~~in ~~our~~connection ~~Chief~~with ~~Executive~~statutory ~~Officer~~and ~~until~~regulatory ~~the~~filings ~~share~~or ~~exchange~~engagements.

~~Hua~~ During ~~Zeng,~~the ~~our~~fiscal ~~Chairman,~~years ~~and~~ended ~~Jing~~September ~~Wang~~30, ~~our Chief Executive Officer~~2012, ~~were~~ ~~the~~fees ~~beneficial~~for ~~owners~~services ofprovided aby ~~majority~~Clement ofC.W. ~~the~~Chan ~~capital~~& ~~stock~~Co. ~~and~~were ~~voting power of Truth Giver Group Limited and China Digital,~~ as ~~well as the Operating Subs.~~follows:

Insider Transactions Policies and Procedures

	2012
Audit fees(1)	$	80,000
Audit-related fees		-
Tax fees		-
All other fees		-
Total	$	80,000

~~The~~(1) ~~Company~~Consists ~~does~~of ~~not~~fees ~~currently~~billed ~~have~~for anthe ~~insider~~audit ~~transaction~~of ~~policy~~our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.

~~Director~~ Pre-Approval ~~Independence~~Policies and Procedures

Under the ~~independence~~Sarbanes-Oxley ~~standard~~Act ~~set~~of ~~forth~~2002, inall ~~Rule~~audit ~~4200(a)~~and ~~(15) of~~non-audit ~~the~~services ~~Market~~performed ~~Place~~by ~~Rules~~our ofauditors ~~the~~must ~~Nasdaq~~be ~~Stock~~approved ~~Market,~~in ~~which~~advance isby our Board to assure that such services do not impair the auditors’ independence ~~standard~~from ~~that~~us. weIn ~~have~~accordance ~~chosen~~with toits ~~report~~policies ~~under~~and procedures, ~~none of~~our Board pre-approved the ~~members~~audit service performed by De Joya Griffith, LLC for our financial statements as of and for the ~~Board~~year ofended ~~Directors~~September ~~are~~30, ~~independent~~2013.

~~ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES~~40

~~Clement~~ ITEM C15.W. ~~Chan~~EXHIBITS &AND ~~Co.~~FINANCIAL ~~served~~STATEMENT ~~as our principal independent accountants for the audit of the fiscal years ended September 30, 2012 and 2011~~SCHEDULES.

~~During the fiscal years ended September 30, 2011 and 2012, fees~~ ~~for services provided by Clement C~~I.W. ~~Chan~~Listing &of ~~Co. were as follows:~~Documents

	2011		2012
Audit fees(1)	$	80,000	$	80,000
Audit-related fees		-		-
Tax fees		-		-
All other fees		-		-
Total		80,000		80,000

(1) Financial Statements.

~~(1)~~ Report ~~Consists~~ of ~~fees~~Independent ~~billed~~Registered ~~for~~Public ~~the~~Accounting audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.Firm

~~Pre-Approval~~ Consolidated ~~Policies~~Balance Sheets as of September 30, 2013 and ~~Procedures~~2012

~~Under~~ Consolidated ~~the~~Statements ~~Sarbanes-Oxley Act~~ of ~~2002,~~Operations ~~all audit~~ and ~~non-audit services~~Comprehensive ~~performed~~Income by our auditors must be approved in advance by our Board to assure that such services do not impair the auditors’ independence from us. In accordance with its policies and procedures, our Board pre-approved the audit service performed by Clement C.W. Chan & Co. for ~~our financial statements as of and for~~ the ~~year~~Years ~~ended~~Ended September 30, 2013 and 2012.

38 Consolidated Statements of Cash Flows for the Years Ended September 30, 2013 and 2012

~~ITEM~~ Consolidated ~~15.~~Statement ~~EXHIBITS~~of ~~AND~~Stockholders’ ~~FINANCIAL~~Equity ~~STATEMENT~~for ~~SCHEDULES.~~the Years Ended September 30, 2013 and 2012

I. Notes ~~Listing~~to ofConsolidated ~~Documents~~Financial Statements

(13) ~~Financial Statements.~~ The following Exhibits are filed as part of this report on Form 10-K:

Report of Independent Registered Public Accounting Firm

Exhibit Number		Description of Exhibit
3.1		Amended and Restated Articles of Incorporation of the Company, dated September 23, 2010(incorporated by reference to Exhibit 3.1 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
3.2		Certificate of Amendment to Articles of Incorporation of the Company, dated May 31, 2011 (incorporated by reference to Exhibit 3.1 to the registrant’s Form 10-Q filed with the SEC on August 15, 2011).
3.3		Amended and Restated Bylaws of the Company, dated March 31, 2011 (incorporated by reference to Exhibit 3.2 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
4.1		Form of Stock Certificate (incorporated by reference to Exhibit 4.1 to the registrant’s Form 10-KSB filed with the SEC on June 24, 2004).
10.1		Share Purchase and Exchange Agreement, dated as of March 31, 2011, among AMP Productions, Ltd., China Digital Image Organization Co., Limited, the shareholders of China Digital and Thomas Mills (incorporated by reference to Exhibit 2.1 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
10.2		Consultancy Agreement dated September 25, 2010, between China Digital Image Organization Co., Limited and Well Trend Consultants Limited (incorporated by reference to Exhibit 10.1 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
10.3		House Lease Contract, dated April 6, 2011, between Shenzhen Digital Image Technology Co., Limited and Galaxy Industrial (Shenzhen) Co., Ltd. (English translation) (incorporated by reference to Exhibit 10.1 to the registrant’s Form 10-Q filed with the SEC on May 23, 2011).
10.4**		Employment Agreement by and between Computer Graphics International Inc. and Yongqing Ma dated June 24, 2011 (incorporated by reference to Exhibit 10.1 to the registrant’s Form 10-Q filed with the SEC on June 27, 2011).
10.5		Letter of Intent for Share Purchase among Li Dongxiang, ZengXianguang and Shenzhen Digital Image Technology Co., Ltd. (English translation) dated September 26, 2011 (incorporated by reference to Exhibit 10.1 to the registrant’s Form 8-K filed with the SEC on October 20, 2011).
21		Subsidiaries of the registrant (incorporated by reference to Exhibit 21 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
31.1*		Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~Consolidated Balance Sheets as of September 30, 2012 and 2011~~41

Consolidated Statements of Income and Comprehensive Income for the Years Ended September 30, 2012 and 2011

101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase
101.DEF*		XBRL Taxonomy Extension Definition Linkbase
101.LAB*		XBRL Taxonomy Extension Label Linkbase
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase

~~Consolidated Statements of Cash Flows for the Years~~ ~~Ended~~* ~~September~~Filed ~~30, 2012 and 2011~~herewith.

~~Consolidated Statement of Stockholders’ Equity~~ ~~for~~** ~~the~~Represents ~~Years~~management ~~Ended~~contract ~~September~~or ~~30,~~compensatory ~~2012~~plan ~~and~~or ~~2011~~arrangement.

~~Notes to Consolidated Financial Statements~~42

~~(3) The~~ ~~following Exhibits are filed as part of this report on Form 10-K:~~SIGNATURES

Exhibit Number		Description of Exhibit
3.1		Amended and Restated Articles of Incorporation of the Company, dated September 23, 2010(incorporated by reference to Exhibit 3.1 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
3.2		Certificate of Amendment to Articles of Incorporation of the Company, dated May 31, 2011 (incorporated by reference to Exhibit 3.1 to the registrant’s Form 10-Q filed with the SEC on August 15, 2011).
3.3		Amended and Restated Bylaws of the Company, dated March 31, 2011 (incorporated by reference to Exhibit 3.2 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
4.1		Form of Stock Certificate (incorporated by reference to Exhibit 4.1 to the registrant’s Form 10-KSB filed with the SEC on June 24, 2004).
10.1		Share Purchase and Exchange Agreement, dated as of March 31, 2011, among AMP Productions, Ltd., China Digital Image Organization Co., Limited, the shareholders of China Digital and Thomas Mills (incorporated by reference to Exhibit 2.1 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
10.2		Consultancy Agreement dated September 25, 2010, between China Digital Image Organization Co., Limited and Well Trend Consultants Limited (incorporated by reference to Exhibit 10.1 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
10.3		House Lease Contract, dated April 6, 2011, between Shenzhen Digital Image Technology Co., Limited and Galaxy Industrial (Shenzhen) Co., Ltd. (English translation) (incorporated by reference to Exhibit 10.1 to the registrant’s Form 10-Q filed with the SEC on May 23, 2011).
10.4**		Employment Agreement by and between Computer Graphics International Inc. and Yongqing Ma dated June 24, 2011 (incorporated by reference to Exhibit 10.1 to the registrant’s Form 10-Q filed with the SEC on June 27, 2011).
10.5		Letter of Intent for Share Purchase among Li Dongxiang, Zeng Xianguang and Shenzhen Digital Image Technology Co., Ltd. (English translation) dated September 26, 2011 (incorporated by reference to Exhibit 10.1 to the registrant’s Form 8-K filed with the SEC on October 20, 2011).
21		Subsidiaries of the registrant (incorporated by reference to Exhibit 21 to the registrant’s Form 8-K filed with the SEC on April 5, 2011).
31.1*		Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Pursuant to the requirements of Section 13 or 15(d) 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.

	COMPUTER GRAPHICS INTERNATIONAL INC.

Date: January 14, 2014	By:	/s/ Jing Wang
		Jing Wang
		Chief Executive Officer

101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase
101.DEF*		XBRL Taxonomy Extension Definition Linkbase
101.LAB*		XBRL Taxonomy Extension Label Linkbase
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

* Each ~~Filed~~person ~~herewith~~whose signature appears below hereby authorizes Jing Wang as attorney-in-fact to sign on his or her behalf, individually, and in each capacity stated below, and to file all amendments and/or supplements to this annual report on Form 10-K.

** Represents management contract or compensatory plan or arrangement.

Signature	Capacity	Date

By: /s/ Jing Wang	Chief Executive Officer and Director	January 14, 2014
Jing Wang	(Principal Executive Officer)

By: /s/ Xiaohong Peng	Chief Financial Officer and Director	January 14, 2014
Xiaohong Peng	(Principal Financial Officer and Principal Accounting Officer)

By: /s/ Hua Zeng	Chairman of the Board of Directors	January 14, 2014
Hua Zeng

4043

~~SIGNATURES~~ COMPUTER GRAPHICS INTERNATIONAL INC.

~~Pursuant to the requirements of Section~~ 13CONSOLIDATED orFINANCIAL ~~15(d) 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.~~STATEMENTS

	COMPUTER GRAPHICS INTERNATIONAL INC.
Date: January 14, 2013	By:	/s/ Jing Wang
		Jing Wang Chief Executive Officer

SEPTEMBER 30, 2013

~~Each person whose signature appears below~~ ~~hereby~~TABLE ~~authorizes~~OF ~~Jing Wang as attorney-in-fact to sign on his or her behalf, individually, and in each capacity stated below, and to file all amendments and/or supplements to this annual report on Form 10-K.~~CONTENTS

Signature		Capacity	Date
Report of Independent Registered Public Accounting Firm	F-1 - F-2
By: /s/ Jing Wang		Chief Executive Officer and Director	January 14, 2013
Consolidated Balance Sheets	F-3
Jing Wang		(Principal Executive Officer)
Consolidated Statements of Operations and Comprehensive Income	F-4
By: /s/ Yongqing Ma		Chief Financial Officer and Director	January 14, 2013
Consolidated Statements of Cash Flows	F-5
Yongqing Ma		(Principal Financial Officer and Principal Accounting Officer)
Consolidated Statements of Stockholders’ Equity	F-6
By: /s/ Hua Zeng		Chairman of the Board of Directors	January 14, 2013
Notes to Consolidated Financial Statements	F-7 - F-23
Hua Zeng

41 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~COMPUTER~~ To ~~GRAPHICS~~the ~~INTERNATIONAL~~Board ~~INC.~~of Directors and Stockholders

~~CONSOLIDATED~~ Computer ~~FINANCIAL~~Graphics ~~STATEMENTS~~International Inc.

~~SEPTEMBER~~ We have audited the accompanying consolidated balance sheets of Computer Graphics International Inc. (the “Company”) as of September 30, ~~2012~~2013 and the related consolidated statements of operations, stockholders’ equity and cash flows for the year then ended. Computer Graphics International Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

~~TABLE~~ We OFconducted ~~CONTENTS~~our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets	F-2
Consolidated Statements of Income and Comprehensive Income	F-3
Consolidated Statements of Cash Flows	F-4
Consolidated Statements of Stockholders’ Equity	F-5
Notes to Consolidated Financial Statements	F-6 - F-22

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Computer Graphics International Inc. as of September 30, 2013 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

~~Report~~ The ofaccompanying ~~Independent~~financial ~~Registered Public~~statements ~~Accounting~~have ~~Firm~~been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Board~~ /s/ ofDe ~~Directors~~Joya Griffith, LLC

~~Computer~~ Henderson, ~~Graphics International Inc.~~Nevada

~~We have audited the accompanying consolidated~~ ~~balance~~January ~~sheets of Computer Graphics International Inc. as of September 30~~14, 2012 and 2011, and the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for years ended September 30, 2012 and 2011. Computer Graphics International Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.2014

~~We conducted our audits in accordance with~~ ~~the~~Corporate standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.Headquarters:

~~In our opinion, the financial statements~~ ~~referred~~De toJoya ~~above present fairly~~Griffith, in all material respects, the financial position of Computer Graphics International Inc. as of September 30, 2012 and 2011, and the results of its operations and its cash flows for years ended September 30, 2012 and 2011 in conformity with accounting principles generally accepted in the United States of America.LLC

~~The accompanying consolidated financial~~ ~~statements~~2580 ~~have~~Anthem ~~been~~Village ~~prepared assuming that the Company will continue as a going concern~~Drive, ~~which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company incurred a net loss of $1~~Henderson,~~136,813~~ ~~for~~NV ~~the~~89052 ~~year ended~~Phone: (702) ~~September~~563-1600 ~~30,~~Fax: ~~2012~~(702) and has accumulated losses of $841,688 at September 30, 2012. These matters are discussed in Note 2 to the consolidated financial statements that raises substantial doubt about the Company’s ability to continue as a going concern. Financial support from the Company’s Chairman in regard to these matters are described in Note 2. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.920-8049

~~Clement C. W. Chan & Co.~~F-1

~~Certified~~ Report of Independent Registered Public ~~Accountants~~Accounting Firm

~~3/F., & 5/F., Heng Shan Centre, 145 Queen’s Road East,~~ ~~Wanchai,~~Board ~~Hong~~of ~~Kong~~Directors

28 Computer ~~December,~~Graphics ~~2012~~International Inc.

~~F-1~~ We have audited the accompanying consolidated balance sheets of Computer Graphics International Inc. as of September 30, 2012 and 2011, and the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for years ended September 30, 2012 and 2011. Computer Graphics International Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

~~COMPUTER~~ We ~~GRAPHICS~~conducted ~~INTERNATIONAL~~our ~~INC~~audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

~~CONSOLIDATED~~ In ~~BALANCE~~our ~~SHEETS~~opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Computer Graphics International Inc. as of September 30, 2012 and 2011, and the results of its operations and its cash flows for years ended September 30, 2012 and 2011 in conformity with accounting principles generally accepted in the United States of America.

	Notes	September 30,			September 30,
		2012			2011
ASSETS
Current Assets
Cash and cash equivalents		$	263,228		$	779,132
Accounts receivable, net of provision of $91,577 (2011 : $Nil)			361,575			307,109
Value-added tax recoverable			35,402			5,865
Other receivables			220,572			45,274
Inventory	3		-			2,080
Total Current Assets			880,777			1,139,460
Property and equipment, net of accumulated depreciation of $350,484 (2011 : $149,509)	3		777,189			871,051
Rental deposits	15(2)		40,361			53,093
Monies held by a legal firm/Deposit for acquisition of a subsidiary	14		268,393			937,236
Deposit for acquisition of a leasehold property	15(1)		-			781,030
Total non-current assets			1,085,943			2,642,410
Total Assets		$	1,966,720		$	3,781,870
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable		$	13,640		$	29,291
Accrued expenses and other payable			497,702			225,235
Income tax payable	7		-			263,417
Total Current Liabilities			511,342			517,943
Non-current liabilities
Amount due to a shareholder	4		754,582			1,845,380
Total Liabilities			1,265,924			2,363,323
Stockholders' Equity
Common stock, US$0.0001 par value, 900,000,000 shares
authorized, 16,331,854 and 16,291,854 shares issued and
outstanding at September 30, 2012 and 2011 respectively (#)	8		1,633			1,629
Additional paid-in capital (#)			1,129,351			1,079,649
Common stock issued for prepaid service	9		(336,454	)		(677,742	)
Statutory reserves	10		500,088			500,088
Accumulated other comprehensive income	11		247,866			219,798
(Accumulated losses)/Retained earnings			(841,688	)		295,125
Total Stockholders' Equity			700,796			1,418,547
Total Liabilities and Stockholders' Equity		$	1,966,720		$	3,781,870

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company incurred a net loss of $1,136,813 for the year ended September 30, 2012 and has accumulated losses of $841,688 at September 30, 2012. These matters are discussed in Note 2 to the consolidated financial statements that raises substantial doubt about the Company’s ability to continue as a going concern. Financial support from the Company’s Chairman in regard to these matters are described in Note 2. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~(#) Reflects~~ Clement ~~the~~C. ~~1-for-2~~W.18 ~~reverse~~Chan ~~split~~& ~~of the Company's outstanding common stock effected on June 7, 2011~~Co.

~~The accompanying~~ ~~notes~~Certified ~~are~~Public ~~an integral part of these consolidated financial statements.~~Accountants

3/F-2., & 5/F., Heng Shan Centre, 145 Queen’s Road East, Wanchai, Hong Kong

~~COMPUTER~~ 28 ~~GRAPHICS~~December, ~~INTERNATIONAL INC.~~2012

~~CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME~~F-2

~~FOR~~ COMPUTER ~~THE~~GRAPHICS ~~YEARS~~INTERNATIONAL ~~ENDED SEPTEMBER 30, 2012 AND 2011~~INC.

	2012			2011
Sales	$	5,795,503		$	10,068,752
Cost of sales		(2,895,566	)		(3,858,809	)
Gross profit		2,899,937			6,209,943
Selling, general and administrative expenses		(4,419,803	)		(2,268,288	)
(Loss)/Income from operations		(1,519,866	)		3,941,655
Other Income (Expense)
Amount recovered from a sundry debtor		140,511			-
Interest income		1,058			12,920
Sundry income		9,373			-
Bank charges		(4,944	)		(1,548	)
Exchange loss		-			(19,020	)
Total other income /(expenses)		145,998			(7,648	)
(Loss)/Income before income taxes		(1,373,868	)		3,934,007
Income tax credit/(expenses) - note 7)		237,055			(1,132,175	)
Net (loss)/income	$	(1,136,813	)	$	2,801,832
Weighted average common shares outstanding (*)
Basic (in shares)		16,301,717			16,038,802
Diluted (in shares)		16,301,717			16,038,802
Net (loss)/income per common share (*)
Basic (in dollars per share)	$	(0.07	)	$	0.17
Diluted (in dollars per share)	$	(0.07	)	$	0.17
Net (loss)/income	$	(1,136,813	)	$	2,801,832
Other comprehensive income - foreign currency translation adjustment		28,068			92,443
Comprehensive (loss)/income	$	(1,108,745	)	$	2,894,275

CONSOLIDATED BALANCE SHEETS

(*)AMOUNTS ~~Reflects~~IN ~~the 1-for-2.18 reverse split of the Company’s outstanding common stock effected on June 7~~USD, ~~2011.~~EXCEPT SHARES)

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

	Notes		September 30,		September 30,
			2013		2012
ASSETS

Current Assets
Cash and cash equivalents			$	290,038	$	263,228
Accounts receivable, net of provision of $235,499 (September 30, 2012 : $91,577)				277,386		361,575
Value-added tax recoverable				-		35,402
Other receivables				150,424		220,572
Total Current Assets				717,848		880,777

Property and equipment, net of accumulated depreciation of $584,640 (September 30, 2012: $350,484)		3		575,597		777,189
Rental deposits		14		37,251		40,361
Monies held by a legal firm/Deposit for acquisition of a subsidiary		13		65,026		268,393

Total Assets			$	1,395,722	$	1,966,720

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities
Short term loan		4	$	471,437	$	-
Accounts payable				52,393		13,640
Accrued expenses and other payable				525,291		497,702
Deferred revenue				55,917		-
Total Current Liabilities				1,105,038		511,342

Amount due to a stockholder		5		838,844		754,582
Total Liabilities				1,943,882		1,265,924

Stockholders' Equity (Deficit)
Common stock, US$0.0001 par value, 900,000,000 shares authorized, 16,331,854 and 16,331,854 shares issued and outstanding at September 30, 2013 and 2012 respectively (#)		7		1,633		1,633
Additional paid-in capital (#)				1,124,411		1,129,351
Common stock issued for prepaid service		8		-		(336,454)
Statutory reserves		9		500,088		500,088
Accumulated other comprehensive income				304,088		247,866
Accumulated deficit				(2,478,380)		(841,688)
Total Stockholders' Equity (Deficit)				(548,160)		700,796

Total Liabilities and Stockholders' Equity (Deficit)			$	1,395,722	$	1,966,720

F (#) Reflects the 1-3for-2.18 reverse split of the Company's outstanding common stock effected on June 7, 2011.

~~COMPUTER~~ The ~~GRAPHICS~~accompanying ~~INTERNATIONAL~~notes ~~INC~~are an integral part of these consolidated financial statements.

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~ F-3

~~FOR~~ COMPUTER ~~THE~~GRAPHICS ~~YEARS~~INTERNATIONAL ~~ENDED SEPTEMBER 30, 2012 AND 2011~~INC.

	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss)/income	$	(1,136,813	)	$	2,801,832
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of prepaid post combination employee benefit		205,050			-
Amount recovered from a sundry debtor		(140,511	)		-
Depreciation		213,431			67,576
Inducement fee		473,192			-
Share-based payment expense		390,994			402,246
Changes in operating assets and liabilities:
Accounts receivable		(51,131	)		(7,707	)
Value-added tax recoverable/payable		(29,447	)		(80,920	)
Amount due from/to a shareholder		-			333,845
Other receivables		(161,363	)		(74,890	)
Inventory		2,101			(2,034	)
Accounts payable		(15,949	)		28,643
Accrued expense and other payable		269,872			99,887
Income tax payable		(265,988	)		(177,713	)
Net cash (used in)/provided by operating activities		(246,562	)		3,390,765
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment		(96,099	)		(788,974	)
Amount recovered from a sundry debtor		140,511			-
Refund of deposit/(deposit paid) for acquisition of a property		788,653			(763,756	)
Deposit paid for acquisition of a subsidiary		-			(916,508	)
Net cash provided by /(used in) investing activities		833,065			(2,469,238	)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash advanced from the shareholder to increase the subsidiary's
paid-up capital		-			1,228,269
Repayment of amount due to a shareholder		(1,098,435	)		-
Repayment of promissory notes		-			(2,368,471	)
Net cash used in financing activities		(1,098,435	)		(1,140,202	)
Effect of exchange rate changes on cash and cash equivalents		(3,972	)		41,405
Net decrease in cash and cash equivalents		(515,904	)		(177,270	)
Cash and cash equivalents, beginning balance		779,132			956,402
Cash and cash equivalents, ending balance	$	263,228		$	779,132
Supplemental disclosure of non-cash financing activities:
i) Distribution upon Group Reorganization (Note 1)	$	-			283,265
ii) Issuance of promissory notes as deemed distribution on
reverse acquisition (Note 1, 6)	$	-			2,368,471
iii) Common stock issued for prepaid services (Note 9)	$	-			1,023,865

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

~~The~~ FOR ~~accompanying~~THE ~~notes~~YEARS ~~are~~ENDED anSEPTEMBER ~~integral~~30, ~~part of~~2013 ~~these~~AND ~~consolidated financial statements.~~2012

~~F-4~~ (AMOUNTS IN USD, EXCEPT SHARES)

COMPUTER GRAPHICS INTERNATIONAL INC.

	2013		2012
Sales	$	3,701,783	$	5,795,503

Cost of sales		(2,502,025)		(2,895,566)

Gross profit		1,199,758		2,899,937

Selling, general and administrative expenses		(2,928,051)		(4,419,803)

Loss from operations		(1,728,293)		(1,519,866)

Other Income
Amount recovered from a sundry debtor		-		140,511
Interest income		654		1,058
Interest expense		(4,262)		-
Sundry income		115,615		9,373
Bank charges		(3,415)		(4,944)
Non operation expense		(16,991)		-

Total other income		91,601		145,998

Loss before income taxes		(1,636,692)		(1,373,868)

Income tax credit		-		237,055

Net loss	$	(1,636,692)	$	(1,136,813)

Other comprehensive income
Foreign currency translation gain		56,222		28,068

Comprehensive loss	$	(1,580,470)	$	(1,108,745)

Net loss per common share (*)
Basic (in dollars per share)	$	(0.10)	$	(0.07)

Weighted average common shares outstanding (*)
Basic (in shares)	$	16,331,854	$	16,301,717

~~CONSOLIDATED~~ (*) ~~STATEMENT~~Reflects OFthe ~~STOCKHOLDERS'~~1-for-2.18 ~~EQUITY~~ reverse split of the Company’s outstanding common stock effected on June 7, 2011.

~~FOR~~ The ~~THE~~accompanying ~~YEARS~~notes ~~ENDED~~are ~~SEPTEMBER~~an ~~30,~~integral ~~2012~~part ~~AND~~of ~~2011~~ these consolidated financial statements.

								Common
	Common		Common		Additional			Stock Issued					Other					Total
	Stock		Stock		Paid-in			For Prepaid			Statutory		Comprehensive		Retained			Stockholders
	Outstanding *		Amount *		Capital *			Service			Reserves		Income		Earnings			Equity
Balance September 30, 2010		14,462,684	$	1,446	$	283,109		$	-		$	146,429	$	127,355	$	215,423		$	773,762
Foreign currency translation adjustments		-		-		-			-			-		92,443		-			92,443
Distribution upon Group reorganization		-		-		(283,265	)		-			-		-		-			(283,265	)
Acquisition of CGII		447,276		45		(45	)		-			-		-		-			-
Issuance of promissory notes recorded as
deemed distribution to shareholders		-		-		-			-			-		-		(2,368,471	)		(2,368,471	)
Issuance of common stock for prepaid service - note 9		1,341,894		134		1,023,731			(1,023,865	)		-		-		-			-
Issuance of common stock to employee - note 9		40,000		4		56,119			-			-		-		-			56,123
Record of amortization of prepaid services - note 9		-		-		-			346,123			-		-		-			346,123
Income for the year ended September 31, 2011		-		-		-			-			-		-		2,801,832			2,801,832
Transferred to statutory reserve		-		-		-			-			353,659		-		(353,659	)		-
Balance September 30, 2011		16,291,854		1,629		1,079,649			(677,742	)		500,088		219,798		295,125			1,418,547
Foreign currency translation adjustments		-		-		-			-			-		28,068		-			28,068
Issuance of common stock to employee - note 9		40,000		4		49,702			-			-		-		-			49,706
Record of amortization of prepaid services - note 9		-		-		-			341,288			-		-		-			341,288
Loss for the year ended September 30, 2012																(1,136,813	)		(1,136,813	)
Balance September 30, 2012		16,331,854	$	1,633	$	1,129,351		$	(336,454	)	$	500,088	$	247,866	$	(841,688	)	$	700,796

	F-4

* The COMPUTER ~~above~~GRAPHICS ~~information~~INTERNATIONAL ~~has been restated to reflect the 1-for-2~~INC.~~18 reverse split of the Company's common stock effected on June 7, 2011.~~

~~The accompanying notes are an integral part~~ ofCONSOLIDATED ~~these~~STATEMENTS ~~consolidated~~OF ~~financial~~CASH ~~statements~~FLOWS

~~F-5~~ FOR THE YEARS ENDED SEPTEMBER 30, 2013 AND 2012

~~COMPUTER~~ (AMOUNTS ~~GRAPHICS~~IN ~~INTERNATIONAL INC.~~USD)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	2013		2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,636,692)	$	(1,136,813)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of prepaid post combination employee benefit		208,314		205,050
Amount recovered from a sundry debtor		-		(140,511)
Depreciation		266,896		213,431
Allowance for doubtful accounts		139,185		-
Inducement fee		-		473,192
Share-based payment expense		336,454		390,994

Changes in operating assets and liabilities:
Accounts receivable		(45,620)		(51,131)
Value-added tax recoverable/payable		35,932		(29,447)
Other receivables, net		69,145		(161,363)
Rent deposits		4,246		-
Inventory		-		2,101
Accounts payable		37,800		(15,949)
Accrued expense and other payable		27,195		269,872
Deferred revenue		55,118		-
Income tax payable		-		(265,988)

Net cash used in operating activities		(502,027)		(246,562)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment		(87,808)		(96,099)
Amount recovered from a sundry debtor		-		140,511
Refund of deposit for acquisition of a leasehold property		-		788,653
Disposal of property and equipment		42,363		-

Net cash (used in) provided by investing activities		(45,445)		833,065

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loan		480,724		-
Repayment of short-term loan		(16,024)		-
Proceeds from a stockholder		82,780		-
Repayment to a stockholder		-		(1,098,435)

Net cash provided by (used in) financing activities		547,480		(1,098,435)

Effect of exchange rate changes on cash and cash equivalents		26,802		(3,972)

Net increase (decrease) in cash and cash equivalents		26,810		(515,904)
Cash and cash equivalents, beginning balance		263,228		779,132
Cash and cash equivalents, ending balance	$	290,038	$	263,228

Cash paid during the period for:
Income tax	$	-	$	26,362
Interest paid	$	4,262	$	-

~~SEPTEMBER~~ The ~~30,~~accompanying ~~2012~~notes are an integral part of these consolidated financial statements.

~~Note 1~~ F- ~~ORGANIZATION~~5

~~Computer Graphics International Inc. (“CGII”~~ orCOMPUTER ~~“the~~GRAPHICS ~~Company”)~~INTERNATIONAL ~~(formerly known as AMP Productions, Ltd~~INC.), was incorporated under the laws of the State of Nevada on February 27, 2003. China Digital Image Organization Co., Limited (“China Digital”) was incorporated in Hong Kong on August 5, 2009. China Digital holds 100% of Shenzhen Digital Image Technologies Co., Ltd. (“SDIT”), a company incorporated in Shenzhen, Peoples’ Republic of China (“PRC”), and ultimately holds 100% of Shenzhen Digital Image 3D Design and Development Co., Ltd. (“SHENZHEN 3D DESIGN”) and Shenzhen Guangzhou Digital Image Technologies Co., Ltd, the companies incorporated in Shenzhen and Guangzhou, PRC.

~~Pursuant to a series of transactions completed~~ inCONSOLIDATED ~~October,~~STATEMENT ~~2010,~~OF ~~China~~STOCKHOLDERS' ~~Digital~~EQUITY ~~became the holding company of SDIT and SHENZHEN 3D DESIGN~~ (~~the "Group Reorganization"~~DEFICIT). In October, 2010, China Digital acquired a 100% interest in SDIT (which directly holds a 100% interest in SHENZHEN 3D DESIGN) at a consideration of CNY2,000,000 (equivalent to $283,265). Prior to and after this acquisition, both China Digital and SDIT were controlled by the same party, Hua Zeng. Hua Zeng already controlled and held a 100% interest in SHENZHEN 3D DESIGN in January, 2007. In August, 2010, SDIT acquired a 100% interest of SHENZHEN 3D DESIGN. Prior to and after this acquisition, both SDIT and SHENZHEN 3D DESIGN were controlled by Hua Zeng.

~~Since China Digital, SDIT and SHENZHEN~~ 3DFOR ~~DESIGN~~THE ~~were~~YEARS ~~under~~ENDED ~~common~~SEPTEMBER control of the ultimate controlling party, Hua Zeng both before and after the completion of the Group Reorganization, the Group Reorganization has been accounted for using merger accounting. The Consolidated Financial Statements have been prepared on the basis as if China Digital had always been the holding company of SDIT and SHENZHEN 3D DESIGN and the group structure had been in existence throughout the years ended September 30, ~~2012~~2013 ~~and~~AND ~~2011 as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation”.~~2012

~~On March 31, 2011, CGII entered into and~~ ~~closed a share purchase and exchange agreement~~ (~~the~~AMOUNTS ~~“Share~~IN ~~Exchange Agreement”) with China Digital~~USD, ~~the~~EXCEPT ~~shareholders of China Digital, and Thomas E. Mills, pursuant to which CGII acquired 100% of the issued and outstanding capital stock of China Digital (the “Share Exchange”~~SHARES) in exchange for (i) 14,462,684 shares of CGII’s common stock, representing 97% of the increased issued and outstanding stock of CGII, and (ii) payment (“the Cash Component”) of $2,368,471 (note 6). The Cash Component was payable in full within 12 months after the Closing.

In connection with the Share Exchange, Thomas E. Mills sold 260,124 shares of CGII’s common stock to Truth Giver Group Limited, a company incorporated under the laws of the British Virgin Islands and owned by Hua Zeng and Jing Wang, in exchange for an aggregate payment of $300,000.

							Common								Total
	Common		Common		Additional		Stock Issued				Other				Stockholders
	Stock		Stock		Paid-in		For Prepaid		Statutory		Comprehensive		Accumulated		Equity
	Outstanding *		Amount *		Capital *		Service		Reserves		Income		Deficit		(Deficit)

Balance September 30, 2011		16,291,854		1,629		1,079,649		(677,742)		500,088		219,798		295,125		1,418,547
Foreign currency translation adjustments		-		-		-		-		-		28,068		-		28,068
Issuance of common stock to employee- note 8		40,000		4		49,702		-		-		-		-		49,706
Record of amortization of prepaid services- note 8f		-		-		-		341,288		-		-		-		341,288
Loss for the year ended September 30, 2012														(1,136,813)		(1,136,813)

Balance September 30, 2012		16,331,854	$	1,633	$	1,129,351	$	(336,454)	$	500,088	$	247,866	$	(841,688)	$	700,796
Foreign currency translation adjustments		-		-		-		-		-		56,222		-		56,222
Record of amortization of prepaid service		-		-		-		336,454		-		-		-

Filing Compare · Computer Graphics International Inc.