Nevada
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26-0768064
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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Large
accelerated filer ¨
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Accelerated
filer ¨
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Non-accelerated
filer ¨ (Do
not check if a smaller reporting company)
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Smaller
reporting company x
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PART
I - FINANCIAL INFORMATION
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1
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Item
1. Financial Statements
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1
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Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
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8
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Item
3.Quantitative and Qualitative Disclosures About Market
Risk
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12
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Item
4T. Controls and Procedures
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12
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PART
II - OTHER INFORMATION
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12
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Item
1. Legal Proceedings
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12
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Item
1A. Risk Factors
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12
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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13
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Item
3. Defaults Upon Senior Securities
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13
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Item
4. Removed and Reserved
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13
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Item
5. Other Information
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13
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Item
6. Exhibits
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13
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SIGNATURES
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14
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UNIVERSAL
SOLAR TECHNOLOGY, INC. AND SUBSIDIARIES
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CONSOLIDATED
BALANCE SHEETS
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September 30, 2010
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December 31, 2009
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|||||||
(Unaudited)
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(Audited)
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|||||||
ASSETS
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||||||||
CURRENT
ASSETS:
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||||||||
Cash
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$ | 126,125 | $ | 1,115,047 | ||||
Prepaid
expenses and other current assets
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1,394,993 | 319,123 | ||||||
Inventories
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603,813 | 42,956 | ||||||
TOTAL
CURRENT ASSETS
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2,124,931 | 1,477,126 | ||||||
Deposits
for future deliveries of property and equipment
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545,269 | 312,362 | ||||||
Land
use right, net of accumulated amortization of $19,741 and $11,452,
respectively
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410,981 | 411,391 | ||||||
Property
and equipment, net of accumulated depreciation of $66,225 and $3,446,
respectively
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5,397,443 | 3,294,946 | ||||||
TOTAL
ASSETS
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$ | 8,478,624 | $ | 5,495,825 | ||||
LIABILITIES
AND STOCKHOLDERS' DEFICIENCY
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||||||||
CURRENT
LIABILITIES:
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||||||||
Accounts
payable and accrued expenses
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$ | 872,977 | $ | 154,813 | ||||
Advance
from customers
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314,726 | |||||||
Short
Term loan
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746,150 | |||||||
Due
to related parties-current portion
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65,922 | 5,675,528 | ||||||
TOTAL
CURRENT LIABILITIES
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1,999,775 | 5,830,341 | ||||||
Due
to related parties- non-current portion
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7,358,022 | 22,485 | ||||||
TOTAL
LIABILITIES
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9,357,797 | 5,852,826 | ||||||
STOCKHOLDERS'
DEFICIENCY:
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||||||||
Preferred
stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares
issued and outstanding
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- | |||||||
Common
stock, $0.0001 par value, 90,000,000 shares authorized, issued and
outstanding 22,599,974
shares and 22,599,974 shares, respectively
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2,260 | 2,260 | ||||||
Additional
paid-in capital
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598,048 | 553,826 | ||||||
Accumulated
deficit
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(1,546,599 | ) | (925,466 | ) | ||||
Accumulated
other comprehensive income (loss)
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67,118 | 12,379 | ||||||
TOTAL
STOCKHOLDERS' DEFICIENCY
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(879,173 | ) | (357,001 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
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$ | 8,478,624 | $ | 5,495,825 |
Three Months Ended
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Three Months Ended
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Nine Months Ended
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Nine Months Ended
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|||||||||||||
Sep
30, 2010
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Sep
30, 2009
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Sep
30, 2010
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Sep
30, 2009
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|||||||||||||
SALES
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$ | 609,500 | $ | 31,609 | $ | 609,500 | $ | 691,660 | ||||||||
Cost
of goods sold
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598,721 | 29,989 | 598,721 | 619,449 | ||||||||||||
Gross
Profit
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10,779 | 1,620 | 10,779 | 72,211 | ||||||||||||
Expenses
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||||||||||||||||
Selling
Expenses
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57,266 | 57,266 | ||||||||||||||
General
and administrative expenses
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90,259 | 120,418 | 441,074 | 282,615 | ||||||||||||
TOTAL
OPERATING EXPENSES
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147,525 | 120,418 | 498,340 | 282,615 | ||||||||||||
LOSS
FROM OPERATIONS
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(136,746 | ) | (118,798 | ) | (487,561 | ) | (210,404 | ) | ||||||||
Interest
expense
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(28,082 | ) | (55,869 | ) | (130,749 | ) | (75,674 | ) | ||||||||
Dividend
and interest income
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0 | 686 | ||||||||||||||
Gain
(loss) on foreign currency transactions
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(49 | ) | 11 | (3,509 | ) | (2,408 | ) | |||||||||
Other
income
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- | - | ||||||||||||||
NET
LOSS
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(164,877 | ) | (174,656 | ) | (621,133 | ) | (288,486 | ) | ||||||||
OTHER
COMPREHENSIVE INCOME (LOSS):
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||||||||||||||||
Foreign
currency translation adjustment
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22,063 | 45 | 54,739 | 28,934 | ||||||||||||
COMPREHENSIVE
LOSS
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$ | (142,814 | ) | $ | (174,611 | ) | $ | (566,394 | ) | $ | (259,552 | ) | ||||
Loss
per common share -basic and diluted
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$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.01 | ) | ||||
Weighted
average number of shares outstanding -basic and
diluted
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22,599,974 | 22,574,974 | 22,599,974 | 22,574,974 |
CONSOLIDATED
STATEMENTS OF CASH FLOWS
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(Unaudited)
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Nine month ended
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Nine month ended
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|||||||
9/30/2010
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9/30/2009
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|||||||
OPERATING
ACTIVITIES:
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||||||||
Net
loss
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$ | (621,133 | ) | $ | (288,486 | ) | ||
Adjustments
to reconcile net loss to net
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||||||||
cash
used in operating activities:
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||||||||
Imputed
interest on loans from related parties
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44,899 | 76,819 | ||||||
Increase
in long term interest payable to affiliated parties
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76,253 | |||||||
Depreciation
of property and equipment
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61,409 | 1,121 | ||||||
Amortization
of land use right and intangible assets
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8,459 | 8,809 | ||||||
Changes
in operating assets and liabilities:
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- | |||||||
Prepaid
expenses and other current assets
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(1,094,077 | ) | 12,650 | |||||
Inventory
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(552,750 | ) | ||||||
Accounts
payable and accrued expenses
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721,912 | 25,940 | ||||||
Advance
from customers
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310,621 | |||||||
NET
CASH USED IN OPERATING ACTIVITIES
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(1,044,407 | ) | (163,147 | ) | ||||
INVESTING
ACTIVITIES:
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||||||||
Deposits
for future deliveries of equipment
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(224,124 | ) | (791,113 | ) | ||||
Acquisition
of property and equipment
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(2,076,393 | ) | (740,226 | ) | ||||
NET
CASH USED IN INVESTING ACTIVITIES
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(2,300,517 | ) | (1,531,339 | ) | ||||
FINANCING
ACTIVITIES:
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||||||||
Proceeds
from short-term loan
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736,416 | |||||||
Loans
from related parties
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1,607,340 | 2,883,004 | ||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
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$ | 2,343,756 | $ | 2,883,004 | ||||
EFFECT
OF EXCHANGE RATE CHANGES ON CASH
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12,246 | 29,510 | ||||||
INCREASE
IN CASH
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(988,922 | ) | 1,218,028 | |||||
CASH
- BEGINNING OF PERIOD
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1,115,047 | 259,025 | ||||||
CASH
- END OF PERIOD
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$ | 126,125 | $ | 1,477,053 | ||||
Supplemental
disclosures of cash flow information:
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||||||||
Interest
paid
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$ | - | $ | - | ||||
Income
taxes paid
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$ | - | $ | - |
September 30,
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December 31,
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|||||||
2010
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2009
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|||||||
Due
to President Ms. Lin Chen
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$ | 104,536 | $ | 0 | ||||
Due
to Mr. Wenshen Chen, Company’s chairman and chief executive officer, due
12/1/2013, at 1% per annum
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$ | 3,067,934 | $ | 2,207,704 | ||||
Due
to Zhuhai Yuemao Laser Facility Engineering Co., Ltd. (“Yuemao
Laser”) due 12/1/2013, at 1% per annum
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$ | 247,600 | $ | 238,009 | ||||
Due
from Zhuhai Yuemao Laser Facility Engineering Co.,
Ltd. (“Yuemao Laser”)
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$ | (38,614 | ) | 0 | ||||
Due
to Yuemao Technology Ltd. (“Yuemao Technology”), due 12/1/2013, at 1% per
annum
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$ | 3,950,118 | $ | 3,252,300 | ||||
Interest
Payable, due 12/1/2013with the principals, not interest
bearing
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$ | 92,370 | $ | 0 | ||||
Total
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$ | 7,423,944 | $ | 5,698,013 | ||||
Current
portion
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$ | (65,922 | ) | (5,675,528 | ) | |||
Non-current
portion
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$ | 7,358,022 | $ | 22, 485 |
September 30,
2010
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December 31,
2009
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|||||||
Construction
in progress
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$ | 715,045 | $ | 1,019,760 | ||||
Office
equipment and furniture
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20,093 | 11,123 | ||||||
Equipment
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4,121,710 | 2,219,913 | ||||||
Automobile
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65,369 | 47,596 | ||||||
Building
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535,513 | |||||||
Software
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5,939 | |||||||
Less
accumulated depreciation and amortization
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(66,226 | ) | (3,446 | ) | ||||
Property,
plant and equipment, net
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$ | 5,397,443 | $ | 3,294,946 |
Exhibit
No.
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Title
of Document
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31.1
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Certification
of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended
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31.2
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Certification
of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended
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32.1
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Certification
pursuant to Section 906 of Sarbanes Oxley Act of 2002 (Chief Executive
Officer)
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32.2
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Certification
pursuant to Section 906 of Sarbanes Oxley Act of 2002 (Chief Financial
Officer)
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Universal
Solar Technology, Inc.
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Date:
November 15, 2010
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By:
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/s/
Wensheng Chen
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Wensheng
Chen
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Chief
Executive Officer
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By:
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/s/
Lijie Zhu
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Lijie
Zhu
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
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