anno-10q052208.htm

Note 1 – ORGANIZATION AND BASIS OF PRESENTATION

American Nano-Silicon Technologies, Inc. (the “Company” or “ANNO”) was originally incorporated in the State of California on September 6, 1996 as CorpHQ, Inc. (“CorpHQ”).

Initially, the Company was engaged in the business activities of providing marketing, advertising and financial consulting services until December 31, 1999. Since then, the Company explored a few business ventures and switched its business strategy to be involved in the development, acquisition and operation of minority-owned portfolio companies focus on consumer products and commercial technologies, as well as development of consulting and other business relationships with client companies that have demonstrated synergies with the Company’s core businesses.

On May 24, 2007, the Company entered into a Stock Purchase and Share Exchange Agreement (the “Exchange Agreement”) with old American Nano Silicon Technologies, Inc., a Delaware corporation (“ANNO-Delaware”), the shareholders of ANNO-Delaware and Nanchong Chunfei Nano-Silicon Technologies Co., Ltd. (“Nanchong Chunfei”), a corporation registered in the People’s Republic of China (“PRC” or “China”).

In connection with the Exchange Agreement, the following major events occurred:

·	On August 9, 2007, the Company changed its name from CorpHQ, Inc. to American Nano Silicon Technologies, Inc. and effected a 1302 to 1 reverse stock split and decreased its authorized common stock from 2 billion shares to 200 millions shares with a par value of $0.0001.

·	On November 9, 2007, the Company issued 25,740,000 shares of New common stock to the shareholders of ANNO-Delaware in exchange for all of the outstanding stock of ANNO-Delaware, resulting in ANNO-Delaware becoming a wholly-owned subsidiary of the Company.

·	The Board of Directors elected to discontinue its original business activities in the Company and has transferred all of the existing assets and liabilities to South Bay Financial Solutions, Inc.

The Share Exchange resulted in a change in control of the Company as the Shareholders of ANNO-Delaware became the majority shareholders of the Company. Also, the original shareholders and directors of the Company resigned and the shareholders of ANNO-Delaware were elected as directors of the Company and appointed as its executive officers.

For accounting purpose, this transaction has been accounted for as a reverse acquisition under the purchase method. Accordingly, ANNO-Delaware and its subsidiaries are treated as the continuing entity for accounting purposes.

American Nano-Silicon Technologies, Inc. (“ANST”) was incorporated on August 8, 2006 under the laws of the State of Delaware. On August 26, 2006, ANST acquired 95% interest of Nanchong Chunfei Nano-Silicon Technologies Co., Ltd. (“Nanchong Chunfei”), a company incorporated in the People’s Republic of China (the “PRC” or “China”) in August 2006. Nanchong Chunfei directly owns 90% of Sichuan Chunfei Refined Chemicals Co., Ltd. (“Chunfei Chemicals”), a Chinese corporation established under the laws of PRC on January 6, 2006. Chunfei Chemicals itself owns 92% of Sichuan Hedi Veterinary Medicines Co., Ltd. (“Hedi Medicines”), also a Chinese company incorporated under the law of PRC on June 27, 2002.

Collectively, ANST, Nachong Chunfie, Chunfei Chemicals and Hedi Medicines are hereinafter referred to as the “Company”.

The Company is primarily engaged in the business of manufacturing and distributing refined consumer chemical products through its subsidiary, Chunfei Chemicals, and veterinary drugs through another subsidiary, Hedi Medicines.

The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Item 310 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended March 31, 2008 and 2007 are not necessarily indicative of the results that may be expected for the full years. The information included in this Form 10-QSB should be read in conjunction with Management’s Discussion and Analysis and the financial statements and notes to thereto included in the Company’s Form 10 filing dated on February 12, 2008.

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AMERICAN NANO-SILICON TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2008 AND 2007 （UNAUDITED）

Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements represent the consolidated accounts of ANST and its subsidiaries, Nanchong Chunfei, Chunfei Chemicals and Hedi Medicines. All significant intercompany balances and transactions have been eliminated in consolidation.

Minority interests

Minority interest results from the consolidation of 95% directly owned subsidiary, Nanchong Chunfei, 85.5% indirectly owned subsidiary, Chunfei Chemicals, and 78.66% indirectly owned subsidiary, Hedi Medicines.

Use of estimates

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and cash in deposits and all highly liquid debt instruments with an original maturity of three months or less.

Inventory

Inventories consist of the raw materials and packing supplies. Inventories are valued at the lower of cost or market with cost determined on a first-in first-out basis. Market value represents the estimated selling price in the ordinary course of business less the estimated costs necessary to complete the sale.

Advances to suppliers

Advance to suppliers represent the payments made and recorded in advance for goods and services. Advances were also made for the purchase of the materials and equipments of the Company’s construction in progress. The final phase of the construction is not completed. As such, no amortization was made.

Property, plant & equipment

Property and equipment are stated at cost. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and locations for its intended use. Depreciation are amortization are calculated using the straight-like method over the following useful lives:

Buildings and improvements 39 years

Machinery, equipment and automobiles 5-10 years

Expenditures for maintenance and repairs are charged to expense as incurred. Additions, renewals and betterments are capitalized.

Revenue recognition

The Company utilizes the accrual method of accounting. Upon commencement of operations, The Company’s revenue recognition policies will be in compliance with Staff Accounting Bulletin (“SAB”) 104. Sales revenue is recognized when products are shipped and payments of the customers and collection are reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

Taxation

Enterprise income tax

The Company is governed by the Income Tax Law of the People’s Republic of China concerning the private-run enterprises, which are subject to tax at a statutory rate of 25% and were, until January 2008, subject to tax at a statutory rate of 33% (30% state income tax plus 3% local income tax) on its taxable income.

The Company will account for income tax under the provisions of SFAS No.109 "Accounting for Income Taxes", which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances will also be established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. The income tax incurred for the Company for the six months ended March 31, 2008 and 2007 was $1,687 and $0, respectively.

Value added tax

Value added tax is imposed on goods sold in or imported into the PRC. Value added tax payable in the People’s Republic of China is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of value added tax included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year. There was no value added tax payable for the Company as of March 31, 2008.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of advances to suppliers and other receivables arising from its normal business activities. The Company does not require collateral or other security to support these receivables. The Company routinely assesses the financial strength of its debtors and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts.

Risks and uncertainties

The operations of the Company are located in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, in addition to the general state of the PRC economy. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

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AMERICAN NANO-SILICON TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2008 AND 2007 （UNAUDITED）

Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair value of financial instruments

The carrying amounts of certain financial instruments, including cash and cash equivalents, advance to suppliers, other receivables, accounts payable, accrued expenses and construction security deposits approximate fair value due to the short-term nature of these items as of March 31, 2008 because of the relatively short-term maturity of these instruments.

Foreign currency translation

The Company’s principal country of operations is in PRC. The financial position and results of operations of the Company are determined using the local currency, Renminbi (“RMB”), as the functional currency. Foreign currency transactions are translated at the applicable rates of exchange in effect at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. Revenues and expenses are translated at the average exchange rates in effect during the reporting period.

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated Other Comprehensive Income". Gains and losses resulting from foreign currency translations are included in Accumulated Other Comprehensive Income.

Recent accounting pronouncements

In June 2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for use in Future Research and Development Activities” (“FSP EITF 07-3”), which addresses whether nonrefundable advance payments for goods or services that used or rendered for research and development activities should be expensed when the advance payment is made or when the research and development activity has been performed. Management is currently evaluating the effect of this pronouncement on financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115 (“SFAS 159”). SFAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective of SFAS 159 is to provide opportunities to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply hedge accounting provisions. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 will be effective in the first quarter of fiscal 2009. The Company is evaluating the impact that this statement will have on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements,” which provides a definition of fair value, establishes a framework for measuring fair value and requires expanded disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The provisions of SFAS No. 157 should be applied prospectively. The Company is currently analyzing whether this new standard will have impact on its financial position and results of operations.

In September 2006, the FASB issued SFAS No. 158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”, which amends SFAS No. 87 “Employers’ Accounting for Pensions” (SFAS No. 87), SFAS No. 88 “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits” (SFAS No. 88), SFAS No. 106 “Employers’ Accounting for Postretirement Benefits Other Than Pensions” (SFAS No. 106), and SFAS No. 132R “Employers’ Disclosures about Pensions and Other Postretirement Benefits (revised 2003)” (SFAS No. 132R). This Statement requires companies to recognize an asset or liability for the overfunded or underfunded status of their benefit plans in their financial statements. SFAS No. 158 also requires the measurement date for plan assets and liabilities to coincide with the sponsor’s year end. The standard provides two transition alternatives related to the change in measurement date provisions. The recognition of an asset and liability related to the funded status provision is effective for fiscal year ending after December 15, 2006 and the change in measurement date provisions is effective for fiscal years ending after December 15, 2008 The implementation of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

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AMERICAN NANO-SILICON TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2008 AND 2007 （UNAUDITED）

Note 3 – INVENTORY

		As of March, 31
		2008
Raw materials	$	82,679
Packing supplies		210,214
Work-in-process		448,545
Finished goods		81,262

Total	$	822,700

No allowance for inventories was made for the period as of March 31, 2008.

Note 4 – PROPERTY, PLANT AND EQUIPMENT


	As of March 31,
	2008
Machinery & equipment	$	647,312
Automobiles		60,766
Plant & Buildings		3,041,359
Total		3,749,437

Less: accumulated depreciation		(151,663	)
Add: construction in process		2,870,903
Property, plant and equipment	$	6,468,677

Depreciation expense for the six months ended March 31, 2008 and 2007 was $58,576 and $ 38,994, respectively.

Construction in progress represents direct costs of construction or acquisition and design fees incurred for the Company’s new plant and equipment. Capitalization of these costs ceases and the construction in progress is transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided until it is completed and ready for its intended use.

NOTE 5 - RELATED PARTY TRANSACTIONS

The details of loans to/from related parties are as follows:

	As of March 31,
	2008

Receivables from affiliates

Chunfei Daily Chemical	$	181,463
Chunfei Real Estate		54,116
Total	$	235,579

Loan from shareholder
Zhang, Qiwei	$	79,863

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AMERICAN NANO-SILICON TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2008 AND 2007 （UNAUDITED）

NOTE 6 - LAND USE RIGHT

All land in the People’s Republic of China is government owned and cannot be sold to any individual or company. However, the government grants the user a “land use right” (the Right) to use the land. The land use right was originally acquired by one of the Company’s shareholders in September 2000 for the amount of $833,686 and later was transferred to the Company as capital investment. The Company has the right to use the land for 50 years and amortized the Right on a straight-line basis over the period of 50 years.

The amortization expense from the six months ended March 31, 2008 and 2007 was $13,713 and $12,814, respectively.

NOTE 7 – DISCONTINUED OPERATIONS

On May 24, 2007, upon signing of the Exchange Agreement, the Company’s Board of Directors elected to discontinue its existing business activities in the Company, and on January 8, 2008, the Company spun off its related assets to South Bay Financial Solutions, Inc. The financial statements for the period ended March 31, 2008 include reclassifications of the operations of the Company’s old business to reflect the disposal of the business below the line as discontinued operations in accordance with the provisions of FASB 144, “ Accounting for the Impairment or Disposal of Long-Lived Assets”. There was a one-time loss of $496,727 on disposal recognized in the Statement of Operations for the six months and three months ended March 31, 2008 as a result of this disposition.

NOTE 8 – CONSTRUCTION SECURITY DEPOSITS

The Company requires security deposits from its plant and building contractor prior to start of the construction. The deposits are refunded upon officially certified completion of the works within the specified time. The purpose of the security deposits is to protect the Company from unexpected delay and poor construction quality.

The Company offers no interest to the security deposits and is not precluded from using the deposits for other purpose. As of March 31, 2008, the balance of the construction security deposits was $1,227,784.

NOTE 9 - SHORT-TERM LOANS

The short-term loans include the following:

	March 31,
	2008
a) Loan payable to Nanchong City Bureau of Finance
one year term, reneable unpn maturity,a fixed interest
rate of 0.47% per month	$	570,451

b) Individual loans from unrelated parties and employees
interest varied from 3% to 10% per month, all with one year term,
renewable upon maturity		213,656

c) Individual loans from unrelated parties with no interest,
payable in one year		71,306

d) Individual loans from unrelated parties with a fixed interest
rate of 2% per month, payable in one year		278,095
Total	$	1,133,508

The Company accrued interest expenses of $70,508 for the six months ended March 31, 2008 and $27,118 for the six months ended March 31, 2007.

NOTE 10– STOCKHOLDERS’ EQUITY

Prior to the closing of the Exchange Agreement, the Company has 1,065,753,214 shares of common stock issued and outstanding. On August 9, 2007, the Company effected a 1,302 for 1 reverse split on its outstanding common stock, which left the Company with 818,767 shares of common stock outstanding.

As part of the Exchange Agreement, the Company issued 25,740,000 shares of its common stock to the shareholders of ANNO-Delaware.

As of March 31, 2008, there were 26,558,767 shares of common stock issued and outstanding.

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ITEM 2. MANGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking” statements as such term is defined in the Private Securities Litigation Reform Act of 1995 and information relating to the Company that is based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect” and “intend” and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein and in other filings made by the company with the Securities and Exchange Commission. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these forward-looking statements.

Management's Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS – Second Quarter 2007 compared to Second Quarter 2008

The Company has one reportable segment that is engaged in manufacturing chemical products, chemical intermediaries and Chinese herbal medicines for animal use.

Revenues decreased from $786,336 in Q2 of 2007 to $424,165 in Q2 of 2008, a decrease of ($362,171) or (46.1%). Gross Profit decreased from $138,783 in Q2 of 2007 to $61,816 in Q2 of 2008, a decrease of ($69,967) or(50.4%). The reduction in revenues and gross profit was primarily the result of production facility difficulties experienced during the period that are ongoing. Selling General and Administrative expense increased

from $41,870 in Q2 of 2007 to $82,272 in Q2 of 2008, an increase of $40,402 or 96.5% principally as a result of charges related to the costs associated with being publicly held and the costs of the reverse acquisition. In addition the Company incurred one-time loss of $496,272 on the disposal of discontinued opeartions during the period, resulting in a loss for Q2 of 2008 of ($544,295) compared to income of $73,667 in

Q2 of 2007.

RESULTS OF OPERATIONS – First two quarters of 2007 Compared to First Two Quarters of 2008

The Company has one reportable segment that is engaged in manufacturing chemical products, chemical intermediaries and Chinese herbal medicines for animal use.

Revenues decreased from $866,783 in the first two quarters of fiscal 2007 to $713,488 in the first two quarters of fiscal 2008, a decrease of ($153,301) or (17.7%). Gross Profit decreased from $163,769 in the first two quarters of fiscal 2007 to $102,369 in the first two quarters of fiscal 2008, a decrease of ($61,400) or (37.5%). The reduction in revenues and gross profit was primarily the result of production facility difficulties experienced during the second quarter of fiscal 2008 that are ongoing. Selling General and Administrative expense increased from $76,657 in the first two quarters of fiscal 2007 to $140,054 in the first two quarters of fiscal 2008, an increase of $63,397 or 82.7% principally as a result of charges related to the costs associated with being publicly held and the costs of the reverse acquisition. In addition the Company incurred one-time loss of $496,272 on the disposal of discontinued operations during the period, resulting in a loss for the first two quarters of fiscal 2008 of ($601,427) compared to income of $58,011 in the first two quarters of Fiscal 2007.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s current assets, $1,479,017,-includes only $127,318 of cash and cash equivalents. Accordingly, unless it can fully restore production at its manufacturing facilities, the Company may not be able to fund its operations without additional investment. Management will seek additional equity or debt financing for the Company to overcome its operating difficulties. However, the Company does not have any commitments for additional financing and no assurance is given that any additional financing will be available or that, if available, it will be on terms that are favorable to our shareholders.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

The discussion and analysis of our financial condition and results of operations are based on our unaudited financial statements, which have been prepared according to U.S. generally accepted accounting principles. In preparing these financial statements, we are required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. We evaluate these estimates on an on-going basis. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We consider the following accounting policies to be the most important to the portrayal of our financial condition and that require the most subjective judgment.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of March 31, 2008, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are effective in enabling us to record, process, summarize and report information required to be included in our periodic SEC filings within the required time period.

(b) Changes in Internal Controls

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

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

The company is not party to any material legal proceeding.

Item 2. Changes in Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

a) EXHIBITS

31 Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

32 Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

b) REPORTS ON FORM 8-K

None

SIGNATURES

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

		American Nano Silicon Technologies, Inc.
	By:	/s/ Pu Fachun
		Pu Fachun
	Date: May 23, 2008	Chief Executive Officer and President (Principal Executive, Financial and Accounting Officer)

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

For the quarterly period ended March 31, 2008

OR

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


California		33-0726410
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
c/o American Union Securities, Inc.
100 Wall Street 15th Floor
New York, NY		10005
(Address of principal executive offices)		(Zip Code)


Large accelerated filer o		Accelerated filer o

Non-accelerated filer o	(Do not check if a smaller reporting company)	Smaller reporting company þ

AMERICAN NANO-SILICON TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Expressed in US dollars)

	March 31, 2008
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	127,318
Accounts receivable		103,696
Advances to suppliers		160,975
Inventory		822,700
Other receivables		4,454
Other receivables - related parties		235,578
Employee advances		24,296
Total Current Assets		1,479,017

Property, plant and equipment, net		6,468,677

Other assets:
Land use right, net		948,432
Total other assets		948,432

Total Assets	$	8,896,126


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Short term loan	$	1,133,508
Accounts payable		424,143
Advance from customers		145,649
Construction security deposits		1,227,784
Accrued expenses and other payables		299,548
Total Current Liabilities		3,230,632

Due to related parties		79,863

Total Liabilities		3,310,495

Minority Interests		955,646

Commitments and Contingencies

Stockholders' Equity
Common stock, $0.0001 par value, 200,000,000 shares authorized;
26,558,767 shares issued and outstanding at March 31, 2008		2,656
Additional paid-in-capital		4,487,743
Accumulated other comprehensive income		835,152
Retained earnings		(695,566	)
Total Stockholders' Equity		4,629,985

Total Liabilities and Stockholders' Equity	$	8,896,126

AMERICAN NANO-SILICON TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS AND THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Expressed in US dollars)



		Six Months Ended						Three Months Ended
		March 31,						March 31,
		2008			2007			2008			2007
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Revenues		$	713,488		$	866,763		$	424,165		$	786,336

Cost of Goods Sold			611,119			702,994			362,349			647,553

Gross Profit			102,369			163,769			61,816			138,783

Operating Expenses
	Selling, general and administrative		140,054			76,657			82,272			41,870

	Income before other Income and (Expenses)		(37,685	)		87,112			(20,456	)		96,913

Other Income and (Expense)
	Interest income (expense)		(70,508	)		(27,083	)		(35,935	)		(20,310	)
	Other income (expense)		29			(2,093	)		36			7
	Total other income and (expense)		(70,479	)		(29,176	)		(35,899	)		(20,303	)

Income (Loss) Before Minority Interests and Income Taxes			(108,164	)		57,936			(56,355	)		76,610

Provision for Income Taxes			1,687			-			1,687			-

Minority Interests			17,014			75			10,019			(2,943	)

Net Income (Loss) from Continuing Operations		$	(92,837	)	$	58,011		$	(48,023	)	$	73,667

Discontinued Operations
	Loss from discontinued operations		(12,318	)		-			-			-
	Loss on disposal		(496,272	)		-			(496,272	)		-

Net Income (Loss) from Discontinued Operations			(508,590	)		-			(496,272	)		-

Net Income (Loss)		$	(601,427	)	$	58,011		$	(544,295	)	$	73,667

Basic and diluted income per common share
	Continuing operations	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00
	Discontinued operations	$	(0.02	)	$	-		$	(0.02	)	$	-

Weighted average number of common shares			26,558,767			25,740,000			26,558,767			25,740,000

AMERICAN NANO-SILICON TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS AND THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Expressed in US dollars)

	Six Months Ended
	March 31,
	2008			2007
	(Unaudited)			(Unaudited)
Cash Flows From Operating Activities:
Continuing operations:
Net Income (Loss) from continuing operations	$	(92,837	)	$	58,011
Adjustments to reconcile net income (loss)to net cash
provided by (used in) operating activities:
Depreciation and amortization		72,289			51,808
Minority interest		(17,014	)		(75	)

Changes in operating assets and liabilities:
Accounts receivable		(103,697	)		(175,224	)
Inventory		(132,670	)		(234,438	)
Advances to suppliers		(37,934	)		72,399
Employee advances		3,615			(8,038	)
Other receivables		168,238			(5,148	)
Accounts payable		41,883			31,451
Advances from customers		145,649			24,146
Construction security deposits		55,741			(23,633	)
Accrued expenses and other payables		(105,791	)		750,717

Cash provided by (used in) continuing activities		(2,528	)		541,976

Discontinued operations
Net Loss from discontinued operations		(508,590	)		-
Adjustments to reconcile net loss to net cash
used in discontinued operations		508,590			-

Cash used in discontinued activities		-			-

Cash provided by (used in) operating activities		(2,528	)		541,976

Cash Flows From Investing Activities:
Purchase of machinery and equipments		(543	)
Additions to construction in process		(445,493	)		(132,721	)

Cash used in investing activities		(446,036	)		(132,721	)

Cash Flows From Financing Activities
Other receivables - related party		37,006			(207,727	)
Repayment of related party loans		(120,362	)		(10,121	)
Repayment of short term loans		196,094			-

Cash provided by (used in) financing activities		112,739			(217,848	)

Effect of exchange rate changes on cash and cash equivalents		39,443			76,958

Increase (decrease) in cash and cash equivalents		(296,382	)		268,365

Cash and Cash Equivalents - Beginning of period		423,700			60,205

Cash and Cash Equivalents - End of period	$	127,318		$	328,570


SUPPLEMENTAL CASH FLOW INFORMATION:
During the year, cash was paid for the following:
Interest expense	$	-		$	-
Income taxes	$	-		$	-

Non-cash investing and financing activities:
Additional capital contributed in the form of property	$	-		$	41,856