1. Nature of Operations China Electronics Holdings, Inc. (the ?Company ?or ?CEHD Nevada?), formerly named Buyonate, Inc., was a development stage company incorporated in the State of Nevada on July 9, 2007. Upon consummation of Share Transfer and Share Exchange transactions referred to below, the Company began to engage in the wholesale and retail distribution of consumer electronics and appliances in certain rural markets in the People?s Republic of China through its indirectly wholly owned subsidiary Guoying. 2008 and 2010 Share Transfers China Electronic Holdings, Inc (?CEH Delaware?) was incorporated on November 15, 2007 in Delaware. CEH Delaware has conducted no business activities. Lu?an Guoying Electronic Sales Co., Ltd., a domestic PRC corporation, (?Guoying?) was established on January 4, 2002 to engage in the wholesale and retail distribution of electronics consumer products to rural areas in An Hui province. Mr. Hailong Liu is the CEO and Chairman of Guoying. Pursuant to a Share Transfer Agreement dated May 30, 2009, Mr. Hailong Liu (the ?Guoying Shareholder?) transferred 100% of outstanding shares of Guoying to CEH Delaware in exchange for an aggregate of 11,566,288 CEH Delaware Shares, constituting 84.6% of issued and outstanding shares of CEH Delaware and also for a consideration of RMB 1,000,000 (the ?Purchase Price?). The Guoying Shareholder contributed the cash portion of the price for their shares to Guoying for working capital and general corporate purpose and as a result of the 2009 Share Transfers, Guoying became a wholly foreign-owned subsidiary (?WFOE?) of CEH Delaware. In an effort to comply with regulations of the PRC applicable to the transfer by a resident of the PRC of shares of a PRC company to a company located outside the PRC, Mr. Liu caused Ms. Sherry Li to act as nominee holding record ownership of his shares in CEH Delaware. As a result of the 2009 Share Transfer, Guoying became a wholly owned subsidiary of CEH Delaware with registered capital of RMB 1,000,000. Subsequently, Guoy