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<P align=center style="margin-top: 0; margin-bottom: 0">As filed with the Securities and Exchange Commission on May 7,
2010</P>
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<P align=right style="margin-top: 0; margin-bottom: 0">Registration No. 333 -</P>
</div>
<P align=center><B><FONT size=5>UNITED STATES </FONT><BR><FONT size=5>SECURITIES
AND EXCHANGE COMMISSION</FONT><BR>Washington, D.C. 20549
<BR>____________________________ </B></P>
<P align=center><B><FONT size=5>FORM S-1</FONT><BR></B><B>REGISTRATION STATEMENT
UNDER THE</B><BR>
  <B>SECURITIES ACT OF 1933 </B></P>
<P align=center><B><FONT size=6>DRAGON ACQUISITION
CORPORATION<BR>
  </FONT></B>(Exact name of registrant as specified in its charter)</P>
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    <TD align=center><B><U>Cayman Islands </U></B></TD>
    <TD align=center width="33%"><B><U>6552 </U></B></TD>
    <TD align=center width="33%"><B><U>N/A </U></B></TD></TR>
  <TR vAlign=top>
    <TD align=center>(State or other jurisdiction of </TD>
    <TD align=center width="33%">(Primary Standard Industrial </TD>
    <TD align=center width="33%">(I.R.S. Employer </TD></TR>
  <TR vAlign=top>
    <TD align=center>incorporation or organization) </TD>
    <TD align=center width="33%">Classification Code Number) </TD>
    <TD align=center width="33%">Identification No.) </TD></TR></TABLE>
<P align=center><B>Floor 28, Block C</B><BR><B>Longhai Mingzhu
Building,</B><BR><B>No.182 Haier Road, Qingdao 266000 </B><BR><B>People&#146;s
Republic of China </B><BR><B><U>(86) 532 8099 7969</U></B><B> </B><BR>(Address
and telephone number of principal executive
offices)<BR>
  ____________________________ </P>
<P align=center><I>Copies to:</I></P>
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  <TR vAlign=top>
    <TD align=center><B>Louis A. Bevilacqua, Esq. </B></TD>
    <TD align=center width="50%"><B>Joseph M. Lucosky, Esq. </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>Thomas M. Shoesmith, Esq. </B></TD>
    <TD align=center width="50%"><B>Anslow &amp; Jaclin, LLP </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>Joseph R. Tiano, Jr., Esq. </B></TD>
    <TD align=center width="50%"><B>195 Route 9 South </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>Pillsbury Winthrop Shaw Pittman LLP </B></TD>
    <TD align=center width="50%"><B>2nd Floor </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>2300 N Street, N.W. </B></TD>
    <TD align=center width="50%"><B>Manalapan, NJ 07726 </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>Washington, D.C. 20037 </B></TD>
    <TD align=left width="50%"><div align="center"><B><U>(732) 409-1212 </U></B></div></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B><U>(202) 663-8000 </U></B></TD>
    <TD align=left width="50%">&nbsp; </TD></TR></TABLE>
<P align=center>(Names, addresses and telephone numbers of agents for service)
<BR>
  <B>____________________________ </B></P>
<P align=justify style="text-indent: 5%"><B>Approximate date of commencement of proposed sale to
public</B>: From time to time after the effective date of this Registration
Statement, as determined by market conditions and other factors. </P>
<P align=justify style="text-indent: 5%">If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X] </P>
<P align=justify style="text-indent: 5%">If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]</P>
<P align=justify style="text-indent: 5%">&nbsp;If this form is a post-effective amendment filed pursuant
to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] </P>
<P align=justify style="text-indent: 5%">If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement the same offering. [ ] </P>
<P align=justify style="text-indent: 5%">If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ] </P>
<P align=justify style="text-indent: 5%">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 definitions of &#147;large accelerated filer,"
"accelerated filer,&#148; and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one):</P>
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  <TR vAlign=top>
    <TD align=center>Large accelerated filer&nbsp; [&nbsp;&nbsp; ]</TD>
    <TD align=center width="50%">Accelerated
      filer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      [X] </TD></TR>
  <TR vAlign=top>
    <TD align=center>Non-accelerated filer&nbsp;&nbsp; [&nbsp;&nbsp; ]</TD>
    <TD align=center width="50%">Smaller reporting company [&nbsp;&nbsp;
  ]</TD></TR>
  <TR vAlign=top>
    <TD align=center><font size="1">(Do not check if a smaller reporting company)
    </font> </TD>
    <TD align=center width="50%">&nbsp; </TD></TR></TABLE><BR>
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<P align=center><B>CALCULATION OF REGISTRATION FEE </B></P>
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  <TR vAlign=top>
    <TD align=center >Title of securities </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD width="12%" align=center vAlign=bottom>Amount to be </TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="16%" align=center vAlign=bottom>Proposed maximum </TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="20%" align=center vAlign=bottom>Proposed maximum aggregate</TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="12%" align=center vAlign=bottom>Amount of </TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=center >to be registered </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD width="12%" align=center vAlign=bottom>registered<SUP>(1)</SUP></TD>
    <TD width="1%" align=center vAlign=bottom ></TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="16%" align=center vAlign=bottom>offering price per share </TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="20%" align=center vAlign=bottom>offering price </TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
    <TD width="12%" align=center vAlign=bottom>registration fee </TD>
    <TD width="1%" align=center vAlign=bottom >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff ><B>Primary Offering</B>: </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="16%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="20%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >
    <p style="margin-left: 10pt">Ordinary Shares, $0.002112 par value per
      share </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><BR></TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="16%"><BR></TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="20%">$23,000,000</TD>
    <TD vAlign=bottom align=left width="1%" ><SUP>(2) </SUP></TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">$1,640</TD>
    <TD vAlign=bottom align=left width="1%" ><SUP>(3) </SUP></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >
    <p style="margin-left: 10pt">Underwriter&#146;s Warrants to
      Purchase Ordinary Shares </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="16%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="20%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
      bgColor=#e6efff>-</TD>
    <TD vAlign=bottom align=left width="1%"
  bgColor=#e6efff><SUP>(4)</SUP></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >
    <p style="margin-left: 10pt">Ordinary Shares Underlying Underwriter&#146;s Warrants, $0.002112 par value per share </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><BR></TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="16%"><BR></TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="20%">$1,250,000 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">$90</TD>
    <TD vAlign=bottom align=left width="1%" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff ><B>Secondary Offering:
</B></TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="16%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="20%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >
    <p style="margin-left: 10pt">Ordinary Shares, $0.002112 par value&nbsp;per
      share </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">765,000</TD>
    <TD vAlign=bottom align=left width="1%" ><SUP>(7) </SUP></TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="16%">$4.00</TD>
    <TD vAlign=bottom align=left width="1%" ><SUP>(5) </SUP></TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="20%">$3,060,000 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">$219 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff
      >
    <p style="margin-left: 10pt">Ordinary Shares Underlying
      6%&nbsp;Convertible Preference
      Shares,&nbsp;$0.002112 par value per
      share </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>2,774,700</TD>
    <TD vAlign=bottom align=left width="1%"
      bgColor=#e6efff><SUP>(8) </SUP></TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="16%" bgColor=#e6efff>$4.00</TD>
    <TD vAlign=bottom align=left width="1%"
      bgColor=#e6efff><SUP>(5) </SUP></TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="20%"
      bgColor=#e6efff>$11,098,800 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>$792 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >
    <p style="margin-left: 10pt">Ordinary Shares Underlying Warrants,&nbsp;$0.002112 par
      value per share </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">1,387,350</TD>
    <TD vAlign=bottom align=left width="1%" ><SUP>(9) </SUP></TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="16%">$6.00</TD>
    <TD vAlign=bottom align=left width="1%" ><SUP>(6) </SUP></TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="20%">$8,324,100 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">$594 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff
      >
    <p style="margin-left: 10pt">Ordinary Shares Underlying Warrants,&nbsp;$0.002112 par value per
      share </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>138,735</TD>
    <TD vAlign=bottom align=left width="1%"
      bgColor=#e6efff><SUP>(10) </SUP></TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="16%" bgColor=#e6efff>$5.00 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff><SUP>(6)</SUP></TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="20%" bgColor=#e6efff>$693,675 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>$50 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >TOTAL </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="16%">&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="20%">$47,426,575 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">$3,385</TD>
    <TD align=left width="1%" ><SUP>(11) </SUP></TD>
  </TR></TABLE>
<P align=justify>(1) In accordance with Rule 416(a), the Registrant is also
registering hereunder an indeterminate number of additional Ordinary Shares that
may be issued and resold resulting from stock splits, stock dividends or similar
transactions. <BR>(2) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(o). <BR>(3) Calculated pursuant to Rule
457(o) based on an estimate of the proposed maximum aggregate offering price.
<BR>(4) No separate registration fee is required pursuant to Rule 457(g).
<BR>(5) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the last private sales price for ordinary shares
of the Registrant as there is currently no public market price for the
Registrant&#146;s ordinary shares. Management considered the total number of shares
outstanding post offering, the public offering of ordinary shares, estimated
market capitalization, forward looking net income, the targeted
price-to-earnings ratio and the effect of the current global economic crisis to
determine the offering price per share. Accordingly, taking the foregoing
factors into consideration, the Registrant arrived at the proposed offering
price per share, which is the effective price per share paid by the investors in
the Company&#146;s April 2010 private placement. <BR>(6) Calculated in accordance
with Rule 457(g) based upon the exercise price of the Warrants held by selling
stockholders named in this registration statement. <BR>(7) Represents the
Registrant&#146;s ordinary shares being registered for resale that have been issued
to the selling stockholders named in this registration statement. <BR>(8)
Represents ordinary shares underlying 6% convertible preference shares being
registered for resale that have been issued to the selling stockholders named in
this registration statement.<BR>(9) Represents ordinary shares issuable upon
exercise of five-year warrants to purchase ordinary shares held by certain
selling stockholders named in this registration statement. <BR>(10) Represents
ordinary shares issuable upon exercise of three-year warrants to purchase
ordinary shares held by certain selling stockholder named in this registration
statement. <BR>(11) Paid herewith. </P>
<TABLE
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  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left>
      <P align=justify><B>The registrant hereby amends this registration
      statement on such date or dates as may be necessary to delay its effective
      date until the </B><B>registrant shall file a further amendment which
      specifically states that this registration statement shall hereafter
      become effective in </B><B>accordance with Section 8(a) of the Securities
      Act of 1933 or until the registration statement shall become effective on
      such date as the </B><B>Commission, acting pursuant to such Section 8(a),
      may determine. </B></P></TD></TR></TABLE><BR>
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<P align=center><B>EXPLANATORY NOTE</B> </P>
<P align=justify>This Registration Statement contains two prospectuses, as set
forth below. </P>
<UL style="TEXT-ALIGN: justify">
  <LI><B><I>Public Offering Prospectus</I></B>. A prospectus, or the Public
  Offering Prospectus, to be used for the public offering of up to ordinary
  shares by us (in addition to ordinary shares that may be sold upon exercise of
  the underwriters&#146; over-allotment option) through the underwriters named on the
  cover page of the Public Offering Prospectus. We are also registering the
  warrants and ordinary shares underlying the warrants to be received by the
  underwriters in this offering. </LI></UL>
<UL style="TEXT-ALIGN: justify">
  <LI><B><I>Resale Prospectus</I></B>. A prospectus, or the Resale Prospectus,
  to be used for the resale by selling stockholders of 765,000 ordinary shares
  and 2,774,700 ordinary shares underlying 6% convertible preference shares,
  $0.002112 par value per share, or Preference Shares. We are also registering
  1,526,085 ordinary shares that have been or may be acquired upon the exercise
  of warrants that have been previously issued to selling stockholders named in
  the Resale Prospectus. </LI></UL>
<P align=justify>The Public Offering Prospectus is substantively identical to the
Resale Prospectus, except for the following major items:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>they contain different outside and inside front covers;
  <LI>they contain different Offering sections in the Prospectus Summary section
  beginning on page 1 and page 1A respectively;
  <LI>they contain different Use of Proceeds sections on page 23 and page 2A
  respectively;
  <LI>the Capitalization and Dilution sections on page 25 and page 26,
  respectively, of the Public Offering Prospectus are deleted from the Resale
  Prospectus;
  <LI>a Selling Stockholder section is included in the Resale Prospectus
  beginning on page 3A;
  <LI>references in the Public Offering Prospectus to the Resale Prospectus will
  be deleted from the Resale Prospectus;
  <LI>the Underwriting section from the Public Offering Prospectus on page 81
  is deleted from the Resale Prospectus and a Plan of Distribution is inserted
  in its place;
  <LI>the Legal Matters section in the Resale Prospectus on page 9A deletes the
  reference to counsel for the underwriters; and
  <LI>the outside back cover of the Public Offering Prospectus is different from
  the outside back cover of the Resale Prospectus. </LI></UL>
<P align=justify>We have included in this Registration Statement, after the
financial statements, a set of alternate pages to reflect the foregoing
differences of the Resale Prospectus as compared to the Public Offering
Prospectus. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_4></A>&nbsp;<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD  rowSpan=8><IMG
      src="sidebar.jpg" width="73" height="733"
      border=0></TD>
    <TD colspan="6" align=left > <P align=center><B><I>PRELIMINARY PROSPECTUS
        </I></B></P>
      <P align=center><B><I><FONT color=#ff0000>Subject to completion, dated May
        7, 2010 </FONT></I></B></P>
      <P align=center><B>________ Ordinary Shares </B></P>
      <P align=center><IMG
      src="logo.jpg" width="125" height="82"
      border=0></P>
      <P align=center><B><font style="font-size: 16pt">DRAGON ACQUISITION CORPORATION<BR>
        </font>
        </B>____________________________ </P>
      <P align=justify>We are offering&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        ordinary shares.</P>
      <P align=justify>Our ordinary shares are not currently listed or quoted
        for trading on any national securities exchange or national quotation
        system. We intend to apply for the listing of our ordinary shares on the
        NASDAQ Global Market under the symbol &#147;OMEI&#148;. There can, however,
        be no assurance that our listing application will be accepted by the NASDAQ
        Global Market.</P>
      <P align=justify><B>Investing in our ordinary shares involves risks that
        are described in the &#147;Risk Factors&#148; section beginning on page
        8 of this prospectus. </B></P></TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left width="60%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="12%"
    >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="12%"
    >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="60%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%"><B>Per
      Share </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Total </B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="60%" bgColor=#e6efff>Public offering price</TD>
    <TD align=center width="1%"  bgColor=#e6efff>$</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="1%"  bgColor=#e6efff>$</TD>
    <TD align=center width="12%" bgColor=#e6efff></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="60%">Underwriting discount</TD>
    <TD align=center width="1%" >$</TD>
    <TD align=center width="12%">&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >$</TD>
    <TD align=center width="12%"></TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="60%" bgColor=#e6efff>Proceeds, before expenses, to Dragon
      Acquisition Corporation</TD>
    <TD align=center width="1%"  bgColor=#e6efff>$</TD>
    <TD align=center width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="1%"  bgColor=#e6efff>$</TD>
    <TD align=center width="12%" bgColor=#e6efff></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left width="60%"  bgColor=#ffffff>&nbsp;</TD>
    <TD align=center width="1%"  bgColor=#ffffff>&nbsp;</TD>
    <TD align=center width="12%"  bgColor=#ffffff>&nbsp;</TD>
    <TD align=center width="2%"  bgColor=#ffffff>&nbsp;</TD>
    <TD align=center width="1%"  bgColor=#ffffff>&nbsp;</TD>
    <TD align=center width="12%"  bgColor=#ffffff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#ffffff>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan="7" align=left  bgColor=#ffffff> <P align=justify>The underwriters
        may also purchase up to an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares from us at the public
        offering price, less the underwriting discount, within 30 days from the
        date of this prospectus to cover over-allotments, if any.</P>
      <P align=justify><B>Neither the Securities and Exchange Commission nor any
        state securities commission has approved or disapproved of these securities
        or determined if this prospectus is truthful or complete. Any representation
        to the contrary is a criminal offense.</B></P>
      <P align=justify>The ordinary shares are expected to be delivered on or
        about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;, 2010. </P>
      <P align=center>____________________________ </P>
      <P align=center><B><font style="font-size: 16pt">Brean</font><font style="font-size: 16pt"> Murray, Carret &amp; Co.</font></B></P>
      <P align=center>____________________________ </P>
      <P align=center>The date of this prospectus is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        , 2010. </P></TD>
  </TR>
</TABLE>
<P align=justify>&nbsp;</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_5></A>
<P align=center><B><U>TABLE OF CONTENTS</U></B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="8%"><B><U>Page</U></B> </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_6"><B>PROSPECTUS
      SUMMARY</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_6"><B>1</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_13"><B>RISK
      FACTORS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_13"><B>8</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_27"><B>SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_27"><B>22</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_28"><B>USE
      OF PROCEEDS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_28"><B>23</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_29"><B>MARKET
      PRICE AND DIVIDENDS ON OUR COMMON EQUITY AND RELATED SHAREHOLDER
      MATTERS</B> </A></TD>
    <TD align=right width="8%"  bgColor=#eeeeee><A
      href="#page_29"><B>24</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_29"><B>DIVIDEND
      POLICY</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_29"><B>24</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_30"><B>CAPITALIZATION</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_30"><B>25</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_32"><B>DILUTION</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_32"><B>26</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_32"><B>EXCHANGE
      RATE INFORMATION</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_32"><B>26</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_33"><B>SELECTED
      CONSOLIDATED FINANCIAL DATA</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_33"><B>27</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_36"><B>MANAGEMENT&#146;S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF</B>
      <B>OPERATIONS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_36"><B>30</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_52"><B>QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_52"><B>46</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_52"><B>BUSINESS</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_52"><B>47</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_70"><B>HISTORY
      AND CORPORATE STRUCTURE</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_70"><B>64</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_73"><B>MANAGEMENT</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_73"><B>67</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_75"><B>EXECUTIVE
      COMPENSATION</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_75"><b>69</b> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_78"><B>TRANSACTIONS
      WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS;</B>
      <B>CORPORATE GOVERNANCE</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_78"><B>72</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_79"><B>SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_79"><B>73</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_80"><B>DESCRIPTION
      OF SECURITIES</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_80"><B>74</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_86"><B>SHARES
      ELIGIBLE FOR FUTURE SALE</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_86"><B>80</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_87"><B>UNDERWRITING</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_87"><B>81</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_94"><B>LEGAL
      MATTERS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_94"><B>88</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_94"><B>EXPERTS</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_94"><B>88</B> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_95"><B>ADDITIONAL
      INFORMATION</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_95"><b>89</b> </A></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_96"><B>INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><b><a href="#page_96">F-1</a></b></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="8%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_111"><B>PART
      II INFORMATION NOT REQUIRED IN THE PROSPECTUS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee><A
      href="#page_111"><B>II-1</B> </A></TD>
  </TR></TABLE>
<P align=justify><B>You should rely only on the information provided in this
prospectus. Neither we nor the selling stockholders have authorized anyone to
provide you with additional or different information. The selling stockholders
are not making an offer of these securities in any jurisdiction where the offer
is not permitted. You should assume that the information in this prospectus is
accurate only as of the date on the front of the document. </B></P>
<P align=center>i </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_6></A>
<div style="border-style: solid; border-width: 1; padding-left: 4; padding-right: 4; padding-top: 1; padding-bottom: 1">
<P align=center style="margin-left: 10; margin-right: 10"><B>PROSPECTUS SUMMARY</B></P>
<P align=justify style="margin-left: 10; margin-right: 10"><I>The items in the following summary are described in more
detail later in this prospectus. Therefore, you should also read the more
detailed information set out in this prospectus, including the financial
statements, the notes thereto and matters set forth under &#147;Risk Factors.&#148;
</I></P>
<P align=justify style="margin-left: 10; margin-right: 10">Except as otherwise indicated by the context, references in
this prospectus to &#147;we,&#148; &#147;us,&#148; &#147;our,&#148; &#147;our Company,&#148; or &#147;the Company&#148; are to the
combined business of Dragon Acquisition and its consolidated subsidiaries,
Leewell, Oumei, Caoxian Industrial, Longhai Hotel, Longhai Real Estate, Oumei
Real Estate, Qingdao Xudong, Weifang Longhai Industry, Weifang Longhai
Properties, Weifang Qilu, Weihai Economic and Weihai Mingwei.</P>
<P align=justify style="margin-left: 10; margin-right: 10">In addition, unless the context otherwise requires and for the
purposes of this prospectus only:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Caoxian Industrial&#148; refers to Caoxian Industrial Properties Co., Ltd., a
  PRC limited company; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Dragon Acquisition&#148; refers to Dragon Acquisition Corporation, a Cayman
  Islands company; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Exchange Act&#148; refers to the Securities Exchange Act of 1934, as amended;
  </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Hong Kong&#148; refers to the Hong Kong Special Administrative Region of the
  People&#146;s Republic of China; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Leewell&#148; refers to Leewell Investment Group Limited, a Hong Kong company;
  </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Longhai Hotel&#148; refers to Longhai Hotel Co., Ltd., a PRC limited company;
  </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Longhai Real Estate&#148; refers to Longhai Real Estate Properties Co., Ltd., a
  PRC limited company; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Oumei&#148; refers to Qingdao Oumei Real Estate Development Co., Ltd., a PRC
  limited company; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;PRC,&#148; &#147;China,&#148; and &#147;Chinese,&#148; refer to the People&#146;s Republic of China;
</P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Qingdao Xudong&#148; refers to Qingdao Xudong Real Estate Development Co.,
  Ltd., a PRC limited company; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Renminbi&#148; and &#147;RMB&#148; refer to the legal currency of China; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;SEC&#148; refers to the Securities and Exchange Commission; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Securities Act&#148; refers to the Securities Act of 1933, as amended; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;U.S. dollars,&#148; &#147;dollars&#148; and &#147;$&#148; refer to the legal currency of the United
  States; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Weifang Longhai Industry&#148; refers to Weifang Longhai Industry Co., Ltd., a
  PRC limited company; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Weifang Longhai Zhiye&#148; refers to Weifang Longhai Zhiye Co., Ltd., a PRC
  limited company; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Weifang Qilu&#148; refers to Weifang Qilu Guotai Properties Co., Ltd., a PRC
  limited company; </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Weihai Economic&#148; refers to Weihai Economic &amp; Technology Development
  Zone Longhai Properties Co., Ltd., a PRC limited company; and </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10">&#147;Weihai Mingwei&#148; refers to Weihai Mingwei Industry Co., Ltd., a PRC limited
  company. </P></LI></UL>
<P align=justify style="margin-left: 10; margin-right: 10">In this prospectus we are relying on and we refer to
information and statistics regarding the real estate industry in China that we
have obtained from various cited public sources. Any such information is
publicly available for free and has not been specifically prepared for us for
use or incorporation in this prospectus or otherwise.</P>
<P align=center style="margin-left: 10; margin-right: 10">1</P>
</div>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<P align=center style="margin-left: 10; margin-right: 10"><B>The Company</B><BR></P>
<P align=justify style="margin-left: 10; margin-right: 10"><B>Overview of Our Business</B><BR></P>
<P align=justify style="margin-left: 10; margin-right: 10">We are one of the leading real estate development companies
located in Qingdao, Shandong province, China. We began operation in 2001 and in
2008 we were recognized in the Qingdao Construction Committee&#146;s evaluation as
one of the top ten real estate developers in Qingdao, measured by a combination
of revenue, customer satisfaction, as well as several other factors.</P>
<P align=justify style="margin-left: 10; margin-right: 10">We develop and sell residential and commercial properties,
targeting middle and upper income customers in the coastal region of the
Shandong peninsula (Greater Qingdao) located in northeastern China, including
the cities of Qingdao, Weihai and Yantai, as well as other inland locations,
including Weifang.</P>
<P align=justify style="margin-left: 10; margin-right: 10">Since our inception, we have completed 15 projects having a
gross floor area, or GFA, of 1,191,722 square meters, of which more than 91.8%
has been sold. In addition, we have seven projects under construction with a
total GFA of 735,274 square meters. </P>
<P align=justify style="margin-left: 10; margin-right: 10">In fiscal year 2009, our total sales increased 22.4% to $94.3
million from $77.0 million in fiscal year 2008. Our gross profit increased 17.3%
to $36.0 million in fiscal year 2009 from $30.7 million in fiscal year 2008,
while our net income before extraordinary item increased 27.9% to $24.3 million
in fiscal year 2009 from $19.0 million in fiscal year 2008.</P>
<P align=justify style="margin-left: 10; margin-right: 10"><B>Our Competitive Strengths</B><BR></P>
<P align=justify style="margin-left: 10; margin-right: 10">We believe the following strengths allow us to compete
effectively in the Chinese real estate development industry:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Proven track record of successful large-scale properties
  development</I></B>. Since our inception in 2001, we have successfully
  completed 15 projects having a GFA of 1,191,722 square meters, of which more
  than 91.8% has been sold. In addition, we have seven projects under
  construction with a total GFA of 735,274 square meters. All of our projects
  have featured modern facilities and attractive landscaping that provides
  comfortable and convenient lifestyles. Since our inception, we have focused on
  providing mid-sized apartments for middle-income residents and have gained an
  in-depth understanding of the preferences of our target customers. Most of the
  apartments we develop are units ranging from 40 square meters to 100 square
  meters, with an average price of less than RMB 4,000 per square meter
  (approximately $585 per square meter). Our ability to cater to our customers&#146;
  preferences has been a major factor in the growth of our business. By
  leveraging our experience and track record, we believe that we can penetrate
  into the real estate markets in other tier two and tier three cities in China.
  </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Widely recognized brand name in an attractive coastal market</I></B>.
  We have received many awards that acknowledge the quality of our real estate
  developments. For example, in 2008 we were recognized in the Qingdao
  Construction Committee&#146;s evaluation as one of the top ten real estate
  developers in Qingdao, measured by a combination of revenue, customer
  satisfaction, as well as several other factors. We believe that the quality of
  our real estate developments and the recognition of our brand name by our
  customers are important to our success. </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Experienced management team</I></B>. Our Chairman, Mr. Antoine Cheng,
  has many years of experience in working with businesses and developed good
  business contacts, including in the real estate development business in China.
  Our senior managers have an average of more than 10 years of experience in the
  real estate industry and substantial management experience. All of them have
  bachelor&#146;s or master&#146;s degrees in business administration or accounting. In
  addition, our staff is well trained and is motivated by our incentive
  programs. We offer employees a variety of relevant training programs. </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Substantial land reserves at premier locations for new development
  projects</I></B>. For our future development, we have acquired substantial
  land reserves at premier locations. Specific projects have been scheduled to
  be constructed on those lands. Please see &#147;Projects&#148; for details about our
  land reserves. </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Strong financial profile and excellent credit record</I></B>. We have
  bank credit facilities with three top Chinese banks, which allow us to
  prudently use debt to leverage our business. We have received &#147;AA&#148; recognition from our top lender, Industrial and Commercial
  Bank of China, Chengyang Branch, in each of the past three years.
  </P></LI></UL>
<P align=center style="margin-left: 10; margin-right: 10">2</P>
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  <UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-left: 10; margin-right: 10"><B><I>Compelling growth strategy</I></B>. We expect to continue our growth
  by: (i) achieving higher returns on projects by developing hotels and villas
  for upper income customers; (ii) continuing development of large middle income
  residential projects; (iii) expanding operations to other tier two and tier
  three cities in the Shandong Province and in other provinces in China; and
  (iv) acquiring projects from distressed developers. </LI></UL>
<P align=justify style="margin-left: 10; margin-right: 10"><B>Our Growth Strategy</B><BR></P>
<P align=justify style="margin-left: 10; margin-right: 10">We intend to increase our market share through aggressive
internal growth and prudent acquisitions that are primarily focused on
outstanding land or projects in the Shandong Province and in other provinces in
China. We intend to achieve this objective by pursuing the following
strategies:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Continue to expand in Shandong Province through new urban development
  projects</I></B>. In the next five years we will continue to focus on real
  estate development along the coastline of the Shandong peninsula, particularly
  in the Qingdao and Weihai regions. Given our knowledge and experience, we
  expect to increase our market share in those areas. For example, our strategic
  plan includes construction of an office building and a large upper-income
  community of villas in coastal Weihai. We also plan to create a high-rise
  resort hotel on the Stone Old Man beach in Qingdao, where we already own the
  land rights. We believe that the Qingdao-Weihai region is one of the most
  suitable and beautiful living areas in China. The region also features good
  economic growth. We believe that the real estate market in the Qingdao-Weihai
  region will remain strong over the next several years, not only due to the
  market awareness created by the global media coverage of Qingdao and its
  Olympic sailing events, but also because of the unique attraction the region
  holds for international customers, travelers and investors. </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Continue to provide cost-effective properties for middle income
  customers</I></B>. The growing number of middle- income consumers in China has
  provided attractive and sustainable growth opportunities for real estate
  developers. As disposable incomes for urban residents increase, they have
  strong motivation and sufficient financial capacity to improve their living
  conditions by purchasing new or better properties. We intend to capitalize on
  the growth opportunities by continuing to offer high-quality mid-sized
  residential units featuring modern designs and convenient facilities at
  competitive prices. </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Penetration of the high-end real estate market</I></B>. We intend to
  penetrate into the high-end real estate market by developing villas, hotels,
  and commercial and office buildings that generate high returns. We have three
  projects in planning in that category. The first is a large community of
  villas and hotel-serviced apartments on the beach in Weihai. The second is an
  office building in Weihai, the Longhai International Plaza, that we believe
  will generate both sales and continuing rental income for us. The third, the
  most interesting of our plans, is the luxury resort hotel, the Longhai Hotel,
  which will be located just across the street from the Stone Old Man beach in
  Qingdao. Construction for the hotel is expected to start in August 2011. The
  architectural and engineering firm we have selected is Epstein, headquartered
  in Chicago, a city famous for innovative architecture. We believe the upscale
  business and tourist volume in Qingdao will provide the sustained demand for
  such a beautiful luxury hotel. These high-end projects should generate higher
  returns on investment than middle-income residential properties. </P>
  <LI>
  <P style="margin-left: 10; margin-right: 10"><B><I>Improve project management and cost control</I></B>. We will improve
  our project management by adopting more stringent financial disciplines in our
  operations at each stage that will help us to increase our returns on our
  project investments. We will use our capital more effectively by better
  managing our assets, receivables and expenditures to attain pre-set targets.
  We will better anticipate the best land rights reserves for development and
  will be able to capture them at the lowest prices to maximize our potential
  returns on our land and on our project investments. Further benefits should
  include a more consistent cash flow from our pre-sales to achieve both better
  cash availability for our projects and a prudent debt-to-total-capital ratio
  that will keep us in the optimum range for our cost of capital. The results
  should be lower effective interest rates on our debt and better cost
  competitiveness for our company. </P></LI></UL>
<P align=justify style="margin-left: 10; margin-right: 10"><B>Our Corporate History and Background</B></P>
<P align=justify style="margin-left: 10; margin-right: 10">We organized under the laws of the Cayman Islands on March 10,
2006 as a blank check development stage company formed for the purpose of
acquiring an operating business, through a stock exchange, asset acquisition or
similar business combination. From our inception until we completed our reverse
acquisition of Leewell on April 14, 2010, our operations consisted entirely of
identifying, investigating and conducting due diligence on potential businesses
for acquisition. </P>
<P align=center style="margin-left: 10; margin-right: 10">3</P>
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<P align=justify style="margin-left: 10; margin-right: 10">On April 14, 2010, we completed a reverse acquisition transaction
  through a share exchange with Leewell whereby we acquired 100% of the issued
  and outstanding capital stock of Leewell. As a result of the reverse acquisition,
  Leewell became our wholly-owned subsidiary and Longhai Holdings Company Limited,
  or Longhai Holdings, the former shareholder of Leewell, became our controlling
  shareholder. The share exchange transaction with Leewell was treated as a reverse
  acquisition, with Leewell as the acquirer and Dragon Acquisition as the acquired
  party. </P>
<P align=justify style="margin-left: 10; margin-right: 10">On April 14, 2010, we also completed a private placement
transaction with a group of accredited investors. Pursuant to a subscription
agreement with the investors, or the Subscription Agreement, we issued to the
investors an aggregate of 2,774,700 units, or the Units, for a purchase price of
$11,098,800, or $4.00 per Unit. Each Unit consists of one Preference Share, and
one warrant to purchase 0.5 ordinary shares, or the Warrants. The Warrants have
a term of 5 years, bear an exercise price of $6.00 per share (subject to
customary adjustments), are exercisable on a net exercise or cashless basis and
are exercisable by investors at any time after the closing date. See &#147;History
and Corporate Structure&#148; below for a detailed description of the reverse
acquisition and the private placement transaction.</P>
<P align=justify style="margin-left: 10; margin-right: 10"><B>Our Corporate Structure</B><BR></P>
<P align=justify style="margin-left: 10; margin-right: 10">All of our business operations are conducted through our
Chinese subsidiaries. The chart below presents our corporate structure:</P>
<P align=center style="margin-left: 10; margin-right: 10"><IMG
src="orgchart.jpg" width="637" height="545"
border=0></P>
<P align=center style="margin-left: 10; margin-right: 10">4</P>
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<P align=justify style="margin-left: 10; margin-right: 10"><B>Office Location</B><BR></P>
<P align=justify style="margin-left: 10; margin-right: 10">Our principal business office is located in China at Floor 28,
Block C Longhai Mingzhu Building, No.182 Haier Road, Qingdao 266000. The
telephone number at our executive offices is (86) 532 8099 7969. Our registered
office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands and
our registered agent is Maples Corporate Services Limited. We maintain a website
at <U><FONT color=#0000ff>http://www.chinaoumeirealestate.com</FONT></U> that
contains information about our company, but that information is not part of this
prospectus. </P>
<P align=center style="margin-left: 10; margin-right: 10">5</P>
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<P align=center><B>The Offering </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>
    <p style="margin-left: 10; margin-right: 10">Ordinary shares offered<SUP>(1)</SUP> </TD>
    <TD align=left width="2%"  >
    <p style="margin-left: 10; margin-right: 10"></TD>
    <TD align=left width="49%">
    <p style="margin-left: 10; margin-right: 10">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp; shares,
      (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      shares, if the underwriters exercise the overallotment option) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">Ordinary shares outstanding prior to the
      offering</TD>
    <TD align=left width="2%"  bgColor=#e6efff
    >
    <p style="margin-left: 10; margin-right: 10">&nbsp;</TD>
    <TD align=left width="49%"
      bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp; shares </TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="margin-left: 10; margin-right: 10">Ordinary shares outstanding after the
      offering<SUP>(2)</SUP> </TD>
    <TD align=left width="2%"  >
    <p style="margin-left: 10; margin-right: 10"></TD>
    <TD align=left
      width="49%">
    <p style="margin-left: 10; margin-right: 10">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      shares, (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares, if the underwriters exercise the overallotment option)
    </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">Offering price</TD>
    <TD align=left width="2%"  bgColor=#e6efff
    >
    <p style="margin-left: 10; margin-right: 10">&nbsp;</TD>
    <TD align=left width="49%"
      bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      per share </TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="margin-left: 10; margin-right: 10">Use of proceeds: </TD>
    <TD align=left width="2%"  >
    <p style="margin-left: 10; margin-right: 10"></TD>
    <TD align=left width="49%">
    <p style="margin-left: 10; margin-right: 10">We intend to use the net proceeds from this
      offering for working capital and general corporate purposes. See &#147;Use of
      Proceeds&#148; on page 23 for more information on the use of proceeds. </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">Risk factors </TD>
    <TD align=left width="2%"  bgColor=#e6efff >
    <p style="margin-left: 10; margin-right: 10"></TD>
    <TD align=left width="49%" bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">See &#147;Risk Factors&#148; and other
      information included in this prospectus for a discussion of the risks you
      should carefully consider before deciding to invest in our ordinary
      shares. </TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="margin-left: 10; margin-right: 10">Trading market and symbol </TD>
    <TD align=left width="2%"  >
    <p style="margin-left: 10; margin-right: 10"></TD>
    <TD align=left width="49%">
    <p style="margin-left: 10; margin-right: 10">We intend to apply for the listing of our
      ordinary shares on the NASDAQ Global Market under symbol &#147;OMEI&#148;. There
      can, however, be no assurance that our ordinary shares will be accepted
      for listing on the NASDAQ Global Market. </TD></TR></TABLE>
<P align=justify style="margin-left: 10; margin-right: 10">(1) Excludes up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares underlying warrants to be
received by the underwriters in this offering. We are also concurrently
registering for resale under a separate Resale Prospectus 765,000 ordinary
shares and 2,774,700 ordinary shares underlying the Preference Shares held by
the selling stockholders named under such prospectus and 1,526,085 ordinary
shares that have been or may be acquired upon the exercise of warrants that have
been previously issued to the selling stockholders named in such prospectus.
None of these securities registered under the Resale Prospectus are being
offered by us and we will not receive any proceeds from the sale of these
shares.</P>
<P align=justify style="margin-left: 10; margin-right: 10">(2) Based on (i) 31,000,062 ordinary shares issued and outstanding
  as of the date of this prospectus and (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares issued in the public
  offering (excluding the underwriters&#146; warrants to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary
  shares and 1,526,085 ordinary shares underlying warrants that were issued on
  April 14, 2010). </P>
<P align=center style="margin-left: 10; margin-right: 10">6 </P>
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<P align=center style="margin-left: 10; margin-right: 10"><B>Summary Consolidated Financial Information</B><BR></P>
<P align=justify style="margin-left: 10; margin-right: 10">The following selected historical financial information should
be read in conjunction with our consolidated financial statements and related
notes and the information contained in &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations&#148; below. The selected consolidated
statement of operations data and statement of cash flows data for the years
ended December 25, 2009, 2008, and 2007 and the selected balance sheet data as
of December 25, 2009 and 2008 are derived from the audited consolidated
financial statements of Leewell included elsewhere in this prospectus. The
selected consolidated financial data for the years ended December 25, 2006 and
2005 and the selected balance sheet data as of December 25, 2007, 2006 and 2005
are derived from the unaudited and unreviewed consolidated financial statements
of Leewell not included in this prospectus.</P>
<P align=justify style="margin-left: 10; margin-right: 10">The audited consolidated financial statements of Leewell for
the fiscal years ended December 25, 2009, 2008, and 2007 are prepared and
presented in accordance with generally accepted accounting principles in the
United States, or U.S. GAAP. The selected financial data information is only a
summary and should be read in conjunction with the historical consolidated
financial statements and related notes of Leewell contained elsewhere herein.
The financial statements contained elsewhere fully represent our financial
condition and operations; however, they are not indicative of our future
performance.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2><B>U.S. dollars, except shares</B>
      </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    colSpan=13 valign="bottom"><FONT size=2><B>Fiscal Year Ended December
      25,</B> </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center valign="bottom">
    <p style="margin-left: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center valign="bottom"><FONT size=2><B>2005</B> </FONT></TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center valign="bottom"><FONT size=2><B>2006</B> </FONT></TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center valign="bottom"><FONT size=2><B>2007</B> </FONT></TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center valign="bottom"><FONT size=2><B>2008</B> </FONT></TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD align=center valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center valign="bottom"><FONT size=2><B>2009</B> </FONT></TD>
    <TD align=center valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2><B>Statements of Operations Data</B>
      </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Total sales </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom"><FONT
      size=2>$</FONT></TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>&nbsp;42,984,961 </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom"><FONT
      size=2>$</FONT></TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>&nbsp;54,291,244 </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom"><FONT
      size=2>$</FONT></TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>&nbsp;51,850,312 </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom"><FONT
      size=2>$</FONT></TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>&nbsp;77,032,561 </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom"><FONT
      size=2>$</FONT></TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>&nbsp;94,315,500 </FONT></TD>
    <TD align=left
bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Total cost of sales </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(32,983,932</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(33,703,168</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(36,243,778</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(46,321,251</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(58,296,408</FONT></TD>
    <TD align=left valign="bottom" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Gross profit </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>10,001,029
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>20,588,076
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>15,606,534
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>30,711,310
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>36,019,092
      </FONT></TD>
    <TD align=left
bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Advertising expenses </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right width="12%" valign="bottom"><FONT size=2>(81,549</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right width="12%" valign="bottom"><FONT size=2>(47,051</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right width="12%" valign="bottom"><FONT size=2>(46,492</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right width="12%" valign="bottom"><FONT size=2>(112,263</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right width="12%" valign="bottom"><FONT size=2>(268,222</FONT></TD>
    <TD align=left valign="bottom" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Commission expenses
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(312,425</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(789,497</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(134,989</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(574,262</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(84,982</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Selling expenses </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(293</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(6,192</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(2,187</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(81,415</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>(49,800</FONT></TD>
    <TD align=left valign="bottom" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Bad debt expense
    </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>-
</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(154,710</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(245,243</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(1,198,942</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(207,523</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>General and administrative expenses </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>(3,212.,010</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>(4,092,355</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>(807,589</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>(2,283,744</FONT></TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>(4,655,596</FONT></TD>
    <TD align=left valign="bottom" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Income from operations
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>6,394,752
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>15,498,271
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>14,370,034
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>26,460,684
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>30,752,969
      </FONT></TD>
    <TD align=left
bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Income before income taxes and extraordinary item </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>6,185,453
      </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>15,392,696
      </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>14,309,351
      </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>25,583,919
      </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>33,402,436
      </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Income taxes </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(2,089,048</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(5,130,644</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(5,090,161</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(6,602,194</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT
      size=2>(9,058,226</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Income before extraordinary item </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>4,096,405
      </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>10,262,052
      </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>9,219,190
      </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>18,981,725
      </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><FONT size=2>24,344,210
      </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Extraordinary item, net
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom"><FONT size=2>- </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom"><FONT size=2>- </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom"><FONT size=2>- </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom"><FONT size=2>12,635,872 </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom"><FONT size=2>- </FONT></TD>
    <TD align=left
bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Net income </FONT></TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>4,096,405 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>10,262,052 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>9,219,190 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>31,617,597 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>24,344,210 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>Basic and diluted earnings per common share
      </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>&nbsp;&nbsp; Income before extraordinary item </FONT></TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>&nbsp;409.64 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>&nbsp;1,026.21 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>&nbsp;921.92 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>&nbsp;0.19 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD align=right valign="bottom"><FONT size=2>&nbsp;0.24 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="margin-left: 10"><FONT size=2>&nbsp;
      &nbsp;Extraordinary item </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>-
</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>-
</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>-
</FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>0.12
    </FONT></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><FONT size=2>-
</FONT></TD>
    <TD align=left
bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="margin-left: 10"><FONT size=2>&nbsp; &nbsp;Net income </FONT></TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>&nbsp;409.64 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>&nbsp;1,026.21 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>&nbsp;921.92 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>&nbsp;0.31 </FONT></TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" ><FONT size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><FONT size=2>&nbsp;0.24 </FONT></TD>
    <TD align=left valign="bottom"
>&nbsp;</TD></TR></TABLE>
&nbsp;<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD align=left style="border-right-style: none; border-right-width: medium">
      <p style="margin-left: 10">&nbsp; </TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
    width="1%">&nbsp;</TD>
      <TD colspan="13" align=center style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium">
        <B>As of December 25</B> </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left style="border-right-style: none; border-right-width: medium">
      <p style="margin-left: 10">&nbsp; </TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=center
      width="12%"><B>2005</B> </TD>
      <TD align=center width="2%" style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=center
      width="12%"><B>2006</B> </TD>
      <TD align=center width="2%" style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=center
      width="12%"><B>2007</B> </TD>
      <TD align=center width="2%" style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=center
      width="12%"><B>2008</B> </TD>
      <TD align=center width="2%" style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=center
      width="12%"><B>2009</B> </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff style="border-right-style: none; border-right-width: medium">
      <p style="margin-left: 10"><B>Balance Sheet Data</B> </TD>
      <TD align=left width="1%" bgColor=#e6efff style="border-style: none; border-width: medium">&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
      <TD align=left width="2%" bgColor=#e6efff style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff style="border-style: none; border-width: medium">&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
      <TD align=left width="2%" bgColor=#e6efff style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff style="border-style: none; border-width: medium">&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
      <TD align=left width="2%" bgColor=#e6efff style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff style="border-style: none; border-width: medium">&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
      <TD align=left width="2%" bgColor=#e6efff style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff style="border-style: none; border-width: medium">&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>
      <p style="margin-left: 10">Working capital </TD>
      <TD align=left width="1%" style="border-top-style: none; border-top-width: medium"><FONT size=2>$</FONT></TD>
      <TD align=right width="12%">16,835,646 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%" style="border-top-style: none; border-top-width: medium"><FONT size=2>$</FONT></TD>
      <TD align=right width="12%">34,470,470 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%" style="border-top-style: none; border-top-width: medium"><FONT size=2>$</FONT></TD>
      <TD align=right width="12%">9,465,778 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%" style="border-top-style: none; border-top-width: medium"><FONT size=2>$</FONT></TD>
      <TD align=right width="12%">18,831,257 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%" style="border-top-style: none; border-top-width: medium"><FONT size=2>$</FONT></TD>
      <TD align=right width="12%">44,207,072 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>
      <p style="margin-left: 10">Total assets </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;53,886,321 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;94,711,799 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;87,822,788 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;178,648,355 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;196,332,843 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>
      <p style="margin-left: 10">Total liabilities </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">40,640,740 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">65,427,400 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
      <TD align=right width="12%" style="border-bottom-style: none; border-bottom-width: medium">59,977,634 </TD>
      <TD align=left width="2%" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">115,401,647 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">101,981,897 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>
      <p style="margin-left: 10">Stockholders&#146; equity </TD>
      <TD align=left width="1%" bgColor=#e6efff><FONT size=2>$</FONT></TD>
      <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">13,245,581 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff><FONT size=2>$</FONT></TD>
      <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">29,284,399 </TD>
      <TD align=left width="2%" bgColor=#e6efff style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="1%"
    bgColor=#e6efff><FONT size=2>$</FONT></TD>
      <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=right width="12%"
    bgColor=#e6efff>27,845,154 </TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff style="border-left-style: none; border-left-width: medium"><FONT size=2>$</FONT></TD>
      <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">63,246,708 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff><FONT size=2>$</FONT></TD>
      <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">94,350,946 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
<P align=center>7 </P>
</div>
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<P align=center><B>RISK FACTORS</B></P>
<P align=justify><I>The ordinary shares being offered by us are highly
speculative in nature, involve a high degree of risk and should be purchased
only by persons who can afford to lose the entire amount invested in our
ordinary shares. Before purchasing any of our ordinary shares, you should
carefully consider the following factors relating to our business and prospects.
You should pay particular attention to the fact that we conduct all of our
operations in China and are governed by a legal and regulatory environment that
in some respects differs significantly from the environment that may prevail in
the U.S. and other countries. If any of the following risks actually occurs, our
business, financial condition or operating results will suffer, the trading
price of our ordinary shares could decline, and you may lose all or part of your
investment. </I></P>
<P align=justify><B>RISKS RELATED TO OUR BUSINESS</B></P>
<P align=justify><B><I>We face risks related to general domestic and global
economic conditions and to the recent credit crisis. </I></B></P>
<P align=justify>We currently generate sufficient operating cash flows, which
combined with access to the credit markets, provide us with significant
discretionary funding capacity.</P>
<P align=justify>However, the current uncertainty arising out of domestic and
global economic conditions, including the recent disruption in credit markets,
poses a risk to the economies in which we operate that has affected demand for
our products and services, and may affect our ability to manage normal
relationships with our customers, suppliers, and creditors. If the current
situation deteriorates significantly, our business could be materially
negatively affected, including such areas as reduced demand for our products and
services from a slow-down in the general economy, or supplier or customer
disruptions resulting from tighter credit markets. In addition, terrorist
activities may cause unpredictable or unfavorable economic conditions and could
have a material adverse effect on the Company&#146;s operating results and financial
condition.<B><I> </I></B></P>
<P align=justify><B><I>Our sales and results of operations could decline due to
macro-economic and other factors outside of our control, such as changes in
consumer confidence and declines in employment levels.</I></B><I> </I></P>
<P align=justify>Changes in national and regional economic conditions, as well
as local economic conditions where we conduct our operations and where
prospective purchasers of our properties live, may result in more caution on the
part of buyers and consequently fewer purchases. These economic uncertainties
involve, among other things, conditions of supply and demand in local markets
and changes in consumer confidence and income, employment levels, and government
regulations. These risks and uncertainties could periodically have an adverse
effect on consumer demand for and the pricing of our properties, which could
cause our operating revenues to decline. In addition, builders are subject to
various risks, many of them outside the control of the builder including
competitive overbuilding, availability and cost of building lots, materials and
labor, adverse weather conditions which can cause delays in construction
schedules, cost overruns, changes in government regulations, and increases in
real estate taxes and other local government fees. A reduction in the Company&#146;s
sales could in turn negatively affect the market price of its securities. </P>
<P align=justify><B><I>Our business is susceptible to fluctuations in the real
estate market of China, especially in certain areas of eastern China where our
operations are concentrated, which may adversely affect our sales and results of
operations.</I></B></P>
<P align=justify>Our business depends substantially on the conditions of the PRC
  real estate market. Demand for real estate in China has grown rapidly in the
  recent decade but such growth is often coupled with volatility in market conditions
  and fluctuations in real estate prices. For example, the rapid expansion of
  the real estate market in major provinces and cities in China in the early 1990s,
  such as Shanghai, Beijing and Guangdong province, led to an oversupply in the
  mid-1990s and a corresponding fall in real estate values and rentals in the
  second half of the decade. Following a period of rising real estate prices and
  transaction volume in most major cities, the industry experienced a severe downturn
  in 2008, with transaction volume in many major cities declining by more than
  40% compared to 2007. </P>
<P align=justify>Average selling prices also declined in many cities during
2008. Fluctuations of supply and demand in China&#146;s real estate market are caused
by economic, social, political and other factors. To the extent fluctuations in
the real estate market adversely affect real estate transaction volumes or
prices, our financial condition and results of operations may be materially and
adversely affected.</P>
<P align=justify>Almost all of our operations are concentrated in Shandong
province, where the real estate market continued to grow in 2008 and 2009 despite the general downturn of the Chinese real
estate market mainly in 2008 and early 2009, however any decrease in demand or
real estate prices or any other adverse developments in this geographic region
would materially and adversely affect our sales and results of operations. </P>
<P align=center>8</P>
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<P align=justify><B><I>We are heavily dependent on the performance of the residential
  property market in China, which is at a relatively early development stage.</I></B></P>
<P align=justify>The residential property industry in the PRC is still in a
relatively early stage of development. Although demand for residential property
in the PRC has been growing rapidly in recent years, such growth is often
coupled with volatility in market conditions and fluctuation in property prices.
It is extremely difficult to predict how much and when demand will develop, as
many social, political, economic, legal, and other factors, most of which are
beyond our control, may affect the development of the market. The level of
uncertainty is increased by the limited availability of accurate financial and
market information and the overall low level of transparency in the PRC,
especially in tier-two cities that have lagged in progress in these aspects when
compared to tier-one cities. </P>
<P align=justify>The lack of a liquid secondary market for residential property
may discourage investors from acquiring new properties. The limited amount of
property mortgage financing available to PRC individuals may further inhibit
demand for residential developments. </P>
<P align=justify><B><I>Our business may be materially and adversely affected by
  government measures aimed at China&#146;s real estate industry.</I></B></P>
<P align=justify>The real estate industry in China is subject to government
regulations. Until 2008, the real estate markets in a number of major cities in
China had experienced rapid and significant growth. Before the global economic
crisis hit all the major economies worldwide in 2008, the PRC government had
adopted a series of measures to restrain what it perceived as unsustainable
growth in the real estate market. From 2003 to 2007, the PRC government
introduced a series of specific administrative and credit-control measures
including, but not limited to, setting minimum down payment requirements for
residential and commercial real estate transactions, limiting availability of
mortgage loans, and tightening the governmental approval process for certain
real estate transactions. For example, in 2006, the State Council and other
related government agencies introduced regulations that increased the mandatory
minimum down payment from 20% to 30% of the purchase price for properties with a
floor area of more than 90 square meters and imposed a business tax on total
proceeds from the resale of properties held for less than five years.</P>
<P align=justify>Since 2008, the PRC government has relaxed such restrictions
and introduced measures aimed at stimulating residential property purchases by
individuals and stabilizing the real estate market. On October 22, 2008, the
Ministry of Finance, the State Administration of Taxation and the People&#146;s Bank
of China, or PBOC, lowered transaction taxes, minimum down payment requirements,
and the mortgage interest rate for certain residential real estate transactions.
In December 2008, the General Office of the State Council promulgated rules that
exempted certain residential real estate transactions from business tax and
urban real estate tax.</P>
<P align=justify>However, despite the recent government measures aimed at
maintaining the long-term stability of the real estate market, we cannot assure
you that the PRC government will not adopt new measures in the future that may
result in short-term downward adjustments and uncertainty in the real estate
market. Our business may be materially and adversely affected as a result of
decreased transaction volumes or real estate prices that may follow these
adjustments or market uncertainty. </P>
<P align=justify><B><I>Our sales will be affected if mortgage financing becomes
  more costly or otherwise becomes less attractive.</I></B></P>
<P align=justify>Substantially all purchasers of our residential properties rely
on mortgages to fund their purchases. An increase in interest rates may
significantly increase the cost of mortgage financing, thus affecting the
affordability of residential properties. In 2008, PBOC changed the lending rates
five times. The benchmark lending rate for loans with a term of over five years,
which affects mortgage rates, was increased to 5.94% on December 31, 2008. The
PRC government and commercial banks may also increase the down payment
requirement, impose other conditions or otherwise change the regulatory
framework in a manner that would make mortgage financing unavailable or
unattractive to potential property purchasers. If the availability or
attractiveness of mortgage financing is reduced or limited, many of our
prospective customers may not be able to purchase our properties and, as a
result, our business, liquidity and results of operations could be adversely
affected. </P>
<P align=center>9</P>
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<P align=justify>In line with industry practice, we provide guarantees to PRC
banks with respect to loans procured by the purchasers of our properties for the total amount of mortgage loans. Such
guarantees expire upon the completion of the registration of the mortgage with
the relevant mortgage registration authorities. If there are changes in laws,
regulations, policies, and practices that would prohibit property developers
from providing guarantees to banks in respect of mortgages offered to property
purchasers and as a result, banks would not accept any alternative guarantees by
third parties, or if no third party is available or willing in the market to
provide such guarantees, it may become more difficult for property purchasers to
obtain mortgages from banks and other financial institutions during sales and
pre-sales of our properties. Such difficulties in financing could result in a
substantially lower rate of sale and pre-sale of our properties, which would
adversely affect our cash flow, financial condition, and results of operations.
We are not aware of any impending changes in laws, regulations, policies, or
practices that will prohibit such practice in China. However, there can be no
assurance that such changes in laws, regulations, policies, or practices will
not occur in China in the future. </P>
<P align=justify><B><I>We have significant short-term debt obligations, which
mature in less than one year. Failure to extend those maturities of, or to
refinance, that debt could result in defaults, and in certain instances,
foreclosures on our assets. Moreover, we may be unable to obtain financing to
fund ongoing operations and future growth.</I></B></P>
<P align=justify>The real estate development industry is capital intensive, and
development requires significant up-front expenditures to acquire land and begin
development. Accordingly, we incur substantial indebtedness to finance our
development activities. </P>
<P align=justify>At December 25, 2009, we had short-term bank loans outstanding
of $2,719,432, long-term bank loans of $35,217,320 maturing within one year,
long-term bank loans of $4,404,000 maturing in more than one year, and notes
payable of $146,800, which were secured by our land use rights and projects
under construction. Failure to obtain extensions of the maturity dates of, or to
refinance, these obligations or to obtain additional equity financing to meet
these debt obligations would result in an event of default with respect to such
obligations and could result in the foreclosure on the collateral. The sale of
such collateral at foreclosure would significantly disrupt our business, which
could significantly lower our sales and profitability. We may be able to
refinance or obtain extensions of the maturities of all or some of such debt
only on terms that significantly restrict our ability to operate, including
terms that place additional limitations on our ability to incur other
indebtedness, to pay dividends, to use our assets as collateral for other
financing, to sell assets or to make acquisitions or enter into other
transactions. Such restrictions may adversely affect our ability to finance our
future operations or to engage in other business activities. If we finance the
repayment of our outstanding indebtedness by issuing additional equity or
convertible debt securities, such issuances could result in substantial dilution
to our stockholders. </P>
<P align=justify>While we believe that our revenue growth projections and our
ongoing cost controls will allow us to generate cash and achieve profitability
in the foreseeable future, there is no assurance as to when or if we will be
able to achieve our projections. Our future cash flows from operations, combined
with our accessibility to cash and credit, may not be sufficient to allow us to
finance ongoing operations or to make required investments for future growth. We
may need to seek additional credit or access capital markets for additional
funds. There is no assurance that we would be successful in this regard. </P>
<P align=justify><B><I>Our practice of pre-selling projects may expose us to
substantial liabilities.</I></B></P>
<P align=justify>It is common practice by property developers in China,
including us, to pre-sell properties (while still under construction), which
involves certain risks. For example, we may fail to complete a property
development that may have been fully or partially pre-sold, which would leave us
liable to purchasers of pre-sold units for losses suffered by them without
adequate resources to pay the liability if funds have been used on the project.
In addition, if a pre-sold property development is not completed on time, the
purchasers of pre-sold units may be entitled to compensation for late delivery.
If the delay extends beyond a certain period, the purchasers may be entitled to
terminate the pre-sale agreement and pursue a claim for damages that exceeds the
amount paid and our ability to recoup the resulting liability from future sales.
</P>
<P align=justify><B><I>We may not be able to successfully execute our strategy
of expanding into new geographical markets in China, which could have a material
adverse effect on our business and results of operations.</I></B></P>
<P align=justify>We plan to continue to expand our business into new
geographical areas in China. Since China is a large and diverse market, consumer
trends and demands may vary significantly by region and our experience in the
markets in which we currently operate may not be applicable in other parts of
China. As a result, we may not be able to leverage our experience to expand into other parts of China. When we enter
new markets, we may face intense competition from companies with greater
experience or an established presence in the targeted geographical areas or from
other companies with similar expansion targets. Therefore, we may not be able to
grow our sales in the new cities we enter due intense competitive pressures and
or the substantial costs involved.</P>
<P align=center>10</P>
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<P align=justify><B><I>We are dependent on third-party subcontractors, manufacturers,
  and distributors for all architecture, engineering and construction services,
  and construction materials. A discontinued supply of such services and materials
  will adversely affect our projects. </I></B></P>
<P align=justify>We are dependent on third-party subcontractors, manufacturers,
and distributors for all architecture, engineering and construction services,
and construction materials. Services and materials purchased from our five
largest subcontractors or suppliers accounted for 96.9% for the year ended
December 25, 2009. A discontinued supply of such services and materials will
adversely affect our construction projects and the success of the Company.<B><I>
</I></B></P>
<P align=justify><B><I>We are subject to extensive government regulation that
could cause us to incur significant liabilities or restrict our business
activities.</I></B><I> </I></P>
<P align=justify>Regulatory requirements could cause us to incur significant
liabilities and operating expenses and could restrict our business activities.
We are subject to statutes and rules regulating, among other things, certain
developmental matters, building and site design, and matters concerning the
protection of health and the environment. Our operating expenses may be
increased by governmental regulations, such as building permit allocation
ordinances and impact and other fees and taxes, that may be imposed to defray
the cost of providing certain governmental services and improvements. Any delay
or refusal from government agencies to grant us necessary licenses, permits, and
approvals could have an adverse effect on our operations. </P>
<P align=justify><B><I>We depend on the availability of additional human resources
  for future growth.</I></B></P>
<P align=justify>We are currently experiencing a period of significant growth in
our sales volume. We believe that continued expansion is essential for us to
remain competitive and to capitalize on the growth potential of our business.
Such expansion may place a significant strain on our management and operations
and financial resources. As our operations continue to grow, we will have to
continually improve our management, operational, and financial systems,
procedures and controls, and other resources infrastructure, and expand our
workforce. There can be no assurance that our existing or future management,
operating and financial systems, procedures, and controls will be adequate to
support our operations, or that we will be able to recruit, retain, and motivate
our employees. Further, there can be no assurance that we will be able to
establish, develop, or maintain the business relationships beneficial to our
operations, or to do so or to implement any of the above activities in a timely
manner. Failure to manage our growth effectively could have a material adverse
effect on our business and the results of our operations and financial
condition. </P>
<P align=justify><B><I>We may be adversely affected by the fluctuation in raw
  material prices and selling prices of our products.</I></B></P>
<P align=justify>The land and raw materials used in our projects have
experienced significant price fluctuations in the past. There is no assurance
that they will not be subject to future price fluctuations or pricing control.
The land and raw materials used in our projects may experience price volatility
caused by events such as market fluctuations or changes in governmental
programs. The market price of land and raw materials may also experience
significant upward adjustment, if, for instance, there is a material
under-supply or over-demand in the market. These price changes may ultimately
result in increases in the selling prices of our products, and may, in turn,
adversely affect our sales volume, sales, operating income, and net income. </P>
<P align=justify><B><I>We face intense competition from other real estate developers.</I></B></P>
<P align=justify>The property industry in the PRC is highly competitive. In the
tier-two cities we focus on, local and regional property developers are our
major competitors, and an increasing number of large state-owned and private
national property developers have started entering these markets. Many of our
competitors, especially the state-owned and private national property
developers, are well capitalized and have greater financial, marketing, and
other resources than we have. Some also have larger land banks, greater
economies of scale, broader name recognition, a longer track record, and more
established relationships in certain markets. In addition, the PRC government&#146;s
recent measures designed to reduce land supply further increased competition for
land among property developers. </P>
<P align=center>11</P>
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<P align=justify>Competition among property developers may result in increased
costs for the acquisition of land for development, increased costs for raw
materials, shortages of skilled contractors, oversupply of properties, decrease
in property prices in certain parts of the PRC, a slowdown in the rate at which
new property developments will be approved and/or reviewed by the relevant
government authorities and an increase in administrative costs for hiring or
retaining qualified personnel, any of which may adversely affect our business
and financial condition. Furthermore, property developers that are better
capitalized than we are may be more competitive in acquiring land through the
auction process. If we cannot respond to changes in market conditions as
promptly and effectively as our competitors, or effectively compete for land
acquisition through the auction systems and acquire other factors of production,
our business and financial condition will be adversely affected. </P>
<P align=justify>In addition, risk of property over-supply is increasing in
parts of China, where property investment, trading and speculation have become
overly active. We are exposed to the risk that in the event of actual or
perceived over-supply, property prices may fall drastically, and our revenue and
profitability will be adversely affected. </P>
<P align=justify><B><I>We could be adversely affected by the occurrence of natural
  disasters.</I></B></P>
<P align=justify>From time to time, our developed sites may experience strong
winds, storms, flooding and earth quakes. Natural disasters could impede
operations, damage infrastructure necessary to our constructions and operations.
The occurrence of natural disasters could adversely affect our business, the
results of our operations, prospects and financial condition<B>.</B> </P>
<P align=justify><B><I>We have limited insurance coverage against damages or
loss we might suffer.</I></B></P>
<P align=justify>The insurance industry in China is still in an early stage of
development and business interruption insurance available in China offers
limited coverage compared to that offered in many developed countries. We carry
insurance for potential liabilities related to our vehicles, but we do not carry
business interruption insurance and therefore any business disruption or natural
disaster could result in substantial damages or losses to us. In addition, there
are certain types of losses (such as losses from forces of nature) that are
generally not insured because either they are uninsurable or insurance cannot be
obtained on commercially reasonable terms. Should an uninsured loss or a loss in
excess of insured limits occur, our business could be materially adversely
affected. If we were to suffer any losses or damages to our properties, our
business, financial condition and results of operations would be materially and
adversely affected.</P>
<P align=justify><B><I>Our operating subsidiaries must comply with environmental
protection laws that could adversely affect our profitability.</I></B><I>
</I></P>
<P align=justify>We are required to comply with the environmental protection
laws and regulations promulgated by the national and local governments of the
PRC. Some of these regulations govern the level of fees payable to government
entities providing environmental protection services and the prescribed
standards relating to construction. Although our construction technologies allow
us to efficiently control the level of pollution resulting from our construction
process, due to the nature of our business, wastes are unavoidably generated in
the processes. If we fail to comply with any of these environmental laws and
regulations in the PRC, depending on the types and seriousness of the violation,
we may be subject to, among other things, warning from relevant authorities,
imposition of fines, specific performance and/or criminal liability, forfeiture
of profits made, or an order to close down our business operations and
suspension of relevant permits. </P>
<P align=justify><B><I>Our business depends substantially on the continuing
efforts of our senior executives and other key personnel, and our business may
be severely disrupted if we lost their services.</I></B></P>
<P align=justify>Our future success heavily depends on the continued service of
our senior executives and other key employees. In particular, we rely on the
expertise and experience of Mr. Antoine Cheng, our Chairman, Mr. Weiqing Zhang,
our Chief Executive Officer and President, and Mr. Yang Chen, our Chief
Financial Officer and Vice President. If one or more of our senior executives
are unable or unwilling to continue to work for us in their present positions,
we may have to spend a considerable amount of time and resources searching,
recruiting, and integrating the replacements into our operations, which would
substantially divert management&#146;s attention from our business and severely
disrupt our business. This may also adversely affect our ability to execute our
business strategy. Moreover, if any of our senior executives joins a competitor
or forms a competing company, we may lose customers, suppliers, know-how, and
key employees.</P>
<P align=center>12</P>
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<P align=justify><B>RISKS RELATED TO DOING BUSINESS IN CHINA</B></P>
<P align=justify><B><I>Changes in China&#146;s political or economic situation
  could harm us and our operating results.</I></B> </P>
<P align=justify>Economic reforms adopted by the Chinese government have had a
positive effect on the economic development of the country, but the government
could change these economic reforms or any of the legal systems at any time.
This could either benefit or damage our operations and profitability. Some of
the things that could have this effect are:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Level of government involvement in the economy;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Control of foreign exchange;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Methods of allocating resources;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Balance of payments position;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">International trade restrictions; and
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">International conflict. </LI></UL>
<P align=justify>The Chinese economy differs from the economies of most
countries belonging to the Organization for Economic Cooperation and
Development, or OECD, in many ways. For example, state-owned enterprises still
constitute a large portion of the Chinese economy, and weak corporate governance
and the lack of a flexible currency exchange policy still prevail in China. As a
result of these differences, we may not develop in the same way or at the same
rate as might be expected if the Chinese economy was similar to those of the
OECD member countries.</P>
<P align=justify><B><I>Uncertainties with respect to the PRC legal system could
  limit the legal protections available to you and us.</I></B> </P>
<P align=justify>We conduct substantially all of our business through our
operating subsidiaries in the PRC. Our operating subsidiaries are generally
subject to laws and regulations applicable to foreign 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 involve 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, all of our executive officers and all of our 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 affect service of process in the United
States or to enforce a judgment obtained in the United States against our
Chinese operations and subsidiaries.</P>
<P align=justify><B><I>You may have difficulty enforcing judgments against us.</I></B></P>
<P align=justify>Most of our assets are located outside of 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 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 of 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. Our counsel as to PRC law,
has advised us that 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.</P>
<P align=center>13</P>
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<P align=justify><B><I>The PRC government exerts substantial influence over the
  manner in which we must conduct our business activities.</I></B> </P>
<P align=justify>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.</P>
<P align=justify>Accordingly, government actions in the future, including any
decision not to continue to support recent economic reforms and to return to a
more centrally planned economy or regional or local variations in the
implementation of economic policies, could have a significant effect on economic
conditions in China or particular regions thereof and could require us to divest
ourselves of any interest we then hold in Chinese properties or joint
ventures.</P>
<P align=justify><B><I>Future inflation in China may inhibit our ability to conduct
  business in China.</I></B> </P>
<P align=justify>In recent years, the Chinese economy has experienced periods of
rapid expansion and highly fluctuating rates of inflation. During the past ten
years, the rate of inflation in China has been as high as 5.9% and as low as
-0.8% . These factors have led to the adoption by the Chinese government, from
time to time, of various corrective measures designed to restrict the
availability of credit or regulate growth and contain inflation. High inflation
may in the future cause the Chinese government to impose controls on credit
and/or prices, or to take other action, which could inhibit economic activity in
China, and thereby harm the market for our products and our company.</P>
<P align=justify><B><I>Restrictions on currency exchange may limit our ability
to receive and use our sales effectively.</I></B></P>
<P align=justify>The majority of our sales will be settled in RMB and U.S.
dollars, and any future restrictions on currency exchanges may limit our ability
to use revenue generated in RMB to fund any future business activities outside
China or to make dividend or other payments in U.S. dollars. Although the
Chinese government introduced regulations in 1996 to allow greater
convertibility of the RMB for current account transactions, significant
restrictions still remain, including primarily the restriction that
foreign-invested enterprises may only buy, sell or remit foreign currencies
after providing valid commercial documents, at those banks in China authorized
to conduct foreign exchange business. In addition, conversion of RMB for capital
account items, including direct investment and loans, is subject to governmental
approval in China, and companies are required to open and maintain separate
foreign exchange accounts for capital account items. We cannot be certain that
the Chinese regulatory authorities will not impose more stringent restrictions
on the convertibility of the RMB.</P>
<P align=justify><B><I>Fluctuations in exchange rates could adversely affect our
  business and the value of our securities.</I></B> </P>
<P align=justify>The value of our ordinary shares will be indirectly affected by
the foreign exchange rate between the U.S. dollar and RMB and between those
currencies and other currencies in which our sales may be denominated.
Appreciation or depreciation in the value of the RMB relative to the U.S. dollar
would affect our financial results reported in U.S. dollar terms without giving
effect to any underlying change in our business or results of operations.
Fluctuations in the exchange rate will also affect the relative value of any
dividend we issue that will be exchanged into U.S. dollars, as well as earnings
from, and the value of, any U.S. dollar-denominated investments we make in the
future.</P>
<P align=justify>Since July 2005, the RMB has no longer been pegged to the U.S.
dollar. Although PBOC 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.</P>
<P align=justify>Very limited hedging transactions are available in China to
reduce 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 of these transactions may be
limited, and we may not be able to successfully hedge our exposure at all. In
addition, our foreign currency exchange losses may be magnified by PRC exchange
control regulations that restrict our ability to convert RMB into foreign
currencies.</P>
<P align=center>14</P>
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<P align=justify><B><I>Restrictions under PRC law on our PRC subsidiaries' ability
  to make dividends and other distributions could materially and adversely affect
  our ability to grow, make investments or acquisitions that could benefit our
  business, pay dividends to you, and otherwise fund and conduct our business.</I></B>
</P>
<P align=justify>Substantially all of our sales are earned by our PRC
subsidiaries. However, 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 dividends 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 our 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 our registered capital. Allocations to these statutory reserve funds 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.</P>
<P align=justify><B><I>Failure to comply with PRC regulations relating to the
  establishment of offshore special purpose companies by PRC residents may subject
  our PRC resident shareholders to personal liability, limit our ability to acquire
  PRC companies or to inject capital into our PRC subsidiaries, limit our PRC
  subsidiaries' ability to distribute profits to us or otherwise materially adversely
  affect us.</I></B> </P>
<P align=justify>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; (3) covering the use of existing offshore entities for offshore
financings; (4) 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 (5) 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 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 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.</P>
<P align=justify>We have asked our shareholders, who are PRC residents as
defined in Circular 75, to register with the relevant branch of SAFE, as
currently required, in connection with their equity interests in us and our
acquisitions of equity interests in our PRC subsidiaries. However, we cannot
provide any assurances that they can obtain the above SAFE registrations
required by Circular 75 and Notice 106. Moreover, because of uncertainty over
how Circular 75 will be interpreted and implemented, and how or whether SAFE
will apply it to us, we cannot predict how it will affect our business
operations or future strategies. For example, our present and prospective PRC
subsidiaries' ability to conduct foreign exchange activities, such as the
remittance of dividends and foreign currency-denominated borrowings, may be
subject to compliance with Circular 75 and Notice 106 by our PRC resident
beneficial holders.</P>
<P align=justify>In addition, such PRC residents may not always be able to
complete the necessary registration procedures required by Circular 75 and
Notice 106. We also have little control over either our present or prospective
direct or indirect shareholders or the outcome of such registration procedures. A
failure by our PRC resident beneficial holders or future PRC resident
shareholders to comply with Circular 75 and Notice 106, if SAFE requires it,
could subject these PRC resident beneficial holders to fines or legal sanctions,
restrict our overseas or cross-border 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.</P>
<P align=center>15</P>
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<P align=justify><B><I>Our business and financial performance may be materially
adversely affected if the PRC regulatory authorities determine that our
acquisition of Oumei constitutes a Round-trip Investment without MOFCOM
approval.</I></B></P>
<P align=justify>On August 8, 2006, six PRC regulatory agencies promulgated the
Regulation on Mergers and Acquisitions of Domestic Companies by Foreign
Investors, or the 2006 M&amp;A Rule, which became effective on September 8,
2006. According to the 2006 M&amp;A Rule, a &#147;Round-trip Investment&#148; is defined
as having taken place when a PRC business that is owned by PRC individual(s) is
sold to a non-PRC entity that is established or controlled, directly or
indirectly, by those same PRC individual(s). Under the 2006 M&amp;A Rules, any
Round-trip Investment must be approved by MOFCOM, and any indirect arrangement
or series of arrangements which achieves the same end result without the
approval of MOFCOM is a violation of PRC law.</P>
<P align=justify>Oumei was acquired in 2007 by Leewell, which was then owned and
controlled by Li Zhou, a citizen of the Commonwealth of Australia. Mr. Zhou
acted as a nominee of Antoine Cheng, the relative of one of a former shareholder
and director of Oumei. Mr. Cheng was a PRC citizen at the time but has since
become a Philippine citizen. The acquisition was approved by the appropriate
Chinese authorities. Li Zhou also founded Longhai Holdings, a BVI company. In
September 2009, ownership of Longhai Holdings was transferred to Antoine Cheng,
who became our Chairman. After Mr. Cheng acquired ownership of Longhai Holdings,
Longhai Holdings acquired all of the equity interest of Li Zhou in Leewell. The
PRC regulatory authorities may take the view that these transactions and the
Share Exchange Agreement are part of an overall series of arrangements which
constitute a Round-trip Investment, because at the end of the transactions,
Antoine Cheng became a majority owner and effective controlling party of a
foreign entity that acquired ownership of our Chinese subsidiaries. If the PRC
regulatory authorities take this view, we cannot assure you we may be able to
obtain the approval required from MOFCOM. It is also possible that the PRC
regulatory authorities could invalidate our acquisition and ownership of our
Chinese subsidiaries, and that these transactions require the prior approval of
the China Securities Regulatory Commission, or CSRC, before MOFCOM approval is
obtained.</P>
<P align=justify>We believe that if these regulatory actions occur, we may be
able to find a way to re-establish control of our Chinese subsidiaries&#146; business
operations through a series of contractual arrangements rather than an outright
purchase of our Chinese subsidiaries. But we cannot assure you that such
contractual arrangements will be protected by PRC law or that the registrant can
receive as complete or effective economic benefit and overall control of our
Chinese subsidiaries&#146; business than if the Company had direct ownership of our
Chinese subsidiaries. In addition, we 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 do so,
and if we cannot put in place or 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 affected. </P>
<P align=justify><B><I>Under the New Enterprise Income Tax Law, we may be
classified as a &#147;resident enterprise&#148; of China. Such classification will likely
result in unfavorable tax consequences to us and our non-PRC shareholders.
</I></B></P>
<P align=justify>China passed a New Enterprise Income Tax Law, or the New EIT
Law, and its implementing rules, both of which became effective on January 1,
2008. Under the New EIT Law, an enterprise established outside of China with &#147;de
facto management bodies&#148; within China is considered a &#147;resident enterprise,&#148;
meaning that it can be treated in a manner similar to a Chinese enterprise for
enterprise income tax purposes. The implementing rules of the New EIT Law define
de facto management as &#147;substantial and overall management and control over the
production and operations, personnel, accounting, and properties&#148; of the
enterprise. In addition, a recent circular issued by the State Administration of
Taxation on April 22, 2009 regarding the standards used to classify certain
Chinese-invested enterprises controlled by Chinese enterprises or Chinese group
enterprises and established outside of China as &#147;resident enterprises&#148; clarified
that dividends and other income paid by such &#147;resident enterprises&#148; will be
considered to be PRC source income, subject to PRC withholding tax, currently at
a rate of 10%, when recognized by non-PRC enterprise shareholders. This recent
circular also subjects such &#147;resident enterprises&#148; to various reporting
requirements with the PRC tax authorities.</P>
<P align=center>16</P>
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<P align=justify>In addition, the recent circular mentioned above sets out
criteria for determining whether &#147;de facto management bodies&#148; are located in
China for overseas incorporated, domestically controlled enterprises. However,
as this circular only applies to enterprises established outside of China that
are controlled by PRC enterprises or groups of PRC enterprises, it remains
unclear how the tax authorities will determine the location of &#147;de facto
management bodies&#148; for overseas incorporated enterprises that are controlled by
individual PRC residents like us and some of our subsidiaries.</P>
<P align=justify>Therefore, although substantially all of our management is
currently located in the PRC, it remains unclear whether the PRC tax authorities
would require or permit our overseas registered entities to be treated as PRC
resident enterprises. We do not currently consider our company to be a PRC
resident enterprise. However, if the PRC tax authorities determine that we are a
&#147;resident enterprise&#148; 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 offering proceeds and non-China source income
would be subject to PRC enterprise income tax at a rate of 25%. Second, although
under the New EIT Law and its implementing rules dividends paid to us from our
PRC subsidiaries would qualify as &#147;tax-exempt income,&#148; we cannot guarantee that
such dividends will not be subject to a 10% withholding tax, as the PRC foreign
exchange control authorities, which enforce the withholding tax, have not yet
issued 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 &#147;resident enterprise&#148; classification could result in a situation in
which a 10% withholding tax is imposed on dividends we pay to our non-PRC
shareholders and with respect to gains derived by our non-PRC shareholders from
transferring our shares.</P>
<P align=justify>In addition, under the New EIT law, the <I>Notice of the State
Administration of Taxation on Negotiated Reduction of Dividends and Interest
Rates</I>, or Notice 112, which was issued on January 29, 2008, the
<I>Arrangement between the PRC and the Hong Kong Special Administrative Region
on the Avoidance of Double Taxation and Prevention of Fiscal Evasion</I>, or the
Double Taxation Arrangement (Hong Kong), which became effective on December 8,
2006, and the <I>Notice of the State Administration of Taxation Regarding
Interpretation and Recognition of Beneficial Owners under Tax Treaties</I>, or
Notice 601, which became effective on October 27, 2009, dividends from our PRC
operating subsidiaries paid to us through our Hong Kong subsidiary may be
subject to a withholding tax at a rate of 10%, or at a rate of 5% if our Hong
Kong subsidiary is considered a &#147;beneficial owner&#148; that is generally engaged
in<I> </I>substantial business activities and entitled to treaty benefits under
the Double Taxation Arrangement (Hong Kong).<I> </I>Furthermore, the ultimate
tax rate will be determined by treaty between the PRC and the tax residence of
the holder<I> </I>of the PRC subsidiary. We are actively monitoring the proposed
withholding tax and are evaluating appropriate<I> </I>organizational changes to
minimize the effect on corresponding tax. </P>
<P align=justify>Dividends declared and paid from before January 1, 2008 on
distributable profits are grandfathered under the New EIT Law and are not
subject to withholding tax. </P>
<P align=justify><B><I>We may be exposed to liabilities under the Foreign Corrupt
  Practices Act and Chinese anti-corruption laws, and any determination that we
  violated these laws could have a material adverse effect on our business.</I></B>
</P>
<P align=justify>We are subject to the Foreign Corrupt Practice Act, or FCPA,
and other laws that prohibit improper payments or offers of payments to foreign
governments and their officials and political parties by U.S. persons and
issuers as defined by the statute, for the purpose of obtaining or retaining
business. We have operations, agreements with third parties, and make most of
our sales in China. The PRC also strictly prohibits bribery of government
officials. Our activities in China create the risk of unauthorized payments or
offers of payments by the employees, consultants, sales agents, or distributors
of our Company, even though they may not always be subject to our control. It is
our policy to implement safeguards to discourage these practices by our
employees. However, our existing safeguards and any future improvements may
prove to be less than effective, and the employees, consultants, sales agents,
or distributors of our Company may engage in conduct for which we might be held
responsible. Violations of the FCPA or Chinese anti-corruption laws may result
in severe criminal or civil sanctions, and we may be subject to other
liabilities, which could negatively affect our business, operating results and
financial condition. In addition, the U.S. government may seek to hold our
Company liable for successor liability FCPA violations committed by companies in
which we invest or that we acquire.</P>
<P align=center>17</P>
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<P align=justify><B>RISKS RELATED TO THIS OFFERING AND THE MARKET FOR OUR
ORDINARY SHARES GENERALLY </B></P>
<P align=justify><B><I>There is no current trading market for our ordinary
shares, and there is no assurance of an established public trading market, which
would adversely affect the ability of our investors to sell their securities in
the public market.</I></B></P>
<P align=justify>Our ordinary shares are not currently listed or quoted for
trading on any national securities exchange or national quotation system. We
intend to apply for the listing of our ordinary shares on the NASDAQ Global
Market under the symbol &#147;OMEI&#148;. There is no guarantee that the NASDAQ Global
Market, or any other exchange or quotation system, will permit our shares to be
listed and traded. If we fail to obtain a listing on the NASDAQ Global Market,
we may seek quotation on the OTC Bulletin Board. FINRA has enacted changes that
limit quotations on the OTC Bulletin Board to securities of issuers that are
current in their reports filed with the SEC. The effect on the OTC Bulletin
Board of these rule changes and other proposed changes cannot be determined at
this time. The OTC Bulletin Board is an inter-dealer, over-the-counter market
that provides significantly less liquidity than the NASDAQ Global Market. The
quotation of our shares on the OTC Bulletin Board may result in a less liquid
market available for existing and potential stockholders to trade our shares,
could depress the trading price of our ordinary shares and could have a
long-term adverse impact on our ability to raise capital in the future. </P>
<P align=justify><B><I>The price of our ordinary shares could be volatile and
could decline following this offering at a time when you want to sell your
holdings.</I></B> </P>
<P align=justify>We intend to have our ordinary shares listed on the NASDAQ
Global Market under the symbol &#147;OMEI&#148; and the trading is expected to start upon
the effectiveness of this registration statement. Although we believe that this
offering and the NASDAQ listing will improve the liquidity for our ordinary
shares, there is no assurance that the offering will improve volume, reduce
volatility and stabilize our share price. Numerous factors, many of which are
beyond our control, may cause the market price of our ordinary shares to
fluctuate significantly. These factors include: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">expiration of lock-up agreements;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">our earnings releases, actual or anticipated changes in our earnings,
  fluctuations in our operating results or our failure to meet the expectations
  of financial market analysts and investors;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">changes in financial estimates by us or by any securities analysts who
  might cover our stock;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">speculation about our business in the press or the investment community;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">significant developments relating to our relationships with our customers
  or suppliers;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">stock market price and volume fluctuations of other publicly traded
  companies and, in particular, those that are in the steel industry;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">customer demand for our products;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">investor perceptions of the steel industry in general and our company in
  particular;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">the operating and stock performance of comparable companies;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">general economic conditions and trends;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">major catastrophic events;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">announcements by us or our competitors of new products, significant
  acquisitions, strategic partnerships or divestitures;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">changes in accounting standards, policies, guidance, interpretation or
  principles;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">loss of external funding sources;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">failure to maintain compliance with NASDAQ rules;
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">sales of our ordinary shares, including sales by our directors, officers
  or significant shareholders; and
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">additions or departures of key personnel. </LI></UL>
<P align=justify>Securities class action litigation is often instituted against
companies following periods of volatility in their stock price. This type of
litigation could result in substantial costs to us and divert our management&#146;s
attention and resources. </P>
<P align=justify>Moreover, securities markets may from time to time experience
significant price and volume fluctuations for reasons unrelated to operating
performance of particular companies. For example, from September 2008 until June
2009, securities markets in the United States, China and throughout the world
experienced a historically large decline in share price. These market fluctuations may adversely affect the
price of our ordinary shares and other interests in our company at a time when
you want to sell your interest in us. </P>
<P align=center>18</P>
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<P align=justify><B><I>Future sales or perceived sales of our ordinary shares
could depress our stock price.</I></B> </P>
<P align=justify>In addition to the ordinary shares offered in this offering,
the registration statement of which this prospectus is a party also covers
765,000 ordinary shares and 2,774,700 ordinary shares underlying the Preference
Shares and 1,526,085 ordinary shares underlying the Warrants issued in a private
placement closed on April 14, 2010. Each selling stockholder named in the
registration statement may sell or transfer any ordinary shares after the
effective date of the registration statement. Additionally, all of our executive
officers and directors and certain of our shareholders have agreed not to sell
shares of our ordinary shares for a period of 18 months starting on April 14,
2010. Ordinary shares subject to these lock-up agreements will become eligible
for sale in the public market upon expiration of these lock-up agreements,
subject to limitations imposed by Rule 144 under the Securities Act. See &#147;Shares
Eligible for Future Sale.&#148; If the holders of these shares were to attempt to
sell a substantial amount of their holdings at once, the market price of our
ordinary shares could decline. Moreover, the perceived risk of this potential
dilution could cause shareholders to attempt to sell their shares and investors
to short the ordinary shares, a practice in which an investor sells shares that
he or she does not own at prevailing market prices, hoping to purchase shares
later at a lower price to cover the sale. As each of these events would cause
the number of shares of our ordinary shares being offered for sale to increase,
our ordinary shares market price would likely further decline. All of these
events could combine to make it very difficult for us to sell equity or
equity-related securities in the future at a time and price that we deem
appropriate. </P>
<P align=justify><B><I>We may be subject to penny stock regulations and
restrictions and you may have difficulty selling our ordinary shares.
</I></B></P>
<P align=justify>The SEC has adopted regulations which generally define
so-called &#147;penny stocks&#148; as an equity security that has a market price of less
than $5.00 per share or an exercise price of less than $5.00 per share, subject
to certain exemptions. If our ordinary shares become a &#147;penny stock&#148;, we may
become subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule.
This rule imposes additional sales practice requirements on broker-dealers that
sell such securities to persons other than established customers and &#147;accredited
investors&#148; (generally, individuals with a net worth in excess of $1,000,000 or
annual income exceeding $200,000, or $300,000 together with their spouses). For
transactions covered by Rule 15g-9, a broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser&#146;s written
consent to the transaction prior to sale. As a result, this rule may affect the
ability of broker-dealers to sell our securities and may affect the ability of
purchasers to sell any of our securities in the secondary market. </P>
<P align=justify>For any transaction involving a penny stock, unless exempt, the
rules require delivery, prior to any transaction in a penny stock, of a
disclosure schedule prepared 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 statements are required to be sent disclosing
recent price information for the penny stock held in the account and information
on the limited market in penny stock. </P>
<P align=justify>There can be no assurance that our ordinary shares will qualify
for exemption from the Penny Stock Rule. In any event, even if our ordinary
shares were exempt from the Penny Stock Rule, we would remain subject to Section
15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any
person from participating in a distribution of penny stock if the SEC finds that
such a restriction would be in the public interest. </P>
<P align=justify><B><I>We may use these proceeds in ways with which you may not
agree.</I></B> </P>
<P align=justify>While we currently intend to use the proceeds from this
offering for working capital and general corporate purposes, we have
considerable discretion in the application of the proceeds. You will not have
the opportunity, as part of your investment decision, to assess whether the
proceeds are being used in a manner agreeable to you. You must rely on our
judgment regarding the application of the net proceeds of this offering. The net
proceeds may be used for corporate purposes that do not immediately improve our
profitability or increase the price of our shares. </P>
<P align=justify><B><I>We do not intend to pay dividends for the foreseeable future.
  </I></B></P>
<P align=justify>For the foreseeable future, we intend to retain any earnings to
finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our
ordinary shares. Accordingly, investors must be prepared to rely on sales of
their ordinary shares after price appreciation to earn an investment return,
which may never occur. Investors seeking cash dividends should not purchase our
ordinary shares. 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 of directors deems relevant. </P>
<P align=center>19</P>
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<P align=justify><B><I>Holders of our ordinary shares may face difficulties in
  protecting their interests because we are incorporated under Cayman Islands
  law.</I></B></P>
<P align=justify>Our corporate affairs are governed by our memorandum and
articles of association, and by the Companies Law (2009 Revision) and the common
law of the Cayman Islands. The rights of our shareholders and the fiduciary
responsibilities of our directors under Cayman Islands law are not as clearly
established as under statutes or judicial precedent in existence in
jurisdictions in the United States. Therefore, shareholders may have more
difficulty in protecting their interests in the face of actions by our
management or board of directors than would shareholders of a corporation
incorporated in a jurisdiction in the United States, due to the comparatively
less developed nature of Cayman Islands law in this area.</P>
<P align=justify>Shareholders of Cayman Islands exempted companies have no
general rights under Cayman Islands law to inspect corporate records and
accounts or to obtain copies of lists of our shareholders. Our directors have
discretion under our articles of association to determine whether or not, and
under what conditions, our corporate records may be inspected by our
shareholders, but are not obliged to make them available to our shareholders.
This may make it more difficult for you to obtain the information needed to
establish any facts necessary for a shareholder motion or to solicit proxies
from other shareholders in connection with a proxy contest.</P>
<P align=justify><B><I>Provisions of our articles of association and Cayman
Islands corporate law may impede a takeover or make it more difficult for
shareholders to change the direction or management of the Company, which could
reduce shareholders&#146; opportunity to influence management of the Company.
</I></B></P>
<P align=justify>Our articles of association permit our board of directors to
issue up to 1,000,000 preference shares from time to time, with such rights and
preferences as they consider appropriate. These terms may include voting rights
including the right to vote as a series on particular matters, preferences as to
dividends and liquidation, conversion rights and redemption rights provisions.
The issuance of any preference shares could reduce the value of such ordinary
shares. In addition, specific rights granted to future holders of preference
shares could be used to restrict our ability to merge with, or sell assets to, a
third party. The ability of the board of directors to issue preference shares
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
shareholders from recognizing a gain in the event that a favorable offer is
extended and could materially and negatively affect the market price of our
ordinary shares.</P>
<P align=justify><B><I>We may be classified as a passive foreign investment
company, which could result in adverse United States federal income tax
consequences to U.S. shareholders.</I></B></P>
<P align=justify>We do not currently expect to be classified as a &#147;passive
foreign investment company,&#148; or PFIC, for U.S. federal income tax purposes for
our taxable year ending December 25, 2010. This expectation is based, in part,
on our estimates of the fair market value of our assets (including goodwill).
However, the PFIC test is an annual test that, as discussed below, depends upon
the composition of our gross income for the year and the percentage, based on a
quarterly average for the year, of our gross assets that constitutes &#147;passive&#148;
assets. Accordingly, it is not possible to determine whether we will not be
classified as a PFIC for our tax year ending December 25, 2010 until after the
year has ended. In addition, even if we are not classified as a PFIC for our
taxable year ending December 25, 2010, because the PFIC test is annual, we
cannot assure you that we will not be a PFIC for any following tax year. Our
special U.S. counsel expresses no opinion with respect to our expectations
contained in this paragraph.</P>
<P align=justify>A non-U.S. corporation is considered to be a PFIC for any
taxable year if either: (1) at least 75% of its gross income is passive income,
or; (2) at least 50% of the value of its assets (based on an average of the
quarterly values of the assets during the taxable year) is attributable to
assets that produce or are held for the production of passive income. </P>
<P align=justify>We will be treated as owning our proportionate share of the
gross assets and earning our proportionate share of the gross income of any
other corporation in which we own, directly or indirectly, at least 25% (by
value) of the stock.</P>
<P align=center>20</P>
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<P align=justify>Subject to various exceptions, passive income generally
includes dividends, interest, rents, royalties and gains from the disposition of
assets that produce or are held for the production of passive income.</P>
<P align=justify>We must make a separate determination each year as to whether
we are a PFIC. As a result, our PFIC status may change. In addition, the
composition of our income and assets will be affected by, among other factors,
how, and how quickly, we spend the cash we raised in our recent private
placement. If we are a PFIC for any year during which you hold ordinary shares
or any other equity interest in the Company, then you generally will continue to
be treated as owning ordinary shares in a PFIC for all succeeding years during
which you hold ordinary shares even if we do not satisfy the PFIC income or
assets test for any particular succeeding taxable year. However, if we cease to
satisfy the PFIC income and assets test for a particular succeeding taxable
year, you may be able to avoid some of the adverse effects of the PFIC regime by
making a &#147;deemed sale&#148; election with respect to the ordinary shares. </P>
<P align=justify>If we are a PFIC for any taxable year during which you hold
ordinary shares, dividends paid by us to you that year and the following year
will not be eligible for the reduced rate of taxation applicable to
non-corporate U.S. holders, including individuals. Dividends that you receive
that do not constitute qualified dividend income are not eligible for taxation
at the 15% maximum rate applicable to qualified dividend income. Instead, you
must include the gross amount of any such dividend paid by us out of our current
or accumulated earnings and profits (as determined for U.S. federal income tax
purposes) in your gross income, and it will be subject to tax at rates
applicable to ordinary income. Additionally, you will be subject to special tax
rules with respect to any &#147;excess distributions&#148; that you receive and any gain
you realize from a sale or other disposition (including a pledge) of the
ordinary shares, unless a &#147;mark-to-market&#148; election is timely made, as discussed
below. Distributions you receive in a taxable year that are greater than 125% of
the average annual distributions you received during the shorter of the three
preceding taxable years or your holding period for the ordinary shares and any
gain from a sale or other disposition (including certain pledges) will generally
be treated as an excess distribution. Under these special tax rules:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the excess distribution will be allocated ratably over your holding period
  for the ordinary shares, </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the amount allocated to the current taxable year, and any taxable year
  prior to the first taxable year in your holding period in which we became a
  PFIC, will be treated as ordinary income, and </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the amount allocated to each other year will be subject to the highest
  applicable tax rate in effect for that year and the interest charge generally
  applicable to underpayments of tax will be imposed on the resulting tax
  attributable to each such year. </P></LI></UL>
<P align=justify>The tax liability for amounts allocated to years prior to the
year of disposition or &#147;excess distribution&#148; cannot be offset by any net
operating losses for such years, and gains (but not losses) realized on the sale
of the ordinary shares cannot be treated as capital gains, even if you hold the
ordinary shares as capital assets.</P>
<P align=justify>If we are a PFIC, you may be subject to the adverse tax
consequences described above with respect to the shares of any of our
subsidiaries that are also PFICs. You should consult your tax advisors regarding
the application of the PFIC rules to any of our subsidiaries.</P>
<P align=justify>If the Company is classified as a PFIC, a U.S. holder may
generally elect out of the treatment described above by making a timely
mark-to-market election if our ordinary shares meet certain regular trading
requirements. However, it should be noted that in such a case, because a
mark-to-market election cannot be made for equity interests in lower-tier PFICs
that we may be treated as owning, a U.S. holder may continue to be subject to
the PFIC rules with respect to its indirect interest in any investments held by
us that are treated as equity interests in a PFIC for U.S. federal income tax
purposes. U.S. holders should consult their tax advisors on the availability and
advisability of a mark-to-market election in the event that we are classified as
a PFIC. It should be noted that we do not currently intend to prepare or provide
the information that would enable you to make a &#147;qualified electing fund&#148;
election in the event that we were classified as a PFIC.</P>
<P align=center>21</P>
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<P align=center><B>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</B></P>
<P align=justify>This prospectus contains forward-looking statements. The
forward-looking statements are contained principally in the sections entitled
&#147;Prospectus Summary,&#148; &#147;Risk Factors,&#148; &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations,&#148; and &#147;Business&#148;. 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. These risks and uncertainties include, but are not
limited to, the factors described in the section captioned &#147;Risk Factors&#148;
above.</P>
<P align=justify>In some cases, you can identify forward-looking statements by
terms such as &#147;anticipate,&#148; &#147;believe,&#148; &#147;could,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148;
&#147;may,&#148; &#147;plan,&#148; &#147;potential,&#148; &#147;predict,&#148; &#147;project,&#148; &#147;should,&#148; &#147;will,&#148; &#147;would&#148; 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:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">our anticipated growth strategies and our ability to manage the expansion
  of our business operations effectively; </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">our dependence on the growth of the real estate market in China and in the
  local areas in which we do business; and </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">our ability to maintain or increase our market share in the competitive
  markets in which we do business. </P></LI></UL>
<P align=justify>Also, forward-looking statements represent our estimates and
assumptions only as of the date of this prospectus. You should read this
prospectus and the documents that we reference in this prospectus, or that we
filed as exhibits to the registration statement of which this prospectus is a
part, completely and with the understanding that our actual future results may
be materially different from what we expect.</P>
<P align=justify>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. </P>
<P align=center>22</P>
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<P align=center><B>USE OF PROCEEDS</B><BR></P>
<P align=justify>We estimate that we will receive net proceeds from this offering
  of approximately $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
  (approximately $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
  if the underwriters exercise their overallotment option in full), based on the
  public offering price of $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
  share. </P>
<P align=justify>We intend to use the net proceeds from the offering for working
capital and general corporate purposes. </P>
<P align=center>23</P>
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<P align=center><B>MARKET PRICE AND DIVIDENDS ON OUR COMMON EQUITY <BR>AND
RELATED SHAREHOLDER MATTERS</B></P>
<P align=justify><B>Market Information</B></P>
<P align=justify>There currently is no market for our ordinary shares. We plan
to list our ordinary shares on the NASDAQ Global Market as soon as practicable.
However, we cannot assure you that we will be able to meet the initial listing
standards of the NASDAQ Global Market, or that we will be able to maintain any
such listing. Until our ordinary shares are listed on an exchange, we expect
that they would be eligible to be quoted on the over-the-counter bulletin board
maintained by the Financial Industry Regulatory Authority. In this venue,
however, an investor may find it difficult to obtain accurate quotations as to
the market value of our ordinary shares and trading of our ordinary shares may
be extremely sporadic. For example, several days may pass before any shares may
be traded. A more active market for our ordinary shares may never develop. In
addition, if we failed to meet the criteria set forth in SEC regulations,
various requirements would be imposed by law on broker-dealers who sell our
securities to persons other than established customers and accredited investors.
Consequently, such regulations may deter broker-dealers from recommending or
selling our ordinary shares, which may further affect its liquidity and could
make it more difficult for us to raise additional capital. </P>
<P align=justify><B>Holders</B></P>
<P align=justify>As of May 5, 2010 there were approximately 514 holders of
record of our ordinary shares. This number does not include shares held by
brokerage clearing houses, depositories or others in unregistered form. </P>
<P align=justify><B>Securities Authorized for Issuance Under Equity Compensation
Plans </B></P>
<P align=justify>We do not have in effect any compensation plans under which our
equity securities are authorized for issuance and we do not have any outstanding
stock options. </P>
<P align=center><B>DIVIDEND POLICY</B></P>
<P align=justify>On December 10, 2008, our board of directors authorized a
special dividend to our shareholders of record of $166,075. Two of our
shareholders, Access America Fund, LP and Mid-Ocean Consulting Limited, did not
accept the dividend. </P>
<P align=justify>Other than this dividend, we have never declared or paid a cash
dividend. Any future decisions 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.</P>
<P align=center>24</P>
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<P align=center><B>CAPITALIZATION</B></P>
<P align=justify>The following table sets forth our capitalization as of
December 25, 2009 (unaudited):</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">on a pro forma basis to give effect to our reverse acquisition of Leewell,
  pursuant to which we issued 29,235,000 ordinary shares to acquire 100% of the
  issued and outstanding capital stock of Leewell; and </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">on an adjusted basis to give effect to the receipt of estimated net
  proceeds of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million from the sale of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares in this offering at the
  assumed public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per ordinary share, and after deducting
  estimated underwriting discounts and commissions and estimated expenses
  payable by us. </P></LI></UL>
<P align=justify>You should read this table in conjunction with the information
contained in &#147;Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operations&#148; and our audited consolidated financial statements,
including the related notes, contained elsewhere in this prospectus. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 height="354">
  <TR vAlign=top>
    <TD align=left height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" height="16"
    ></TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" height="16"><B>As
      of December 25, 2009</B> </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="2%" height="16"
    ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="11">&nbsp; </TD>
    <TD align=left width="1%" height="11" ></TD>
    <TD align=center width="14%" height="11">&nbsp; </TD>
    <TD align=center width="2%" height="11" ></TD>
    <TD align=center width="1%" height="11" ></TD>
    <TD align=center width="14%" height="11" style="border-right-style: none; border-right-width: medium"><B>Pro Forma,</B> </TD>
    <TD align=left width="2%" height="11" style="border-style: none; border-width: medium" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" height="16" ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="14%" height="16"><B>Pro Forma</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="2%" height="16" ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" height="16" ></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=center
    width="14%" height="16"><B>as Adjusted</B> </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%" height="16" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="15">&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%" height="15" ></TD>
    <TD colspan="4" align=center vAlign=bottom height="15" style="border-right-style: none; border-right-width: medium"><B>(in thousands)</B> </TD>
    <TD vAlign=bottom align=center width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff height="15">Cash and cash equivalents </TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff height="15">$</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff height="15" style="border-right-style: none; border-right-width: medium">2,284 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="15" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff height="15" style="border-left-style: none; border-left-width: medium">$</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff height="15" style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="15" style="border-style: none; border-width: medium">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="15">Restricted Cash </TD>
    <TD vAlign=bottom align=left width="1%" height="15" style="border-bottom-style: solid; border-bottom-width: 1" ></TD>
    <TD vAlign=bottom align=right width="14%" height="15" style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1">1,642 </TD>
    <TD vAlign=bottom align=left width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
    <TD vAlign=bottom align=left width="1%" height="15" style="border-left-style: none; border-left-width: medium" ></TD>
    <TD vAlign=bottom align=left width="14%" height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff height="16">
    <p style="margin-left: 10pt">Total Cash </TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff height="16">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium; border-top-style:solid; border-top-width:1" vAlign=bottom align=right
    width="14%" bgColor=#e6efff height="16">3,926 </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff height="16">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff height="16">$</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=left
    width="14%" bgColor=#e6efff height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff height="16">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="15">Debt: </TD>
    <TD vAlign=bottom align=left width="1%" height="15" ></TD>
    <TD vAlign=bottom align=left width="14%" height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
    <TD vAlign=bottom align=left width="1%" height="15" style="border-left-style: none; border-left-width: medium" ></TD>
    <TD vAlign=bottom align=left width="14%" height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff height="15">
    <p style="margin-left: 15pt">Short-term
      debt </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff height="15">$</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff height="15" style="border-right-style: none; border-right-width: medium">2,719 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="15" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff height="15" style="border-left-style: none; border-left-width: medium">
    $</TD>
    <TD vAlign=bottom align=left width="14%" bgColor=#e6efff height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="15" style="border-style: none; border-width: medium">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="15">
    <p style="margin-left: 15pt">Long-term debt (including
      current portion) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" height="15" ></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=right
    width="14%" height="15">39,621 </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%" height="15" ></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" vAlign=bottom align=left
    width="1%" height="15" ></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=left
    width="14%" height="15">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%" height="15" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff height="16">
    <p style="margin-left: 40pt">Total debt </TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; " vAlign=bottom align=left
    width="1%"  bgColor=#e6efff height="16">$</TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=right
    width="14%" bgColor=#e6efff height="16">42,340 </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff height="16">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; ; border-left-style:none; border-left-width:medium" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff height="16">$</TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=left
    width="14%" bgColor=#e6efff height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff height="16">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="15">Stockholders&#146; equity: </TD>
    <TD vAlign=bottom align=left width="1%" height="15" ></TD>
    <TD vAlign=bottom align=left width="14%" height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
    <TD vAlign=bottom align=left width="1%" height="15" style="border-left-style: none; border-left-width: medium" ></TD>
    <TD vAlign=bottom align=left width="14%" height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left
      bgColor=#e6efff height="30">
    <p style="margin-left: 15pt">Preference
      shares, $0.002112 par value, 20,000,000 shares authorized,&nbsp;none
      issued and outstanding </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff height="30">&nbsp;</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff height="30" style="border-right-style: none; border-right-width: medium"><BR>
      - </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="30" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff height="30" style="border-left-style: none; border-left-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="14%" bgColor=#e6efff height="30" style="border-right-style: none; border-right-width: medium"><BR></TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="30" style="border-style: none; border-width: medium">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left height="49">
    <p style="margin-left: 15pt">Ordinary shares, par value $0.002112 per share,
    authorized 100,000,000 shares, 30,235,062 shares issued and outstanding on a pro
      forma basis <SUP>(1) </SUP>, and shares issued and outstanding on a pro forma,
      as adjusted basis<SUP>(2)</SUP> </TD>
    <TD vAlign=bottom align=left width="1%" height="49" >$</TD>
    <TD vAlign=bottom align=right width="14%" height="49" style="border-right-style: none; border-right-width: medium">
    64 </TD>
    <TD vAlign=bottom align=left width="2%" height="49" style="border-style: none; border-width: medium" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" height="49" style="border-left-style: none; border-left-width: medium" >
    $</TD>
    <TD vAlign=bottom align=left width="14%" height="49" style="border-right-style: none; border-right-width: medium"> <BR></TD>
    <TD vAlign=bottom align=left width="2%" height="49" style="border-style: none; border-width: medium" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff height="15">
    <p style="margin-left: 15pt">Additional
      paid in capital </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff height="15">&nbsp;</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff height="15" style="border-right-style: none; border-right-width: medium">5,610 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="15" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff height="15" style="border-left-style: none; border-left-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="14%" bgColor=#e6efff height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="15" style="border-style: none; border-width: medium">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="15">
    <p style="margin-left: 15pt">Appropriated
      retained earnings </TD>
    <TD vAlign=bottom align=left width="1%" height="15" ></TD>
    <TD vAlign=bottom align=right width="14%" height="15" style="border-right-style: none; border-right-width: medium">10,299 </TD>
    <TD vAlign=bottom align=left width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
    <TD vAlign=bottom align=left width="1%" height="15" style="border-left-style: none; border-left-width: medium" ></TD>
    <TD vAlign=bottom align=left width="14%" height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" height="15" style="border-style: none; border-width: medium" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff height="15">
    <p style="margin-left: 15pt">Unappropriated
      retained earnings </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff height="15">&nbsp;</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff height="15" style="border-right-style: none; border-right-width: medium">71,327 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="15" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff height="15" style="border-left-style: none; border-left-width: medium">&nbsp;</TD>
    <TD vAlign=bottom align=left width="14%" bgColor=#e6efff height="15" style="border-right-style: none; border-right-width: medium">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff height="15" style="border-style: none; border-width: medium">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="16">
    <p style="margin-left: 15pt">Accumulated
      other comprehensive income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" height="16" >$</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=right
    width="14%" height="16">7,041 </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%" height="16" ></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" vAlign=bottom align=left
    width="1%" height="16" >$</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=left
    width="14%" height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%" height="16" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff height="16">
    <p style="margin-left: 40pt">Total stockholders&#146; equity
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff height="16">$</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=right
    width="14%" bgColor=#e6efff height="16">94,341 </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff height="16">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff height="16">$</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=left
    width="14%" bgColor=#e6efff height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff height="16">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left height="18">Total capitalization </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" height="18" >$</TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=right
    width="14%" height="18">136,681 </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%" height="18" ></TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; ; border-left-style:none; border-left-width:medium" vAlign=bottom align=left
    width="1%" height="18" >$</TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" vAlign=bottom align=right
    width="14%" height="18"></TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=bottom align=left
    width="2%" height="18" ></TD>
  </TR>
</TABLE>
<P align=justify>_______________________________<BR>(1) The number of our
ordinary shares shown above to be outstanding as of December 25, 2009 on a pro
forma basis is based on (i) 1,000,062 ordinary shares issued and outstanding as
of December 25, 2009 and (ii) 29,235,000 ordinary shares issued in connection
with the acquisition of Leewell on April 14, 2010.</P>
<P align=justify>(2) The number of our ordinary shares shown above to be
outstanding after this offering is based on (i) 1,000,062 ordinary shares issued
and outstanding as of December 25, 2009; (ii) 29,235,000 ordinary shares issued
in connection with the acquisition of Leewell on April 14, 2010;
(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ordinary shares to be issued in the public offering (excluding the underwriters&#146;
over-allotment option of up
to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
shares); and (iv) 765,000 ordinary shares issued in connection with the private
placement on April 14, 2010.</P>
<P align=justify>&nbsp;</P>
<P align=center>25 </P>
<A name=page_31></A>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_32></A>
<P align=center><B>DILUTION</B></P>
<P align=justify>Our net tangible book value on December 25, 2009, on a pro
forma basis, was approximately $36.7 million, or $1.21 per ordinary share. For
the purpose of this prospectus, &#147;Net
tangible book value&#148; is total assets minus the sum of liabilities and intangible
assets on a pro forma basis. &#147;Net tangible book value per share&#148; is net tangible
book value divided by 30,235,062 ordinary shares issued and outstanding on a pro
forma basis on December 25, 2009.</P>
<P align=justify>After giving effect to the sale by us of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares in
this offering at the assumed public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share and after
deducting the underwriting discounts and commissions and estimated expenses
related to this offering payable by us, our adjusted net tangible book value as
of December 25, 2009 would have been $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, or $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per ordinary share. This
represents an immediate increase in net tangible book value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share to
our existing stockholders and an immediate decrease in the net tangible book
value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share to new investors. Dilution in the net tangible book value
per share to new investors represents the difference between the offering price
per share and the net tangible book value per ordinary share immediately after
this offering. The following table illustrates this per share dilution:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Assumed public offering price per share </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Net tangible book value per share as of December 25, 2009
      on a pro forma basis </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;1.21 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Increase in net tangible book value per
      share attributable to this offering </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>As adjusted net tangible book value per share as of
      December 25, 2009 after giving effect to this offering </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Dilution per share to new investors in this
      offering </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>A $1.00 increase in the assumed public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per
share would increase our adjusted net tangible book value per share after this
offering by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share and would increase the dilution per share to new
investors in this offering by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, assuming that the number of shares
offered by us, as set forth on the cover page of this prospectus, remains the
same and after deducting the underwriting discounts and commissions and
estimated expenses related to this offering payable by us.</P>
<P align=justify>If the underwriters exercise their over-allotment option to
purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; additional
ordinary shares  from us in full in this
offering at the assumed public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, the adjusted net
tangible book value as of December 25, 2009 after giving effect to this offering
would increase to $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, and dilution per share to new investors in this
offering would be $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share.</P>
<P align=center><B>EXCHANGE RATE INFORMATION</B></P>
<P align=justify>Our business is primarily conducted in China, and the financial
records of our PRC subsidiaries are maintained in RMB, their functional
currency. However, we use the U.S. dollar as our reporting currency. The assets
and liabilities of our PRC subsidiaries are translated from RMB into U.S. dollar
at the exchange rates on the balance sheet date, shareholders&#146; equity is
translated at the historical rates and the revenues and expenses are translated
at the weighted average exchange rate for the period. We make no representation
that any RMB or U.S. dollar amounts could have been, or could be, converted into
U.S. dollars or RMB, as the case may be, at any particular rate, or at all. The
PRC government imposes control over its foreign currency reserves in part
through direct regulation of the conversion of RMB into foreign exchange and
through restrictions on foreign trade. On April 30, 2010, the exchange rate was
&#165; 6.8247 to $1.00.</P>
<P align=justify>The following table sets forth information concerning exchange
rates between the RMB and the U.S. dollar for the periods indicated. </P>
<P align=center>26</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_33></A><BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: medium none #000000; " align=left
      >&nbsp; </TD>
      <TD align=left width="1%" style="border-bottom-style: none; border-bottom-width: medium" >&nbsp;</TD>
      <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>Noon
        Buying Rate</B><B><SUP>(1)</SUP></B></TD>
      <TD style="BORDER-BOTTOM: medium none #000000; " align=right width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
      ><B>Fiscal Year Ended December 25,</B> </TD>
      <TD align=left width="1%" style="border-style: none; border-width: medium" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
      width="20%"><B>Year End</B><B><SUP>(2)</SUP></B></TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center width="2%"
    >&nbsp;</TD>
      <TD align=center width="1%" style="border-style: none; border-width: medium" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
      width="20%"><B>Weighted Average</B><B><SUP>(3)</SUP></B></TD>
      <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR>
      <TD >&nbsp; </TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="43%" colspan="4" align="center">
      <p align="center">&nbsp; <b>(RMB per U.S. Dollar)</b></TD>
      <TD width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >2005 </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="20%" bgColor=#e6efff>8.0762 </TD>
      <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="20%" bgColor=#e6efff>8.1840 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >2006 </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="20%">7.8153 </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="20%">7.9712 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >2007 </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="20%" bgColor=#e6efff>7.3475 </TD>
      <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="20%" bgColor=#e6efff>7.5936 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >2008 </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="20%">6.8355 </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="20%">6.9339 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >2009 </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="20%" bgColor=#e6efff>6.8271 </TD>
      <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="20%" bgColor=#e6efff>6.8301 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >2010 </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="20%">&nbsp; </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="20%">&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp;Through April 30, 2010
      </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="20%" bgColor=#e6efff>6.8247 </TD>
      <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="20%" bgColor=#e6efff>6.8258 </TD>
      <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>________________ </P>
<P align=justify>(1) The exchange rates are based on the noon buying rate in the
city of New York for cable transfers of RMB as certified for customs purposes by
the Federal Reserve Bank of New York. <BR>(2) All periods end December 25 of the
stated year. <BR>(3) Weighted averages for a period are calculated by using the
average of the exchange rates on the end of each month during the period. </P>
<P align=center><B>SELECTED CONSOLIDATED FINANCIAL DATA </B></P>
<P align=justify>The following selected historical financial information should
be read in conjunction with our consolidated financial statements and related
notes and the information contained in &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations&#148; below. The selected consolidated
statement of operations data and statement of cash flows data for the years
ended December 25, 2009, 2008, and 2007 and the selected balance sheet data as
of December 25, 2009 and 2008 are derived from the audited consolidated
financial statements of Leewell included elsewhere in this prospectus. The
selected consolidated financial data for the years ended December 25, 2006 and
2005 and the selected balance sheet data as of December 25, 2007, 2006 and 2005
are derived from the unaudited and unreviewed consolidated financial statements
of Leewell not included in this prospectus.</P>
<P align=justify>The audited consolidated financial statements of Leewell for
the fiscal years ended December 25, 2009, 2008, and 2007 are prepared and
presented in accordance with generally accepted accounting principles in the
United States, or U.S. GAAP. The selected financial data information is only a
summary and should be read in conjunction with the historical consolidated
financial statements and related notes of Leewell contained elsewhere herein.
The financial statements contained elsewhere fully represent our financial
condition and operations; however, they are not indicative of our future
performance.</P>
<P align=center>27</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_34></A><BR>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD align=left><B>U.S. dollars, except shares</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD colspan="13" align=center style="BORDER-BOTTOM: #000000 1px solid">
        <B>Fiscal Year Ended December 25,</B> </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2009</B> </TD>
      <TD align=center width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2008</B> </TD>
      <TD align=center width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2007</B> </TD>
      <TD align=center width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2006</B> </TD>
      <TD align=center width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2005</B> </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff><B>Statements of Operations Data</B> </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="12%" bgColor=#e6efff>(Unaudited) </TD>
      <TD vAlign=bottom align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=center width="12%" bgColor=#e6efff>(Unaudited) </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Total sales </TD>
      <TD vAlign=bottom align=left width="1%">$</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp;94,315,500 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">$</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp;77,032,561 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">$</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp;51,850,312 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">$</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp;54,291,244 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">$</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp;42,984,961 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Total cost of sales </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(58,296,408</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(46,321,251</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(36,243,778</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(33,703,168</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(32,983,932</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Gross profit </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">36,019,092 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">30,711,310 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">15,606,534 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">20,588,076 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">10,001,029 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Advertising expenses </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(268,222</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(112,263</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(46,492</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(47,051</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(81,549</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Commission expenses </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(84,982</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(574,262</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(134,989</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(789,497</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(312,425</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Selling expenses </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(49,800</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(81,415</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(2,187</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(6,192</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(293</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Bad debt expense </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(207,523</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(1,198,942</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(245,243</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(154,710</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>General and administrative <BR>
        expenses </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        (4,655,596</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        (2,283,744</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        (807,589</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        (4,092,355</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        (3,212.,010</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Income from operations </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">30,752,969 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">26,460,684 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">14,370,034 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">15,498,271 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">6,394,752 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR>
      <TD bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Gain on business acquisitions <BR>
        (bargain purchase) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        3,188,924 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        - </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        - </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        - </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        - </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Miscellaneous income </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>327,294 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>91,945 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>10,280 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>16,022 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(35,988</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Interest expense </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">(866,751</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">(968,710</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">(70,963</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">(121,597</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">(173,311</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Income before income taxes and <BR>
        extraordinary item </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><BR>
        33,402,436 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><BR>
        25,583,919 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><BR>
        14,309,351 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><BR>
        15,392,696 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><BR>
        6,185,453 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Income taxes </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(9,058,226</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(6,602,194</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(5,090,161</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(5.130,644</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(2,089,048</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Income before extraordinary item </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>24,344,210 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>18,981,725 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>9,219,190 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>10,262,052 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>4,096,405 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Extraordinary item, net </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">12,635,872 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Net income </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>24,344,210 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>31,617,597 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>9,219,190 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>10,262,052 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>4.096.405 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Foreign currency translation adjustment </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>475,907 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>3,488,440 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>2,107,856 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>687,566 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>281,009 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Comprehensive income </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">&nbsp;24,820,117 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">&nbsp;35,106,037 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">&nbsp;11,327,046 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">&nbsp;10,949,618 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">&nbsp;4,377,414 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR>
      <TD bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Basic and diluted earnings per common share </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"></TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"></TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"></TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"></TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"></TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>&nbsp;&nbsp;&nbsp;Income before extraordinary
        item </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;0.24 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;0.19 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;921.92 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;1,026.21
      </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;409.64 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; &nbsp;Extraordinary item </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">0.12 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Net income </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;0.24 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;0.31 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;921.92 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;1,026.21 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;409.64 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Weighted average common <BR>
        shares outstanding </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        102,566,690 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        102,566,690 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        10,000 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        10,000 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><BR>
        10,000 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff><B>Cash Flow Data</B> </TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Net cash provided by (used in) </TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">&nbsp; </TD>
      <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Operating Activities </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;11,250,820
      </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;61,015,081
      </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;1,212,951
      </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;(5,953,059</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;10,036,251
      </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; &nbsp;Investing Activities </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">234,814 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(58,521,630</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(13,689,661</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(59,164</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%">(14,539</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Financing Activities </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(9,866,408</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(3,805,052</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>14,167,583 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>5,759,286 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(13,067,679</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;&nbsp;&nbsp;Effect of exchange rate&nbsp;<BR> &nbsp;&nbsp;&nbsp;changes
        on cash </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        6,573 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        16,518 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        9.891 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        (57,807</TD>
      <TD vAlign=bottom align=left width="2%">) </TD>
      <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
      <TD vAlign=bottom align=right width="12%"><BR>
        43,366 </TD>
      <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Net increase (decrease) in cash </TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;1,625,799 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;(1,295,083</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;1,700,764 </TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;(310,744</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;(3,002,601</TD>
      <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    </TR>
  </TABLE>
</DIV>
<P align=center>28</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_35></A><BR>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD colspan="13" align=center style="BORDER-BOTTOM: #000000 1px solid">
        <B>As of December 25</B> </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2009</B> </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2008</B> </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2007</B> </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2006</B> </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2005</B> </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left><B>Balance Sheet Data</B> </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=left width="12%">&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=left width="12%">&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=left width="12%">&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=left width="12%">&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=left width="12%">&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Current assets </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;133,002,971 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;105,072,009 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;69,443,412 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;92,211,870 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;51,282,518 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Long-term assets </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">63,329,872 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">73,576,346 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">18,379,376 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">2,499,929 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">2,603,803 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Total assets </TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;196,332,843 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;178,648,355 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;87,822,788 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;94,711,799 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;53,886,321 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Current liabilities </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;88,795,899 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;86,240,752 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;59,977,634 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;57,741,400 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;34,446,872 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Long-term liabilities </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">13,185,998 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">29,160,895 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">7.686,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">6,193,868 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Total liabilities </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>101,981,897 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>115,401,647 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>59,977,634 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>65,427,400 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>40,640,740 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Stockholders&#146; equity </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">94,350,946 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">63,246,708 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">27,845,154 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">29,284,399 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">13,245,581 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Total liabilities &amp; stockholders&#146;
        equity </TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;196,332,843 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;178,648,355 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;87,822,788 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;94,711,799 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;53,886,321 </TD>
      <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify><STRONG>Quarterly Financial Results</STRONG> </P>
<P align=justify>The following table presents our unaudited and unreviewed
quarterly consolidated statement of operations for the quarters presented. We
believe that the historical quarterly information has been prepared
substantially on the same basis as the audited consolidated financial
statements, and all necessary adjustments, consisting only of normal recurring
adjustments, have been included in the amounts below to state fairly the
unaudited quarterly results of operations data.</P>
<P align=justify>(All amounts in thousands of U.S. dollars; unaudited and
unreviewed)</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Sep</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Jun</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Mar</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Dec 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Jun 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Mar 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Dec 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Sep 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>25,</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="8%"><B>2009</B> </TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="8%"><B>2009</B> </TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="8%"><B>2009</B> </TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="8%"><B>2009</B> </TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="8%"><B>2008</B> </TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="8%"><B>2008</B> </TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="8%"><B>2008</B> </TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="8%"><B>2008</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Sales </TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>54,106 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>9,266 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>10,848 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>16,821 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>46,046 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>13,273 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>17,006 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>707 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Sales to related party </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">3,274 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Total sales </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>57,380 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>9,266 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>10,848 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>16,821 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>46,046 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>13,273 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>17,006 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>707 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cost of sales </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(35,266</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(5,874</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(6,144</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(10,158</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(27,177</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(9,219</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(9,657</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(268</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cost of sales to <BR>related party </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff><BR>(854</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff><BR>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff><BR>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff><BR>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff><BR>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff><BR>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff><BR>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff><BR>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total cost of sales </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(36,120</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(5,874</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(6,144</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(10,158</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(27,177</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(9,219</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(9,657</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(268</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Gross profit </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>21,260 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>3,392 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>4,704 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>6,663 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>18,869 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>4,054 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>7,349 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>439 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Advertising expenses </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(16</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(90</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(4</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(158</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(79</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(4</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(7</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(22</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
  </TD></TR>
  <TR vAlign=top>
    <TD align=left>Commission expenses </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(81</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(4</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(121</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(45</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(147</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(261</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Selling expenses </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(19</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(6</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(16</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(9</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(50</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(7</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(14</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(10</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
  </TD></TR>
  <TR vAlign=top>
    <TD align=left>Bad debt expense </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(207</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"><BR></TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(1,199</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>General and administrative expenses
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(2,351</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(956</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(815</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(534</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(193</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(1,031</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(473</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(587</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
  </TD></TR>
  <TR vAlign=top>
    <TD align=left>Total operating expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(2,593</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(1,052</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(916</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(705</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(1,642</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(1,087</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(641</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(880</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income from operations </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>18,667 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,340 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>3,788 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>5,958 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>17,227 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,967 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>6,708 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(441</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
  </TD></TR></TABLE>
<P align=center>29</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_36></A><BR>
<DIV>
<TABLE
style="FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Sep</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Jun</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Mar</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Dec 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Jun 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Mar 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Dec 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Sep 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>25,</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>2008</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>2008</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>2008</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>2008</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Gain on business acquisition (bargain purchase) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"
      bgColor=#e6efff>3,189 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>-
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>-
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>-
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>-
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>-
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Miscellaneous income </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">152 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(9</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(7</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">191 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(11</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">61 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">34 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">8 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Interest expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(34</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(29</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(340</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(464</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(247</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(386</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(235</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(101</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
  </TD></TR>
  <TR vAlign=top>
    <TD align=left>Income before income taxes and extraordinary items </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">21,974 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">2,302 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">3,441 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">5,685 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">16,969 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">2,642 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">6,507 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(534</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income taxes &#150; current &amp; deferred </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(9,058</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(6,602</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Income before extraordinary items </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">12,916 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">2,302 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">3,441 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">5,685 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">10,367 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">2,642 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">6,507 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(534</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Extraordinary items, net of income
      tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>12,636 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Net income </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">12,916 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">2,302 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">3,441 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">5,685 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">23,003 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">2,642 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">6,507 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">(534</TD>
    <TD vAlign=bottom align=left width="2%" >)
</TD></TR></TABLE></DIV>
<P align=center><B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
<BR>AND RESULTS OF OPERATIONS </B></P>
<P align=justify><B>Overview</B></P>
<P align=justify>We are one of the leading real estate development companies
located in Qingdao, Shandong province, China. In 2008, we were recognized in the
Qingdao Construction Committee&#146;s evaluation as one of the top ten real estate
developers in Qingdao, measured by a combination of revenue, customer
satisfaction, and several other factors. </P>
<P align=justify>Through our Chinese subsidiaries, we develop and sell
residential and commercial properties, targeting middle and upper income
customers in the coastal region of the Shandong peninsula (Greater Qingdao)
located in northeastern China, including the cities of Qingdao, Weihai, and
Yantai, as well as other inland locations, including Weifang. </P>
<P align=justify>Since our inception, we have completed 15 projects having a GFA
of 1,191,722 square meters, of which more than 91.8% has been sold. In addition,
we have seven projects under construction with a total GFA of 735,274 square
meters.</P>
<P align=justify>In fiscal year 2009, our total sales increased 22.4% to $94.3
million from $77.0 million in fiscal year 2008. Our gross profit increased 17.3%
to $36.0 million in fiscal year 2009 from $30.7 million in fiscal year 2008,
while our net income before extraordinary item increased 27.9% to $24.3 million
in fiscal year 2009 from $19.0 million in fiscal year 2008.</P>
<P align=justify>Our mission is to provide high-quality, comfortable, and
convenient living space to middle and upper income customers, primarily in
Shandong Province and in other provinces in China, while also earning for our
shareholders an internal rate of return that exceeds our cost of capital. We
expect to increase our market share through aggressive internal growth and
prudent acquisitions in Shandong Province and in other provinces in China. Our
goal is to be one of the top two real estate developers in Greater Qingdao in
the next five years by capturing and exploiting the growth opportunities in
Shandong Province and by providing the most desirable coastal and inland
apartments to middle and upper income customers, as well as by increasing our
development of commercial properties. </P>
<P align=center>30</P>
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<A name=page_37></A>
<P align=justify><B>Recent Developments</B></P>
<P align=justify><B><I>Reverse Acquisition of Leewell</I></B></P>
<P align=justify>On April 14, 2010, we completed a reverse acquisition
transaction through a share exchange with Leewell whereby we acquired 100% of
the issued and outstanding capital stock of Leewell, in exchange for 29,235,000
ordinary shares, par value $0.002112 per share, which shares constituted 94.31%
of our issued and outstanding shares on a fully-diluted basis, as of and
immediately after the consummation of the reverse acquisition. As a result of
the reverse acquisition, Leewell became our wholly-owned subsidiary and Longhai
Holdings, the former shareholder of Leewell, became our controlling shareholder.
The share exchange transaction with Leewell was treated as a reverse acquisition
for accounting purposes, with Leewell as the acquirer and Dragon Acquisition as
the acquired party. Unless the context suggests otherwise, when we refer in this
prospectus 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 Leewell and its consolidated subsidiaries.<B> </B></P>
<P align=justify>Upon the closing of the reverse acquisition on April 14, 2010,
Mr. David Richardson resigned from our board of directors, effective
immediately, and Mr. Joseph Rozelle submitted a resignation letter in which he
resigned from all offices that he held effective immediately and from his
position as our director effective on May 1, 2010.</P>
<P align=justify>Also upon the closing of the reverse acquisition, our board of
directors increased its size from two (2) to three (3) members and appointed Mr.
Antoine Cheng, Mr. Weiqing Zhang, and Mr. Zhongbo Zhou to fill the vacancies
created by the resignations of Messrs. Richardson and Rozelle and such increase.
Mr. Cheng&#146;s appointment became effective upon closing of the reverse acquisition
on April 14, 2010, while appointments of Messrs. Zhang and Zhou became effective
on May 1, 2010. In addition, our board of directors appointed Mr. Antoine Cheng
to serve as the Chairman of the Board, Mr. Weiqing Zhang to serve as our Chief
Executive Officer and President, and Mr. Yang Chen to serve as our Chief
Financial Officer and Vice President, effective immediately at the closing of
the reverse acquisition.<B> </B></P>
<P align=justify>As a result of our acquisition of Leewell, we now own all of
the issued and outstanding capital stock of Leewell, which in turn owns Oumei
and its Chinese subsidiaries. Leewell was established in Hong Kong on August 10,
2007 to serve as an investment holding company. Oumei was established in the PRC
on May 15, 2001. Its principal activities include the development and sales of
residential and commercial properties in Qingdao and other cities in Shandong
Province, China, which we also refer to as Greater Qingdao. </P>
<P align=justify>On September 20, 2007, Leewell acquired 100% of the equity
interests in Oumei from its shareholders, including Mr. Weiqing Zhang, Oumei&#146;s
Chief Executive Officer and President, for RMB 97,010,000 (approximately $13.1
million). In October 2007, the acquisition was approved by the appropriate
Chinese authorities, and Oumei&#146;s status changed from a Chinese domestic company
to a wholly-owned foreign enterprise. </P>
<P align=justify>Oumei has three branch offices, located in Jimo, Pingdu, and
Laixi, and has purchased the following nine Chinese subsidiaries:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Weihai Mingwei, purchased on January 19, 2008 for RMB 110,000,000
  (approximately $15 million); </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Longhai Hotel, purchased on January 22, 2008 for RMB 110,000,000
  (approximately $15 million); </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Weihai Economic, purchased on January 23, 2008 for RMB 140,000,000
  (approximately $19 million); </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Qingdao Xudong, purchased on January 24, 2008 for RMB 60,000,000
  (approximately $8.3 million); </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Weifang Longhai Industry, purchased on August 27, 2008 for RMB 30,000,000
  (approximately $4.4 million); </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Weifang Longhai Zhiye, purchased on August 28, 2008 for RMB 30,000,000
  (approximately $4.4 million); </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Weifang Qilu, purchased on August 29, 2008 for RMB 40,000,000
  (approximately $5.8 million); </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Caoxian Industrial, purchased on June 25, 2009 for RMB 15,000,000
  (approximately $2.2 million); and </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">Longhai Real Estate, purchased on September 25, 2009 for RMB 20,000,000
  (approximately $2.9 million). </P></LI></UL>
<P align=justify>As a result of our reverse acquisition of Leewell, we have
assumed the business and operations of Leewell and its Chinese subsidiaries. We plan to change our name to &#147;China
Oumei Real Estate Inc.&#148; to more accurately reflect our new business operations. </P>
<P align=center>31</P>
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<P align=justify><B><I>Financing Transaction</I></B></P>
<P align=justify>On April 14, 2010, we also completed a private placement
transaction with a group of accredited investors. Pursuant to the Subscription
Agreement with the investors, we issued to the investors an aggregate of
2,774,700 Units for a purchase price of $11,098,800, or $4.00 per Unit. Each
Unit consists of one Preference Share and one Warrant to purchase 0.5 ordinary
shares. The Warrants have a term of 5 years, bear an exercise price of $6.00 per
share (subject to customary adjustments), are exercisable on a net exercise or
cashless basis and are exercisable by investors at any time after the closing
date. See &#147;Description of Securities &#150; Preference Shares&#148; below for a
description of our Preference Shares. </P>
<P align=justify>Pursuant to the Subscription Agreement, we are obligated to
file a registration statement covering the resale of the ordinary shares
underlying the Preference Shares and the Warrants no later than thirty (30) days
following the closing date and shall use our best efforts to cause the
registration statement to be declared effective under the Securities Act as
promptly as possible, but in no event later than 180 days following the closing
date. If we do not timely file the required registration statement, or if it is
not declared effective by the SEC in a timely manner, then we are obligated to
pay to each investor a liquidated damages fee of 1% of such investor&#146;s
investment per month, for up to a maximum of 10% of each investor&#146;s investment
pursuant to the Subscription Agreement, except that we will not be obligated to
pay any such fee if we are unable to fulfill our registration obligations as a
result of rules, regulations, positions or releases issued or actions taken by
the SEC with respect to Rule 415 of the Securities Act, so long as we register
at such time the maximum number of securities permissible by the SEC.</P>
<P align=justify>In connection with the private placement, we entered into the
Make Good Escrow Agreement with Longhai Holdings, our controlling shareholder,
Collateral Agents, LLC, the escrow agent, and Access America Investments, LLC,
as representative of the investors, pursuant to which the parties agreed to
certain &#147;make good&#148; provisions in the event that we do not meet certain
financial performance thresholds for fiscal years 2010 and 2011. Pursuant to the
Make Good Escrow Agreement, the parties agreed to the establishment of an escrow
account and Longhai Holdings delivered into escrow certificates evidencing
7,500,000 ordinary shares held by it, to be held for the benefit of the
investors. Under the Make Good Escrow Agreement, we established minimum after
tax net income thresholds (as determined in accordance with GAAP and excluding
any non-cash expenses and one-time expenses related to the reverse acquisition
of Leewell and the private placement transaction) of $40 million for fiscal year
2010 and $60 million for fiscal year 2011 and minimum earnings per share
thresholds (calculated on a fully diluted basis and including adjustment for any
stock splits, stock combinations, stock dividends or similar transactions, and
for shares issued in one public offering or pursuant to the exercise of any
warrants, options, or other securities issued during or prior to the calculation
period) of $1.13 for fiscal year 2010 and $1.70 for fiscal year 2011. If our
after tax net income or earnings per share for either fiscal year 2010 or fiscal
year 2011 is less than 90% of the applicable performance threshold, then the
performance threshold will be deemed not to have been achieved, and the
investors will be entitled to receive ordinary shares based upon a pre-defined
formula agreed to between the parties. The parties agreed that, for purposes of
determining whether or not any of the performance thresholds is met, the release
of any of the escrowed shares and any related expense recorded under GAAP shall
not be deemed to be an expense, charge, or any other deduction from revenues
even if GAAP requires contrary treatment or the annual report for the respective
fiscal years filed with the SEC by the Company may report otherwise. </P>
<P align=justify>Also in connection with the private placement, we entered into
the Holdback Escrow Agreement with Collateral Agents, LLC, the escrow agent,
Brean Murray, Carret &amp; Co., LLC, the placement agent, and Access America
Investments, LLC, as representative of the investors, pursuant to which
$2,219,760 was deposited with the escrow agent to be distributed upon the
satisfaction of certain covenants set forth in the Subscription Agreement.
Pursuant to the Holdback Escrow Agreement, $1,109,880 will be released to the
Company upon our satisfaction of a covenant regarding the composition of our
board of directors and $1,109,880 will be released to the Company upon our
satisfaction of a covenant regarding the hiring of a chief financial officer
meeting the requirements specified in the Subscription Agreement. Pursuant to
the Holdback Escrow Agreement, an additional $1,000,000 was deposited with the
escrow agent to be released to us in incremental amounts to pay for fees and
expenses relating to our obligations as a public company. </P>
<P align=justify>We also entered into the IR Escrow Agreement with Collateral
Agents, LLC, the escrow agent, Brean Murray, Carret &amp; Co., LLC, the
placement agent, and Access America Investments, LLC, as representative of the
investors, pursuant to which $120,000 was deposited with the escrow agent to be
distributed in incremental amounts to pay our investor relations firm, the
choice of which is subject to the placement agent's approval.</P>
<P align=center>32</P>
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<P align=justify>In connection with the private placement, we also entered into
a Lockup Agreement with Longhai Holdings and each of our directors and officers,
pursuant to which each of them agreed not to transfer any of our capital stock
held directly or indirectly by them for an eighteen-month period following the
closing of the private placement. </P>
<P align=justify><B>Principal Factors Affecting Our Financial Performance
</B></P>
<P align=justify>Our operating results are primarily affected by the following
  factors:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Growth in the Chinese economy</I></B>. We operate in China and derive
  almost all of our revenues from sales to customers in China. Economic
  conditions in China, therefore, affect virtually all aspects of our
  operations, including the demand for our properties, the availability and
  prices of our raw materials, and our other expenses. China has experienced
  significant economic growth, achieving a compound annual growth rate of more
  than 10% in gross domestic product from 1996 through 2008. China is expected
  to experience continued growth in all areas of investment and consumption.
  However, if the global economic recession were to become more protracted,
  China&#146;s growth might be somewhat more modest, since China has not been
  entirely immune to the global economic slowdown and has been experiencing a
  slowing in its growth rate. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Growth of the Chinese real estate market and the local markets in
  which our properties are sold</I></B>. China&#146;s real estate bull market began
  more than six years ago. According to the National Bureau of Statistics of
  China, the total GFA of residential and commercial properties sold increased
  from 224.1 million square meters in 2001 to 937.1 million square meters in
  2009, a compound annual growth rate of 19.6%. Qingdao&#146;s real estate market has
  also experienced strong growth since 2001. According to the Qingdao Statistics
  Yearbooks 2004-2008 and the Qingdao Municipal Bureau of Statistics, the
  compound annual growth rate, or CAGR, in Qingdao from 2003 to 2008 for GFA
  completed was 4.1%, the CAGR for GFA sold was 11.2%, and the CAGR for the
  average prices of properties in Qingdao was 16.6%. Weihai&#146;s real estate market
  has seen similar increases. According to the Weihai Statistics Yearbooks
  2004-2008 and the Qingdao Municipal Bureau of Statistics, the CAGR from 2003
  to 2008 of GFA completed was 12.8%, for the GFA sold was 18.5%, and for
  average prices of properties in Weihai was 12.4%. Despite moderations in
  growth caused by the current global economic weakness in 2008 and 2009, we
  believe the structural forces in China and in the markets in which we sell our
  properties support continuing good demand for real estate during the next 10
  years, however there can be no assurance that current trends will continue.
  </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>China&#146;s Economic Stimulus Programs</I></B><I>. </I>In response to the
  global financial and economic crisis, the Chinese government announced a RMB 4
  trillion stimulus program on November 27, 2008. Within the RMB 4 trillion
  package, about RMB 400 billion will go toward civil works, including
  low-income housing and renovation, which we believe will benefit the Shandong
  Province. Two additional categories (technology advances and industry
  restructuring, which together will be allocated RMB 370 billion, and
  infrastructure, which will be allocated RMB 1.5 trillion) are also expected to
  benefit industries in Qingdao, Weihai, Weifang, and the entire Shandong
  Province. On February 26, 2009, China&#146;s State Council reinforced China&#146;s 2008
  stimulus package by further measures to stimulate specific industries in 2009.
  The industries included automobile, iron and steel, textiles, equipment
  manufacturing, shipbuilding, electronics and information technology,
  petrochemicals, light industries, nonferrous metals, and logistics. We believe
  China&#146;s RMB 4 trillion stimulus package and its further efforts focused on 10
  industries will improve Greater Qingdao&#146;s economy, further strengthen the
  region&#146;s long-term competitive ability, and support the demand for middle and
  upper income housing, as well as the need for better commercial and office
  space, and a few world-class hotels. However, although individuals and
  governments around the world hope that government stimulus efforts are
  starting to have the desired effects, the true benefits of these and perhaps
  additional stimulus efforts by local, provincial, and national governments in
  China, as well as by other countries, is not yet assured, since the
  sustainability of the global economic recovery is yet to be proven. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Public and government reaction to a possible over-stimulated real
  estate market. </I></B>China&#146;s National People&#146;s Congress, or NPC, the
  nation&#146;s body that creates legally binding motions and laws, and the Chinese
  People&#146;s Political Consultative Conference, or CPPCC, the nation&#146;s top
  advisory (but not legally binding) body consisting of representatives from all
  regions and most walks of life in China, both met in early March 2010 in
  Beijing. On the agenda of the NPC and the CPPCC were subjects that included
  the real estate market, property prices, low-income housing,
mortgage controls, the rise in housing prices beyond affordability for some
people, the allocation of land for housing and commercial development, and the
current taxation system as it influences housing and private sector incentives
to develop affordable housing. The influence of these discussions on the
nation&#146;s real estate market and the effect on our business, if any, is not yet
known.<I> </I> </P></LI></UL>
<P align=center>33</P>
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<P align=justify><B>Taxation </B></P>
<P align=justify><B><I>Cayman Islands</I></B></P>
<P align=justify>The Government of the Cayman Islands does not, under existing
legislation, impose any income, corporate or capital gains tax, estate duty,
inheritance tax, gift tax or withholding tax upon us or our shareholders. The
Cayman Islands are not party to a double tax treaty with any country that is
applicable to any payments made to or by us. </P>
<P align=justify>We have received an undertaking from the Governor-in-Cabinet
  of the Cayman Islands that, in accordance with section 6 of the Tax Concessions
  Law (1999 Revision) of the Cayman Islands, for a period of 20 years from April
  2006 no law which is enacted in the Cayman Islands imposing any tax to be levied
  on profits, income, gains or appreciations shall apply to us or our operations
  and, in addition, that no tax to be levied on profits, income, gains or appreciations
  or which is in the nature of estate duty or inheritance tax shall be payable
  (i) on or in respect of our shares, debentures or other obligations or (ii)
  by way of the withholding in whole or in part of a payment of dividend or other
  distribution of income or capital by us to our shareholders or a payment of
  principal or interest or other sums by us due under a debenture or other obligation.</P>
<P align=justify><B><I>Hong Kong</I></B></P>
<P align=justify>Our indirect subsidiary, Leewell, was incorporated in Hong Kong
and under the current laws of Hong Kong, is subject to Profits Tax of 16.5% . No
provision for Hong Kong Profits Tax has been made as Leewell has no taxable
income.</P>
<P align=justify><B><I>China</I></B></P>
<P align=justify>Before the implementation of the New EIT Law, FIEs established
in the PRC, unless granted preferential tax treatments by the PRC government,
were generally subject to an earned income tax, or EIT, rate of 33.0%, which
included a 30.0% state income tax and a 3.0% local income tax. On March 16,
2007, the National People&#146;s Congress of China passed the New EIT Law, and on
November 28, 2007, the State Council of China passed the EIT Law Implementing
Rules which took effect on January 1, 2008. The EIT Law and its implementing
rules impose a unified EIT of 25.0% on all domestic-invested enterprises and
FIEs, unless they qualify under certain limited exceptions.</P>
<P align=justify>In addition to the changes to the current tax structure, under
the New EIT Law, an enterprise established outside of China with &#147;de facto
management bodies&#148; 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 &#147;de facto management bodies&#148; as &#147;an establishment that
exercises, in substance, overall management and control over the production,
business, personnel, accounting, etc., of a Chinese enterprise.&#148; If the PRC tax
authorities subsequently determine that we should be classified as a resident
enterprise, then our organization&#146;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 &#147;Risk Factors &#150; Risks Related to Our Business &#150; Under the
New Enterprise Income Tax Law, we may be classified as a &#147;resident enterprise&#148;
of China. Such classification will likely result in unfavorable tax consequences
to us and our non-PRC shareholders.&#148; </P>
<P align=justify>In addition, the New 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&#146; shareholder has a
tax treaty with China that provides for a different withholding arrangement.
Oumei is considered an FIE and is directly held by our subsidiary in Hong Kong.
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 Leewell by Oumei, but this treatment will depend on our status
as a non-resident enterprise.</P>
<P align=justify>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.</P>
<P align=center>34</P>
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<P align=justify><B>Results of Operations</B></P>
<P align=justify><B><U>Year Ended December 25, 2009 Compared With Year Ended
December 25, 2008</U></B><B> </B></P>
<P align=justify>The following table shows key components of our results of
operations during the fiscal years ended December 25, 2009 and 2008, in both
dollars and as a percentage of our total sales.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Fiscal Year Ended</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Fiscal Year Ended</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>U.S. dollars, except percentages</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>December 25, 2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>December 25, 2008</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Percent of</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Percent of</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Dollars</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Total Sales</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Dollars</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Total Sales</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Sales </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;91,041,042 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>96.5% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;77,032,561 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>100.0% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Sales to related party </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">3,274,458 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">3.5%
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Total sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>94,315,500 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>100.0% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>77,032,561 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>100.0% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cost of sales </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(57,442,457</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(60.9)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(46,321,251</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(60.1)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cost of sales to related party </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(853,951</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(0.9)% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Total cost of sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(58,296,407</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(61.8)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(46,321,251</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(60.1)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Gross profit </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">36,019,092 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">38.2% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">30,711,310 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">39.9% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Advertising expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(268,222</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(0.3)% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(112,263</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(0.1)% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Commission expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(84,982</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.1)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(574,262</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.7)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Selling expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(49,800</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(0.1)% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(81,415</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(0.1)% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Bad debt expense </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(207,523</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.2)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,198,942</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1.6)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>General and administrative expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(4,655,596</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(4.9)% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(2,283,744</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(3.0)% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income from operations </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>30,752,970 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>32.6% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>26,460,684 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>34.4% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Gain on business acquisitions (bargain purchase)
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,188,924 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3.4% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Miscellaneous income </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">327,294 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">0.3% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">91,945 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">0.1% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Interest expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(866,751</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(0.9)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(968,710</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1.3)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Income before income taxes and extraordinary items </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">33,402,436 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">35.4% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">25,583,919 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">33.2% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(9,058,226</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(9.6)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(6,602,194</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(8.6)% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Income before extraordinary items </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">24,344,210 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">25.8% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">18,981,725 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">24.6% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Extraordinary items, net </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>12,635,872 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>16.4% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net income </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">24,344,210 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">25.8% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">31,617,597 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">41.0% </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Foreign currency translation adjustment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">475,907 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">0.5%
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">3,488,440 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">4.6%
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Comprehensive income </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;24,820,117 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>26.3% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;35,106,037 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>45.6% </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B><I>Sales</I></B>. Our total sales increased 22.4% to $94.3
million in the fiscal year ended December 25, 2009 from $77.0 million in the
fiscal year ended December 25, 2008, mainly due to sales related to the
acquisition of two project development companies, the completion and sales of
the Xingfu Renjia project phase 1 and the Fuxiang Huayuan project phase 2, in
addition to a higher average selling price per square meter for both residential
and commercial properties delivered in fiscal year 2009 compared with fiscal
year 2008. Effective December 26, 2008, we adopted the percentage of completion
method of accounting for revenue recognition for all building construction
projects in progress in which the construction period was expected to be more
than 12 months at that date. The full accrual method was used before that date
for all of our residential and commercial projects. We changed to the percentage
of completion method for contracts longer than one year because this method more
accurately reflects how revenue is earned on these contracts, particularly for
interim reporting purposes. ASC 250 requires retrospective application of a
change in accounting principle unless impracticable. The change to the
percentage of completion method had no effect on our December 25, 2008 financial
statements and we found it was impracticable to determine the effect on the
December 25, 2007 financial statements as no progress reports detailing the
percentage of completion of our contracts were prepared for that year. </P>
<P align=center>35</P>
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<P align=justify><B><I>Cost of sales</I></B>. Our total cost of sales increased
25.9% to $58.3 million in the fiscal year 2009 from $46.3 million in the fiscal
year 2008, mainly in support of the increase in sales, plus higher costs in
constructing high rise tower office buildings in fiscal year 2009, which are
more expensive to construct than the low rise buildings completed in fiscal year
2008. </P>
<P align=justify><B><I>Gross profit and gross profit margin</I></B>. Our gross
profit increased 17.3% to $36.0 million in the fiscal year 2009 from $30.7
million in the fiscal year 2008. The gross profit margin (gross profit as a
percentage of total sales) was 38.2% for the fiscal year 2009 and 39.9% for the
fiscal year 2008. The decline in the gross margin was primarily due to the
Fuxiang Garden Phase 2 and the Xingfu Renjia Phase 1 projects, both of which had
lower than average selling prices. Additionally, the costs of construction of
high rise office tower buildings in fiscal year 2009 are relatively higher than
the projects sold in fiscal year 2008. </P>
<P align=justify><B><I>Advertising expenses</I></B>. Advertising expenses
increased 138.9% to $0.3 million in the fiscal year 2009 from $0.1 million in
the fiscal year 2008, mainly due to our increased advertising efforts to create
buyer awareness and interest in our newly available properties at our Qilu
Textile Center and Weihai Longhai International Plaza projects, as well as in
our Xingfu Renjia residential project. </P>
<P align=center>39</P>
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<P align=justify><B><I>Commission expenses</I></B>.<B><I> </I></B>Commissions
paid to independent sales agents decreased 85.2% between fiscal year 2009 and
fiscal year 2008 since we used temporary independent sales agents to maximize
our pre-sales in the first phase of sales for residential and commercial
properties in 2008. In 2009, we did not rely as heavily on these temporary sales
agents.</P>
<P align=justify><B><I>Selling expenses</I></B>. Our selling expenses decreased
38.8% to $0.05 million in the fiscal year 2009 from $0.08 million in the fiscal
year 2008, mainly due to the absence in 2009 of the sales and marketing
materials purchased for the intense selling effort in the first phase of
pre-sales for residential and commercial properties in 2008. </P>
<P align=justify><B><I>Bad debt expense</I></B>. Our bad debt expense declined
82.7% in fiscal year 2009 from fiscal year 2008, primarily due to the write back
of an allowance against other receivables which was recorded in 2008. This was
partially offset by an additional provision for doubtful accounts receivable
made in accordance with the Company&#146;s bad debt allowance policy. </P>
<P align=justify><B><I>General and administrative expenses</I></B>. General and
administrative expenses increased 103.9% in fiscal year 2009 from fiscal year
2008, primarily due to the increase in Land Appreciation Tax and the expenses
incurred in anticipation of the reverse acquisition transaction with Leewell and
related private placement.</P>
<P align=justify><B><I>Gain on business acquisitions (bargain
purchases)</I></B>. In fiscal year 2009, a new accounting standard issued by the
Financial Accounting Standards Board revised the recognition and presentation of
gains on acquisitions in the statement of operations. Any such gains are no
longer considered extraordinary items. The gain on business acquisitions
(bargain purchase) of $3.2 million in 2009 represents the difference between the
amounts paid for two companies and their market values. Please see Note 2 to the
consolidated Financial Statements for further details.</P>
<P align=justify><B><I>Interest expense</I></B>. Interest expense decreased
10.5% to $0.9 million in the fiscal year 2009 from $1.0 million in fiscal year
2008, primarily due to lower average borrowings in 2009. </P>
<P align=justify><B><I>Income taxes</I></B>. Income taxes increased 37.2% to
$9.1 million in the fiscal year 2009 from $6.6 million in the fiscal year 2008,
mainly due to higher income before taxes. Please see &#147;Taxation&#148; above for more
information. </P>
<P align=justify><B><I>Income before extraordinary items</I></B>. Income before
extraordinary items was up 28.3% to $24.3 million in the fiscal year 2009
compared with $19.0 million in 2008, as a result of the factors described above.
</P>
<P align=justify><B><I>Extraordinary items, net</I></B>.<B><I> </I></B>In fiscal
year 2008, we acquired four project companies (Qingdao Xudong, Weifang Longhai
Industry, Weifang Longhai Zhiye and Weifang Qilu) and recorded a gain of $12.6
million as an extraordinary item, based on the differences between our purchase
prices and the estimated fair market values of the acquisitions. </P>
<P align=justify><B><I>Net income</I></B>. Net income decreased 23.0% to $24.3
million in fiscal year 2009 from $31.6 million in 2008, primarily due the
absence in fiscal year 2009 of a gain from extraordinary items that occurred in
fiscal year 2008, and due to higher income taxes in 2009. </P>
<P align=justify><B><U>Year Ended December 25, 2008 Compared With Year Ended December
  25, 2007</U></B></P>
<P align=justify>The following table shows key components of our results of
operations during the fiscal years ended December 25, 2008 and 2007, both in
dollars and as a percentage of our total sales. </P>
<P align=center>40</P>
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noShade SIZE=5>
<A name=page_47></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD colspan="4" align=center><B>Fiscal Year Ended</B> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD colspan="4" align=center><B>Fiscal Year Ended</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>U.S. dollars, except percentages</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>December
      25, 2008</B> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>December
      25, 2007</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B>Percent of</B> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B>Percent of</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Dollars</B> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Total Sales</B> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Dollars</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Total Sales</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Total sales </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;77,032,561 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>100.0% </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;51,850,312 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>100.0% </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cost of total sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(46,321,251</TD>
    <TD align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(60.1)%</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(36,243,778</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(69.9)%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Gross profit </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>30,711,310 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>39.9% </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>15,606,534 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>30.1% </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Advertising expenses </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(112,263</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.1)%</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(46,492</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.0)%</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Commission expenses </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(574,262</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(0.7)%</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(134,989</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(0.3)%</TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Selling expenses </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(81,415</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.1)%</TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(2,187</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.0)%</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Bad debt expense </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(1,198,942</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(1.6)%</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(245,243</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(0.5)%</TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>General and administrative expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(2,283,744</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(3.0)%</TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(807,589</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1.6)%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Income from operations </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">26,460,684 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">34.4% </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">14,370,034 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">27.7% </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Miscellaneous income </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">91,945 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">0.1% </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">10,280 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">0.0% </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Interest expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(968,710</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1.3)%</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(70,963</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(0.1)%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Income before income taxes and extraordinary items </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">25,583,919 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">33.2% </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">14,309,351 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">27.6% </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(6,602,194</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(8.6)%</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(5,090,161</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(9.8)%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Income before extraordinary items </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">18,981,725 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">24.6% </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">9,219,190 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">17.8% </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Extraordinary items, net </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>12,635,872 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>16.4% </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net income </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">31,617,597 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">41.0% </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">9,219,190 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">17.8% </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Foreign currency translation adjustment </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">3,488,440 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">4.6% </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">2,107,856 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">4.0% </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Comprehensive income </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;35,106,037 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>45.6% </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;11,327,046 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>21.8% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B><I>Sales</I></B>. Total sales increased 48.6% to $77.0
million in the fiscal year 2008 from $51.9 million in the fiscal year 2007. The
increase in sales was mainly due to the inclusion of seven project companies
acquired as subsidiaries in 2008, which were not part of the company in 2007.
Our internal growth, excluding the acquisitions in 2008, also contributed to the
sales increase, mainly due to the completion of project buildings, as we
expanded our operations into a wider geographic market.</P>
<P align=justify><B><I>Cost of sales</I></B>. Total cost of sales increased
27.8% to $46.3 million in fiscal year 2008 from $36.2 million in fiscal year
2007, in support of the higher sales. </P>
<P align=justify><B><I>Gross profit and gross profit margin</I></B>. Gross
profit increased 96.8% to $30.7 million in fiscal year 2008 from $15.6 million
in fiscal year 2007. The gross profit margin (gross profit as a percent of total
sales) was 39.9% in 2008 compared with 30.1% in 2007, mainly due to a higher
portion of sales in 2008 that were in higher-margin commercial and residential
projects, compared with the lower-margin residential and commercial buildings
completed in 2007. We also had higher selling prices in 2008 compared to 2007.
</P>
<P align=justify><B><I>Advertising expenses</I></B>. Advertising expenses
increased 141.5% to $0.1 million in 2008 from $0.05 million in 2007, mainly due
to an aggressive marketing campaign to attract potential customers at the start
of the pre-sales periods. </P>
<P align=justify><B><I>Commissions</I></B>.<B><I> </I></B>Commissions paid to
independent professional sales representatives increased 325.4% to $0.6 million
in the fiscal year 2008 from $0.1 million in the fiscal year 2007, due to the
temporary use of independent sales representatives needed to grow sales rapidly
in the beginning phase of the pre-sales of apartments in our buildings, which
helps to create the sales momentum so that most apartments in the buildings will
be sold as construction progresses. </P>
<P align=justify><B><I>Selling expenses</I></B>. Our selling expenses increased
3,622.7% to $0.081 million in the fiscal year 2008 from $0.002 million in the
fiscal year 2007, mainly due to a much greater effort to create pre-sales. Eight
of our companies, including seven subsidiaries, were in the selling phase of
construction in 2008, compared with only one company in 2007.</P>
<P align=center>41</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_48></A>
<P align=justify><B><I>Bad debt expense</I></B>. Our bad debt expense increased
388.9% in the fiscal year 2008 to $1.2 million from $0.2 million in the fiscal
year 2007, primarily due to an expense of approximately $0.6 million for other
receivables and an additional allowance for doubtful accounts receivable of
approximately $0.6 million in accordance with the Company&#146;s policy. </P>
<P align=justify><B><I>General and administrative expenses</I></B>. General and
administrative expenses increased 182.8% to $2.3 million in the fiscal year 2008
from $0.8 million in the fiscal year 2007, mainly due to the expansion of our
operations by way of the acquisition of seven companies in 2008. </P>
<P align=justify><B><I>Interest expense</I></B>. Interest expense increased
1,265.1% to $0.9 million in the fiscal year 2008 from $0.07 million in the
fiscal year 2007, primarily due to higher average borrowings in 2008 compared
with 2007. The consolidation of the seven subsidiaries acquired in 2008, with
most having some amount of debt, was the primary cause of the higher interest
expense in 2008. </P>
<P align=justify><B><I>Income taxes</I></B>. Income taxes increased 29.7% to
$6.6 million in the fiscal year 2008 from $5.1 million in the fiscal year 2007,
mainly due to higher income before taxes.</P>
<P align=justify><B><I>Income before extraordinary items, net</I></B>.<B><I>
</I></B>Income before extraordinary items was up 105.9% to $19.0 million in the
fiscal year 2008 compared with $9.2 million in the fiscal year 2007, as a result
of the factors described above.<B><I> </I></B></P>
<P align=justify><B><I>Extraordinary items, net</I></B>.<B><I> </I></B>In fiscal
year 2008, we acquired four project companies (Qingdao Xudong, Weifang Longhai
Industry, Weifang Longhai Zhiye and Weifang Qilu) and recorded a gain of $12.6
million as an extraordinary item, based on the differences between our purchase
prices and the estimated fair market values of the acquisitions. There were no
extraordinary items in fiscal year 2007. </P>
<P align=justify><B><I>Net Income</I></B>. Net income increased 243.0% to $31.6
  million in fiscal year 2008 from $9.2 million in fiscal year 2007, primarily
  due higher sales and operating income, and the gain from extraordinary items
  in 2008, partly offset by higher interest expense, and a lower income tax rate.</P>
<P align=justify><B>Liquidity and Capital Resources</B><BR></P>
<P align=justify>As of December 25, 2009, we had cash and cash equivalents of
$2.3 million. The following table provides a summary of our net cash flows from
operating, investing, and financing activities. To date, we have financed our
operations primarily through net cash flow from operations, augmented by
short-term bank borrowings and equity contributions by our shareholders. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>U.S. Dollars </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="7" align=center style="BORDER-BOTTOM: #000000 1px solid"> <B>Year
      Ended December 25</B><B>, </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2009 </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2008 </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2007 </B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash provided by operating activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;11,250,820 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;61,015,081 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;1,212,951 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash provided by (used in) investing activities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">234,814 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(58,521,630</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(13,689,661</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash provided by (used in) financing activities
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(9,866,408</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(3,805,052</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>14,167,583 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Effects of exchange rate change in cash </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">6,573
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">16,518 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">9,891
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net increase (decrease) in cash and cash equivalents
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,625,799 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,295,083</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,700,764 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash and cash equivalents at beginning of the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">638,639 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,933,722 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">232,958 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash and cash equivalent at end of the year
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;2,264,438 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>638,639 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;1,933,722 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B><I>Net cash flow from operating activities</I></B><BR></P>
<P align=justify>In accordance with Accounting Standards Codification, or ASC,
  230, <I>Statement of Cash Flows</I>, cash flows from our operations are calculated
  based upon the local currencies. As a result, amounts related to assets and
  liabilities reported on the statement of cash flows will not necessarily agree
  with changes in the corresponding balances on the balance sheet. </P>
<P align=justify>Net cash provided by operating activities was $11.3 million in
the fiscal year 2009, compared with $61.0 million provided by operating
activities in the fiscal year 2008. Net income after adjustment for noncash
items was $30.3 million in the fiscal year 2009. This increase was augmented by
a reduction in inventories of $24.6 million, related party receivables collected
of $7.3 million, expenditures made in previous years but expensed in the fiscal
year 2009 of $2.3 million, and an increase in taxes incurred but not paid of
$3.8 million. This total increase of $68.3 million was offset by a decrease in deposits received from customers of
$38.0 million, income recognized of $10.7 million but either not billed or
received in cash, and payments for accounts payable of $9.3 million. </P>
<P align=center>42</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_49></A>
<P align=justify>Net cash provided by operating activities was $61.0 million in
the fiscal year 2008 compared with $1.2 million in the fiscal year 2007. Net
income after adjustment for noncash items was $21.7 million in the fiscal year
2008. This increase was augmented by a net collection from related parties of
$58.5 million, a decrease in inventories of $26.0 million, an increase in taxes
incurred but not paid of $9.9 million, collection of other receivables of $4.7
million, and collection of contracts receivable of $1.6 million. This total
increase of $122.4 million was offset by a decrease in deposits received from
customers of $56.5 million, expenditures made but not expensed in the fiscal
year 2008 of $1.7 million, and payments for accounts payable of $1.3
million.</P>
<P align=justify><B><I>Net cash flow from investing activities</I></B></P>
<P align=justify>Net cash provided by investing activities in the fiscal year
2009 was $0.2 million, compared with $58.5 million net cash used in investing
activities in the fiscal year 2008. The increase was mainly due to the absence
in the fiscal year 2009 of the purchase of four subsidiaries acquired in the
fiscal year 2008.</P>
<P align=justify>Net cash used in investing activities in the fiscal year 2008
was $58.5 million, compared with $13.7 million used in the fiscal year 2007. The
increase in the net cash used in investing activities was mainly due to
acquisition of four subsidiaries in the fiscal year 2008.</P>
<P align=justify><B><I>Net cash flow from financing activities</I></B></P>
<P align=justify>Net cash used in financing activities in the fiscal year 2009
was $9.9 million, compared with $3.8 net cash used in financing activities in
the fiscal year 2008. The increase was mainly due to repayments of long-term
borrowings in the fiscal year 2009, partly offset by proceeds received from
long-term borrowings in 2009. </P>
<P align=justify>Net cash used in financing activities in the fiscal year 2008
was $3.8 million, compared with $14.2 million of net cash provided by financing
activities in the fiscal year 2007. The decrease was mainly due to a net
reduction in short-term borrowing in 2008 and a net increase in short-term
borrowing in 2007. </P>
<P align=justify>As of December 25, 2009, the amount, maturity date and term of
each of our bank loans were as follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left ><B>Bank</B> </TD>
    <TD align=left width="45%" ><B>Amount outstanding as of
      December 25, 2009</B> </TD>
    <TD align=left width="15%"><B>Maturity Date</B> </TD>
    <TD align=left width="15%"><B>Duration</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Rural Credit Cooperatives
      <BR>Fangzi Branch </TD>
    <TD align=left width="45%" bgColor=#e6efff >RMB 15,309,428
      (approximately $2,247,424) <BR></TD>
    <TD align=left width="15%" bgColor=#e6efff>Jan 13, 2011 <BR></TD>
    <TD align=left width="15%" bgColor=#e6efff>1 year <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left >China Agricultural Bank Jimo <BR>Branch </TD>
    <TD align=left width="45%" >RMB 2,203,982 (approximately
      $323,545) <BR></TD>
    <TD align=left width="15%">January, 2013 <BR></TD>
    <TD align=left width="15%">10 years <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >China Agricultural Bank Laixi
      <BR>Branch </TD>
    <TD align=left width="45%" bgColor=#e6efff >RMB 1,011,330
      (approximately $148,463) <BR></TD>
    <TD align=left width="15%" bgColor=#e6efff>November 2015 <BR></TD>
    <TD align=left width="15%" bgColor=#e6efff>10 years <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left >China Construction Bank <BR>Caoxian Branch
</TD>
    <TD align=left width="45%" >RMB 35,000,000 (approximately
      $5,138,000) <BR></TD>
    <TD align=left width="15%">May 27, 2010 <BR></TD>
    <TD align=left width="15%">1 year, 7 months </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >China Industry and Commercial
      <BR>Bank Chengyang Branch </TD>
    <TD align=left width="45%" bgColor=#e6efff >RMB 200,000,000
      (approximately $29,360,000) <BR></TD>
    <TD align=left width="15%" bgColor=#e6efff>May 2010 <BR></TD>
    <TD align=left width="15%" bgColor=#e6efff>3 years </TD></TR>
  <TR vAlign=top>
    <TD align=left >China Construction Bank <BR>Weihai Branch </TD>
    <TD align=left width="45%" >RMB 30,000,000 (approximately
      $4,404,000) <BR></TD>
    <TD align=left width="15%">December 2011 <BR></TD>
    <TD align=left width="15%">2 years <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >China Construction Bank
      <BR>Gaomi Branch </TD>
    <TD align=left width="45%" bgColor=#e6efff >RMB 4,900,000
      (approximately $719,320) <BR></TD>
    <TD align=left width="15%" bgColor=#e6efff>February, 2010 <BR></TD>
    <TD align=left width="15%" bgColor=#e6efff>3 years <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>TOTAL</B> </TD>
    <TD align=left width="45%" ><B>RMB 288,424,740 (approximately
      $42,340,752)</B> </TD>
    <TD align=left width="15%">&nbsp; </TD>
    <TD align=left width="15%">&nbsp; </TD></TR></TABLE>
<P align=justify>We believe that our currently available working capital,
including the aggregate proceeds of our capital raising activities and the
credit facilities referred to above, should be adequate to sustain our
operations at our current levels through at least the next twelve months. We
may, however, in the future, require additional cash resources due to changed
business conditions, implementation of our strategy to expand our production
capacity, or other investments or acquisitions we may decide to pursue. If our
own financial resources are insufficient to satisfy our capital requirements, we
may seek to sell additional equity or debt securities or obtain additional
credit facilities. The sale of additional equity securities could result in
dilution to our shareholders. The incurrence of indebtedness would result in
increased debt service obligations and could require us to agree to operating
and financial covenants that would restrict our operations. Financing may not be available in amounts or on
terms acceptable to us, if at all. Any failure by us to raise additional funds
on terms favorable to us, or at all, could limit our ability to expand our
business operations and could harm our overall business prospects. </P>
<P align=center>43</P>
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<P align=justify><B>Obligations Under Material Contracts </B></P>
<P align=justify>The table below shows our contractual obligations as of December
  25, 2009. </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD align=left><B>U.S. Dollars</B> </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD colspan="13" align=center style="BORDER-BOTTOM: #000000 1px solid">
        <B>Payments Due by Period</B> </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD align=center width="2%"  >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%"><B>Less than</B> </TD>
      <TD align=center width="2%"  >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD align=center width="2%"  >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD align=center width="2%"  >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%"><B>More than</B> </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Contractual Obligations</B>
      </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%"><B>Total</B> </TD>
      <TD align=center width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="11%"><B>1
        year</B> </TD>
      <TD align=center width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%"><B>1-3 years</B> </TD>
      <TD align=center width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%"><B>3-5 years</B> </TD>
      <TD align=center width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="11%"><B>5
        years</B> </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Long-term debt obligations </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="11%" bgColor=#e6efff>&nbsp;39,621,320 </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="11%" bgColor=#e6efff>&nbsp;35,217,320 </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="11%" bgColor=#e6efff>&nbsp;4,404,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="11%" bgColor=#e6efff>&nbsp;- </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="11%" bgColor=#e6efff>&nbsp;- </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Other obligations </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">- </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">- </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">- </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">- </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">- </TD>
      <TD align=left width="2%"  >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Total </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="11%"
    bgColor=#e6efff>&nbsp;39,621,320 </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="11%"
    bgColor=#e6efff>&nbsp;35,217,320 </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="11%"
    bgColor=#e6efff>&nbsp;4,404,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="11%"
    bgColor=#e6efff>&nbsp;- </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="11%"
    bgColor=#e6efff>&nbsp;- </TD>
      <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify><B>Inflation </B></P>
<P align=justify>Inflation 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 the foreseeable future. However, our
management will closely monitor price changes in the Chinese economy and the
real estate industry and continually maintain effective cost controls in
operations.<B> </B></P>
<P align=justify><B>Off Balance Sheet Arrangements</B></P>
<P align=justify>We 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, sales or expenses, results of
operations, liquidity or capital expenditures, or capital resources that are
material to an investment in our securities.<B> </B></P>
<P align=justify><B>Seasonality</B></P>
<P align=justify>Our operating results and operating cash flows historically
have not been subject to dramatic seasonal variations, although there is an
increase in advertising and selling expenses when we begin pre-sales of new
projects under construction. New market opportunities or new project
introductions could change any perceived patterns, seasonal or operational.</P>
<P align=justify><B>Critical Accounting Policies</B></P>
<P align=justify>The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires our
management to make assumptions, estimates, and judgments that affect the amounts
reported, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We have identified certain accounting policies that
are significant to the preparation of our financial statements. These accounting
policies are important for an understanding of our financial condition and
results of operations. Critical accounting policies are those that are most
important to the portrayal of our financial condition and results of operations
and require management&#146;s difficult, subjective, or complex judgment, often as a
result of the need to make estimates about the effect of matters that are
inherently uncertain and may change in subsequent periods. Certain accounting
estimates are particularly sensitive because of their significance to financial
statements and because of the possibility that future events affecting the
estimate may differ significantly from management&#146;s current judgments. We
believe the following critical accounting policies involve the most significant
estimates and judgments used in the preparation of our financial statements:
</P>
<P align=justify><B><I>Revenue Recognition</I></B></P>
<P align=justify>Real estate sales are reported in accordance with the
provisions of ASC 360-20, <I>Property, Plant and Equipment, Real Estate Sales,
Sales Other Than Retail Land Sales</I>. Revenue from the sales of development
properties where the construction period is twelve months or less is recognized
by the full accrual method when the sale is consummated. A sale is not
considered consummated until (1) the parties are bound by the terms of a
contract or agreement, (2) all consideration has been exchanged, (3) any
permanent financing of which the seller is responsible has been arranged, (4)
all conditions precedent to closing have been performed, (5) the seller does not
have substantial continuing involvement with the property, and (6) the usual risks and
rewards of ownership have been transferred to the buyer. Revenue recognized to
date in excess of amounts received from customers is classified as current
assets under contracts receivable. Sales transactions not meeting all the
conditions of the full accrual method are accounted for using the deposit method
of accounting. Under the deposit method, all costs are capitalized as incurred,
and payments received from the buyer are recorded as a deposit liability.</P>
<P align=center>44</P>
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<A name=page_51></A>
<P align=justify>Effective December 26, 2008, the Company adopted the
percentage-of-completion method of accounting for revenue recognition for all
building construction projects in progress in which the construction period was
expected to be more than twelve months at that date. The full accrual method was
used before that date for all of our residential and commercial projects. The
Company changed to the percentage-of-completion method for contracts longer than
one year as this method more accurately reflects how revenue is earned on these
contracts, particularly for interim reporting purposes. </P>
<P align=justify>ASC 250 requires retrospective application of a change in
accounting principle unless impracticable. The change to the
percentage-of-completion method had no effect on our December 25, 2008 financial
statements and we found it was impracticable to determine the effect on the
December 25, 2007 financial statements as no progress reports detailing the
percentage-of-completion of our contracts were prepared for that year. </P>
<P align=justify>Revenue and profit from the sale of development properties
where the construction period is more than twelve months is recognized by the
percentage-of-completion method on the sale of individual units when the
following conditions are met: (1) construction is beyond a preliminary stage;
(2) the buyer is committed to the extent of being unable to require a refund
except for non-delivery of the unit; (3) sufficient units have already been sold
to assure that the entire property will not revert to rental property; (4) sales
prices are collectible and (5) aggregate sales proceeds and costs can be
reasonably estimated. If any of these criteria are not met, proceeds are
accounted for as deposits until the criteria are met and/or the sale
consummated.</P>
<P align=justify>Under the percentage of completion method, revenues from units
sold and related costs are recognized over the course of the construction
period, based on the completion progress of a project. In relation to any
project, revenue is determined by calculating the ratio of completion and
applying that ratio to the contracted sales amounts. This ratio of completion is
determined by an independent third party hired by the Company as the contractors
employed by the Company request advance payments and do not specifically
allocate these costs to the various projects. Cost of sales is recognized by
multiplying the ratio by the total budgeted costs. Changes to total estimated
contract costs or losses, if any, are recognized in the period in which they are
determined. Revenue recognized to date in excess of amounts received from
customers is classified as current assets under revenue in excess of billings.
Amounts received from customers in excess of revenue recognized to date are
classified as current liabilities under customer deposits.</P>
<P align=justify>Any losses incurred or identified on real estate transaction
are recognized in the period in which the transaction occurs.</P>
<P align=justify><B><I>Real Estate Capitalization and Cost Allocation</I></B></P>
<P align=justify>Properties under construction or held for sale consist of
residential and commercial units under construction and units completed.</P>
<P align=justify>Properties under construction or held for sale are stated at
cost or estimated net realizable value, whichever is lower. Costs include costs
of land use rights, direct development costs, including predevelopment costs,
interest on indebtedness, construction overhead and indirect project costs.
Total estimated costs of multi-unit developments are allocated to individual
units based upon specific identification methods. Costs of land use rights
include land premiums and deed tax and are allocated to projects on the basis of
acreage and GFA. </P>
<P align=justify><B><I>Allowance for Doubtful Accounts</I></B></P>
<P align=justify>The Company recognizes an allowance for doubtful accounts to
ensure contracts receivable, related party receivables and other receivables are
not overstated due to uncollectability. Bad debt reserves are maintained for all
customers based on a variety of factors, including the length of time the
receivables are past due, significant one-time events and historical experience.
An additional reserve for individual accounts is recorded when the Company
becomes aware of a customer's or debtor's inability to meet its financial
obligation, such as in the case of bankruptcy filings or deterioration in the
customer's or debtor&#146;s operating results or financial position. If circumstances
related to customers or debtors change, estimates of the recoverability of
receivables would be further adjusted.</P>
<P align=center>45</P>
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<A name=page_52></A>
<P align=justify><B><I>Land Appreciation Tax (&#147;LAT&#148;)</I></B></P>
<P align=justify>In accordance with the relevant taxation laws in the PRC, the
Company is subject to LAT based on progressive rates ranging from 30% to 60% on
the appreciation of land value, which is calculated as the proceeds of sales of
properties less deductible expenditures, including borrowings costs and all
property development expenditures. The tax rules to implement the laws stipulate
that the whole project must be completed before the LAT obligation can be
assessed. Accordingly, the Company records the liability and the related expense
at the completion of a project, unless the tax authorities impose an assessment
at an earlier date. Deposits made against the eventual obligation are included
in prepaid expenses.</P>
<P align=center><B>QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK</B></P>
<P align=justify><B>Interest Rate Risk</B></P>
<P align=justify>We are exposed to interest rate risk primarily with respect to
our short-term bank loans and long-term bank loans. Although the interest rates,
which are based on the banks&#146; prime rates with respect to our short-term loans
are fixed for the terms of the loans, the terms are typically three to twelve
months for short-term bank loans and interest rates are subject to change upon
renewal. There were no material changes in interest rates for short-term bank
loans renewed during the year ended December 25, 2009.<B> </B></P>
<P align=justify>A hypothetical 1.0% increase in the annual interest rates for
all of our credit facilities under which we had outstanding borrowings as of
December 25, 2009, would decrease net income before provision for income taxes
by approximately $0.34 million for the year ended December 25, 2009. Management
monitors the banks&#146; prime rates in conjunction with our cash requirements to
determine the appropriate level of debt balances relative to other sources of
funds. We have not entered into any hedging transactions in an effort to reduce
our exposure to interest rate risk. </P>
<P align=justify><B>Foreign Exchange Risk</B></P>
<P align=justify>While our reporting currency is the U.S. Dollar, all of our
consolidated sales and consolidated costs and expenses are denominated in RMB.
All of our assets are denominated in RMB except for cash. As a result, we are
exposed to foreign exchange risk as our sales and results of operations may be
affected by fluctuations in the exchange rate between U.S. Dollars and RMB. If
RMB depreciates against the U.S. Dollar, the value of our RMB sales, earnings
and assets as expressed in our U.S. Dollar financial statements will decline.
Assets and liabilities are translated at exchange rates at the balance sheet
dates and revenue and expenses are translated at the average exchange rates and
shareholders&#146; equity is translated at historical exchange rates. Any resulting
translation adjustments are not included in determining net income but are
included in determining other comprehensive income, a component of shareholders&#146;
equity. We have not entered into any hedging transactions in an effort to reduce
our exposure to foreign exchange risk.<B> </B></P>
<P align=justify>The value of the RMB against the U.S. dollar and other
currencies is affected by, among other things, changes in China&#146;s political and
economic conditions. Since July 2005, the RMB has not been pegged to the U.S.
dollar. Although the People&#146;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 or Euro in the medium to long term. Moreover, it is possible that in
the future, PRC authorities may lift restrictions on fluctuations in RMB
exchange rate and lessen intervention in the foreign exchange market. </P>
<P align=justify><B>Inflation</B></P>
<P align=justify>Inflationary factors such as increases in the cost of our
product and overhead costs may adversely affect our operating results. Although
we do not believe that inflation has had a material effect on our financial
position or results of operations to date, a high rate of inflation in the
future may have an adverse effect on our ability to maintain current levels of
gross margin and selling, general and administrative expenses as a percentage of
net sales if the selling prices of our products do not increase with these
increased costs. </P>
<P align=center>46</P>
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<A name=page_53></A>
<P align=center><B>BUSINESS</B></P>
<P align=justify><B><I>Business Overview</I></B></P>
<P align=justify>We are one of the leading real estate development companies
located in Qingdao, Shandong province, China. We began operation in 2001 and in
2008, we were recognized in the Qingdao Construction Committee&#146;s evaluation as
one of the top ten real estate developers in Qingdao, measured by a combination
of revenue, customer satisfaction, as well as several other factors. </P>
<P align=justify>We develop and sell residential and commercial properties,
targeting middle and upper income customers in the coastal region of the
Shandong peninsula (Greater Qingdao) located in northeastern China, including
the cities of Qingdao, Weihai and Yantai, as well as other inland locations,
including Weifang. </P>
<P align=justify>Since our inception, we have completed 15 projects having a
gross floor area, or GFA, of 1,191,722square meters, of which more than 91.8%
has been sold. In addition, we have seven projects under construction with a
total GFA of 735,274 square meters.</P>
<P align=justify>In fiscal year 2009, our total sales increased 22.4% to $94.3
million from $77.0 million in fiscal year 2008. Our gross profit increased 17.3%
to $36.0 million in fiscal year 2009 from $30.7 million in fiscal year 2008,
while our net income before extraordinary item increased 27.9% to $24.3 million
in fiscal year 2009 from $19.0 million in fiscal year 2008.</P>
<P align=justify>Our mission is to provide high-quality, comfortable, and
convenient living space to middle and upper income customers, primarily in
Shandong Province and in other provinces in China, while also earning for our
shareholders an internal rate of return that exceeds our cost of capital. We
expect to increase our market share through aggressive internal growth and
prudent acquisitions in Shandong Province and in other provinces in China. Our
goal is to be one of the top two real estate developers in Greater Qingdao in
the next five years by capturing and exploiting the growth opportunities in
Shandong Province and by providing the most desirable coastal and inland
apartments to middle and upper income customers, as well as by increasing our
development of commercial properties. </P>
<P align=justify><B>Our Industry</B></P>
<P align=justify><B><I>The Real Estate Industry in China</I></B></P>
<P align=justify>China&#146;s real estate sector is in the early stage of a long-term
growth cycle, supported by growth in its gross domestic product, or GDP, rising
demand for housing, and substantial structural changes. </P>
<P align=justify>China has experienced rapid economic growth in the last 20
years. According to China&#146;s Department of Commercial Affairs, China&#146;s GDP
achieved an annual growth rate of 17.1% from 2004 to 2008. According to the
National Statistics Bureau of China, China&#146;s GDP in 2009 was RMB 33.5 trillion,
up 8.7% from 2008. The official per capita data for 2008 and 2009 is not yet
available as of the date of this prospectus. </P>
<P align=center><img src="form1.gif" border="0" width="449" height="353"> </P>
<P align=center>47</P>
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<A name=page_54></A>
<P align=justify>Despite the recent global economic recession, China is expected
to achieve relatively good economic growth in the next several years, compared
to many other major economies in the world. </P>
<P align=center><img src="form2.jpg" border="0" width="570" height="262"> </P>
<P align=justify>China&#146;s real estate bull market began more than six years
  ago. Despite the moderations in growth caused by the global economic weakness
  in 2008 and 2009, we believe the structural forces in China support continuing
  good demand for real estate in China during the next 10 years. The two primary
  drivers for this long-term real estate demand in China are urbanization (which
  includes both the expansion and development of cities and the dramatic migration
  of people from rural to urban areas) and the rising disposable income per capita
  in the cities. <I>Increasing Urbanization </I></P>
<P align=justify>China is continuing its rapid urbanization. In 2009, more than
622 million people were living in urban areas, accounting for 46.6% of total
population of 1.33 billion, according to the National Bureau of Statistics of
China. The State Council of China estimated in 2007 that China&#146;s urban
population in 2020 would be approximately 870 million people, or approximately
60% of the total population of 1.45 billion. </P>
<P align=justify>Another source, the United Nations&#146; <I>State of World
Population 2007</I>, reported that approximately 18 million people in China are
expected to migrate from rural to urban areas each year, and that the urban
population would reach about 877 million people in the next 10 years. </P>
<P align=center><img src="form3.jpg" border="0" width="655" height="312"></P>
<P align=justify>The rural to urban migration is likely to continue, both
because of the potential for higher income and greater wealth accumulation, and
because of the evolution of China&#146;s farming toward larger-scale and more
efficient methods that require fewer people to do the agricultural work.</P>
<P align=center>48</P>
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<P align=justify>With the substantial housing demand created by the structural
shift of the migration, the urban real estate market has been thriving. That
long-term trend is expected to continue. </P>
<P align=justify><I>Increasing Disposable Incomes</I></P>
<P align=justify>Disposable income per capita in urban areas between 2001 and
2009 has grown at a compound average annual growth rate of 12.2%, from RMB 6,860
(approximately $1,009) in 2001 to RMB 17,175 (approximately $2,510) in 2009. As
disposable income per capital increases, urban residents have strong motivation
to improve their living conditions by purchasing new or larger properties,
demonstrated by the urban living expenses per capita in the same years that have
steadily increased at a compound annual growth rate of 10.2%, from RMB 548.0
(approximately $81) in 2001 to RMB 982.3 (approximately $145) in 2007, which is
the most recent year available for this measure. </P>
<P align=justify>Rural dwellers are drawn to cities primarily by the potential
of higher incomes and greater wealth, because urban jobs generally pay higher
wages and salaries. </P>
<P align=justify>The latest data from the National Bureau of Statistics of China
shows that both disposable income and wealth accumulation are higher for urban
dwellers and confirms the economic attractiveness of the migration from rural to
urban areas. </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top bgcolor="#0066CC">
      <TD align=left ><font color="#FFFFFF">Annual per capita disposable income
        and expenses </font></TD>
      <TD width="11%" align=left><font color="#FFFFFF">&nbsp;</font> </TD>
      <TD width="11%" align=left><font color="#FFFFFF">&nbsp;</font> </TD>
      <TD width="11%" align=left><font color="#FFFFFF">&nbsp;</font> </TD>
      <TD width="11%" align=left><font color="#FFFFFF">&nbsp;</font> </TD>
      <TD width="11%" align=left><font color="#FFFFFF">&nbsp;</font> </TD>
      <TD width="11%" align=left><font color="#FFFFFF">&nbsp;</font> </TD>
    </TR>
    <TR vAlign=top bgcolor="#0066CC">
      <TD align=left ><font color="#FFFFFF">(RMB) </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF">2002 </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF">2003 </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF">2004 </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF">2005 </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF">2006 </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF">2007 </font></TD>
    </TR>
    <TR vAlign=top bgcolor="#FFCC66">
      <TD align=left >Urban per capita </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Disposable income of urban households </TD>
      <TD align=center width="11%">7,703 </TD>
      <TD align=center width="11%">8,472 </TD>
      <TD align=center width="11%">9,422 </TD>
      <TD align=center width="11%">10,493 </TD>
      <TD align=center width="11%">11,760 </TD>
      <TD align=center width="11%">13,786 </TD>
    </TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD align=left >Consumption expenditures of urban households </TD>
      <TD width="11%" align=center>6,030 </TD>
      <TD width="11%" align=center>6,511 </TD>
      <TD width="11%" align=center>7,182 </TD>
      <TD width="11%" align=center>7,943 </TD>
      <TD width="11%" align=center>8,697 </TD>
      <TD width="11%" align=center>9,998 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Net increase in wealth, urban </TD>
      <TD align=center width="11%">1,673 </TD>
      <TD align=center width="11%">1,961 </TD>
      <TD align=center width="11%">2,240 </TD>
      <TD align=center width="11%">2,550 </TD>
      <TD align=center width="11%">3,063 </TD>
      <TD align=center width="11%">3,789 </TD>
    </TR>
    <TR vAlign=top bgcolor="#FFCC66">
      <TD align=left >Rural per capita </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
      <TD width="11%" align=left>&nbsp; </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Net income of rural households </TD>
      <TD align=center width="11%">2,476 </TD>
      <TD align=center width="11%">2,622 </TD>
      <TD align=center width="11%">2,936 </TD>
      <TD align=center width="11%">3,255 </TD>
      <TD align=center width="11%">3,587 </TD>
      <TD align=center width="11%">4,140 </TD>
    </TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD align=left >Living expenditures of rural households </TD>
      <TD width="11%" align=center>1,834 </TD>
      <TD width="11%" align=center>1,943 </TD>
      <TD width="11%" align=center>2,185 </TD>
      <TD width="11%" align=center>2,555 </TD>
      <TD width="11%" align=center>2,829 </TD>
      <TD width="11%" align=center>3,224 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Net increase in wealth, rural </TD>
      <TD align=center width="11%">642 </TD>
      <TD align=center width="11%">679 </TD>
      <TD align=center width="11%">751 </TD>
      <TD align=center width="11%">700 </TD>
      <TD align=center width="11%">758 </TD>
      <TD align=center width="11%">917 </TD>
    </TR>
  </TABLE>
</DIV>
<P align=center><I>Source: The National Bureau of Statistics of China </I></P>
<P align=justify><I>Growth of the Chinese Real Estate Industry </I></P>
<P align=justify>The growth in China&#146;s real estate industry is reflected in the
growth of investment in real estate development, total GFA sold, and average
home prices. Total investment on real estate development in 2009 was RMB 3623.2
billion, up 16.1% from 2008.<B> </B></P>
<P align=justify>According to the National Bureau of Statistics of China, the
total GFA of residential and commercial properties sold increased from 224.1
million square meters in 2001 to 937.1 million square meters in 2009, a compound
annual growth rate of 19.6% .<B> </B></P>
<P align=center>49</P>
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<P align=center><img src="form4.jpg" border="0" width="532" height="350"> </P>
<P align=justify>Despite significant appreciation of real estate prices in China
in recent years, comparative analysis of fundamental factors indicate that
prices are still reasonable. Studies have shown that a key underlying driver for
real estate market growth is GDP per capita. Recent International Monetary Fund
studies report that China&#146;s recent real estate appreciation is supported by
strong per capita economic growth. When compared using &#147;price per capita GDP&#148; in
the U.S. and India, China&#146;s real estate market appears undervalued. For example,
although Shanghai represents the most expensive real estate market in China,
India&#146;s Mumbai (Bombay) has seen real estate prices grow to more than twice
those of Shanghai, even though China has higher economic growth. </P>
<P align=justify>Rising disposable income in the second-tier cities has lured
top luxury goods manufacturers, including LVMH Group (one of the world&#146;s largest
luxury goods companies), to expand aggressively into key second-tier cities. The
Chinese government has also been instrumental in stimulating regional growth by
designating certain second-tier regions as priority zones. These actions are
benefitting the Greater Qingdao area, our primary market. In 2008 and 2009,
Qingdao&#146;s urban disposable income per capita grew 14.6% and 13.8%, compared with
8.4% and 9.8% for all of China.</P>
<P align=center>50</P>
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<P align=justify><B><I>Shandong Province</I></B><BR></P>
<P align=justify>We conduct most of our operations in Shandong Province,
including the city of Qingdao and two other smaller cities, Weihai and Weifang.
Shandong Province, which includes Greater Qingdao, is located in northeastern
China, on the gulf called the Bohai Sea and on the Yellow Sea. It includes the
Shandong peninsula in the east and a central hilly complex surrounded by part of
the intensively cultivated northern China Plain. The flood-prone Yellow River
crosses northern sections. Wheat and soybeans are the chief crops, and wild silk
is important on the peninsula. Major resources are the Shengli petroleum fields
in the north and extensive coal deposits at Zibo, Boshan, and Zaozhuang. Jinan,
the capital, and the Qingdao and Zibo municipalities are major urban areas.
Settled as early as the 3rd century BC, Shandong was part of China during the
Shang dynasty and played a major role in ancient Chinese history. It was
venerated as the birthplace of the philosophers Confucius and Mencius.</P>
<P align=center><IMG
src="map1.jpg" width="263" height="218"
border=0></P>
<P align=justify>Shandong Province is approximately 153,300 square kilometers in
area, with a population density of 1,859.9 people per square kilometer.</P>
<P align=justify><I>Greater Qingdao</I><BR></P>
<P align=justify>Greater Qingdao includes the cities of Qingdao, Jimo, Laixi,
Pingdu, and three smaller cities. Located in the China-Japan-Korea triangle,
Qingdao is a one-hour flight from Seoul and a two-hour flight from Tokyo. </P>
<P align=center><IMG src="map2.jpg" width="481" height="280" border=0> </P>
<P align=justify>Qingdao is a major naval base, an industrial center, and a port
on the Yellow Sea at the entrance to sheltered Jiaozhou Bay. The port, which
rarely freezes over, serves the industrialized northern China Plain and was
expanded in 1976 to include an oil terminal for large tankers on Huang
Island.</P>
<P align=justify>The leading manufactured goods of the city include textiles,
railroad equipment, rubber goods, fertilizer, and chemicals. Tsingtao beer,
brewed here since Germany leased the Kiaochow territory (1898-1914), is sold
around the world. Qingdao was transformed by the Germans from a small fishing
village into a modern European-style industrial port in the early 20th century.
As a result of the reform and industrial restructuring in the past two decades,
major industries, including electronics and information technology, appliances,
engineered materials, brewing, automobiles, and shipbuilding, have grown
dramatically in Qingdao. The Shandong Oceanography College is also located here.
</P>
<P align=justify>Qingdao is considered one of best places to live in China as
reported by various Chinese media outlets including CCTV. As one of China&#146;s top
ten economically dynamic cities ranked by National Statistics Bureau, Qingdao
has an excellent environment for investment and living. It offers
fairly priced markets, good infrastructure facilities, comfortable living
conditions, efficient government operations, sound public security, good
personal and property safety, and glorious days in the city, at the beach,
sailing, or hiking in the mountains. </P>
<P align=center>51</P>
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<P align=justify><I>Economic Growth</I><BR></P>
<P align=justify>Shandong has experienced rapid economic growth in the last 20
years. According to National Bureau of Statistics of China, Shandong&#146;s GDP per
capita increased from RMB 10,195 (approximately $1,500) in 2001 to 35,796
(approximately $5,232) in 2009, a compound annual growth rate of 17.0% . </P>
<P align=justify>Qingdao is the leading city in the Shandong peninsula, measured
by GDP and the GDP growth rate. As one of China&#146;s top ten economically dynamic
cites, GDP per capita in Qingdao exceeded $8,000 in 2009, making it the eighth
largest city economy in China.</P>
<P align=center><img src="form7.gif" border="0" width="746" height="266"></P>
<P align=justify>Compared to tier-one cities, we believe Qingdao will continue
its growth momentum for quite a few years. Its strong economic fundamentals
should provide a solid foundation for growth in the real estate sector. </P>
<P align=center><img src="form8.jpg" border="0" width="736" height="293"></P>
<P align=justify>Qingdao hosted the sailing competitions of the Olympic and
Paralympic Games in August and September 2008, which boosted the city&#146;s economy
due to the Olympic participants and visitors, as well as to the new fixed assets
built to support the Olympic games and festivities, especially the Qingdao
International Marina &amp; Olympic Sailing Center. Built on the site of the
former Beihai shipyard on Fushan Bay, the new Qingdao International Marina &amp;
Olympic Sailing Center covers a total area of 450,000 square meters,
plus major and secondary breakwaters, an embankment, a quay, and the renovation
of the shore wall. The facility serves as the home port of several sailing
organizations. Qingdao hosted the Volvo Ocean Race 2008-2009 as the Chinese port
city on the world circuit.</P>
<P align=center>52</P>
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<P align=justify><I>Economic Stimulus Plans</I><BR></P>
<P align=justify>In response to the global financial and economic crisis, the
Chinese government announced a RMB 4 trillion stimulus program on November 27,
2008. Subsequently, on March 6, 2009, the National Development and Reform
Commission Director announced a reshaping of that economic stimulus package that
retained the investment total of RMB 4 trillion but adjusted its focus. Within
the RMB 4 trillion package, about RMB 400 billion will go toward civil works,
including low-income housing and renovation, which we believe will benefit
Shandong Province. Two additional categories (technology advances &amp; industry
restructuring for RMB 370 billion and infrastructure for RMB 1.5 trillion) are
also expected to benefit industries in Qingdao, Weihai, Weifang, and the entire
Shandong Province. </P>
<P align=center><img src="form9.gif" border="0" width="608" height="215"> </P>
<P align=justify>On February 26, 2009, China&#146;s State Council reinforced China&#146;s
2008 stimulus package by further measures to stimulate specific industries in
2009. The industries include automobile, iron and steel, textiles, equipment
manufacturing, shipbuilding, electronics and information technology,
petrochemicals, light industries, nonferrous metals, and logistics. </P>
<P align=justify>We believe China&#146;s RMB 4 trillion stimulus package and its
  further efforts focused on 10 industries will improve Qingdao&#146;s economy,
  further strengthen the region&#146;s long-term competitive ability, and support
  the demand for middle and upper income housing, as well as the need for better
  commercial and office space, and a few world-class hotels. However, although
  individuals and governments around the world hope that government stimulus efforts
  will have the desired effects, the true benefit from these and perhaps additional
  stimulus efforts by local, provincial, and national governments in China, as
  well as by other countries, still remain uncertain.</P>
<P align=justify><B><I>The Qingdao Real Estate Market</I></B><BR></P>
<P align=justify>Qingdao&#146;s real estate market has experienced strong growth
since 2001. The table below shows housing demand in Qingdao between 2003 and
2008. In 2009, GFA completed was 8.14 million square meters, and GFA sold was
12.62 million square meters. Average price data is not yet available for 2009.
</P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top bgcolor="#0066CC">
      <TD align=left><font color="#FFFFFF">&nbsp;</font> </TD>
      <TD width="11%" align=center><font color="#FFFFFF"><B>2003</B> </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF"><B>2004</B> </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF"><B>2005</B> </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF"><B>2006</B> </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF"><B>2007</B> </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF"><B>2008</B> </font></TD>
      <TD width="11%" align=center><font color="#FFFFFF"><B>CAGR</B> </font></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>GFA completed (millions m<SUP>2</SUP>) </TD>
      <TD align=center width="11%" bgColor=#e6efff>5.37 </TD>
      <TD align=center width="11%" bgColor=#e6efff>6.35 </TD>
      <TD align=center width="11%" bgColor=#e6efff>8.11 </TD>
      <TD align=center width="11%" bgColor=#e6efff>6.52 </TD>
      <TD align=center width="11%" bgColor=#e6efff>6.40 </TD>
      <TD align=center width="11%" bgColor=#e6efff>6.57 </TD>
      <TD align=center width="11%" bgColor=#e6efff>4.1% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>GFA sold (millions m<SUP>2</SUP>) </TD>
      <TD align=center width="11%">4.53 </TD>
      <TD align=center width="11%">5.16 </TD>
      <TD align=center width="11%">7.4 </TD>
      <TD align=center width="11%">7.36 </TD>
      <TD align=center width="11%">8.33 </TD>
      <TD align=center width="11%">7.69 </TD>
      <TD align=center width="11%">11.2% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Average price (RMB) </TD>
      <TD align=center width="11%" bgColor=#e6efff>2,350 </TD>
      <TD align=center width="11%" bgColor=#e6efff>2,965 </TD>
      <TD align=center width="11%" bgColor=#e6efff>3,604 </TD>
      <TD align=center width="11%" bgColor=#e6efff>4,254 </TD>
      <TD align=center width="11%" bgColor=#e6efff>5,202 </TD>
      <TD align=center width="11%" bgColor=#e6efff>5,074 </TD>
      <TD align=center width="11%" bgColor=#e6efff>16.6% </TD>
    </TR>
  </TABLE>
</DIV>
<P align=center><I>Source: Qingdao Statistics Yearbook 2004-2008 &amp; Qingdao
Municipal Bureau of Statistics</I></P>
<P align=justify>Compared to tier-one cities, the affordability of Qingdao has
remained essentially constant over the past few years. It is the most affordable
of the major cities shown in the graph below, which illustrates affordability
based upon the most recent data available. </P>
<P align=center>53</P>
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<P align=center><img src="form10.jpg" border="0" width="534" height="273"> </P>
<P align=justify>Good demographic and economic factors, including emerging
high-tech industries and increasing foreign capital inflow, bode well for
Qingdao&#146;s future growth.</P>
<P align=center><img src="form11.gif" border="0" width="725" height="297"></P>
<P align=justify>Growth factors include the transition of certain industries to
higher value-added business (especially high-technology and services), rising
GDP per capita, increasing foreign investment, and expanding foreign retailing
and hotel operations. Between 2002 and 2007, Qingdao&#146;s GDP per capita achieved a
19.3% compound annual growth rate, while Qingdao&#146;s urban disposable income per
capita grew at a point-to-point compound annual growth rate of 15.3% from 2002
to 2008.</P>
<P align=justify>In addition, efforts by Qingdao&#146;s local government to create
clear strategies, institute attractive policies, and invest in the necessary
infrastructure are focused on creating favorable investment environments. </P>
<P align=justify>Qingdao is focused on expanding its three relatively new
industries: its modernized seaport, tourism, and marine science. The city also
continues to enlarge its traditional industries of electronics and home
appliances; petrochemicals; automobile; locomotive; ship building; and
engineered materials. With Qingdao&#146;s base as a seaport, this robust city is also
building a regional shipping center, a logistics center, a service center, a
financial center, and a high-technology industry development center. </P>
<P align=justify>Qingdao&#146;s thrust to expand its industries and its recent
experience as the world&#146;s host for the sailing events of the Olympics and
Paralympics are combining to grow this energetic city as it increases its role
in the global marketplace. Qingdao's development is based on the concept of
"three-point layout," "one-line planning," and "group development strategy."</P>
<P align=center>54</P>
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<P align=justify>The "three-point layout" refers to the development of the
Jiaozhou Bay region relying on the three basic points of the old urban districts
of Qingdao, Huangdao, and Hongdao, and the construction of the new urban
district by connecting the three points with a transoceanic bridge or undersea
tunnel and the Jiaozhou Bay Expressway.</P>
<P align=justify>The "one-line planning" refers to building a coastal highway
from Langyatai in Jiaonan to Tianhengdao Island in Jimo, which will connect all
parts of the city to form a main urban development belt.</P>
<P align=justify>The "group development strategy" refers to the expansion of
business groups on both sides of the coastal highway. There will be seven
development groups respectively in Tianhengdao Island, Aoshan, Zhucheng,
Hongdao, Huangdao, Jiaonan, and Langyatai, which will push forward the
urbanization of the adjacent regions. To carry out the west coast development
strategy and construct those seven areas, the municipal government will relocate
ports to the western coast, and plans to establish an international port and an
international transshipment port. </P>
<P align=justify>The Qingdao Economic and Technological Development Zone, or
QETDZ, is one of the state-level economic and technological development zones
approved by China&#146;s State Council. The zone is located on the west coast of
Jiaozhou Bay, which is connected to the Bohai Sea Economic Belt. It is in the
center of the Greater Qingdao strategy that aims to create huge development
potential. According to a recent comprehensive evaluation on the investment
environment from China&#146;s Ministry of Commerce, or MOFCOM, QETDZ ranks fourth
overall, first in social and environment, and third in human resources, supply
level, and technical innovation, among all the 54 state-level development zones.
</P>
<P align=justify>So far, a total of RMB 20 billion has been invested in the
construction of infrastructure facilities in the zone. The Qianwan international
port, inside the QETDZ, has a 100 million ton capacity, is the largest modern
container deep-water dock in China, and links with more than 100 shipping routes
to all parts of the world.</P>
<P align=justify>With the approval of the Shandong Provincial Government,
Qingdao has established six provincial-level economic and technological
development zones, including the development zones in Jimo, Laixi, Pingdu,
Jiaonan, and Jiaozhou, and the Coastal economic and technology development zone.
These development zones have complete infrastructure facilities with beneficial
investment policies and convenient transportation.</P>
<P align=justify><B><I>The Weihai Real Estate Market</I></B></P>
<P align=justify>According to the Weihai Bureau of Statistics, approximately 2.3
million square meters of residential GFA was sold in Weihai in 2007, up 46% from
2006; approximately 3.5 million square meters were sold in 2008, up 52.1% from
2007; and approximately 5.6 million square meters were sold in 2009, up 40.9%
from 2008.</P>
<P align=justify>The table below shows Weihai&#146;s recent total GFA completed,
total GFA sold, and average price per square meter for all commercial and
residential property transactions in the city. In 2009, GFA completed was 5.8
million square meters, and GFA sold was 5.6 million square meters. Average price
data is not yet available for 2009.</P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top bgcolor="#0066CC">
      <TD align=left ><font color="#FFFFFF">&nbsp;</font> </TD>
      <TD width="10%" align=center><font color="#FFFFFF"><B>2003</B> </font></TD>
      <TD width="10%" align=center><font color="#FFFFFF"><B>2004</B> </font></TD>
      <TD width="10%" align=center><font color="#FFFFFF"><B>2005</B> </font></TD>
      <TD width="10%" align=center><font color="#FFFFFF"><B>2006</B> </font></TD>
      <TD width="10%" align=center><font color="#FFFFFF"><B>2007</B> </font></TD>
      <TD width="10%" align=center><font color="#FFFFFF"><B>2008</B> </font></TD>
      <TD width="10%" align=center><font color="#FFFFFF"><B>2009</B> </font></TD>
      <TD
      width="10%" align=center style="BORDER-BOTTOM: #000000 1px solid"><font color="#FFFFFF"><B>CAGR</B>
        </font></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >GFA completed (millions m<SUP>2</SUP>) </TD>
      <TD align=center width="10%" bgColor=#e6efff>1.7 </TD>
      <TD align=center width="10%" bgColor=#e6efff>1.6 </TD>
      <TD align=center width="10%" bgColor=#e6efff>1.9 </TD>
      <TD align=center width="10%" bgColor=#e6efff>2.3 </TD>
      <TD align=center width="10%" bgColor=#e6efff>2.6 </TD>
      <TD align=center width="10%" bgColor=#e6efff>3.1 </TD>
      <TD align=center width="10%" bgColor=#e6efff>5.8 </TD>
      <TD align=center width="10%" bgColor=#e6efff>22.7% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >GFA sold (millions m<SUP>2</SUP>) </TD>
      <TD align=center width="10%">1.5 </TD>
      <TD align=center width="10%">2.0 </TD>
      <TD align=center width="10%">1.9 </TD>
      <TD align=center width="10%">2.3 </TD>
      <TD align=center width="10%">3.3 </TD>
      <TD align=center width="10%">3.5 </TD>
      <TD align=center width="10%">5.6 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%">24.6% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Average price (RMB) </TD>
      <TD align=center width="10%" bgColor=#e6efff>1,653 </TD>
      <TD align=center width="10%" bgColor=#e6efff>1,765 </TD>
      <TD align=center width="10%" bgColor=#e6efff>1,952 </TD>
      <TD align=center width="10%" bgColor=#e6efff>2,260 </TD>
      <TD align=center width="10%" bgColor=#e6efff>2,793 </TD>
      <TD align=center width="10%" bgColor=#e6efff>2,964 </TD>
      <TD align=center width="10%" bgColor=#e6efff>* </TD>
      <TD align=center width="10%" bgColor=#e6efff>12.4%* </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left ><I>* Average price per square meter in RMB is not yet available
        for 2009.</I> </TD>
      <TD align=left width="10%" >&nbsp;</TD>
      <TD align=left width="10%" >&nbsp;</TD>
      <TD align=left width="10%" >&nbsp;</TD>
      <TD align=left width="10%" >&nbsp;</TD>
      <TD align=left width="10%">&nbsp; </TD>
      <TD align=left width="10%">&nbsp; </TD>
      <TD align=left width="10%">&nbsp; </TD>
      <TD align=left width="10%">&nbsp; </TD>
    </TR>
  </TABLE>
</DIV>
<P align=center><I>Source: Weihai Statistical Yearbooks 2004 to 2008 &amp;
Weihai Municipal Bureau of Statistics</I></P>
<P align=justify>As reflected in the above chart, supply and demand have been
almost matched in Weihai&#146;s property market and both have increased over the last
five years.</P>
<P align=justify>With total GFA sold of about 5.6 million square meters in 2009,
the Weihai housing market has grown at a compound annual growth rate of 24.6% in
the six years between 2003 and 2009.</P>
<P align=justify><B>Our Competitive Strengths</B></P>
<P align=justify>We believe the following strengths allow us to compete
effectively in the Chinese real estate development industry:</P>
<P align=center>55</P>
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noShade SIZE=5>
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<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Proven track record of successful large-scale properties
  development</I></B>. Since our inception in 2001, we have successfully
  completed 15 projects having a GFA of 1,191,722 square meters, of which more
  than 91.8% has been sold. In addition, we have seven projects under
  construction with a total GFA of 735,274 square meters. All of our projects
  have featured modern facilities and attractive landscaping that provides
  comfortable and convenient lifestyles. Since our inception, we have focused on
  providing mid-sized apartments for middle-income residents and have gained an
  in-depth understanding of the preferences of our target customers. Most of the
  apartments we develop are units ranging from 40 square meters to 100 square
  meters, with an average price of less than RMB 4,000 per square meter
  (approximately $585 per square meter). Our ability to cater to our customers&#146;
  preferences has been a major factor in the growth of our business. By
  leveraging our experience and track record, we believe that we can penetrate
  into the real estate markets in other tier two and tier three cities in China.
  </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Widely recognized brand name in an attractive coastal market</I></B>.
  We have received many awards that acknowledge the quality of our real estate
  developments. For example, in 2008 we were recognized in the Qingdao
  Construction Committee&#146;s evaluation as one of the top ten real estate
  developers in Qingdao, measured by a combination of revenue, customer
  satisfaction, as well as several other factors. We believe that the quality of
  our real estate developments and the recognition of our brand name by our
  customers are important to our success. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Experienced management team</I></B>. Our Chairman, Mr. Antoine Cheng,
  has many years of experience in working with businesses and developed good
  business contacts, including in the real estate development business in China.
  Our senior managers have an average of more than 10 years of experience in the
  real estate industry and substantial management experience. All of them have
  bachelor&#146;s or master&#146;s degrees in business administration or accounting. In
  addition, our staff is well trained and is motivated by our incentive
  programs. We offer employees a variety of relevant training programs. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Substantial land reserves at premier locations for new development
  projects</I></B>. For our future development, we have acquired substantial
  land reserves at premier locations. Specific projects have been scheduled to
  be constructed on those lands. Please see &#147;Projects&#148; for details about our
  land reserves. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Strong financial profile and excellent credit record</I></B>. We have
  bank credit facilities with three top Chinese banks, which allow us to
  prudently use debt to leverage our business. We have received &#147;AA&#148; recognition
  from our top lender, Industrial and Commercial Bank of China, Chengyang
  Branch, in each of the past three years. </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5"><B><I>Compelling growth strategy</I></B>. We expect to continue our growth
  by: (i) achieving higher returns on projects by developing hotels and villas
  for upper income customers; (ii) continuing development of large middle income
  residential projects; (iii) expanding operations to other tier two and tier
  three cities in the Shandong Province and in other provinces in China; and
  (iv) acquiring projects from distressed developers. </P></LI></UL>
<P align=justify><B>Our Growth Strategy</B></P>
<P align=justify>We intend to increase our market share through aggressive
internal growth and prudent acquisitions that are primarily focused on
outstanding land or projects in the Shandong Province and in other provinces in
China. We intend to achieve this objective by pursuing the following
strategies:</P>
<UL style="TEXT-ALIGN: justify">
  <LI><B><I>Continue to expand in Shandong Province through new urban
  development projects</I></B>. In the next five years we will continue to focus
  on real estate development along the coastline of the Shandong peninsula,
  particularly in the Qingdao and Weihai regions. Given our knowledge and
  experience, we expect to increase our market share in those areas. For
  example, our strategic plan includes construction of an office building and a
  large upper-income community of villas in coastal Weihai. We also plan to
  create a high-rise resort hotel on the Stone Old Man beach in Qingdao, where
  we already own the land rights. We believe that the Qingdao-Weihai region is
  one of the most suitable and beautiful living areas in China. The region also
  features good economic growth. We believe that the real estate market in the
  Qingdao-Weihai region will remain strong over the next several years, not only
  due to the market awareness created by the global media coverage of Qingdao
  and its Olympic sailing events, but also because of the unique attraction the
  region holds for international customers, travelers and investors. </LI></UL>
<P align=center>56</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_63></A>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P><B><I>Continue to provide cost-effective properties for middle income
  customers</I></B>. The growing number of middle- income consumers in China has
  provided attractive and sustainable growth opportunities for real estate
  developers. As disposable incomes for urban residents increase, they have
  strong motivation and sufficient financial capacity to improve their living
  conditions by purchasing new or better properties. We intend to capitalize on
  the growth opportunities by continuing to offer high-quality mid-sized
  residential units featuring modern designs and convenient facilities at
  competitive prices. </P>
  <LI>
  <P><B><I>Penetration of the high-end real estate market</I></B>. We intend to
  penetrate into the high-end real estate market by developing villas, hotels,
  and commercial and office buildings that generate high returns. We have three
  projects in planning in that category. The first is a large community of
  villas and hotel-serviced apartments on the beach in Weihai. The second is an
  office building in Weihai, the Longhai International Plaza, that we believe
  will generate both sales and continuing rental income for us. The third, the
  most interesting of our plans, is the luxury resort hotel, the Longhai Hotel,
  which will be located just across the street from the Stone Old Man beach in
  Qingdao. Construction for the hotel is expected to start in August 2011. The
  architectural and engineering firm we have selected is Epstein, headquartered
  in Chicago, a city famous for innovative architecture. We believe the upscale
  business and tourist volume in Qingdao will provide the sustained demand for
  such a beautiful luxury hotel. These high-end projects should generate higher
  returns on investment than middle-income residential properties. </P>
  <LI>
  <P><B><I>Improve project management and cost control</I></B>. We will improve
  our project management by adopting more stringent financial disciplines in our
  operations at each stage that will help us to increase our returns on our
  project investments. We will use our capital more effectively by better
  managing our assets, receivables and expenditures to attain pre-set targets.
  We will better anticipate the best land rights reserves for development and
  will be able to capture them at the lowest prices to maximize our potential
  returns on our land and on our project investments. Further benefits should
  include a more consistent cash flow from our pre-sales to achieve both better
  cash availability for our projects and a prudent debt-to-total-capital ratio
  that will keep us in the optimum range for our cost of capital. The results
  should be lower effective interest rates on our debt and better cost
  competitiveness for our company. </P></LI></UL>
<P align=justify><B>Project Development Process</B></P>
<P align=justify>We have adopted a systematic approach to real estate
development that includes land rights acquisition, site planning and
development, architecture and engineering, construction, marketing and
pre-sales.</P>
<P align=justify>We acquire land rights by (1) participating in public tender,
auction, and listing for sales of land; (2) mergers or acquisitions of
companies, including related companies, owning land use rights; and (3)
purchasing distressed projects that have not been completed. After we have
obtained the development rights for land, we usually are required to pay a land
premium to acquire the land rights, in accordance with laws and regulations.
</P>
<P align=justify>In the past, we acquired most of our land rights from companies
owned by Longhai Group, a company controlled by Mr. Antoine Cheng, our Chairman.
Longhai Group&#146;s primary business is infrastructure and building construction.
Through its infrastructure construction business, Longhai Group works with local
governments and often finances (by agreeing to be paid sometime following the
completion of construction instead of being paid as construction progresses) the
government&#146;s public infrastructure projects that can include old city relocation
projects. In exchange for such financing, the local governments invite Longhai
Group to bid for premium parcels of land for residential use at public auction
or grant Longhai Group the right of first refusal to bid for industrial parcels
for which the Longhai Group already has land use rights, but whose use has been
changed to real estate development. Since Longhai Group does not have the
necessary license to engage in residential development in China, it typically
sold companies owning these land use rights to us so that we could develop these
parcels using our real estate development license.</P>
<P align=justify>We usually finance our real estate development projects through
a combination of four sources: company cash, capital from investors, bank loans,
and cash paid by customers when they sign pre-sales purchase agreements for
their apartments. The proportion of the funding sources varies by project. </P>
<P align=justify>First, we select the site, acquire the land use rights, and
cover the preliminary development costs using our own cash and capital from
investors. </P>
<P align=center>57</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_64></A>
<P align=justify>We next obtain loans from commercial banks and/or from
investors to continue the project. </P>
<P align=justify>As our construction progresses, we reach the stage where we are
permitted to begin selling the apartments and to complete pre-sales agreements
with our customers. Our customers, in most cases, pay 100% of the apartment
price in cash (including their mortgage financing, if needed) when they sign the
purchase agreement. We have access to 95% of that cash, with 5% of the price
retained by the bank until the apartment ownership is transferred to the buyer.
The cash payments by our customers provide the remaining cash needed to complete
the project. </P>
<P align=justify>The net proceeds from the sales of the properties are used to
compensate investors and to add to our retained earnings. The cash cycle then
begins again with the selection of new sites and the acquisition of the
development and land rights. </P>
<P align=justify><B>Projects</B></P>
<P align=justify>Since our inception, we have completed 15 projects having a GFA
of 1,191,722 square meters, of which more than 91.8% has been sold. All of our
housing projects have featured secured parking, cable TV access, hot water,
heating systems, and access to natural gas. Sales from those 15 projects have
totaled $250 million. </P>
<P align=justify>We have seven residential and commercial project phases under
construction with a total GFA of 735,274 square meters and expected sales of
$266.2 million. </P>
<P align=justify>We have significant land use rights, consisting of six
properties with a total land area of 387,127 square meters. On these properties,
we plan to construct, among others, a luxury high-rise beach hotel, high-rise
residential and commercial buildings, residential villas, and a high-rise office
building. </P>
<P align=justify>We classify our projects into three categories: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Projects in planning, where we have obtained the land use rights and the
  construction has yet to start; </P>
  <LI>
  <P>Projects under construction, in which all buildings have not been
  completed; and </P>
  <LI>
  <P>Completed projects, where the construction of all buildings has been
  finished. </P></LI></UL>
<P align=justify><B><I>Projects in planning </I></B></P>
<P align=justify>Our projects in planning, including land reserves, total five
properties with a land area of 329,276 square meters. </P>
<P align=justify>Planned projects include a luxury high-rise beach hotel,
high-rise residential and commercial buildings, residential villas, and a
high-rise office building. </P>
<P align=justify><B><U>Projects in Planning</U></B></P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD colspan="2" align=left ><STRONG>U.S. dollars in millions</STRONG> </TD>
      <TD align=left width="11%">&nbsp; </TD>
      <TD align=left width="11%">&nbsp; </TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD colspan="3" align=center style="BORDER-BOTTOM: #000000 1px solid"> <B>Estimated</B>
      </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >&nbsp; </TD>
      <TD align=left >&nbsp; </TD>
      <TD align=left width="11%">&nbsp; </TD>
      <TD align=left width="11%">&nbsp; </TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD align=center width="11%"><B>Total</B> </TD>
      <TD align=center width="11%"><B>Total</B> </TD>
      <TD align=center width="11%"><B>Net profit</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >&nbsp; </TD>
      <TD align=left >&nbsp; </TD>
      <TD align=left width="11%">&nbsp; </TD>
      <TD align=left width="11%">&nbsp; </TD>
      <TD align=center width="11%"><B>Land</B> </TD>
      <TD align=center width="11%"><B>GFA</B> </TD>
      <TD align=center width="11%"><B>sales</B> </TD>
      <TD align=center width="11%"><B>profit</B> </TD>
      <TD align=center width="11%"><B>margin</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left style="BORDER-BOTTOM: #000000 1px solid"
      >&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    ><B>Project Name</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="11%"><B>Location</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="11%"><B>Type</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%"><B>sq. m.</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%"><B>sq. m.</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%"><B>$</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%"><B>$</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%"><B>%</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left bgColor=#e6efff >1 </TD>
      <TD align=left bgColor=#e6efff >Longhai Hotel </TD>
      <TD align=left width="11%" bgColor=#e6efff>Qingdao </TD>
      <TD align=left width="11%" bgColor=#e6efff>Hotel </TD>
      <TD align=right width="11%" bgColor=#e6efff>7,572 </TD>
      <TD align=right width="11%" bgColor=#e6efff>80,000 </TD>
      <TD align=right width="11%" bgColor=#e6efff>400.0 </TD>
      <TD align=right width="11%" bgColor=#e6efff>180.0 </TD>
      <TD align=right width="11%" bgColor=#e6efff>45.0 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >2 </TD>
      <TD align=left >Weihai Beach Resort </TD>
      <TD align=left width="11%">Weihai </TD>
      <TD align=left width="11%">Villas </TD>
      <TD align=right width="11%">127,082 </TD>
      <TD align=right width="11%">81,200 </TD>
      <TD align=right width="11%">190.3 </TD>
      <TD align=right width="11%">56.5 </TD>
      <TD align=right width="11%">29.7 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left bgColor=#e6efff >3 </TD>
      <TD align=left bgColor=#e6efff >Dongli Garden Phase 2 </TD>
      <TD align=left width="11%" bgColor=#e6efff>Qingdao </TD>
      <TD align=left width="11%" bgColor=#e6efff>Residences </TD>
      <TD align=right width="11%" bgColor=#e6efff>67,700 </TD>
      <TD align=right width="11%" bgColor=#e6efff>245,900 </TD>
      <TD align=right width="11%" bgColor=#e6efff>204.9 </TD>
      <TD align=right width="11%" bgColor=#e6efff>40.2 </TD>
      <TD align=right width="11%" bgColor=#e6efff>19.6 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >4 </TD>
      <TD align=left >Xingfu Renjia Phase 2 </TD>
      <TD align=left width="11%">Caoxian </TD>
      <TD align=left width="11%">Residences </TD>
      <TD align=right width="11%">99,234 </TD>
      <TD align=right width="11%">100,000 </TD>
      <TD align=right width="11%">23.7 </TD>
      <TD align=right width="11%">7.1 </TD>
      <TD align=right width="11%">30.0 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left bgColor=#e6efff >5 </TD>
      <TD align=left bgColor=#e6efff >Jiangshan Dijing </TD>
      <TD align=left width="11%" bgColor=#e6efff>Laixi </TD>
      <TD align=left width="11%" bgColor=#e6efff>Residences </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>27,688 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>70,687 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>25.9 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>7.5 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>29.0 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >&nbsp; </TD>
      <TD align=left >&nbsp; </TD>
      <TD align=left width="11%">&nbsp; </TD>
      <TD align=left width="11%">&nbsp; </TD>
      <TD align=right width="11%">329,276 </TD>
      <TD align=right width="11%">577,787 </TD>
      <TD align=right width="11%">844.8 </TD>
      <TD align=right width="11%">291.3 </TD>
      <TD align=right width="11%">34.5 </TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>Land reserves are essential for our future developments.
Currently we have in inventory six parcels for which we own the land use rights.
Those land use rights were acquired mainly through our purchase in 2008 of our
project companies and subsidiaries that already owned the rights. The
registration of those land use rights was completed in August 2008. Some of the
land has been selected for specific projects while the projects for the other
parcels are to be determined. The following table lists the land rights we
own.</P>
<P align=justify>Our land reserves shown below include some of the projects in
planning shown in the table above.</P>
<P align=center>58</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_65></A><BR>
<DIV>
  <TABLE
style="FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse"
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD colspan="7" align=center > <B><U>Land Reserves for Projects in Planning</U></B>
      </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left ></TD>
      <TD align=left ><STRONG>U.S. dollars in millions</STRONG> </TD>
      <TD align=left width="14%">&nbsp; </TD>
      <TD align=left width="14%">&nbsp; </TD>
      <TD align=center width="14%">&nbsp; </TD>
      <TD align=center width="14%">&nbsp; </TD>
      <TD align=center width="14%">&nbsp; </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >&nbsp; </TD>
      <TD align=left >&nbsp; </TD>
      <TD align=left width="14%">&nbsp; </TD>
      <TD align=left width="14%">&nbsp; </TD>
      <TD align=center width="14%">&nbsp; </TD>
      <TD align=center width="14%">&nbsp; </TD>
      <TD align=center width="14%"><B>Estimated</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >&nbsp; </TD>
      <TD align=left >&nbsp; </TD>
      <TD align=left width="14%">&nbsp; </TD>
      <TD align=left width="14%">&nbsp; </TD>
      <TD align=center width="14%"><B>Land</B> </TD>
      <TD align=center width="14%"><B>Land cost</B> </TD>
      <TD align=center width="14%"><B>market value</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left style="BORDER-BOTTOM: #000000 1px solid"
      >&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    ><B>Land or Project Name</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="14%"><B>Location</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="14%"><B>Type</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%"><B>sq. m.</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%"><B>$</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%"><B>$</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left bgColor=#e6efff >1 </TD>
      <TD align=left bgColor=#e6efff >Longhai Hotel </TD>
      <TD align=left width="14%" bgColor=#e6efff>Qingdao </TD>
      <TD align=left width="14%" bgColor=#e6efff>Hotel </TD>
      <TD align=right width="14%" bgColor=#e6efff>7,572 </TD>
      <TD align=right width="14%" bgColor=#e6efff>25.5 </TD>
      <TD align=right width="14%" bgColor=#e6efff>159.3 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >2 </TD>
      <TD align=left >Weihai Beach Resort </TD>
      <TD align=left width="14%">Weihai </TD>
      <TD align=left width="14%">Villas </TD>
      <TD align=right width="14%">127,082 </TD>
      <TD align=right width="14%">40.1 </TD>
      <TD align=right width="14%">142.7 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left bgColor=#e6efff >3 </TD>
      <TD align=left bgColor=#e6efff >Dongli Garden Phase 2 </TD>
      <TD align=left width="14%" bgColor=#e6efff>Qingdao </TD>
      <TD align=left width="14%" bgColor=#e6efff>Residences </TD>
      <TD align=right width="14%" bgColor=#e6efff>67,700 </TD>
      <TD align=right width="14%" bgColor=#e6efff>58.6 </TD>
      <TD align=right width="14%" bgColor=#e6efff>87.5 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >4 </TD>
      <TD align=left >Xingfu Renjia Phase 2 </TD>
      <TD align=left width="14%">Caoxian </TD>
      <TD align=left width="14%">Residences </TD>
      <TD align=right width="14%">99,234 </TD>
      <TD align=right width="14%">2.1 </TD>
      <TD align=right width="14%">26 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left bgColor=#e6efff >5 </TD>
      <TD align=left bgColor=#e6efff >Jiangshan Dijing </TD>
      <TD align=left width="14%" bgColor=#e6efff>Laixi </TD>
      <TD align=left width="14%" bgColor=#e6efff>Residences </TD>
      <TD align=right width="14%" bgColor=#e6efff>27,688 </TD>
      <TD align=right width="14%" bgColor=#e6efff>0.5 </TD>
      <TD align=right width="14%" bgColor=#e6efff>7.8 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left >6 </TD>
      <TD align=left >Huashan Town </TD>
      <TD align=left width="14%">Jimo </TD>
      <TD align=left width="14%">Residences </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="14%">57,851 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="14%">12.9
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="14%">&nbsp; </TD>
    </TR>
    <TR vAlign=top>
      <TD width="5%" align=left bgColor=#e6efff >&nbsp; </TD>
      <TD align=left bgColor=#e6efff >&nbsp; </TD>
      <TD align=left width="14%" bgColor=#e6efff>&nbsp; </TD>
      <TD align=left width="14%" bgColor=#e6efff>&nbsp; </TD>
      <TD align=right width="14%" bgColor=#e6efff>387,127 </TD>
      <TD align=right width="14%" bgColor=#e6efff>139.7 </TD>
      <TD align=right width="14%" bgColor=#e6efff>423.3 </TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify><B><I>Projects under construction</I></B></P>
<P align=justify>We have seven residential and commercial project phases under
construction with a total GFA of 735,274 square meters and expected sales of
$266.2 million. </P>
<P align=center><B><U>Projects Under Construction</U></B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left colSpan=3><B>U.S. dollars in millions</B> </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="21%"
    colSpan=7><B>Estimated</B> </TD>
    </TR>
  <TR vAlign=top>
    <TD noWrap align=center>&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="3%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%"><B>Total&nbsp; </B></TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="5%" ><STRONG>Total</STRONG></TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%" >&nbsp;<STRONG>Net
      profit</STRONG> </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=center>&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="3%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%">&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%"><B>Land</B> </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%"><B>GFA</B> </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%"><B>Total</B> </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%"><B>Units</B> </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%"><B>sales</B> </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="5%"
      >&nbsp;<STRONG>profit</STRONG></TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="6%"><B>margin</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="3%"><B>Project Name</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%"><B>Location</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%"><B>Start</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%"><B>Finish</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%"><B>sq. m.</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%"><B>sq. m.</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%"><B>units</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%"><B>sold</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="5%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="6%"><B>%</B> </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff width="4%">1 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#e6efff>Longhai Lidu 1 &amp; 2
    </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>Weifang </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>2006.06 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>2012.06 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>120,170 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>130,698 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>1,572 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>1,303 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>45.9 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#e6efff>20.0 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>43.6 </TD></TR>
  <TR vAlign=top>
    <TD align=left width="4%">2 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%">Qilu Textile Centre commercial </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">Weifang </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">2005.08 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">2010.12 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">128,924 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">142,499 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">1,371 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">1,142 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">30.1 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="5%">9.9 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">33.0 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF" width="4%">3 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="7%" bgcolor="#E6EFFF">Qilu Textile Centre residential </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">Weifang </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">2007.03 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">2010.06 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">72,056 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">71,456 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">740 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">288 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">16.3 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="5%" bgcolor="#E6EFFF">5.6 </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="6%" bgcolor="#E6EFFF">34.2 </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left width="4%">4 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%">Weihai International
      Plaza </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">Weihai </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">2009.09 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">2011.06 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">9,058 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">54,817 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">430 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">51.9 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="5%">15.1 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="6%">29.0 </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>5 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#e6efff>Oumei Complex 2 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>Weifang </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>2010.03 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>2012.12 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>42,544 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>70,587 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>566 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>- </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>18.6 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#e6efff>6.1 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>32.7 </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left>6 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="3%">Dongli Garden Phase 1 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">Qingdao </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">2008.12 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">2010.12 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">175,508 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">213,315 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">2274 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">1317 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">58.6 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="5%">14.7 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="6%">25.0 </TD>
    </TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>7 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#e6efff>Longhai Mingzhu </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>Qingdao </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>2006.09 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#e6efff>2010.05 </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="6%"
    bgColor=#e6efff>9,700 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="6%"
    bgColor=#e6efff>51,902 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="6%"
    bgColor=#e6efff>340 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="6%"
    bgColor=#e6efff>163 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="6%"
    bgColor=#e6efff>44.8 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="5%"
    bgColor=#e6efff>13.9 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="6%"
    bgColor=#e6efff>31.0 </TD>
    </TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="6%">557,960 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="6%">735,274 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="6%">7,293 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="6%">4,213 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="6%">266.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="5%">85.3 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="6%">32.0 </TD>
    </TR></TABLE>
<P align=justify><B><I>Completed projects</I></B></P>
<P align=justify>Since our inception, we had completed 15 projects having a
total GFA of 1,191,722 square meters, of which more than 91.8% has been sold.
Sales from those projects totaled $250 million, net profit was $88.6 million,
and the projects earned a consolidated return on investment of 113%.</P>
<P align=justify>All projects have included secured parking, cable TV, hot
water, heating systems, and access to natural gas. </P>
<P align=center>59</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_66></A>
<P align=center><B><U>Completed Projects</U> </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left colSpan=6><B>U.S. dollars in millions</B> </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="21%" colSpan=11 style="border-bottom-style: solid; border-bottom-width: 1"><B>
    Sources of funding</B>&nbsp;&nbsp;
</TD>
    </TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"><B>Total&nbsp;</B> </TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"
    >&nbsp;<STRONG>Net</STRONG></TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%" style="border-top-style: solid; border-top-width: 1"><B>
    Total&nbsp;</B> </TD>
    <TD noWrap align=right width="1%" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="1%" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="3%" style="border-top-style: solid; border-top-width: 1"
    >&nbsp;<STRONG>Pre-</STRONG></TD>
    <TD noWrap align=left width="1%" style="border-top-style: solid; border-top-width: 1" ></TD>
    <TD noWrap align=left width="1%" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD noWrap align=left width="3%" style="border-top-style: solid; border-top-width: 1">&nbsp; </TD>
    <TD noWrap align=left width="1%" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD noWrap align=left width="1%" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD noWrap align=left width="4%" style="border-top-style: solid; border-top-width: 1">&nbsp; </TD>
    <TD noWrap align=left width="1%" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"><B>Total</B> </TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"
      >&nbsp;<STRONG>Total</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"
    >&nbsp;<STRONG>net</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"
      >&nbsp;<STRONG>profit</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"
      >&nbsp;<STRONG>capital</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="3%"
    >&nbsp;<STRONG>sale</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="3%"
    >&nbsp;<STRONG>Bank</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"
      >&nbsp;<STRONG>Oumei</STRONG></TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"><B>Land</B> </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"><B>GFA</B> </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"><B>Total</B> </TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%" ><STRONG>cost</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%" ><STRONG>sales</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%" ><STRONG>profit</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%" ><STRONG>margin</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%"
    ><STRONG>required</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="3%" ><STRONG>cash</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="3%" ><STRONG>loans</STRONG></TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%" ><STRONG>cash</STRONG></TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%"><B>Project Name</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="1%"><B>City</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%"><B>Type</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="4%"
    >&nbsp;<STRONG>Finish</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%"><B>sq. m.</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%"><B>sq. m.</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%"><B>units</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%"><B>%</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="3%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="3%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="4%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff width="4%">1 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#e6efff>Jiangnan Garden 1, 2 &amp; 3
</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>Jimo </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>Apts </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2004.11 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>61,230 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>91,539 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>762 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>13.8 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>20.9 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>7.1 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>34.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>13.8 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>3.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>4.4 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>6.4 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="4%">2 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">Decorative Materials Center </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="1%">Jimo </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">Apts </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">2004.12 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">75,466 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">38,868 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">223 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">7.6 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">11.7 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">4.1 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">35.0 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">7.6 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="3%">3.4 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="3%"></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">4.2 </TD>
    <TD align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff width="4%">3 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff>Jiangnan Garden 6 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>Jimo </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>Apts </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2005.05 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>11,773 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>109,094 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>785 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>19.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>32.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>13.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>40.6 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>19.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>4.9 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>5.9 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>8.2 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left width="4%">4 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="7%">Sunshine </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%">Jimo </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">Apts </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">2005.07 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">8,010 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">11,548 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">99 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">1.8 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">3.3 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">1.5 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">45.5 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">1.8 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="3%">0.8 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">1.0 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff width="4%">5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#e6efff>Shanghai Garden 1 &amp; 2 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>Laixi </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>Apts </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2005.12 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>57,401 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>104,084 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>910 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>11.7 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>18.8 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>7.1 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>37.8 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>11.7 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>5.2 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="3%" bgColor=#e6efff></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>6.5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left width="4%">6 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">Fenglin Oasis </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="1%">Laixi </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">Apts </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">2006.06 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">78,636 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">97,568 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">844 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">11.9 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">19.3 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">7.4 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">38.3 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">11.9 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="3%">5.5 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">6.4 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff width="4%">7 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#e6efff>Yuyuan Fengjing </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>Laixi </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>Apts </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2006.09 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>89,323 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>125,706 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>1,054 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>14.5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>19.8 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>5.3 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>26.8 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>14.5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>5.4 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="3%" bgColor=#e6efff></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>9.1 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="4%">8 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="4%">Jiangnan Garden 7 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="1%">Jimo </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">Apts </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">2006.10 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">3,553 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">12,936 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">90 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">2.4 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">5.7 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">3.3 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">57.9 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">2.4 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="3%">1.0 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="3%"></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">1.4 </TD>
    <TD align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff width="4%">9 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#e6efff>Shanshui Longyuan </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>Pingdu </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>Apts </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2007.10 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>225,914 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>257,762 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>1,830 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>41.5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>55.3 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>13.8 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>25.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>41.5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>9.6 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>13.2 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>18.7 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="4%">10 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="4%">Longze Yuyuan </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="1%">Laixi </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">Apts </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">2007.10 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">120,223 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">78,146 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">804 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">11.3 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">17.9 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">6.6 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">36.9 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">11.3 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="3%">0.9 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="3%">8.8 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">1.6 </TD>
    <TD align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>11 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#e6efff>Shanghai Garden 3 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>Laixi </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>Apts </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2007.12 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>11,055 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>16,055 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>125 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>1.7 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>4.2 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2.5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>59.5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>1.7 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>0.7 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="3%" bgColor=#e6efff></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>1.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>12 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="4%">Fuxiang Huayuan 1 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=right width="1%">Weifang </TD>
    <TD align=right width="1%" ></TD>
    <TD align=right width="1%" ></TD>
    <TD align=right width="4%" >Apts </TD>
    <TD align=left width="1%" ></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">2008.12 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">44,075 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">52,700 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">430 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">9.0 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">14.4 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">5.4 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">37.5 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">9.0 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="3%">3.9 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="3%"></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">5.1 </TD>
    <TD align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>13 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#e6efff>Fuxiang Huayuan 2 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=right width="1%" bgColor=#e6efff>Weifang </TD>
    <TD align=right width="1%"  bgColor=#e6efff></TD>
    <TD align=right width="1%"  bgColor=#e6efff></TD>
    <TD align=right width="4%"  bgColor=#e6efff>Apts </TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2009.12 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>10,400 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>18,392 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>125 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>3.1 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>5.1 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2.0 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>39.2 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>3.1 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff>1.4 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="3%" bgColor=#e6efff></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>1.7 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>14 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="4%">Oumei Complex 1 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=right width="1%">Weifang </TD>
    <TD align=right width="1%" ></TD>
    <TD align=right width="1%" ></TD>
    <TD align=right width="4%" >Apts </TD>
    <TD align=left width="1%" ></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">2009.12 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">55,303 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">91,778 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">708 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">8.5 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">15.8 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">7.3 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">46.2 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">8.5 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="3%">3.8 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="3%"></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="4%">4.7 </TD>
    <TD align=left width="1%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>15 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#e6efff>Xingfu Renjia 1 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>Caoxian </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>Apts </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="4%" bgColor=#e6efff>2009.12 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>80,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>85,546 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>828 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>4.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>6.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>2.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>34.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>4.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="3%"
    bgColor=#e6efff>1.8 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="3%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="4%"
    bgColor=#e6efff>2.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">932,362 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">1,191,722 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">9,617 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">162 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">250 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">88.6 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">35.4 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">162 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="3%">51.3 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="3%">32.3 </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="4%">78.4 </TD>
    <TD noWrap align=left width="1%"
>&nbsp;</TD></TR></TABLE>
<P align=justify><B>Architecture, Engineering and Construction</B></P>
<P align=justify>We outsource the architecture, engineering, and construction of
our projects. </P>
<P align=justify>We work with several architecture and engineering companies. We
collaborate with them on the site and building designs and rely on them for the
detailed execution of the design concepts. </P>
<P align=justify>We also outsource our project construction to qualified
subcontractors who are the winners in our competitive bidding process, which is
based on required quality and lowest price. Our contracts, typically
fixed-priced, provide for periodic payments during construction. </P>
<P align=justify>Below is a list of some of the key companies to whom we
outsource these services.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Name of
      Company</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="65%"><B>Services Provided</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Qingdao Zhongxing Construction Ltd. </TD>
    <TD align=left width="65%" bgColor=#e6efff>Construction </TD></TR>
  <TR vAlign=top>
    <TD align=left>Longhai Construction Ltd. </TD>
    <TD align=left width="65%">Construction </TD></TR></TABLE>
<P align=justify><B>Quality and Performance</B></P>
<P align=justify>We and our chosen architects and engineers supervise the
construction by our contractors. In addition to the construction, our
contractors are responsible for purchasing all building materials, including the
two main building materials, steel and concrete. Contractors are required to
perform to their working plan and adhere to the specifications in our
construction plans and contracts. We have delivered all our projects to our
customers on or before the due date and at or above the quality specified in the
customers&#146; purchase agreements. </P>
<P align=center>60</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_67></A>
<P align=justify>Our finished construction includes the completed buildings with
all public portions of the buildings fully finished and all of the common
grounds landscaped. The apartment interiors typically are finished to the gray
shell stage. This permits the apartment buyers to select their own interior
design and finishing companies, so they can get all the features, fixtures,
fittings, furnishings, textures, and colors they prefer. This separation of
responsibilities between the real estate developer and the independent interior
designers and finishers is traditional in China. </P>
<P align=justify><B>Sales and Marketing</B></P>
<P align=justify>In marketing our properties, we use our own marketing team, but
occasionally outsource our marketing and sales efforts to independent sales
agents. To market our properties, we use a combination of advertisements in
newspapers, magazines, television, and outdoor billboards, in addition to news
releases that generate media stories about our projects. </P>
<P align=justify>To help customers choose among the apartment layouts that we
offer, we usually create fully finished and furnished show rooms that give them
a sound basis for deciding exactly what they want. We pay for the completion of
these marketing show rooms. After most of the units in the development have been
sold, we sell the show rooms as residences, usually at premium prices.</P>
<P align=justify><B>Competition</B></P>
<P align=justify>The real estate development business in China is organized into
four qualification levels under Certificates of the Qualifications of Real
Property Development Enterprises issued by the Ministry of Housing and
Urban-Rural Development.</P>
<P align=justify>The starting qualification level is Level 4 (see table below).
A company may rise in its qualification level, depending on its registered
capital, the number of years of industry experience, the area of land it has
developed, and its safety record. Only one level may be ascended each year.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="15%"><B>Registered</B> </TD>
    <TD align=left width="15%">&nbsp; </TD>
    <TD align=center width="15%"><B>Developed</B> </TD>
    <TD align=left width="15%">&nbsp; </TD>
    <TD align=center width="15%"><B>Time for</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="15%"><B>Capital</B> </TD>
    <TD align=center width="15%"><B>Experience</B> </TD>
    <TD align=center width="15%"><B>Area</B> </TD>
    <TD align=center width="15%"><B>Other</B> </TD>
    <TD align=center width="15%"><B>License to be</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%"><B>($ millions)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%"><B>(years)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%"><B>(square feet)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%"><B>Requirements</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%"><B>Authorized</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Level 1 </TD>
    <TD align=center width="15%" bgColor=#e6efff>6.25 </TD>
    <TD align=center width="15%" bgColor=#e6efff>5 </TD>
    <TD align=center width="15%" bgColor=#e6efff>3,229,278 </TD>
    <TD align=center width="15%" bgColor=#e6efff>No Severe Accident </TD>
    <TD align=center width="15%" bgColor=#e6efff>20 Days </TD></TR>
  <TR vAlign=top>
    <TD align=left>Level 2 </TD>
    <TD align=center width="15%">2.5 </TD>
    <TD align=center width="15%">3 </TD>
    <TD align=center width="15%">1,614,639 </TD>
    <TD align=center width="15%">No Severe Accident </TD>
    <TD align=center width="15%">20 Days </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Level 3 </TD>
    <TD align=center width="15%" bgColor=#e6efff>1.0 </TD>
    <TD align=center width="15%" bgColor=#e6efff>2 </TD>
    <TD align=center width="15%" bgColor=#e6efff>538,213 </TD>
    <TD align=center width="15%" bgColor=#e6efff>No Severe Accident </TD>
    <TD align=center width="15%" bgColor=#e6efff>20 Days </TD></TR>
  <TR vAlign=top>
    <TD align=left>Level 4 </TD>
    <TD align=center width="15%">0.125 </TD>
    <TD align=center width="15%">1 </TD>
    <TD align=center width="15%">not applicable </TD>
    <TD align=left width="15%">&nbsp; </TD>
    <TD align=left width="15%">&nbsp; </TD></TR></TABLE></DIV>
<P align=justify>We obtained the Level 1 Certificate of the Qualifications of
Real Property Development Enterprises on November 11, 2008, which is valid until
November 7, 2011. We gained Level 2 Qualification in 2006. </P>
<P align=justify>The real estate market in which we operate is highly
competitive. Typically, the housing and land development industry is a regional
business with mostly local players competing with us for small- to medium-size
projects. Our major competitors are other large-scale local real estate
companies that include state-owned and private real estate developers. In
addition, some large-scale national real estate developers are entering the
Greater Qingdao market. Based on the Qingdao Construction Committee&#146;s rakings,
in 2008, we ranked as one of the top ten real estate developers in Qingdao,
measured by a combination of sales, customer satisfaction, and several other
factors. </P>
<P align=justify>Our major competitors include:</P>
<UL style="TEXT-ALIGN: justify">
  <LI><B><I>Hisense Real Estate Development Co., Ltd. </I></B>Hisense Real
  Estate Development Co., Ltd., or Hisense, was founded in 1995 and is the
  strongest real estate company with the highest development capacity among the
  top 10 in the Qingdao market. Hisense holds a Level 1 Qualification
  Certificate for real estate development, a Level 1 Qualification for property
  management, and Class A Certificate for design. It has developed more than 1
  million square meters of projects each year for several years. Its completed
  development projects include Hisense-Huiyuan housing, Hisense-Yandao
  international apartments, Hisense-Qingquan villas, a high-end office building,
  and the Hisense information technology industrial park, plus other similar
  developments. Hisense is focused on land reserves and projects in Qingdao and
  is absent in other cities in the Shandong Province and in other provinces in
  China. </LI></UL>
<P align=center>61</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_68></A>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P><B><I>Haier Real Estate Development Co., Ltd. </I></B>Established in 2002,
  Haier Real Estate Development Co., Ltd., or Haier, is engaged in real estate
  development and investment within the Haier Group and has embraced the Haier
  group&#146;s beliefs, spirit, style, focus on clients, and objectives that include
  creating a solid foundation for long-term development. At the end of 2007, the
  company had seven real estate development subsidiaries, one property
  management company, and one branch company. Haier&#146;s real estate development
  and investment projects are located in Qingdao, as well as in Jinan, Beijing,
  Chongqing, Taiyuan, Suzhou, and other locations. In these cities, Haier owns a
  number of land reserves and has more than 10 projects competed or under
  construction. Haier ranks second in Qingdao&#146;s top 10 real estate development
  companies, according to the government&#146;s comprehensive competitiveness
  evaluation. We believe that Haier&#146;s real estate weaknesses include (1) its
  relative inexperience in real estate in Greater Qingdao due to a rather recent
  start in the region and (2) its subordination to the Haier Group, which we
  believe has led to a complicated management structure and a decision-making
  system burdened by unnecessary complexity and lengthy processing time, both of
  which are likely to limit Haier&#146;s effectiveness and growth in the Qingdao real
  estate market. </P>
  <LI>
  <P><B><I>Qingdao Construction Corporation of China</I></B>. Qingdao
  Construction Corporation of China, or Qingdao Construction, is a government
  owned construction company. In the last few years, Qingdao Construction has
  expanded into real estate development, which has become the company&#146;s second
  biggest operation, but is still a modest business. It mainly focuses on the
  construction of affordable low-income and low-rent apartments. Although it has
  been ranked by the government among the top 10 developers in Qingdao recently,
  primarily due to its construction business, Qingdao Construction still lacks
  extensive experience in real estate development. We believe the company will
  continue to expand its real estate development operations, but its market
  share in real estate development appears to be insufficient at the moment for
  sustainable operations as a stand-alone business. </P>
  <LI>
  <P><B><I>Tiantai Group. </I></B>Tiantai Group, or Tiantai, was an early
  participant in the real estate development business and is quite mature in its
  operations in Qingdao. It ranks about fifth among Qingdao&#146;s top 10 developers,
  according to the government. Tiantai has focused on a branding and high-level
  development strategy, therefore its output and market share are relatively
  low. Founded 15 years ago, Tiantai has developed only seven projects with a
  total GFA of 1.3 million square meters. So far, Tiantai has kept its focus on
  the Qingdao city market. </P></LI></UL>
<P align=justify>Some of our competitors have greater financial and marketing
resources than we do. Some also have larger land reserves, greater economies of
scale, broader name recognition, and longer track records. For example, a major
rival, Tiantai, is a large-scale private real estate developer engaged in real
estate development and real estate management, with a proven track record and
annual development GFA of about 700,000 square meters. </P>
<P align=justify>We differentiate ourselves from our competitors by (1)
conducting much of our operations in second-tier and third-tier cities, (2)
focusing on middle-income families in those second-tier and third-tier cities,
(3) offering mid-sized apartments that range from 40 to 100 square meters and
(4) leveraging our relationship with our affiliate, Longhai Group, as described
above under &#147;Project Development Process.&#148; </P>
<P align=justify>We believe that these four strategies have given us a
competitive advantage over other companies that can result in sustainable
long-term growth and attractive returns on investment. Those advantages also
build a base on which we are expanding into new geographic markets and into the
upper income segments of our current markets. </P>
<P align=justify>We expect to increase our market share and return on investment
by leveraging our premium land reserves by (1) continuing to build middle income
housing, (2) developing high-end residential and commercial projects and
landmark buildings, (3) broadening our geographic diversification, and (4)
strengthening our brand recognition and reputation for high quality. </P>
<P align=justify><B>Employees</B></P>
<P align=justify>As of December 25, 2009, we had a total of 216 employees. The
following table shows the number of our employees by function.<B> </B></P>
<P align=center>62</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_69></A><BR>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Function</B>
</TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="25%"
    ><B>Number Of Employees</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Senior Management </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="25%" bgColor=#e6efff >17 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Sales and Marketing </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="25%" >28 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Development Strategies Department </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="25%" bgColor=#e6efff >48 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Engineering Department </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="25%" >64 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Quality Control </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="25%" bgColor=#e6efff >9 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Human Resource &amp; Administration </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="25%" >6 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Accounting </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="25%" bgColor=#e6efff >44 </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Total</B> </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="25%" ><B>216</B>
</TD></TR></TABLE></DIV>
<P align=justify>Subdivided by educational achievement, 2% of our employees hold
advanced degrees, 20% have bachelor&#146;s degrees, and 26% hold technical or
vocational training certificates. </P>
<P align=justify>To increase the knowledge and performance of our employees, we
have established an employee training and development program, which ranges from
recruiting to advanced training. Our employee incentive plans and programs
encourage and reward superior performance. In the next five years, three major
employee development plans will be implemented to attract more talented and
bilingual management staff and experienced sales people, to enhance employees&#146;
on-the-job training, and to establish company-wide, performance-oriented
incentive plans that may include stock awards or stock options. </P>
<P align=justify>We maintain a satisfactory working relationship with our employees,
  and we have not experienced any significant labor disputes or any difficulty
  in recruiting staff for our operations. None of our employees is represented
  by a labor union.</P>
<P align=justify>Our employees in China participate in a state pension plan
organized by Chinese municipal and provincial governments. We are required to
make monthly contributions to the plan for each employee at the rate of 23% of
his or her average assessable salary. In addition, we are required by Chinese
law to cover employees in China with various types of social insurance. We
believe that we are in material compliance with the relevant PRC laws.<B>
</B></P>
<P align=justify><B>Intellectual Property</B></P>
<P align=justify>We do not own or license any material intellectual property
rights.</P>
<P align=justify><B>PRC Government Regulations</B></P>
<P align=justify><B><I>Permits and Certificates </I></B></P>
<P align=justify>As part of the project development process, we are required to
obtain a number of certificates, permits, and licenses from different government
agencies, including among others: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Land Use Rights Certificate that certifies the right of a party to use
  land; </P>
  <LI>
  <P>Construction Land Planning Permit that authorizes a developer to begin the
  land survey, planning, and design for the land; </P>
  <LI>
  <P>Construction Works Planning Permit that indicates the government&#146;s approval
  of a developer&#146;s overall planning and design for the project and allows the
  developer to apply for a Work Commencement Permit; </P>
  <LI>
  <P>Work Commencement Permit that authorizes a developer to begin excavation
  and construction; and </P>
  <LI>
  <P>Pre-sales Permit that authorizes a developer to begin completing pre-sales
  purchase agreements with customers and collect their cash for the apartments
  still under construction. </P></LI></UL>
<P align=justify>Housing and land development sales companies are regulated by
the Ministry of Land &amp; Natural Resources and authorized by the local office
of the Ministry. Each project also has to be authorized and must obtain a
&#147;Commercial License for Housing Sale&#148; from the Real Estate Bureau.<B><I>
</I></B></P>
<P align=center>63</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_70></A>
<P align=justify><B><I>Environmental Regulations</I></B></P>
<P align=justify>The major environmental regulations applicable to us include
the PRC Environmental Protection Law, the PRC Law on the Prevention and Control
of Water Pollution, the PRC Law on the Prevention and Control of Air Pollution,
the PRC Law on the Prevention and Control of Solid Waste Pollution, and the PRC
Law on the Prevention and Control of Noise Pollution.</P>
<P align=justify><B><I>Taxation</I></B></P>
<P align=justify>For a detailed discussion of PRC tax regulations, see
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations &#150; Taxation &#150; China.&#148; </P>
<P align=justify><B><I>Foreign Currency Exchange</I></B></P>
<P align=justify>Under the PRC foreign currency exchange regulations applicable
to us, RMB is convertible for current account items, including the distribution
of dividends, interest payments, trade and service-related foreign exchange
transactions. Conversion of RMB for capital account items, such as direct
investment, loan, security investment and repatriation of investment, however,
is still subject to the approval of the PRC State Administration of Foreign
Exchange, or SAFE. Foreign invested enterprises, or FIEs, established in the PRC
may only buy, sell and/or remit foreign currencies at those banks authorized to
conduct foreign exchange business after providing valid commercial documents
and, in the case of capital account item transactions, obtaining approval from
the SAFE. Capital investments by FIEs outside of China are also subject to
limitations, which include approvals by MOFCOM, SAFE and the State Reform and
Development Commission. </P>
<P align=justify><B><I>Dividend Distributions</I></B></P>
<P align=justify>Under applicable PRC regulations, FIEs in China may pay
dividends only 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.</P>
<P align=justify><B>Properties</B></P>
<P align=justify>All land in China is owned by the State. Individuals and
companies are permitted to acquire rights to use land or land use rights for
specific purposes. In the case of land used for industrial purposes, the land
use rights are granted for a period of 50 years. This period may be renewed at
the expiration of the initial and any subsequent terms. Granted land use rights
are transferable and may be used as security for borrowings and other
obligations.</P>
<P align=justify>We have a bank of land use rights, consisting of six properties
with a total land area of 387,127 square meters. On these properties, we plan to
construct, among others, a luxury high-rise beach hotel, high-rise residential
and commercial buildings, residential villas, and a high-rise office building.
Please see &#147;Description of Business - Projects&#148; for details about our land
reserves.</P>
<P align=justify><B>Legal Proceedings</B></P>
<P align=justify>From time to time, we may become involved in various lawsuits
and legal proceedings which 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 affect on our business, financial condition or operating
results.<B> </B></P>
<P align=center><B>HISTORY AND CORPORATE STRUCTURE</B></P>
<P align=justify><B>General</B></P>
<P align=justify>We organized under the laws of the Cayman Islands on March 10,
2006 as a blank check development stage company formed for the purpose of
acquiring an operating business, through a stock exchange, asset acquisition or
similar business combination. From our inception until we completed our reverse
acquisition of Leewell on April 14, 2010, our operations consisted entirely of
identifying, investigating and conducting due diligence on potential businesses
for acquisition. </P>
<P align=center>64</P>
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<P align=justify><B><I>Reverse Acquisition of Leewell</I></B></P>
<P align=justify>On April 14, 2010, we completed a reverse acquisition
transaction through a share exchange with Leewell whereby we acquired 100% of
the issued and outstanding capital stock of Leewell, in exchange for 29,235,000
ordinary shares, par value $0.002112 per share, which shares constituted 94.31%
of our issued and outstanding shares on a fully-diluted basis, as of and
immediately after the consummation of the reverse acquisition. As a result of
the reverse acquisition, Leewell became our wholly-owned subsidiary and Longhai
Holdings, the former shareholder of Leewell, became our controlling shareholder.
The share exchange transaction with Leewell was treated as a reverse
acquisition, with Leewell as the acquirer and Dragon Acquisition as the acquired
party. Unless the context suggests otherwise, when we refer in this prospectus
to business and financial information for periods prior to the consummation of
the reverse acquisition for accounting purposes, we are referring to the
business and financial information of Leewell and its consolidated
subsidiaries.</P>
<P align=justify>Upon the closing of the reverse acquisition on April 14, 2010,
Mr. David Richardson resigned from our board of directors, effective
immediately, and Mr. Joseph Rozelle submitted a resignation letter in which he
resigned from all offices that he held effective immediately and from his
position as our director on May 1, 2010. </P>
<P align=justify>Also upon the closing of the reverse acquisition, our board of
directors increased its size from two (2) to three (3) members and appointed Mr.
Antoine Cheng, Mr. Weiqing Zhang, and Mr. Zhongbo Zhou to fill the vacancies
created by the resignations of Messrs. Richardson and Rozelle and such increase.
In addition, our board of directors appointed Mr. Antoine Cheng to serve as the
Chairman of the Board, Mr. Weiqing Zhang to serve as our Chief Executive Officer
and President, and Mr. Yang Chen to serve as our Chief Financial Officer and
Vice President, effective immediately at the closing of the reverse
acquisition.</P>
<P align=justify>As a result of our acquisition of Leewell, we now own all of
the issued and outstanding capital stock of Leewell, which in turn owns Oumei
and its Chinese subsidiaries. Leewell was established in Hong Kong on August 10,
2007 to serve as an investment holding company. Oumei was established in the PRC
on May 15, 2001. Its principal activities include the development and sales of
residential and commercial properties in Qingdao and its nearby cities, or
Greater Qingdao, and other cities in Shandong Province, China.</P>
<P align=justify>On September 20, 2007, Leewell acquired 100% of the equity
interests in Oumei from its shareholders, including Mr. Weiqing Zhang, Oumei&#146;s
Chief Executive Officer and President, for RMB 97,010,000 (approximately $13.1
million). In October 2007, the acquisition was approved by the appropriate
Chinese authorities, and Oumei&#146;s status changed from a Chinese domestic company
to a wholly-owned foreign enterprise.</P>
<P align=justify>Oumei has three branch offices, located in Jimo, Pingdu, and
Laixi, and has purchased the following nine Chinese subsidiaries: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Weihai Mingwei, purchased on January 19, 2008 for RMB 110,000,000
  (approximately $15 million);
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Longhai Hotel, purchased on January 22, 2008 for RMB 110,000,000
  (approximately $15 million);
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Weihai Economic, purchased on January 23, 2008 for RMB 140,000,000
  (approximately $19 million);
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Qingdao Xudong, purchased on January 24, 2008 for RMB 60,000,000
  (approximately $8.3 million);
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Weifang Longhai Industry, purchased on August 27, 2008 for RMB 30,000,000
  (approximately $4.4 million);
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Weifang Longhai Zhiye, purchased on August 28, 2008 for RMB 30,000,000
  (approximately $4.4 million);
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Weifang Qilu, purchased on August 29, 2008 for RMB 40,000,000
  (approximately $5.8 million);
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Caoxian Industrial, purchased on June 25, 2009 for RMB 15,000,000
  (approximately $2.2 million); and
  <LI>
  <p style="margin-top: 0; margin-bottom: 5">Longhai Real Estate, purchased on September 25, 2009 for RMB 20,000,000
  (approximately $2.9 million). </LI></UL>
<P align=justify>As a result of our reverse acquisition of Leewell, we have
assumed the business and operations of Leewell and its Chinese subsidiaries. We
plan to change our name to &#147;China Oumei Real Estate Inc.&#148; to more accurately
reflect our new business operations.</P>
<P align=center>65</P>
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<P align=justify><B><I>Financing Transaction</I></B></P>
<P align=justify>On April 14, 2010, we also completed a private placement
transaction with a group of accredited investors. Pursuant to the Subscription
Agreement with the investors, we issued to the investors an aggregate of
2,774,700 Units for a purchase price of $11,098,800, or $4.00 per Unit. Each
Unit consists of one Preference Share and one Warrant to purchase 0.5 ordinary
shares. The Warrants have a term of 5 years, bear an exercise price of $6.00 per
share (subject to customary adjustments), are exercisable on a net exercise or
cashless basis and are exercisable by investors at any time after the closing
date. See &#147;Description of Securities &#150; Preference Shares&#148; below for a
description of our Preference Shares.</P>
<P align=justify>Pursuant to the Subscription Agreement, we are obligated to
file a registration statement covering the resale of the ordinary shares
underlying the Preference Shares and the Warrants no later than thirty (30) days
following the closing date and shall use our best efforts to cause the
registration statement to be declared effective under the Securities Act as
promptly as possible, but in no event later than 180 days following the closing
date. If we do not timely file the required registration statement, or if it is
not declared effective by the SEC in a timely manner, then we are obligated to
pay to each investor a liquidated damages fee of 1% of such investor&#146;s
investment per month, for up to a maximum of 10% of each investor&#146;s investment
pursuant to the Subscription Agreement, except that we will not be obligated to
pay any such fee if we are unable to fulfill our registration obligations as a
result of rules, regulations, positions or releases issued or actions taken by
the SEC with respect to Rule 415 of the Securities Act, so long as we register
at such time the maximum number of securities permissible by the SEC.</P>
<P align=justify>In connection with the private placement, we entered into the
Make Good Escrow Agreement with Longhai Holdings, our controlling shareholder,
Collateral Agents, LLC, the escrow agent, and Access America Investments, LLC,
as representative of the investors, pursuant to which the parties agreed to
certain &#147;make good&#148; provisions in the event that we do not meet certain
financial performance thresholds for fiscal years 2010 and 2011. Pursuant to the
Make Good Escrow Agreement, the parties agreed to the establishment of an escrow
account and Longhai Holdings delivered into escrow certificates evidencing
7,500,000 ordinary shares held by it, to be held for the benefit of the
investors. Under the Make Good Escrow Agreement, we established minimum after
tax net income thresholds (as determined in accordance with GAAP and excluding
any non-cash expenses and one-time expenses related to the reverse acquisition
of Leewell and the private placement transaction) of $40 million for fiscal year
2010 and $60 million for fiscal year 2011 and minimum earnings per share
thresholds (calculated on a fully diluted basis and including adjustment for any
stock splits, stock combinations, stock dividends or similar transactions, and
for shares issued in one public offering or pursuant to the exercise of any
warrants, options, or other securities issued during or prior to the calculation
period) of $1.13 for fiscal year 2010 and $1.70 for fiscal year 2011. If our
after tax net income or earnings per share for either fiscal year 2010 or fiscal
year 2011 is less than 90% of the applicable performance threshold, then the
performance threshold will be deemed not to have been achieved, and the
investors will be entitled to receive ordinary shares based upon a pre-defined
formula agreed to between the parties. The parties agreed that, for purposes of
determining whether or not any of the performance thresholds is met, the release
of any of the escrowed shares and any related expense recorded under GAAP shall
not be deemed to be an expense, charge, or any other deduction from revenues
even if GAAP requires contrary treatment or the annual report for the respective
fiscal years filed with the SEC by the Company may report otherwise.</P>
<P align=justify>Also in connection with the private placement, we entered into
the Holdback Escrow Agreement with Collateral Agents, LLC, the escrow agent,
Brean Murray, Carret &amp; Co., LLC, the placement agent, and Access America
Investments, LLC, as representative of the investors, pursuant to which
$2,219,760 was deposited with the escrow agent to be distributed upon the
satisfaction of certain covenants set forth in the Subscription Agreement.
Pursuant to the Holdback Escrow Agreement, $1,109,880 will be released to the
Company upon our satisfaction of a covenant regarding the composition of our
board of directors and $1,109,880 will be released to the Company upon our
satisfaction of a covenant regarding the hiring of a chief financial officer
meeting the requirements specified in the Subscription Agreement. Pursuant to
the Holdback Escrow Agreement, an additional $1,000,000 was deposited with the
escrow agent to be released to us in incremental amounts to pay for fees and
expenses relating to our obligations as a public company.</P>
<P align=justify>We also entered into the IR Escrow Agreement with Collateral
Agents, LLC, the escrow agent, Brean Murray, Carret &amp; Co., LLC, the
placement agent, and Access America Investments, LLC, as representative of the
investors, pursuant to which $120,000 was deposited with the escrow agent to be
distributed in incremental amounts to pay our investor relations firm, the
choice of which is subject to the placement agent's approval. </P>
<P align=center>66</P>
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<P align=justify>In connection with the private placement, we also entered into
a Lockup Agreement with Longhai Holdings and each of our directors and officers,
pursuant to which each of them agreed not to transfer any of our capital stock
held directly or indirectly by them for an eighteen-month period following the
closing of the private placement.</P>
<P align=justify><B>Our Corporate Structure</B></P>
<P align=justify>All of our business operations are conducted through our
Chinese subsidiaries. The chart below presents our corporate structure:</P>
<P align=center><img src="orgchart2.jpg" width="637" height="495" border=0></P>
<P align=center><B>MANAGEMENT </B></P>
<P align=justify><B>Directors and Executive Officers </B></P>
<P align=justify>The following sets forth information about our directors and
executive officers as of the date of this prospectus:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>NAME</B> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="6%"><B>AGE</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="65%"><B>POSITION</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Antoine Cheng </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff>53 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="65%" bgColor=#e6efff>Chairman of the Board of
      Directors </TD></TR>
  <TR vAlign=top>
    <TD align=left>Weiqing Zhang </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="6%">36 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="65%">Chief Executive Officer, President and Director
    </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Yang Chen </TD>
    <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff>38 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="65%" bgColor=#e6efff>Chief Financial Officer and
      Vice President </TD></TR>
  <TR vAlign=top>
    <TD align=left>Zhongbo Zhou </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="6%">34 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="65%">Director </TD></TR></TABLE>
<P align=center>67</P>
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<P align=justify><B>Mr. Antoine Cheng</B>. Mr. Cheng has been the Chairman of
our board of directors since the closing of our reverse acquisition of Leewell
on April 14, 2010 and has served as the Chairman of Oumei since 2006. Mr. Cheng
became Chairman of Oumei after he retired from government service. Prior to
joining Oumei, Mr. Cheng served as Chief Director of the Industry and Commerce
Department of the Qingdao (Pingdu and Jimo) Municipal Government from 1998 to
2006 and as Vice Chief Director of the Public Security Bureau of the Pingdu
Municipal Government from 1992 to 1998. Mr. Cheng received his Master&#146;s degree
in economics from Shandong Public Administration College in 2005. </P>
<P align=justify><B>Mr. Weiqing Zhang</B>. Mr. Zhang has served as our Chief
Executive Officer and President since the closing of our reverse acquisition of
Leewell on April 14, 2010 and became a member of our board of directors on May
1, 2010. Mr. Zhang has held the same positions with Oumei since its formation in
May 2001. Prior to joining Oumei, he was responsible for properties development
for Longhai Real Estate Development Co., Ltd., between August 1994 and May 2001.
With more than 15 years of experience in real estate development, Mr. Zhang has
successfully developed more than two million square meters of GFA and has also
served in strategic planning and general administration functions. He graduated
from Qingdao Construction Engineering College in 1994 with a Bachelor&#146;s degree
in Business. </P>
<P align=justify><B>Mr. Yang Chen</B>. Mr. Chen has served as our Chief
Financial Officer and Vice President since the closing of our reverse
acquisition of Leewell on April 14, 2010, and has held the same positions with
Oumei since January 2008. Mr. Chen has more than 17 years of experience in
accounting and financial management. Prior to joining Oumei, he served as chief
financial officer for several companies, including Mudanjiang Dongxing Group
Corporation, a retail-oriented diversified company (hotels, supermarkets,
villas, and electrical equipment) from 2004 to 2008 and Harbin Guangyun
Electrical Appliance Co., Ltd. prior to joining Mudanjiang Dongxing in 2004. Mr.
Chen graduated from Harbin Institute of Technology with a Bachelor&#146;s degree in
industrial accounting in 1992. </P>
<P align=justify><B>Mr. Zhongbo Zhou</B>. Mr. Zhou became a member of our board
of directors on May 1, 2010. Mr. Zhou also serves as the Vice General Manager of
Engineering Department of Oumei, where he is responsible for project and sales
management. He joined Oumei in 2001 and served as its Vice General Manager of
Administration from 2005 to 2007. Mr. Zhou holds a Bachelor&#146;s degree in civil
engineering of Qingdao Technical University.</P>
<P align=justify><B>Significant Employees</B></P>
<P align=justify>In addition to the foregoing named officers and directors, the
  following employees are also key to our business and operations:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>NAME</B> </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="6%"
    ><B>AGE</B> </TD>
    <TD align=left width="2%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="65%"
    ><B>POSITION</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Zhongbo Zhou </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff >34 </TD>
    <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=left width="65%" bgColor=#e6efff >Vice General
      Manager of Engineering Department of Oumei </TD></TR>
  <TR vAlign=top>
    <TD align=left>Yalei Chen </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="6%" >33 </TD>
    <TD align=left width="2%"  >&nbsp;</TD>
    <TD align=left width="65%" >Vice General Manager of
      Development Strategies Department of Oumei </TD></TR></TABLE>
<P align=justify><B>Mr. Zhongbo Zhou</B>. Mr. Zhou has served as Oumei&#146;s Vice
General Manager of Engineering Department since 2007 and is responsible for
project and sales management. He joined Oumei in 2001 and served as its Vice
General Manager of Administration from 2005 to 2007. Mr. Zhou holds a Bachelor&#146;s
degree in civil engineering from Qingdao Technical University.</P>
<P align=justify><B>Mr. Yalei Chen</B>. Mr. Chen has served as Oumei&#146;s Vice
General Manager of Development Strategies Department since 2007 and is in charge
of its development strategies. He joined Oumei in 2001 as a technician and
assistant to General Manager. Prior to that, Mr. Chen worked as a technician in
Qingdao Pingdu Construction Group Company Factory and ZTE Corporation. He
graduated from China Agricultural University in 1997 with a college diploma.</P>
<P align=justify><B>Family Relationships</B></P>
<P align=justify>There are no family relationships among any of our officers or
directors.</P>
<P align=justify><B>Involvement in Certain Legal Proceedings</B></P>
<P align=justify>To the best of our knowledge, none of our directors or
executive officers 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 five 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, or a finding of any violation of federal or state securities
laws, except for matters that were dismissed without sanction or settlement.
Except as set forth in our discussion below in &#147;Certain Relationships and
Related Transactions, and Director Independence &#150; Transactions with Related
Persons,&#148; none of our directors, director nominees, or executive officers has
been involved in any transactions with us or any of our directors, executive
officers, affiliates, or associates which are required to be disclosed pursuant
to the rules and regulations of the SEC.</P>
<P align=center>68</P>
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<P align=justify><B>Board Composition and Committees</B><BR></P>
<P align=justify>The board of directors is currently composed of three members,
Messrs. Antoine Cheng, Weiqing Zhang and Zhongbo Zhou. All Board action requires
the approval of a majority of the directors in attendance at a meeting at which
a quorum is present. We may increase the size of our board of directors in the
future but have not determined the approximate time to take such action. </P>
<P align=justify>We currently do not have standing audit, nominating or
compensation committees. Our board of directors handles the functions that would
otherwise be handled by each of the committees. We intend, however, to establish
an audit committee, a nominating committee and a compensation committee of the
board of directors as soon as practicable. We envision that the audit committee
will be primarily responsible for reviewing the services performed by our
independent auditors, evaluating our accounting policies and our system of
internal controls. The nominating committee would be primarily responsible for
nominating directors and setting policies and procedures for the nomination of
directors. The nominating committee would also be responsible for overseeing the
creation and implementation of our corporate governance policies and procedures.
The compensation committee will be primarily responsible for reviewing and
approving our compensation and benefit policies, including compensation of
executive officers. </P>
<P align=justify>Our board of directors has not made a determination as to
whether any member of our board is an audit committee financial expert. Upon the
establishment of an audit committee, the board will determine whether any of the
directors qualify as an audit committee financial expert. </P>
<P align=center><B>EXECUTIVE COMPENSATION</B></P>
<P align=justify><B>Compensation Discussion and Analysis</B></P>
<P align=justify><B><I>Background and Compensation Philosophy</I></B></P>
<P align=justify>Prior to our reverse acquisition of Leewell, our operating
subsidiaries were private limited companies organized under the laws of the PRC,
and in accordance with PRC regulations, the salary of our executives was
determined by our shareholders.</P>
<P align=justify>In 2009, our named executive officers included Mr. Weiqing
Zhang, our Chief Executive Officer and President, and Mr. Yang Chen, our Chief
Financial Officer. Mr. Zhang is also a member of our board of directors. In
2009, our board of directors determined the compensation of our named executive
officers, based on our financial and operating performance and prospects, the
level of compensation paid to similarly situated executives in comparably sized
companies and the contributions made by each of the executive officers to our
success. As disclosed below, each of the named executive officers entered into
an employment agreement and their employment agreements govern the amount of
base salary the executives are paid.</P>
<P align=justify>As the membership of our board of directors increases, our
board of directors may form a compensation committee charged with the oversight
of our executive compensation plans, policies and programs and the authority to
determine and approve the compensation of our chief executive officer and make
recommendations with respect to the compensation of our other executive
officers.</P>
<P align=justify><B><I>Elements of Compensation</I></B></P>
<P align=justify>We provide our executive officers with a base salary and
discretionary bonuses to compensate them for services rendered during the year.
We believe that our policy of compensating our executives in this way has served
the company well and does not encourage unreasonable risk-taking.</P>
<P align=center>69</P>
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<UL style="TEXT-ALIGN: justify">
  <LI>
  <P><I>Base Salary</I>. The base salary we provide is intended to equitably
  compensate the named executive officers based upon their level of
  responsibility, complexity and importance of role, leadership and growth
  potential, and experience. The base salary paid to our named executive
  officers is governed by their respective employment agreements and is
  reflected in the Summary Compensation Table below. </P>
  <LI>
  <P><I>Discretionary Bonus</I>. We did not pay bonus compensation to our
  executive officers in 2009. If, in the future, our board of directors
  determines to provide bonus compensation as a regular part of our executive
  compensation package, our compensation committee or our board if we do not yet
  have a compensation committee, may adopt a formal incentive bonus plan, which
  will establish performance goals for each of the executive officers and
  maximum amounts that may be earned upon attainment of such performance goals.
  </P>
  <LI>
  <P><I>Equity Incentives</I>. Presently, we do not have an equity based
  incentive program and we did not grant stock based awards as a component of
  compensation in 2009. In the future, we may adopt and establish an equity
  incentive plan pursuant to which awards may be granted and which will provide
  us with the ability to provide to our eligible employees, including each of
  our named executive officers, grants of stock compensation awards based on our
  shares if our compensation committee determines that such awards are in our
  and our shareholders&#146; best interests. </P>
  <LI>
  <P><I>Retirement Benefits</I>. Our executive officers are not presently
  entitled to company-sponsored retirement benefits. </P>
  <LI>
  <P><I>Perquisites</I>. Historically, we have provided certain of our named
  executive officers with perquisites and other personal benefits that we
  believe are reasonable. We do not view perquisites as a significant element of
  our comprehensive compensation structure, but do believe they can be useful in
  attracting, motivating and retaining the executive talent for which we
  compete, especially for executives who perform services abroad as expatriates.
  We believe that these additional benefits assist our executives in performing
  their duties and provide time efficiencies for our executives. It is expected
  that our historical practices regarding perquisites will continue and will be
  subject to periodic review by our compensation committee. </P></LI></UL>
<P align=justify><B>Summary Compensation Table &#151; Fiscal Years Ended December 25,
2009, 2008 and 2007</B> </P>
<P align=justify>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. No other executive
officer received total annual salary and bonus compensation in excess of
$100,000.</P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top>
    <TD align=center ><BR><BR><B>Name and Principal Position
    </B></TD>
    <TD align=center width="6%" ><BR><BR><STRONG>Year</STRONG>
</TD>
    <TD align=center width="12%"><BR><B>Salary</B> <BR><B>($)</B> </TD>
    <TD align=center width="12%"><BR><B>Bonus</B> <BR><B>($)</B> </TD>
    <TD align=center width="12%"><B>Stock</B> <BR><B>Awards</B> <BR><B>($)</B>
    </TD>
    <TD align=center width="12%"><B>Option</B> <BR><B>Awards
      </B><BR><B>($)</B> </TD>
    <TD align=center width="12%"><B>All Other</B>
      <BR><STRONG>Compensation</STRONG> <BR><B>($)</B> </TD>
    <TD align=center width="12%"><BR><B>Total</B> <BR><B>($)</B> </TD></TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD rowSpan=3 align=left >Weiqing Zhang, <BR>
        Chief Executive
      Officer <SUP>(1)</SUP> <BR></TD>
      <TD width="6%" align=center >2009 </TD>
      <TD width="12%" align=center>15,812 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>15,812 </TD>
    </TR>
  <TR vAlign=top>
      <TD width="6%" align=center bgcolor="#E6EFFF" >2008 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">14,000 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">14,000 </TD>
    </TR>
  <TR vAlign=top>
      <TD width="6%" align=center bgcolor="#E6EFFF" >2007 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">9,000 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">9,000 </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3 >Yang Chen, <BR>Chief Financial
      Officer <SUP>(1)</SUP> <BR></TD>
    <TD align=center width="6%" >2009 </TD>
    <TD align=center width="12%">14,000 </TD>
    <TD align=center width="12%">0 </TD>
    <TD align=center width="12%">0 </TD>
    <TD align=center width="12%">0 </TD>
    <TD align=center width="12%">0 </TD>
    <TD align=center width="12%">14,000 </TD></TR>
  <TR vAlign=top>
    <TD align=center width="6%" >2008 </TD>
    <TD align=center width="12%">14,000 </TD>
    <TD align=center width="12%">0 </TD>
    <TD align=center width="12%">0 </TD>
    <TD align=center width="12%">0 </TD>
    <TD align=center width="12%">0 </TD>
    <TD align=center width="12%">14,000 </TD></TR>
  <TR vAlign=top>
    <TD align=center width="6%" >2007 </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD></TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD rowSpan=3 align=left >Joseph Rozelle, <BR>
        Former
      President and Chief <BR>Financial Officer <SUP>(2)</SUP> </TD>
      <TD width="6%" align=center >2009 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>0 </TD>
      <TD width="12%" align=center>0 </TD>
    </TR>
  <TR vAlign=top>
      <TD width="6%" align=center bgcolor="#E6EFFF" >2008 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
    </TR>
  <TR vAlign=top>
      <TD width="6%" align=center bgcolor="#E6EFFF" >2007 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="12%" align=center bgcolor="#E6EFFF">0 </TD>
    </TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><sup>(1) </sup> </TD>
    <TD>
      <P align=justify>On April 14, 2010, we acquired Leewell in a reverse
      acquisition transaction that was structured as a share exchange and in
      connection with that transaction, Mr. Weiqing Zhang became our Chief
      Executive Officer and President and Mr. Chen became our Chief Financial
      Officer and Vice President. Prior to the effective date of the reverse
      acquisition, Messrs. Zhang and Chen held the same positions with Leewell&#146;s
      subsidiary, Oumei. The annual, long-term, and other compensation shown in
      this table includes the amounts Messrs. Zhang and Chen received from Oumei
      prior to the consummation of the reverse acquisition. Mr. Chen was not
      employed by Oumei in 2007.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(2) </sup> </TD>
    <TD>
      <P align=justify>Mr. Joseph Rozelle resigned from all offices he held with
      us upon the closing of the reverse acquisition of Leewell on April 14,
      2010.</P></TD></TR></TABLE>
<P align=center>70</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_77></A>
<P align=justify><B>Summary of Employment Agreements and Material Terms</B> </P>
<P align=justify>All of our employees, including Mr. Weiqing Zhang, our Chief
Executive Officer and President, and Mr. Yang Chen, our Chief Financial Officer
and Vice President, have executed our standard employment agreement. Our
employment agreements with our executives provide the amount of each executive
officer&#146;s salary and establish their eligibility to receive a bonus. Mr. Zhang&#146;s
employment agreement provides for an annual salary of RMB108,000 (approximately
$16,000) and expires on June 5, 2012, and Mr. Chen&#146;s employment agreement
provides for an annual salary of RMB96,000 (approximately $15,000) and expires
on July 1, 2012.</P>
<P align=justify>Other than the salary and necessary social benefits required by
the government, which are defined in the employment agreement, we currently do
not provide other benefits to our officers at this time. Our executive officers
are not entitled to severance payments upon the termination of their employment
agreements or following a change in control.</P>
<P align=justify><B>Grants of Plan-Based Awards</B></P>
<P align=justify>No plan-based awards were granted to any of our named executive
officers during the fiscal year ended December 25, 2009.</P>
<P align=justify><B>Outstanding Equity Awards at Fiscal Year End</B></P>
<P align=justify>No unexercised options or warrants were held by any of our
named executive officers at December 25, 2009. No equity awards were made during
the fiscal year ended December 25, 2009. </P>
<P align=justify><B>Option Exercises and Stock Vested</B></P>
<P align=justify>No options to purchase our capital stock were exercised by any
of our named executive officers, nor was any restricted stock held by such
executive officers vested during the fiscal year ended December 25, 2009.</P>
<P align=justify><B>Pension Benefits</B></P>
<P align=justify>No named executive officers received or held pension benefits
during the fiscal year ended December 25, 2009.</P>
<P align=justify><B>Nonqualified Deferred Compensation</B></P>
<P align=justify>No nonqualified deferred compensation was offered or issued to
any named executive officer during the fiscal year ended December 25, 2009. </P>
<P align=justify><B>Potential Payments Upon Termination or Change in Control</B>
</P>
<P align=justify>Our executive officers are not entitled to severance payments
upon the termination of their employment agreements or following a change in
control. </P>
<P align=justify><B>Compensation of Directors</B></P>
<P align=justify>No member of our board of directors received any compensation
for his services as a director during the fiscal year ended December 25,
2009.<B> </B></P>
<P align=justify><B>Compensation Committee Interlocks and Insider Participation
</B></P>
<P align=justify>During the fiscal year 2009 we did not have a standing
compensation committee. Our board of directors was responsible for the functions
that would otherwise be handled by the compensation committee. All directors
participated in deliberations concerning executive officer compensation,
including directors who were also executive officers, however, none of our
executive officers received any compensation during the last fiscal year. None
of our executive officers has served on the board of directors or compensation
committee (or other committee serving an equivalent function) of any other
entity, any of whose executive officers served on our Board or Compensation
Committee.</P>
<P align=center>71</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_78></A>
<P align=center><B>TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN
CONTROL PERSONS; <BR>CORPORATE GOVERNANCE </B></P>
<P align=justify><B>Transactions With Related Persons</B></P>
<P align=justify>The following includes a summary of transactions since the
beginning of the 2009 fiscal year, or any currently proposed transaction, in
which we were or are to be a participant and the amount involved exceeded or
exceeds $120,000 and in which any related person had or will have a direct or
indirect material interest (other than compensation described under &#147;Executive
Compensation&#148;). We believe the 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&#146;s-length transactions.</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>As of December 25, 2009 and 2008, we had a total of $2,949,102 and
  $15,279,068, respectively, due from Longhai Group and its subsidiaries. The
  Longhai Group is controlled by Mr. Antoine Cheng, our Chairman. These balances
  have no stated terms for repayment and are not interest bearing. </P>
  <LI>
  <P>In 2009, we sold two floors of a project for office use to Longhai
  Construction Company, a subsidiary of Longhai Group, for approximately
  $3,274,000. </P></LI></UL>
<P align=justify><B>Policies and Procedures for Review, Approval or Ratification
of Transactions with Related Persons </B></P>
<P align=justify>As we increase the size of our board of directors and gain
independent directors, we expect to prepare and adopt a written related-person
transactions policy that sets forth our policies and procedures regarding the
identification, review, consideration and approval or ratification of
&#147;related-persons transactions.&#148; For purposes of our policy only, a
&#147;related-person transaction&#148; will be a transaction, arrangement or relationship
(or any series of similar transactions, arrangements or relationships) in which
we and any &#147;related person&#148; are participants involving an amount that exceeds
$120,000. Transactions involving compensation for services provided to us as an
employee, director, consultant or similar capacity by a related person will not
be covered by this policy. A related person will be any executive officer,
director or a holder of more than five percent of our ordinary shares, including
any of their immediate family members and any entity owned or controlled by such
persons. </P>
<P align=justify>We anticipate that, where a transaction has been identified as
a related-person transaction, the policy will require management to present
information regarding the proposed related-person transaction to our audit
committee (or, where approval by our audit committee would be inappropriate, to
another independent body of our board of directors) for consideration and
approval or ratification. Management&#146;s presentation will be expected to include
a description of, among other things, the material facts, the direct and
indirect interests of the related persons, the benefits of the transaction to us
and whether any alternative transactions are available. </P>
<P align=justify>To identify related-person transactions in advance, we are
expected to rely on information supplied by our executive officers, directors
and certain significant shareholders. In considering related-person
transactions, our board of directors will take into account the relevant
available facts and circumstances including, but not limited to: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the risks, costs and benefits to us; </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the effect on a director&#146;s independence in the event the related person is
  a director, immediate family member of a director or an entity with which a
  director is affiliated; </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the terms of the transaction; </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the availability of other sources for comparable services or products; and
  </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the terms available to or from, as the case may be, unrelated third parties
  or to or from our employees generally. </P></LI></UL>
<P align=justify>We also expect that the policy will require any interested
director to excuse himself or herself from deliberations and approval of the
transaction in which the interested director is involved. </P>
<P align=justify><B>Promoters and Certain Control Persons</B></P>
<P align=justify>We did not have any promoters at any time during the past five
fiscal years.</P>
<P align=center>72</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_79></A>
<P align=justify><B>Director Independence</B><BR></P>
<P align=justify>We currently do not have any independent directors, as the term
&#147;independent&#148; is defined by the rules of the Nasdaq Stock Market. </P>
<P align=center><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT</B></P>
<P align=justify>The following table sets forth information regarding beneficial
ownership of each class of our voting securities as of May 5, 2010 (i) by each
person who is known by us to beneficially own more than 5% of our voting
securities; (ii) by each of our officers and directors; and (iii) by all of our
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, Floor 28, Block
C, Longhai Mingzhu Building, No.182 Haier Road, Qingdao 266000, People&#146;s
Republic of China. </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top>
      <TD vAlign=bottom align=left rowSpan=3 ><U>Name and Address of Beneficial
        </U><U>Owner </U></TD>
      <TD vAlign=bottom align=left width="12%" rowSpan=3><U>Office, If Any </U></TD>
      <TD colspan="5" align=center vAlign=bottom> <U>Shares Beneficially Owned</U><SUP>(1)
        </SUP> </TD>
    </TR>
    <TR vAlign=top>
      <TD colspan="2" align=center vAlign=bottom>&nbsp; &nbsp;<U>Ordinary Shares</U><SUP>(2)
        </SUP></TD>
      <TD colspan="2" align=center vAlign=bottom><U>Preference Shares</U><SUP>(3)
        </SUP></TD>
      <TD vAlign=bottom align=center width="12%" rowSpan=2><U>% Total </U><BR>
        <U>Voting </U><BR> <U>Power</U><SUP>(4) </SUP></TD>
    </TR>
    <TR vAlign=top>
      <TD vAlign=bottom align=center width="12%"><U>Shares </U></TD>
      <TD vAlign=bottom align=center width="12%"><U>% of <BR>
        </U><U>Class </U></TD>
      <TD vAlign=bottom align=center width="12%"><U>Shares </U></TD>
      <TD vAlign=bottom align=center width="12%"><U>% of </U><U>Class </U></TD>
    </TR>
    <TR vAlign=bottom bgcolor="#E6EFFF">
      <TD colspan="7" align=center>&nbsp;<B>Directors </B><B>and Officers&nbsp;&nbsp;</B>&nbsp;&nbsp;
      </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Antoine Cheng <SUP>(5) </SUP></TD>
      <TD align=left width="12%">Chairman </TD>
      <TD align=center width="12%">27,143,000 </TD>
      <TD align=center width="12%">87.56% </TD>
      <TD align=center width="12%">0 </TD>
      <TD align=center width="12%">* </TD>
      <TD align=center width="12%">80.36% </TD>
    </TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD align=left >Weiqing Zhang <SUP>(6) </SUP><BR></TD>
      <TD width="12%" align=left>CEO, President <BR> and Director </TD>
      <TD width="12%" align=center>10,000 <BR></TD>
      <TD width="12%" align=center>* <BR></TD>
      <TD width="12%" align=center>0 <BR></TD>
      <TD width="12%" align=center>* <BR></TD>
      <TD width="12%" align=center>* <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Yang Chen <SUP>(7) </SUP><BR></TD>
      <TD align=left width="12%">CFO &amp; Vice <BR>
        President </TD>
      <TD align=center width="12%">10,000 <BR></TD>
      <TD align=center width="12%">* <BR></TD>
      <TD align=center width="12%">0 <BR></TD>
      <TD align=center width="12%">* <BR></TD>
      <TD align=center width="12%">* <BR></TD>
    </TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD align=left >Zhongbo Zhou <SUP>(8) </SUP><BR> <BR> <BR></TD>
      <TD width="12%" align=left>Director <BR> <BR> <BR></TD>
      <TD width="12%" align=center>3,000 <BR> <BR> <BR></TD>
      <TD width="12%" align=center>* <BR> <BR> <BR></TD>
      <TD width="12%" align=center>0 <BR> <BR> <BR></TD>
      <TD width="12%" align=center>* <BR> <BR> <BR></TD>
      <TD width="12%" align=center>* <BR> <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >All officers and directors as a group <BR>
        (4 persons named above) </TD>
      <TD align=left width="12%"><BR></TD>
      <TD align=center width="12%">27,166,000 <BR></TD>
      <TD align=center width="12%">87.63% <BR></TD>
      <TD align=center width="12%">0 <BR></TD>
      <TD align=center width="12%">* <BR></TD>
      <TD align=center width="12%">80.43% <BR></TD>
    </TR>
    <TR vAlign=bottom bgcolor="#E6EFFF">
      <TD colspan="7" align=center>&nbsp;<B>5% Security Holders&nbsp;&nbsp;&nbsp;&nbsp;
        </B></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Longhai Holdings Company Limited <SUP>(5) </SUP></TD>
      <TD align=left width="12%">&nbsp; </TD>
      <TD align=center width="12%">27,143,000 </TD>
      <TD align=center width="12%">87.56% </TD>
      <TD align=center width="12%">0 </TD>
      <TD align=center width="12%">* </TD>
      <TD align=center width="12%">80.36% </TD>
    </TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD align=left >Jayhawk Private Equity Fund II, L.P. <SUP>(9) </SUP><BR>
        930 Tahoe Blvd., 802-281 <BR>
        Incline Village, NV 89451 </TD>
      <TD width="12%" align=left><BR> <BR></TD>
      <TD width="12%" align=center>375,000 <BR> <BR></TD>
      <TD width="12%" align=center>1.20% <BR> <BR></TD>
      <TD width="12%" align=center>750,000 <BR> <BR></TD>
      <TD width="12%" align=center>27.03% <BR> <BR></TD>
      <TD width="12%" align=center>3.29% <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Access America Fund, LP <SUP>(10) </SUP><BR>
        11200 Westheimer Rd., Suite 508 <BR>
        Houston, TX 77042 </TD>
      <TD align=left width="12%"><BR> <BR></TD>
      <TD align=center width="12%">404,164 <BR> <BR></TD>
      <TD align=center width="12%">1.30% <BR> <BR></TD>
      <TD align=center width="12%">375,000 <BR> <BR></TD>
      <TD align=center width="12%">13.51% <BR> <BR></TD>
      <TD align=center width="12%">2.29% <BR> <BR></TD>
    </TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD align=left >Hua-Mei 21st Century Partners, LP <SUP>(11) </SUP><BR>
        237 Park Avenue, 9th Floor <BR>
        New York, NY 10017 </TD>
      <TD width="12%" align=left><BR> <BR></TD>
      <TD width="12%" align=center>446,500 <BR> <BR></TD>
      <TD width="12%" align=center>1.43% <BR> <BR></TD>
      <TD width="12%" align=center>475,000 <BR> <BR></TD>
      <TD width="12%" align=center>17.12% <BR> <BR></TD>
      <TD width="12%" align=center>2.71% <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Guerrilla Partners, LP <SUP>(12) </SUP><BR>
        237 Park Avenue, 9th Floor <BR>
        New York, NY 10017 </TD>
      <TD align=left width="12%"><BR> <BR></TD>
      <TD align=center width="12%">258,500 <BR> <BR></TD>
      <TD align=center width="12%">* <BR> <BR></TD>
      <TD align=center width="12%">275,000 <BR> <BR></TD>
      <TD align=center width="12%">9.91% <BR> <BR></TD>
      <TD align=center width="12%">1.57% <BR> <BR></TD>
    </TR>
    <TR vAlign=top bgcolor="#E6EFFF">
      <TD align=left >Taylor International Fund, Ltd. <SUP>(13) </SUP><BR>
        714 S. Dearborn Street, 2nd Floor <BR>
        Chicago, IL 60605 </TD>
      <TD width="12%" align=left><BR> <BR></TD>
      <TD width="12%" align=center>404,164 <BR> <BR></TD>
      <TD width="12%" align=center>1.30% <BR> <BR></TD>
      <TD width="12%" align=center>375,000 <BR> <BR></TD>
      <TD width="12%" align=center>13.51% <BR> <BR></TD>
      <TD width="12%" align=center>2.29% <BR> <BR></TD>
    </TR>
  </TABLE>
</DIV><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left colSpan=2>* Less than 1% </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%" >&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify><sup>(1) </sup> </P></TD>
    <TD align=left width="95%" >
      <P align=justify>Beneficial Ownership is determined in accordance with the
      rules of the SEC and generally includes voting or investment power with
      respect to securities. Each of the beneficial owners listed above has
      direct ownership of and sole voting power and investment power with
      respect to our ordinary shares. For each beneficial owner above, any
      options exercisable within 60 days have been included in the denominator.
      </P></TD></TR>
  <TR>
    <TD><sup>&nbsp; </sup> </TD>
    <TD width="95%" >&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><sup>(2) </sup> </TD>
    <TD align=left width="95%" >Based on 31,000,062 ordinary
      shares issued and outstanding as of May 5, 2010. </TD></TR></TABLE>
<P align=center>73</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_80></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><sup>(3) </sup> </TD>
    <TD>
      <P align=justify>Based on 2,774,700 Preference Shares issued and
      outstanding as of May 5, 2010. Each Preference Share is convertible into
      one (1) ordinary share (subject to customary adjustments for stock splits,
      combinations, or equity dividends on ordinary shares). Holders of
      Preference Shares vote with the holders of ordinary shares on all matters
      on an &#147;as converted&#148; basis. See &#147;Description of Securities &#150; Preference
      Shares&#148; below for more information regarding our Preference
  Shares.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(4) </sup> </TD>
    <TD>
      <P align=justify>Percentage of Total Capital Stock represents total
      ownership with respect to all shares of our ordinary shares and Preference
      Shares, as a single class and on an &#147;as converted&#148; basis.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(5) </sup> </TD>
    <TD>
      <P align=justify>Includes 27,143,000 ordinary shares held by Longhai
      Holdings. Mr. Antoine Cheng is the sole shareholder and director of
      Longhai Holdings and has voting and dispositive control over the
      securities held by it. Pursuant to the Lock-up Agreement, all of the
      ordinary shares held by Longhai Holdings are subject to an eighteen-month
      lock-up period following the closing of the private placement on April 14,
      2010. In addition, pursuant to the Make Good Escrow Agreement, Longhai
      Holdings deposited 7,500,000 ordinary shares held by it into an escrow
      account for the benefit of the investors in the event that we fail to meet
      certain financial performance thresholds.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(6) </sup> </TD>
    <TD>
      <P align=justify>Pursuant to the Lock-up Agreement, all of the ordinary
      shares held by Mr. Weiqing Zhang are subject to an eighteen-month lock-up
      period following the closing of the private placement on April 14,
      2010.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(7) </sup> </TD>
    <TD>
      <P align=justify>Pursuant to the Lock-up Agreement, all of the ordinary
      shares held by Mr. Yang Chen are subject to an eighteen-month lock-up
      period following the closing of the private placement on April 14,
      2010.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(8) </sup> </TD>
    <TD>
      <P align=justify>Pursuant to the Lock-up Agreement, all of the ordinary
      shares held by Mr. Zhongbo Zhou are subject to an eighteen-month lock-up
      period following the closing of the private placement on April 14,
      2010.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(9) </sup> </TD>
    <TD>
      <P align=justify>Includes 375,000 shares underlying a warrant to purchase
      our ordinary shares. Kent C. McCarthy has sole voting and dispositive
      power over securities held by Jayhawk Private Equity Fund II,
  L.P.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(10) </sup> </TD>
    <TD>
      <P align=justify>Includes 187,500 shares underlying a warrant to purchase
      our ordinary shares. Christopher Efird is the Managing Partner of Access
      America Fund, LP and has voting and dispositive control over securities
      held by it.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(11) </sup> </TD>
    <TD>
      <P align=justify>Includes 237,500 shares underlying a warrant to purchase
      our ordinary shares. Peter Siris is the Managing Director of Hua-Mei 21st
      Century Partners, LP and has voting and dispositive control over
      securities held by it.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(12) </sup> </TD>
    <TD>
      <P align=justify>Includes 137,500 shares underlying a warrant to purchase
      our ordinary shares. Peter Siris is the Managing Director of Guerrilla
      Partners, LP and has voting and dispositive control over securities held
      by it.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><sup>(13) </sup> </TD>
    <TD>
      <P align=justify>Includes 187,500 shares underlying a warrant to purchase
      our ordinary shares. Robert J. Kirkland is the President of Taylor Asset
      Management, Inc., the general partner of Taylor International Fund, Ltd.,
      and has voting and dispositive control over securities held by
  it.</P></TD></TR></TABLE>
<P align=justify><B>Changes in Control</B></P>
<P align=justify>We do not currently have any arrangements which if consummated
may result in a change of control of our Company.</P>
<P align=center><B>DESCRIPTION OF SECURITIES</B></P>
<P align=justify>Our authorized share capital consists of 100,000,000 ordinary
shares, par value $0.002112 per share, and 20,000,000 preference shares, par
value $0.002112 per share.</P>
<P align=justify>We are a Cayman Islands exempted company and our affairs are
governed by our memorandum and articles of association, the Companies Law (2009
Revision) and the common law of the Cayman Islands. The following are summaries
of material provisions of our memorandum and articles of association and the
Companies Law insofar as they relate to the material terms of our ordinary
shares. Complete copies of our memorandum and articles of association are filed
as exhibits to our public filings.</P>
<P align=center>74</P>
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<P align=justify><B>Ordinary Shares</B></P>
<P align=justify><B><I>General</I></B>. All the issued and outstanding ordinary
shares are fully paid and non-assessable. Our ordinary shares are not entitled
to any sinking fund or pre-emptive rights. As of the date of this prospectus,
there are 31,000,062 ordinary shares issued and outstanding.</P>
<P align=justify><B><I>Dividends</I></B>. The holders of our ordinary shares are
entitled to such dividends as may be declared or paid by our board of directors
subject to our memorandum and articles of association and the Companies Law. No
dividend may be declared or paid unless our directors determine that immediately
after the payment, we will be able to satisfy our liabilities as they become due
in the ordinary course of business, and we have funds lawfully available for
such purpose.</P>
<P align=justify><B><I>Voting Rights</I></B>. The holders of our ordinary shares
have identical rights, as provided by our memorandum and articles of
association. General meetings of shareholders are expected to be held annually
and may be convened by the board of directors as it may consider necessary or
desirable or upon a request of one or more shareholders holding in the aggregate
not less than 10% of our voting share capital. If the board of directors does
not convene a requisitioned meeting within 21 days of the deposit of the
requisition notice, the requisitionists may themselves convene the general
meeting. </P>
<P align=justify>A quorum for a general meeting of shareholders is considered
present if there are one or more shareholders entitled to vote and present in
person or by proxy holding in aggregate more than 50% of our voting share
capital. If a quorum is not present within half an hour after the time appointed
for the general meeting, the general meeting shall stand adjourned to the same
day in the next week at the same time and place. If at such adjourned general
meeting a quorum is not present within half an hour from the time appointed for
holding the general meeting, the shareholder or shareholders present in person
or by proxy shall be a quorum and may transact the business for which the
general meeting was called. </P>
<P align=justify>An ordinary resolution to be passed by the shareholders
requires the affirmative vote of a simple majority of the votes attaching to our
shares cast in a general meeting, while a special resolution requires the
affirmative vote of no less than two-thirds of the votes cast attaching to our
shares. Pursuant to the Companies Law, special resolution is required for
important matters such as amending the memorandum and articles of association, a
change of name and winding up. Holders of our shares may affect certain changes
by ordinary resolution, including electing and removing directors.</P>
<P align=justify><B><I>Transfer of Shares</I></B>. Subject to our memorandum and
articles of association, as applicable, any of our shareholders may transfer all
or any of his or her ordinary shares by an instrument of transfer in the usual
or common form or any other form approved by our board. Our board of directors
may, in its sole discretion, decline to register any transfer of any ordinary
share for any or no reason. If our directors refuse to register a transfer, they
shall, within two months after the date on which the instrument of transfer was
lodged, send to each of the transferor and the transferee notice of such
refusal. The registration of transfers may be suspended and the register closed
at such times and for such periods as our board of directors may from time to
time determine; provided, however, that the registration of transfers shall not
be suspended nor the register closed for more than 45 days in any year. </P>
<P align=justify><B><I>Liquidation</I></B>. On a return of capital on winding up
or otherwise (other than on conversion, redemption or purchase of shares), after
payment in full of the amounts required to be paid to creditors and holders of
any issued and outstanding preference shares, if any, all holders of ordinary
shares are entitled to receive the same amount per share with respect to any
distribution of assets to holders of ordinary shares.</P>
<P align=justify><B><I>Calls on Ordinary Shares and Forfeiture of Ordinary
Shares</I></B>. Our board of directors may from time to time make calls upon
shareholders for any amounts unpaid on their ordinary shares in a notice served
to such shareholders at least 14 days prior to the specified time and place of
payment. The ordinary shares that have been called upon and remain unpaid on the
specified time are subject to forfeiture in accordance with the procedure under
our memorandum and articles of association.</P>
<P align=justify><B><I>Redemption of Ordinary Shares</I></B>. Ordinary shares
are not redeemable but, subject to the provisions of the Companies Law, we may
issue shares on terms that are subject to redemption, at our option or at the
option of the holders, on such terms and in such manner as may be determined
pursuant to our memorandum and articles of association.</P>
<P align=center>75</P>
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<P align=justify><B><I>Variations of Rights of Shares</I></B>. All or any of the
special rights attached to any class of shares may, subject to the provisions of
the Companies Law, be varied either with the consent of the holders of
two-thirds of the issued shares of that class or with the sanction of a special
resolution passed at a general meeting of the holders of the shares of that
class. </P>
<P align=justify><B><I>Inspection of Books and Records</I></B>.<B> </B>Holders
of our ordinary shares will have no general right under Cayman Islands law to
inspect or obtain copies of our list of shareholders or our corporate records
(other than our memorandum and articles of association). However, we provide our
shareholders with annual audited financial statements. </P>
<P align=justify><B><I>Directors</I></B>. Unless the shareholders otherwise
decided by ordinary resolution, the minimum number of directors is one, and the
maximum number is unlimited. Our board of directors will consist of a single
class of directors who will serve until they resign or are removed in accordance
with the memorandum and articles of association. Our board has the power at any
time to appoint a person as a director either to fill a casual vacancy or as an
addition to the existing board. A director may be removed from office, with or
without cause, by an ordinary resolution of shareholders. A meeting of directors
is duly constituted if, at the commencement of the meeting, there are present,
in person or by proxy, not less than two directors (unless a different quorum
has otherwise been fixed by our board). Any resolution that may be passed by our
directors or a committee of directors at a meeting may also be passed by a
unanimous written resolution of the directors.</P>
<P align=justify><B>Preference Shares</B></P>
<P align=justify>On April 14, 2010, our board of directors established a series
of our preference shares, par value $0.002112 per share, designated as &#147;6%
Convertible Preference Shares&#148; (which we refer to herein as the Preference
Shares). As of the date of this prospectus, there are 2,774,700 Preference
Shares issued and outstanding. A summary of the Preference Shares is set forth
below: </P>
<P align=justify><B><I>Ranking</I></B>. With respect to rights upon liquidation,
winding-up or dissolution, the Preference Shares rank senior to our ordinary
shares and any other classes or series of stock of the Company not designated as
ranking senior to or <I>pari passu</I> with the Preference Shares.</P>
<P align=justify><B><I>Voting</I></B>. The holders of the Preference Shares will
vote on an &#147;as converted&#148; basis, together with the ordinary shares, as a single
class, in connection with any proposal submitted to our shareholders.</P>
<P align=justify><B><I>Conversion</I></B>. Each Preference Share is optionally
convertible into one (1) fully paid and non-assessable ordinary share.</P>
<P align=justify><B><I>Mandatory Conversion</I></B>. We have the right to
convert outstanding Preference Shares into ordinary shares if, for a period of
at least twenty (20) consecutive business days, (i) the volume weighted average
price of our ordinary shares equals or exceeds US$6.00, (ii) average daily
trading volume of our ordinary shares equals or exceeds 50,000 shares per day,
and (iii) trading volume of our ordinary shares equals or exceeds 30,000 shares
on every business day during this period.</P>
<P align=justify><B><I>Anti-Dilution</I></B>. The number of ordinary shares into
which each Preference Share may be converted into will be proportionally
adjusted in the event of any stock splits, combinations, or equity dividends on
ordinary shares. Upon certain reorganizations, reclassifications, mergers, or
consolidations, the holders of Preference Shares may convert their shares into
the securities or property that they would have been entitled to upon the
consummation of such transaction if the holder had converted the Preference
Shares immediately prior to such transaction. </P>
<P align=justify><B><I>Dividends</I></B>.<I> </I>Each Preference Share will be
entitled to receive cumulative dividends at the annual rate of six percent (6%)
accruing on a daily basis on the purchase price of the Preference Share. Such
dividends will be payable in cash annually on January 1 beginning with the first
such date after April 14, 2010. If the six percent (6%) dividend is not timely
paid in full, any such unpaid dividend amount will be increased by 6% per year,
accruing on a daily basis.</P>
<P align=justify><B><I>Liquidation</I></B>.<I> </I>In the event of the
liquidation, dissolution or winding up of the affairs of the Company, whether
voluntary or involuntary, the holders of the Preference Shares then outstanding
will be entitled to receive, out of the assets of the Company available for
distribution to its shareholders, an amount equal to the amount credited as paid
up on the Preference Shares plus accrued but unpaid dividends, before any
payment shall be made or any assets distributed to the holders of the ordinary
shares or any other class or series of stock issued by the Company not
designated as ranking senior to or <I>pari passu with</I> the Preference Shares
in respect of the right to participate in distributions or payments upon a liquidation event.</P>
<P align=center>76</P>
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<P align=justify><B>Warrant</B></P>
<P align=justify>In connection with our private placement which was closed on
April 14, 2010, we issued to the investors Warrants to purchase in aggregate
1,387,350 ordinary shares. The Warrants have a term of five years with an
exercise price of $6.00 per share (subject to customary adjustments) and are
exercisable by investors on a net exercise or cashless basis at any time after
the closing date.</P>
<P align=justify>On April 14, 2010, we also issued warrants for the purchase of
an aggregate of 138,735 ordinary shares, exercisable for a period of three years
at an exercise price of $5.00 per share, to Brean Murray, Carret &amp; Co., LLC
and/or its designees, as partial compensation for services provided by them in
connection with the private placement transaction.</P>
<P align=justify>As of the date of this prospectus, none of the above warrants
have been exercised.</P>
<P align=justify><B>Corporate Law</B></P>
<P align=justify>The Companies Law differs from laws applicable to U.S.
corporations and their shareholders. Set forth below is a summary of the
significant differences between the provisions of the Companies Law applicable
to us and the laws applicable to companies incorporated in the United States and
their shareholders.</P>
<P align=justify><B><I>Director Independence</I></B></P>
<P align=justify>Neither Cayman Islands law nor our memorandum and articles of
association require that a majority of our directors be independent. As a matter
of Cayman Islands law, a director of a Cayman Islands company is in the position
of a fiduciary with respect to the company, and therefore it is considered that
he owes the following duties to the company&#151;a duty to act bona fide in the best
interests of the company, a duty not to make a profit based on his position as
director (unless the company permits him or her to do so) and a duty not to put
himself or herself in a position where the interests of the company conflict
with his or her personal interest or his or her duty to a third party. The duty
of a director not to put himself or herself in a position of conflict may be
modified by the company's articles of association. Our articles of association
permit our directors to have such a conflict and to participate and vote in
respect of any decision in which they may have a conflict, provided their
conflicting interests are adequately disclosed. This does not modify the
directors' duty to act in a way they consider to be bona fide in the best
interests of the company. </P>
<P align=justify>A director of a Cayman Islands company owes to the company a
duty to act with skill and care. It was previously considered that a director
need not exhibit in the performance of his duties a greater degree of skill than
may reasonably be expected from a person of his knowledge and experience.
However, English and Commonwealth courts have moved towards a dual
objective/subjective standard with regard to the required skill and care, to the
effect that a director must exercise the skill and care of a reasonably diligent
person having both (a) the general knowledge, skill and experience that may
reasonably be expected of a person carrying out the same actions as our carried
out by that direction in relation to the company and (b) the general knowledge,
skill and experience that that particular director has. These authorities are
likely to be followed in the Cayman Islands. </P>
<P align=justify><B><I>Restrictions on Nonresident or Foreign Shareholders</I></B></P>
<P align=justify>Under Cayman Islands law, there are no limitations on the
rights of nonresident or foreign shareholders to hold or vote our ordinary
shares. </P>
<P align=justify><B><I>Anti-Money Laundering &#151; Cayman Islands</I></B></P>
<P align=justify>In order to comply with legislation or regulations aimed at the
prevention of money laundering, we may adopt and maintain anti-money laundering
procedures, and we may require shareholders to provide evidence to verify their
identity and source of funds. Where permitted, and subject to certain
conditions, we may also delegate the maintenance of our anti-money laundering
procedures (including the acquisition of due diligence information) to a
suitable person.</P>
<P align=justify>We reserve the right to request such information as is
necessary to verify the identity of a shareholder unless in the particular case
we are satisfied that an exemption applies under the Money Laundering
Regulations (2009 Revision) of the Cayman Islands, as amended and revised from time to time,
or the Regulations. Depending on the circumstances of each application, a
detailed verification of identity might not be required where: </P>
<P align=center>77</P>
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<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the shareholder makes the payment for their investment from an account held
  in the applicant&#146;s name at a recognized financial institution; or </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the shareholder is regulated by a recognized regulatory authority and is
  based or incorporated in, or formed under the law of, a recognized
  jurisdiction; or </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the purchase of shares is made through an intermediary which is regulated
  by a recognized regulatory authority and is based in or incorporated in, or
  formed under the law of a recognized jurisdiction, and an assurance is
  provided in relation to the procedures undertaken on the underlying investors.
  </P></LI></UL>
<P align=justify>For the purposes of these exceptions, recognition of a
financial institution, regulatory authority or jurisdiction will be determined
in accordance with the Regulations by reference to those jurisdictions
recognized by the Cayman Islands Monetary Authority as having equivalent
anti-money laundering regulations. </P>
<P align=justify>In the event of delay or failure on the part of a shareholder
in producing any information required for verification purposes, we may refuse
to accept the application, in which case any funds received will be returned
without interest to the account from which they were originally debited.</P>
<P align=justify>We also reserve the right to refuse to make any redemption
payment to a shareholder if our directors suspect, or are advised that, the
payment of redemption proceeds to such shareholder might result in a breach of
applicable anti-money laundering or other laws or regulations by any person in
any relevant jurisdiction, or if such refusal is considered necessary or
appropriate to ensure the compliance by us with any such laws or regulations in
any applicable jurisdiction. </P>
<P align=justify>If any person resident in the Cayman Islands knows or suspects,
or has reasonable grounds for knowing or suspecting, that another person is
engaged in criminal conduct or is involved with terrorism or terrorist property,
and the information for that knowledge or suspicion came to their attention in
the course of business in the regulated sector, the person will be required to
report such knowledge or suspicion to (i) the Financial Reporting Authority of
the Cayman Islands, pursuant to the Proceeds of Crime Law, 2008 of the Cayman
Islands, if the disclosure relates to criminal conduct or money laundering, or
(ii) a police officer of the rank of constable or higher pursuant to the
Terrorism Law (2009 Revision) of the Cayman Islands, if the disclosure relates
to involvement with terrorism or terrorist financing and property. Such a report
shall not be treated as a breach of confidence or of any restriction upon the
disclosure of information imposed by any enactment or otherwise. </P>
<P align=justify><B><I>Mergers and Similar Arrangements</I></B></P>
<P align=justify>In certain circumstances, the Cayman Islands Companies Law
allows for mergers or consolidations between two Cayman Islands companies or
between a Cayman Islands company and a company incorporated in another
jurisdiction (provided that it is permitted by the laws of that other
jurisdiction).</P>
<P align=justify>Where the merger or consolidation is between two Cayman Islands
companies, the directors of each company must approve a written plan of merger
or consolidation containing certain prescribed information. That plan of merger
or consolidation must then be authorized by either (a) a special resolution
(usually a majority of 66 2/3% in value) of the shareholders of each company
voting together as one class if the shares to be issued to each shareholder in
the consolidated or surviving company will have the same rights and economic
value as the shares held in the relevant constituent company or (b) a
shareholder resolution of each company passed by a majority in number
representing 75% in value of the shareholders voting together as one class. A
shareholder has the right to vote on a merger or consolidation regardless of
whether the shares that he or she holds otherwise give him or her voting rights.
No shareholder resolution is required for a merger between a parent company
(i.e., a company that owns at least 90% of the issued shares of each class in a
subsidiary company) and its subsidiary company. The consent of each holder of a
fixed or floating security interest of a constituent company must be obtained
unless the court waives such requirement. If the Cayman Islands Registrar of
Companies is satisfied that the requirements of the Companies Law (which
includes certain other formalities) have been complied with, the Registrar of
Companies will register the plan of merger or consolidation.</P>
<P align=center>78</P>
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<P align=justify>Where the merger or consolidation involves a foreign
constituent company, and where the surviving company is a Cayman Islands company, the procedure is similar, save that,
with respect to the foreign constituent company, the director of the surviving
or consolidated company is required to make a declaration to the effect that,
having made due enquiry, he or she is of the opinion that the requirements set
out below have been met: (i) that the merger or consolidation is permitted, or
not prohibited, by the constitutional documents of the foreign company and by
the laws of the jurisdiction in which the foreign company is incorporated, and
that those laws, and any requirements of those constitutional documents have
been, or will be, complied with; (ii) that no petition or other similar
proceeding has been filed and remains outstanding or order made or resolution
adopted to wind up or liquidate the foreign company in any jurisdictions; (iii)
that no receiver, trustee, administrator or other similar person has been
appointed in any jurisdiction and is acting in respect of the foreign company,
its affairs or its property or any part thereof; (iv) that no scheme, order,
compromise or other similar arrangement has been entered into or made in any
jurisdiction whereby the rights of creditors of the foreign company are, and
continue to be, suspended or restricted; (v) that the foreign company is able to
pay its debts as they fall due and that the merger or consolidation is bona fide
and not intended to defraud unsecured creditors of the foreign company; (vi)
that in respect of the transfer of any security interest granted by the foreign
company to the surviving or consolidated company (a) consent or approval to the
transfer has been obtained, released or waived; (b) the transfer is permitted
by, and has been approved in accordance with, the constitutional documents of
the foreign company; and (c) the laws of the jurisdiction of the foreign company
with respect to the transfer have been ,or will be, complied with; (vii) that
the foreign company will, upon the merger or consolidation becoming effective,
cease to be incorporated, registered or exist under the laws of the relevant
foreign jurisdiction; and (viii) that there is no other reason why it would be
against the public interest to permit the merger or consolidation. </P>
<P align=justify>Where the above procedures are adopted, the Companies Law
provides for a right of dissenting shareholders to receive a payment of the fair
value of their shares upon their dissenting to the merger or consolidation if
they follow a prescribed procedure. In essence, that procedure is as follows:
(a) the shareholder must give his or her written objection to the merger or
consolidation to the constituent company before the vote on the merger or
consolidation, including a statement that the shareholder proposes to demand
payment for his or her shares if the merger or consolidation is authorized by
the vote; (b) within 20 days following the date on which the merger or
consolidation is approved by the shareholders, the constituent company must give
written notice to each shareholder who made a written objection; (c) a
shareholder must, within 20 days following receipt of such notice from the
constituent company, give the constituent company a written notice of his or her
intention to dissent, including, among other details, a demand for payment of
the fair value of his or her shares; (d) within seven days following the date of
the expiration of the period set out in paragraph (b) above, or seven days
following the date on which the plan of merger or consolidation is filed,
whichever is later, the constituent company, the surviving company or the
consolidated company must make a written offer to each dissenting shareholder to
purchase his or her shares at a price that the company determines is the fair
value and, if the company and the shareholder agree the price within 30 days
following the date on which the offer was made, the company must pay the
shareholder such amount; and (e) if the company and the shareholder fail to
agree a price within such 30-day period, within 20 days following the date on
which such 30-day period expires, the company (and any dissenting shareholder)
must file a petition with the Cayman Islands Grand Court to determine the fair
value and such petition must be accompanied by a list of the names and addresses
of the dissenting shareholders with whom agreements as to the fair value of
their shares have not been reached by the company. At the hearing of that
petition, the court has the power to determine the fair value of the shares
together with a fair rate of interest, if any, to be paid by the company upon
the amount determined to be the fair value. Any dissenting shareholder whose
name appears on the list filed by the company may participate fully in all
proceedings until the determination of fair value is reached. These rights of a
dissenting shareholder may not be available in certain circumstances, for
example, to dissenters holding shares of any class in respect of which an open
market exists on a recognized stock exchange or recognized interdealer quotation
system at the relevant date or where the consideration for such shares to be
contributed are shares of any company listed on a national securities exchange
or shares of the surviving or consolidated company.</P>
<P align=justify>Moreover, Cayman Islands law also has separate statutory
provisions that facilitate the reconstruction or amalgamation of companies and,
in certain circumstances, schemes of arrangement will generally be more suited
for complex mergers or other transactions involving widely-held companies,
commonly referred to in the Cayman Islands as a &#147;scheme of arrangement&#148;, which
may be tantamount to a merger. In the event that a merger was sought pursuant to
a scheme of arrangement (the procedures of which are more rigorous, and take
longer to complete, than the procedures typically required to consummate a
merger in the United States), the arrangement in question must be approved by a
majority in number of each class of shareholders and creditors with whom the
arrangement is to be made and who must in addition represent three-fourths in
value of each such class of shareholders or creditors, as the case may be, that
are present and voting either in person or by proxy at a meeting. The convening
of the meetings and, subsequently, the terms of the arrangement, must be
sanctioned by the Grand Court of the Cayman Islands.</P>
<P align=center>79</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_86></A>
<P align=justify>While a dissenting shareholder would have the right to express
to the court the view that the transaction should not be approved, the court can
be expected to approve the arrangement if it satisfies itself that: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">we are not proposing to act illegally or beyond the scope of our corporate
  authority, and the statutory provisions as to majority vote have been complied
  with; </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the shareholders have been fully informed and were fairly represented at
  the meeting in question; </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the arrangement is such as a businessperson could reasonably approve; and
  </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the arrangement would not amount to a &#147;fraud on the minority.&#148; </P></LI></UL>
<P align=justify>If a scheme of arrangement or takeover offer (as described
below) is approved, any dissenting shareholder would have no rights comparable
to appraisal rights, which would otherwise ordinarily be available to dissenting
shareholders of United States corporations, providing rights to receive payment
in cash for the judicially determined value of the shares. </P>
<P align=justify>Further, transactions similar to a merger, reconstruction
and/or an amalgamation may, in some circumstances, be achieved through other
means to these statutory provisions, such as a share capital exchange, asset
acquisition or control, through contractual arrangements, of an operating
business. </P>
<P align=justify><B><I>Squeeze-out Provisions</I></B></P>
<P align=justify>When a takeover offer is made and accepted by holders of 90% of
the shares to whom the offer is made within four months, the offeror may, within
a two-month period, require the holders of the remaining shares to transfer such
shares on the terms of the offer. An objection can be made to the Grand Court of
the Cayman Islands, but this is unlikely to succeed unless there is evidence of
fraud, bad faith, collusion or inequitable treatment of the shareholders. </P>
<P align=justify><B><I>Shareholders' Suits</I></B></P>
<P align=justify>Our Cayman Islands counsel is not aware of any reported class
action having been brought in a Cayman Islands court. Derivative actions have
been brought in the Cayman Islands courts, and the Cayman Islands courts have
confirmed their availability for such actions. In most cases, we will be the
proper plaintiff in any claim based on a breach of duty owed to us, and a claim
against (for example) our officers or directors usually may not be brought by a
shareholder. However, based on English authorities, which would in all
likelihood be of persuasive authority and be applied by a court in the Cayman
Islands, exceptions to the foregoing principle apply in circumstances in which:
</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">a company is acting, or proposing to act, illegally or beyond the scope of
  its authority; </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the act complained of, although not beyond the scope of the authority,
  could be effected if duly authorized by more than the number of votes which
  have actually been obtained; or </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">those who control the company are perpetrating a &#147;fraud on the minority.&#148;
  </P></LI></UL>
<P align=justify>A shareholder may have a direct right of action against us
where the individual rights of that shareholder have been infringed or are about
to be infringed. </P>
<P align=justify><B>Transfer Agent and Registrar</B></P>
<P align=justify>Our independent stock transfer agent is Interwest Transfer
Company, Inc., located in Salt Lake City, Utah. Their mailing address is 1981
East 4800 South, Suite 100, Salt Lake City, Utah 84117. Their phone number is
(801) 272-9294. </P>
<P align=center><B>SHARES ELIGIBLE FOR FUTURE SALE</B></P>
<P align=justify>Prior to this offering, there has been no public market for our
ordinary shares. Future sales of substantial amounts of our ordinary shares in
the public market could adversely affect market prices. Upon completion of this
offering, we will have outstanding an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ordinary shares, assuming no exercise of the underwriters&#146; over-allotment
option. The&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ordinary shares sold in the offering and the 5,065,785 ordinary shares that we
are concurrently registering under a separate prospectus for resale by the
selling stockholders named in such prospectus, will be freely tradable without
restriction or further registration under the Securities Act, except that any
shares purchased by our &#147;affiliates,&#148; as that term is defined in Rule 144 of the
Securities Act, may generally only be sold in compliance with the limitations of
Rule 144 described below. </P>
<P align=center>80</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_87></A>
<P align=justify>All other outstanding shares not sold in this offering or
registered under a separate resale prospectus will be deemed &#147;restricted
securities&#148; under Rule 144. Restricted securities may be sold in the public
market only if registered or if they qualify for an exemption from registration
(under Rule 144 or otherwise) under the Securities Act. Rule 144 is described
below.</P>
<P align=justify><B>Rule 144</B></P>
<P align=justify>In general, under Rule 144 as currently in effect, a person (or
persons whose shares are aggregated) who is deemed to be an affiliate of ours at
the time of sale, or at any time during the preceding three months, and who has
beneficially owned restricted shares for at least six months, would be entitled
to sell within any three-month period a number of shares that does not exceed
the greater of 1% of the then outstanding shares or the average weekly trading
volume of shares during the four calendar weeks preceding such sale. Sales under
Rule 144 are subject to certain manner of sale provisions, notice requirements
and the availability of current public information about us. A person who has
not been our affiliate at any time during the three months preceding a sale, and
who has beneficially owned his shares for at least six months, would be entitled
under Rule 144 to sell such shares without regard to any manner of sale, notice
provisions or volume limitations described above. Any such sales must comply
with the public information provision of Rule 144 until our ordinary shares have
been held for one year. </P>
<P align=justify>Because we were a shell company with no operations prior to the
close of the share exchange transaction with Leewell, none of our ordinary
shares may be sold pursuant to Rule 144 until April 19, 2011, which is 12 months
after the filing of a current report on Form 8-K reporting the closing of the
share exchange transaction with Leewell.</P>
<P align=justify><B>Lock-Up Agreements</B></P>
<P align=justify>In connection with the private placement closed on April 14,
2010, we entered into the Lock-up Agreement, with Longhai Holdings and each of
our directors and officers, pursuant to which each of them agreed not to
transfer any of our capital stock held directly or indirectly by them for an
eighteen-month period following the closing of the private placement on April
14, 2010. </P>
<P align=center><B>UNDERWRITING</B><BR></P>
<P align=justify>Subject to the terms and conditions in the underwriting
agreement,
dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
, 2010, by and among us and Brean Murray, Carret &amp; Co., LLC, who is acting
as the representative of the underwriters of this offering, each underwriter
named below has severally agreed to purchase from us, on a firm commitment
basis, the number of ordinary shares set forth opposite its name below, at the
public offering price, less the underwriting discount set forth on the cover
page of this prospectus: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Number</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><U>Underwriter</U></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>of Shares</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Brean Murray, Carret &amp; Co., LLC </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Total</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="12%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>The underwriters have agreed to purchase all of the shares
offered by this prospectus if they are purchased. Under the terms of the
underwriting agreement, if an underwriter defaults in its commitment to purchase
shares, the commitments of non-defaulting underwriters may be increased or the
underwriting agreement may be terminated, depending on the circumstances. The
underwriting agreement also provides that the obligations of the underwriters to
pay for and accept delivery of the shares are subject to the passing upon of
certain legal matters by counsel and certain conditions such as confirmation of
the accuracy of representations and warranties by us about our financial
condition and operations and other matters. </P>
<P align=center>81</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_88></A>
<P align=justify>The shares should be ready for delivery on or
about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;, 2010 against payment in immediately available funds. The underwriters
may reject all or part of any order. </P>
<P align=justify><B>Commissions and Discounts</B> </P>
<P align=justify>The underwriters will initially offer the shares to be sold in
this offering directly to the public at the initial public offering price set
forth on the cover of this prospectus and to selected dealers at the initial
public offering price less a selling concession not in excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share. After the offering,
the underwriters may change the offering price and other selling terms. No
change in those terms will change the amount of proceeds to be received by us as
set forth on the cover of this prospectus. </P>
<P align=justify>The following table shows the public offering price,
underwriting fees and expenses to be paid by us to the underwriters and the
proceeds of the public offering, before expenses, to us.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="14%"><B>Per
      Share</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="14%"><B>Aggregate Amount</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Public offering price </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="14%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="14%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Underwriting discount </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="14%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="14%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Non-accountable expense allowance (1)</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="14%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="14%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Proceeds before other expenses (2) </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="14%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="14%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=justify>(1) The non-accountable expense allowance
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the
gross proceeds of the offering is not payable with respect to the ordinary shares sold upon exercise of the underwriters&#146; over-allotment option. </P>
<P align=justify>(2) We estimate that the total expense of this offering
excluding the underwriters&#146; discount and the non-accountable expense allowance
will be approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
.. These expenses include, but are not limited to, SEC registration fees,
Financial Industry Regulatory, Inc., or FINRA, filing fees, NASDAQ Global Market
filing fees, accounting fees and expenses, legal fees and expenses, printing and
engraving expenses and transfer agent fees.</P>
<P align=justify>The distribution of our securities will end upon the
underwriters&#146; cessation of selling efforts and stabilization activities. </P>
<P align=justify><B>Overallotment Option </B></P>
<P align=justify>We have granted an option to the underwriters to purchase up
to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; additional shares at
the public offering price, less the underwriting discount. The underwriters may
exercise this option for 30 days from the date of this prospectus solely to
cover overallotments. If this option is exercised in full, the total price to
the public will be
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
million and the total proceeds to us will be
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;million. The
underwriters have severally agreed that, to the extent the over-allotment option
is exercised, they will each purchase a number of additional shares
proportionate to the underwriter&#146;s initial amount reflected in the table above.
</P>
<P align=justify><B>Representative&#146;s Warrant </B></P>
<P align=justify>We have also agreed to issue to Brean Murray, &amp; Carret Co.,
LLC, a  warrant to purchase a number of our ordinary shares
equal to an aggregate of five (5%) percent of the ordinary shares sold in the
offering. The warrant will have an exercise price equal to 125% of the offering
price of the shares sold in this offering. The warrants are exercisable for five
(5) years from the issue date. The warrant is not redeemable by us, and allows
for &#147;cashless&#148; exercise. The warrant also provides for unlimited &#147;piggyback&#148;
registration rights at our expense with respect to the underlying ordinary shares during the five (5) year period. Pursuant to the rules of the FINRA
(formerly the NASD), and in particular Rule 5110, the warrant (and underlying
shares) issued to Brean Murray, &amp; Carret Co., LLC may not be sold,
transferred, assigned, pledged, or hypothecated, or the subject of any hedging,
short sale, derivative, put or call transaction that would result in the
effective disposition of the securities by any person for a period of 180 days
immediately following the date of delivery and payment for the shares offered;
<I>provided, however</I>, that the warrant (and underlying shares) may be
transferred to officers or partners of Brean Murray, &amp; Carret Co., LLC and
members of the underwriting syndicate as long as the warrants (and underlying
shares) remain subject to the lockup. </P>
<P align=center>82</P>
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noShade SIZE=5>
<A name=page_89></A>
<P align=justify><B>Other Terms</B></P>
<P align=justify>The underwriting agreement provides for indemnification between
us and the underwriters against specified liabilities, including liabilities
under the Securities Act, and for contribution by us and the underwriters to
payments that may be required to be made with respect to those liabilities. We
have been advised that, in the opinion of the SEC, indemnification liabilities
under the Securities Act is against public policy as expressed in the Securities
Act, and is therefore, unenforceable. </P>
<P align=justify><B>Price Stabilization, Short Positions</B></P>
<P align=justify>Until the distribution of the ordinary shares offered by this
prospectus is completed, rules of the SEC may limit the ability of the
underwriters to bid for and to purchase our ordinary shares. As an exception to
these rules, the underwriters may engage in transactions effected in accordance
with Regulation M under the Exchange Act that are intended to stabilize,
maintain or otherwise affect the price of our ordinary shares. The underwriters
may engage in over-allotment sales, syndicate covering transactions, stabilizing
transactions and penalty bids in accordance with Regulation M.</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P><I>Stabilizing Transactions</I>. The underwriters may make bids or
  purchases for the purpose of pegging, fixing or maintaining the price of our
  securities, so long as stabilizing bids do not exceed the maximum price
  specified in Regulation M, which generally requires, among other things, that
  no stabilizing bid shall be initiated at or increased to a price higher than
  the lower of the offering price or the highest independent bid for the
  security on the principal trading market for the security. </P>
  <LI>
  <P><I>Over-allotment Sales. </I>The underwriters may exercise the
  over-allotment option which involves sales by the underwriters of ordinary
  shares in excess of the number of ordinary shares the underwriters are
  obligated to purchase, which creates a short position. The short position may
  be either a covered short position or a naked short position. In a covered
  short position, the number of ordinary shares over-allotted by the
  underwriters is not greater than the number of ordinary shares that they may
  purchase in the over-allotment option. In a naked short position, the number
  of ordinary shares involved is greater than the number of shares in the
  over-allotment option. The underwriters may close out any covered short
  position by either exercising their over-allotment option or purchasing our
  ordinary shares in the open market. </P>
  <LI>
  <P><I>Syndicate Coverage Transactions. </I>The underwriters may create a short
  position in our securities by selling more of our securities than are set
  forth on the cover page of this prospectus. If the underwriters create a short
  position during the offering, the representatives may engage in syndicate
  covering transactions by purchasing our securities in the open market. </P>
  <LI>
  <P><I>Penalty Bids</I>. The representatives may reclaim a selling concession
  from a syndicate member when the units originally sold by the syndicate member
  is purchased in a stabilizing or syndicate covering transaction to cover
  syndicate short positions. </P></LI></UL>
<P align=justify>Stabilization, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of our ordinary
shares or preventing or retarding a decline in the market price of our ordinary
shares. As a result, the price of our ordinary shares may be higher than the
price that might otherwise exist in the open market. </P>
<P align=justify>Neither we nor the underwriters make any representation or
prediction as to the effect that the transactions described above may have on
the prices of our ordinary shares. These transactions may occur on the NASDAQ or
on any trading market. If any of these transactions are commenced, they may be
discontinued without notice at any time. </P>
<P align=justify>A prospectus in electronic format may be made available on a
website maintained by the representatives of the underwriters and may also be
made available on a website maintained by other underwriters. The underwriters
may agree to allocate a number of shares to underwriters for sale to their
online brokerage account holders. Internet distributions will be allocated by
the representatives of the underwriters to underwriters that may make Internet
distributions on the same basis as other allocations. In connection with the
offering, the underwriters or syndicate members may distribute prospectuses
electronically. No forms of prospectus other than printed prospectuses and
electronically distributed prospectuses that are printable in Adobe .PDF format
will be used in connection with this offering. </P>
<P align=center>83</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_90></A>
<P align=justify>The underwriters have informed us that they do not expect to
confirm sales of ordinary shares offered by this prospectus to accounts over
which they exercise discretionary authority without obtaining the specific
approval of the account holder. </P>
<P align=justify><B>Foreign Regulatory Restrictions on Purchase of the Ordinary
Shares </B></P>
<P align=justify>No action may be taken in any jurisdiction other than the
United States that would permit a public offering of the ordinary shares or the
possession, circulation or distribution of this prospectus in any jurisdiction
where action for that purpose is required. Accordingly, the ordinary shares may
not be offered or sold, directly or indirectly, and neither the prospectus nor
any other offering material or advertisements in connection with the ordinary
shares may be distributed or published in or from any country or jurisdiction
except under circumstances that will result in compliance with any applicable
rules and regulations of any such country or jurisdiction. </P>
<P align=justify>In addition to the public offering of the shares in the United
States, the underwriters may, subject to the applicable foreign laws, also offer
the ordinary shares to certain institutions or accredited persons in the following
countries: </P>
<P align=justify><I>United Kingdom. </I>No offer of ordinary shares has been
made or will be made to the public in the United Kingdom within the meaning of
Section 102B of the Financial Services and Markets Act 2000, as amended, or
FSMA, except to legal entities which are authorized or regulated to operate in
the financial markets or, if not so authorized or regulated, whose corporate
purpose is solely to invest in securities or otherwise in circumstances which do
not require the publication by us of a prospectus pursuant to the Prospectus
Rules of the Financial Services Authority, or FSA. Each underwriter: (i) has
only communicated or caused to be communicated and will only communicate or
cause to be communicated an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of FSMA) to persons who have
professional experience in matters relating to investments falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 or in circumstances in which Section 21 of FSMA does not
apply to us; and (ii) has complied with, and will comply with all applicable
provisions of FSMA with respect to anything done by it in relation to the shares
in, from or otherwise involving the United Kingdom. </P>
<P align=justify><I>European Economic Area.</I> In relation to each member state
of the European Economic Area which has implemented the Prospectus Directive,
which we refer to as a Relevant Member State, with effect from and including the
date on which the Prospectus Directive is implemented in that Relevant Member
State, which we refer to as the Relevant Implementation Date, no offer of
ordinary shares has been made and or will be made to the public in that Relevant
Member State prior to the publication of a prospectus in relation to the
ordinary shares which has been approved by the competent authority in that
Relevant Member State or, where appropriate, approved in another Relevant Member
State and notified to the competent authority in that Relevant Member State, all
in accordance with the Prospectus Directive, except that, with effect from and
including the Relevant Implementation Date, an offer of ordinary shares may be
made to the public in that Relevant Member State at any time: (a) to legal
entities which are authorized or regulated to operate in the financial markets
or, if not so authorized or regulated, whose corporate purpose is solely to
invest in securities; (b) to any legal entity which has two or more of (i) an
average of at least 250 employees during the last financial year; (ii) a total
balance sheet of more than &euro;43,000,000 and (iii) an annual net turnover of more
than &euro;50,000,000, as shown in its last annual or consolidated accounts; or (c)
in any other circumstances which do not require the publication by us of a
prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes
of this provision, the expression an &#147;offer of ordinary shares to the public&#148; in
relation to any ordinary shares in any Relevant Member State means the
communication in any form and by any means of sufficient information on the
terms of the offer and the ordinary shares to be offered so as to enable an
investor to decide to purchase or subscribe the ordinary shares, as the same may
be varied in that Relevant Member State by any measure implementing the
Prospectus Directive in that Relevant Member State and the expression Prospectus
Directive means Directive 2003/71/ EC and includes any relevant implementing
measure in each Relevant Member State. </P>
<P align=justify><I>Germany. </I>Any offer or solicitation of ordinary shares
within Germany must be in full compliance with the German Securities Prospectus
Act (Wertpapierprospektgesetz &#151; WpPG). The offer and solicitation of securities
to the public in Germany requires the approval of the prospectus by the German
Federal Financial Services Supervisory Authority (Bundesanstalt f&#252;r
Finanzdienstleistungsaufsicht &#151; BaFin). This prospectus has not been and will
not be submitted for approval to the BaFin. This prospectus does not constitute
a public offer under the German Securities Prospectus Act
(Wertpapierprospektgesetz). This prospectus and any other document relating to
the ordinary shares, as well as any information contained therein, must
therefore not be supplied to the public in Germany or used in connection with
any offer for subscription of the ordinary shares to the public in Germany, any
public marketing of the ordinary shares or any public solicitation for offers to subscribe for or
otherwise acquire the ordinary shares. The prospectus and other offering
materials relating to the offer of the ordinary shares are strictly confidential
and may not be distributed to any person or entity other than the designated
recipients hereof. </P>
<P align=center>84</P>
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<P align=justify><I>Greece. </I>This prospectus has not been approved by the
Hellenic Capital Markets Commission or another EU equivalent authority and
consequently is not addressed to or intended for use, in any way whatsoever, by
Greek residents. The ordinary shares have not been offered or sold and will not
be offered, sold or delivered directly or indirectly in Greece, except to (i)
&#147;qualified investors&#148; (as defined in article 2(f) of Greek Law 3401/2005) and/or
to (ii) less than 100 individuals or legal entities, who are not qualified
investors (article 3, paragraph 2(b) of Greek Law 3401/2005), or otherwise in
circumstances which will not result in the offer of the new ordinary shares
being subject to the Greek Prospectus requirements of preparing a filing a
prospectus (under articles 3 and 4 of Greek Law 3401/2005). </P>
<P align=justify><I>Italy.</I> This offering of the ordinary shares has not been
cleared by Consob, the Italian Stock Exchanges regulatory agency of public
companies, pursuant to Italian securities legislation and, accordingly, no
ordinary shares may be offered, sold or delivered, nor may copies of this
prospectus or of any other document relating to the ordinary shares be
distributed in Italy, except (1) to professional investors (operatori
qualificati); or (2) in circumstances which are exempted from the rules on
solicitation of investments pursuant to Decree No. 58 and Article 33, first
paragraph, of Consob Regulation No. 11971 of May 14, 1999, as amended. Any
offer, sale or delivery of the ordinary shares or distribution of copies of this
prospectus or any other document relating to the ordinary shares in Italy under
(1) or (2) above must be (i) made by an investment firm, bank or financial
intermediary permitted to conduct such activities in Italy in accordance with
the Decree No. 58 and Legislative Decree No. 385 of September 1, 1993, or the
Banking Act; and (ii) in compliance with Article 129 of the Banking Act and the
implementing guidelines of the Bank of Italy, as amended from time to time,
pursuant to which the issue or the offer of securities in Italy may need to be
preceded and followed by an appropriate notice to be filed with the Bank of
Italy depending, inter alia, on the aggregate value of the securities issued or
offered in Italy and their characteristics; and (iii) in compliance with any
other applicable laws and regulations. </P>
<P align=justify><I>Cyprus.</I> The Underwriter has agreed that (i) it will not
be providing from or within Cyprus any &#147;Investment Services&#148;, &#147;Investment
Activities&#148; and &#147;Non-Core Services&#148; (as such terms are defined in the Investment
Firms Law 144(I) of 2007, (the &#147;IFL&#148;) in relation to the ordinary shares, or
will be otherwise providing Investment Services, Investment Activities and
Non-Core Services to residents or persons domiciled in Cyprus. Each underwriter
has agreed that it will not be concluding in Cyprus any transaction relating to
such Investment Services, Investment Activities and Non-Core Services in
contravention of the IFL and/or applicable regulations adopted pursuant thereto
or in relation thereto; and (ii) it has not and will not offer any of the
ordinary shares other than in compliance with the provisions of the Public Offer
and Prospectus Law, Law 114(I)/2005. </P>
<P align=justify><I>Switzerland.</I> This document does not constitute a
prospectus within the meaning of Art. 652a of the Swiss Code of Obligations. The
ordinary shares may not be sold directly or indirectly in or into Switzerland
except in a manner which will not result in a public offering within the meaning
of the Swiss Code of Obligations. Neither this document nor any other offering
materials relating to the ordinary shares may be distributed, published or
otherwise made available in Switzerland except in a manner which will not
constitute a public offer of the ordinary shares of in Switzerland. </P>
<P align=justify><I>Norway.</I> This prospectus has not been approved or
disapproved by, or registered with, the Oslo Stock Exchange, the Norwegian
Financial Supervisory Authority (Kredittilsynet) nor the Norwegian Registry of
Business Enterprises, and the ordinary shares are marketed and sold in Norway on
a private placement basis and under other applicable exceptions from the
offering prospectus requirements as provided for pursuant to the Norwegian
Securities Trading Act. </P>
<P align=justify><I>Botswana.</I> The company hereby represents and warrants
that it has not offered for sale or sold, and will not offer or sell, directly
or indirectly the ordinary shares to the public in the Republic of Botswana, and
confirms that the offering will not be subject to any registration requirements
as a prospectus pursuant to the requirements and/or provisions of the Companies
Act, 2003 or the Listing Requirements of the Botswana Stock Exchange. </P>
<P align=justify><I>Hong Kong.</I> The ordinary shares may not be offered or
sold by means of any document other than (i) in circumstances which do not
constitute an offer to the public within the meaning of the Companies Ordinance
(Cap.32, Laws of Hong Kong), or (ii) to &#147;professional investors&#148; within the
meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and
any rules made thereunder, or (iii) in other circumstances which do not result
in the document being a &#147;prospectus&#148; within the meaning of the Companies
Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or
document relating to the ordinary shares may be issued or may be in the
possession of any person for the purpose of issue (in each case whether in Hong
Kong or elsewhere), which is directed at, or the contents of which are likely to
be accessed or read by, the public in Hong Kong (except if permitted to do so
under the laws of Hong Kong) other than with respect to ordinary shares which
are or are intended to be disposed of only to persons outside Hong Kong or only
to &#147;professional investors&#148; within the meaning of the Securities and Futures
Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder. </P>
<P align=center>85</P>
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<P align=justify><I>Singapore.</I> This prospectus has not been registered as a
prospectus with the Monetary Authority of Singapore. Accordingly, this
prospectus and any other document or material in connection with the offer or
sale, or invitation for subscription or purchase, of the ordinary shares may not
be circulated or distributed, nor may the ordinary shares be offered or sold, or
be made the subject of an invitation for subscription or purchase, whether
directly or indirectly, to persons in Singapore other than (i) to an
institutional investor under Section 274 of the Securities and Futures Act,
Chapter 289 of Singapore, or the SFA, (ii) to a relevant person, or any person
pursuant to Section 275(1A), and in accordance with the conditions, specified in
Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with
the conditions of, any other applicable provision of the SFA. Where the ordinary
shares are subscribed or purchased under Section 275 by a relevant person which
is: (a) a corporation (which is not an accredited investor) the sole business of
which is to hold investments and the entire share capital of which is owned by
one or more individuals, each of whom is an accredited investor; or (b) a trust
(where the trustee is not an accredited investor) whose sole purpose is to hold
investments and each beneficiary is an accredited investor, shares, debentures
and units of shares and debentures of that corporation or the beneficiaries&#146;
rights and interest in that trust shall not be transferable for 6 months after
that corporation or that trust has acquired the ordinary shares under Section
275 except: (i) to an institutional investor under Section 274 of the SFA or to
a relevant person, or any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA; (ii) where no
consideration is given for the transfer or (iii) by operation of law. </P>
<P align=justify><I>People&#146;s Republic of China. </I>This prospectus has not been
and will not be circulated or distributed in the PRC, and ordinary shares may
not be offered or sold, and will not be offered or sold to any person for
re-offering or resale, directly or indirectly, to any resident of the PRC except
pursuant to applicable laws and regulations of the PRC. For the purpose of this
paragraph only, the PRC does not include Taiwan and the special administrative
regions of Hong Kong and Macau. </P>
<P align=justify><I>Israel.</I> This Prospectus does not constitute an offer to
sell the ordinary shares to the public in Israel or a prospectus under the
Israeli Securities Law, 5728-1968 and the regulations promulgated thereunder, or
the Israeli Securities Law, and has not been filed with or approved by the
Israel Securities Authority. In Israel, pursuant to an exemption afforded under
the Israeli Securities Law, this Prospectus may be distributed only to, and may
be directed only at, investors listed in the first addendum to the Israeli
Securities Law, or the Addendum, consisting primarily of certain mutual trust
and provident funds, or management companies thereto, banks, as defined under
the Banking (Licensing) Law, 5741-1981, except for joint service companies
purchasing for their own account or for clients listed in the Addendum,
insurers, as defined under the Supervision of Financial Services Law
(Insurance), 5741-1981, portfolio managers purchasing for their own account or
for clients listed in the Addendum, investment advisers purchasing for their own
account, Tel Aviv Stock Exchange members purchasing for their own account or for
clients listed in the Addendum, underwriters purchasing for their own account,
venture capital funds, certain corporations which primarily engage in the
capital market and fully-owned by investors listed in the Addendum and
corporations whose equity exceeds NIS250 Million, collectively referred to as
institutional investors. Institutional investors may be required to submit
written confirmation that they fall within the scope of the Addendum. </P>
<P align=justify><I>United Arab Emirates.</I> This document has not been
reviewed, approved or licensed by the Central Bank of the United Arab Emirates
(the &#147;UAE&#148;), Emirates Securities and Commodities Authority or any other relevant
licensing authority in the UAE including any licensing authority incorporated
under the laws and regulations of any of the free zones established and
operating in the territory of the UAE, in particular the Dubai International
Financial Services Authority (the &#147;DFSA&#148;), a regulatory authority of the Dubai
International Financial Centre (the &#147;DIFC&#148;). The issue of ordinary shares does
not constitute a public offer of securities in the UAE, DIFC and/or any other
free zone in accordance with the Commercial Companies Law, Federal Law No. 8 of
1984 (as amended), DFSA Offered Securities Rules and the Dubai International
Financial Exchange Listing Rules, accordingly, or otherwise. The ordinary shares
may not be offered to the public in the UAE and/or any of the free zones
including, in particular, the DIFC. The ordinary shares may be offered and this
document may be issued, only to a limited number of investors in the UAE or any
of its free zones (including, in particular, the DIFC) who qualify as
sophisticated investors under the relevant laws and regulations of the UAE or the free zone concerned.
Management of the company, and the representatives represent and warrant that
the ordinary shares will not be offered, sold, transferred or delivered to the
public in the UAE or any of its free zones including, in particular, the DIFC. </P>
<P align=center>86</P>
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<P align=justify><I>Oman.</I> For the attention of the residents of Oman:</P>
<P align=justify>The information contained in this memorandum neither
constitutes a public offer of securities in the Sultanate of Oman (&#147;Oman&#148;) as
contemplated by the Commercial Companies Law of Oman (Sultani Decree 4/74) or
the Capital Market Law of Oman (Sultani Decree 80/98), nor does it constitute an
offer to sell, or the solicitation of any offer to buy non-Omani securities in
Oman as contemplated by Article 6 of the Executive Regulations to the Capital
Market Law of Oman (issued vide Ministerial Decision No 4/2001), and nor does it
constitute a distribution of non-Omani securities in Oman as contemplated under
the Rules for Distribution of Non-Omani Securities in Oman issued by the Capital
Market Authority of Oman (&#147;CMA&#148;). Additionally, this memorandum is not intended
to lead to the conclusion of any contract of whatsoever nature within the
territory of Oman. </P>
<P align=justify>This memorandum has been sent at the request of the investor in
Oman, and by receiving this memorandum, the person or entity to whom it has been
issued and sent understands, acknowledges and agrees that this memorandum has
not been approved by the CMA or any other regulatory body or authority in Oman,
nor has any authorization, license or approval been received from the CMA or any
other regulatory authority in Oman, to market, offer, sell, or distribute the
ordinary shares within Oman. </P>
<P align=justify>No marketing, offering, selling or distribution of any
financial or investment products or services has been or will be made from
within Oman and no subscription to any securities, products or financial
services may or will be consummated within Oman. The Underwriter is not a
company licensed by the CMA to provide investment advisory, brokerage, or
portfolio management services in Oman, nor banks licensed by the Central Bank of
Oman to provide investment banking services in Oman. The Underwriter does not
advise persons or entities resident or based in Oman as to the appropriateness
of investing in or purchasing or selling securities or other financial products.
</P>
<P align=justify>Nothing contained in this memorandum is intended to constitute
Omani investment, legal, tax, accounting or other professional advice. This
memorandum is for your information only, and nothing herein is intended to
endorse or recommend a particular course of action. You should consult with an
appropriate professional for specific advice on the basis of your situation.
</P>
<P align=justify>Any recipient of this memorandum and any purchaser of the
ordinary shares pursuant to this memorandum shall not market, distribute,
resell, or offer to resell the ordinary shares within Oman without complying
with the requirements of applicable Omani law, nor copy or otherwise distribute
this memorandum to others. </P>
<P align=justify><I>Canada.</I></P>
<P align=justify><U>Resale Restrictions</U></P>
<P align=justify>The distribution of our securities in Canada is being made only
on a private placement basis exempt from the requirement that we prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of our securities are made. Any resale of our securities in Canada
must be made under applicable securities laws that will vary depending on the
relevant jurisdiction, and which may require resales to be made under available
statutory exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of our securities. </P>
<P align=justify><U>Representations of Purchasers</U></P>
<P align=justify>By purchasing our securities in Canada and accepting a purchase
confirmation a purchaser is representing to us and the dealer from whom the
purchase confirmation is received that: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>the purchaser is entitled under applicable provincial securities laws to
  purchase our securities without the benefit of a prospectus qualified under
  those securities laws; </LI></UL>
<P align=center>87</P>
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<A name=page_94></A>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">where required by law, that the purchaser is purchasing as principal and
  not as agent; </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the purchaser has reviewed the text above under Resale Restrictions; and
  </P>
  <LI>
  <P style="margin-top: 0; margin-bottom: 5">the purchaser acknowledges and consents to the provision of specified
  information concerning its purchase of our securities to the regulatory
  authority that by law is entitled to collect the information. </P></LI></UL>
<P align=justify>Further details concerning the legal authority for this
information are available on request.</P>
<P align=justify><U>Rights of Action &#151; Ontario Purchasers Only</U></P>
<P align=justify>Under Ontario securities legislation, certain purchasers who
purchase a security offered by this prospectus during the period of distribution
will have a statutory right of action for damages, or while still the owner of
our securities, for rescission against us in the event that this prospectus
contains a misrepresentation without regard to whether the purchaser relied on
the misrepresentation. The right of action for damages is exercisable not later
than the earlier of 180 days from the date the purchaser first had knowledge of
the facts giving rise to the cause of action and three years from the date on
which payment is made for our securities. The right of action for rescission is
exercisable not later than 180 days from the date on which payment is made for
our securities. If a purchaser elects to exercise the right of action for
rescission, the purchaser will have no right of action for damages against us.
In no case will the amount recoverable in any action exceed the price at which
our securities were offered to the purchaser and if the purchaser is shown to
have purchased the securities with knowledge of the misrepresentation, we will
have no liability. In the case of an action for damages, we will not be liable
for all or any portion of the damages that are proven to not represent the
depreciation in value of our securities as a result of the misrepresentation
relied upon. These rights are in addition to, and without derogation from, any
other rights or remedies available at law to an Ontario purchaser. The foregoing
is a summary of the rights available to an Ontario purchaser. Ontario purchasers
should refer to the complete text of the relevant statutory provisions. </P>
<P align=justify><U>Enforcement of Legal Rights</U></P>
<P align=justify>All of our directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon us or
those persons. All or a substantial portion of our assets and the assets of
those persons may be located outside of Canada and, as a result, it may not be
possible to satisfy a judgment against us or those persons in Canada or to
enforce a judgment obtained in Canadian courts against us or those persons
outside of Canada. </P>
<P align=justify><U>Taxation and Eligibility for Investment</U></P>
<P align=justify>Canadian purchasers of our securities should consult their own
legal and tax advisors with respect to the tax consequences of an investment in
our securities in their particular circumstances and about the eligibility of
our securities for investment by the purchaser under relevant Canadian
legislation. </P>
<P align=center><B>LEGAL MATTERS</B></P>
<P align=justify>Certain legal matters as to United States federal and New York
law will be passed upon for us by Pillsbury Winthrop Shaw Pittman LLP. Certain
legal matters in connection with the offering will be passed upon for the
underwriters by Anslow &amp; Jaclin, LLP. The validity of the ordinary shares
offered in this offering and certain other legal matters as to Cayman Islands
law will be passed upon for us by Maples and Calder. Legal matters as to PRC law
will be passed upon for us by Deheng Law Firm and for the underwriters by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .
Pillsbury Winthrop Shaw Pittman LLP may rely upon Deheng Law Firm with respect
to matters governed by PRC law. </P>
<P align=center><B>EXPERTS</B></P>
<P align=justify>The audited consolidated financial statements of Leewell as of
December 25, 2009 and 2008 and for the fiscal years ended December 25, 2009,
2008, and 2007, appearing in this prospectus and registration statement have
been audited by MSPC, Certified Public Accountants and Advisors, A
Professional Corporation, an independent registered public accounting firm, as
set forth in their report thereon appearing elsewhere herein and in the
registration statement, and are included in reliance upon such report given on
the authority of such firm as experts in accounting and auditing. </P>
<P align=center>88</P>
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<P align=justify>&nbsp;</P>
<P align=center><B>ADDITIONAL INFORMATION</B></P>
<P align=justify>We filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended, for the
ordinary shares in this offering. This prospectus does not contain all of the
information in the registration statement and the exhibits and schedule that
were filed with the registration statement. For further information with respect
to us and our ordinary shares, we refer you to the registration statement and
the exhibits and schedule that were filed with the registration statement.
Statements contained in this prospectus about the contents of any contract or
any other document that is filed as an exhibit to the registration statement are
not necessarily complete, and we refer you to the full text of the contract or
other document filed as an exhibit to the registration statement. A copy of the
registration statement and the exhibits and schedules that were filed with the
registration statement may be inspected without charge at the Public Reference
Room maintained by the Securities and Exchange Commission at 100 F Street, N.E.
Washington, DC 20549, and copies of all or any part of the registration
statement may be obtained from the Securities and Exchange Commission upon
payment of the prescribed fee. Information regarding the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC. The address of the
website is www.sec.gov. </P>
<P align=justify>We file periodic reports under the Securities Exchange Act of
1934, including annual, quarterly and special reports, and other information
with the SEC. These periodic reports, and other information, are available for
inspection and copying at the regional offices, public reference facilities and
website of the SEC referred to above. </P>
<P align=center>89</P>
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<P align=center><B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS </B></P>
<P align=justify>&nbsp;</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="8%" ><B><U>Page</U></B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_F-1"><B>CONSOLIDATED
      FINANCIAL STATEMENTS OF LEEWELL INVESTMENT GROUP</B> <B>LIMITED FOR THE
      FISCAL YEARS ENDED DECEMBER 25, 2009, 2008 AND 2007</B> </A></TD>
    <TD align=left width="8%" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_F-2">Report
      of Independent Registered Public Accounting Firm </A></TD>
    <TD align=center width="8%" bgColor=#eeeeee ><A
      href="#page_F-2">F-3</A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_F-3">Consolidated
      Balance Sheets </A></TD>
    <TD align=center width="8%" ><A
      href="#page_F-3">F-4</A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_F-4">Consolidated
      Statements of Income and Comprehensive Income </A></TD>
    <TD align=center width="8%" bgColor=#eeeeee ><A
      href="#page_F-4">F-5</A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_F-5">Consolidated
      Statements of Changes in Shareholders&#146; Equity </A></TD>
    <TD align=center width="8%" ><A
      href="#page_F-5">F-6
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_F-6">Consolidated
      Statements of Cash Flows </A></TD>
    <TD align=center width="8%" bgColor=#eeeeee ><A
      href="#page_F-6">F-7</A></TD></TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_F-8">Notes
      to Consolidated Financial Statements </A></TD>
    <TD align=center width="8%" ><A
      href="#page_F-8">F-9</A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_F-25"><B>UNAUDITED
      PRO FORMA COMBINED FINANCIAL INFORMATION OF DRAGON</B> <B>ACQUISITION
      CORPORATION AS OF DECEMBER 31, 2009</B> </A></TD>
    <TD align=center width="8%" bgColor=#eeeeee ><A
      href="#page_F-25">F-26
      </A></TD></TR></TABLE>
<p align="center">F-1</p>
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noShade SIZE=5>
<A name=page_97>
<P align=center>&nbsp;</P>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED </B></P>
<P align=center><B>FINANCIAL STATEMENTS </B></P>
<P align=center><B>FOR THE YEARS ENDED DECEMBER 25, 2009, 2008 and 2007 </B></P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center>F-2</P>
<A name=page_F-3></A>
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<A name=page_F-4></A>
<P align=center><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
</B></P>
<P align=justify><B><I>To the Board of Directors and Shareholders of <BR>Leewell
Investment Group Limited and Subsidiaries </I></B></P>
<P align=justify>We have audited the accompanying consolidated balance sheets of
Leewell Investment Group Limited and Subsidiaries as of December 25, 2009 and
2008 and the related consolidated statements of income and comprehensive income,
changes in shareholders' equity, and cash flows for each of the three years in
the period ended December 25, 2009. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. </P>
<P align=justify>We conducted 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 audits 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&#146;s internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes 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. </P>
<P align=justify>In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Leewell Investment Group Limited and Subsidiaries as of December 25, 2009 and
2008 and the results of their operations and their cash flows for each of the
three years in the period ended December 25, 2009 in conformity with United
States generally accepted accounting principles. </P>
<P align=justify>MSPC <BR>Certified Public Accountants and Advisors, A
Professional Corporation </P>
<P align=justify>New York, New York <BR>March 23, 2010</P>
<P align=center>F-3 </P>
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<A name=page_F-5></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>CONSOLIDATED BALANCE SHEETS </B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>December 25,</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>December 25,</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B><U>2009</U></B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B><U>2008</U></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=center bgColor=#e6efff colSpan=6>ASSETS&nbsp;&nbsp; </TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>CURRENT ASSETS </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Cash </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;2,264,438 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;638,639 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Restricted cash </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,641,778 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,635,878 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Revenue in
      excess of billings </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,045,979 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Contracts receivable, net </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">12,552,315 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">6,359,497 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Related party
      receivable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,949,102 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>15,279,068 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Inventories </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">106,452,702 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">77,008,683 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Other
      receivables, net </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,634,987 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>367,836 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Prepaid expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,461,670 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">3,782,408 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Total Current Assets </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>133,002,971 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>105,072,009 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>PROPERTY, PLANT AND EQUIPMENT, NET </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,461,317 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,001,888 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>PROPERTY, PLANT AND EQUIPMENT, IDLE </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,530,390 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,991,799 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>GOODWILL </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,620,670 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,596,117 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>LAND USE RIGHTS, NET </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">54,060,495 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">64,655,669 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>DEFERRED TAX ASSETS </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>657,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>330,873 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#ffffff>TOTAL ASSETS </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#ffffff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#ffffff>&nbsp;196,332,843 </TD>
    <TD align=left width="2%"  bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#ffffff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#ffffff>&nbsp;178,648,355 </TD>
    <TD align=left width="2%"  bgColor=#ffffff>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=center colSpan=6>LIABILITIES AND SHAREHOLDERS&#146; EQUITY&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>CURRENT LIABILITIES </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Current portion of long-term
      debt </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;35,217,320 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;14,682,599 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Short-term loans
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,719,432 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,879,010 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Notes payable </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">146,800 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Accounts payable
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>487,238 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Customer deposits </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">19,780,472 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">42,980,448 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Other payables
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,186,745 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,287,869 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Taxes payable </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">26,049,956 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">22,217,920 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Other current
      liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>207,936 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>192,906 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total
      Current Liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">88,795,899 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">86,240,752 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>LONG-TERM DEBT </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">4,404,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">29,160,895 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>LONG-TERM DEFERRED TAX LIABILITIES </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>8,781,998 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>SHAREHOLDERS' EQUITY </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Common stock par value $0.1282 per
      share, 150,000,000 shares authorized, </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;102,566,690 issued and
      outstanding in 2009 and 2008 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">13,149,576 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">13,149,576 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp; &nbsp;Paid-in capital </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">(7,465,626</TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >) </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">(13,749,747</TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Appropriated
      retained earnings </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">10,298,700 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">6,642,568 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp; &nbsp;Unappropriated retained earnings
    </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">71,326,950 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">50,638,872 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Accumulated
      other comprehensive income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">7,041,346 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">6,565,439 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total
      Shareholders' Equity </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" bgcolor="#E6EFFF"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%" bgcolor="#E6EFFF">94,350,946 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" bgcolor="#E6EFFF"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%" bgcolor="#E6EFFF">63,246,708 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
    </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">&nbsp;196,332,843 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">&nbsp;178,648,355 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=center>See Accompanying Notes to Consolidated Financial Statements </P>
<P align=center>F-4 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-6></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
</B><BR><B>THE YEARS ENDED DECEMBER 25, 2009, 2008, AND 2007 </B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B><U>2009</U></B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B><U>2008</U></B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B><U>2007</U></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Restated</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>SALES </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;91,041,042 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;77,032,561 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;51,850,312 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>SALES TO RELATED PARTY </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">3,274,458 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;TOTAL SALES </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>94,315,500 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>77,032,561 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>51,850,312 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>COST OF SALES </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(57,442,457</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(46,321,251</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(36,243,778</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>COST OF SALES TO RELATED PARTY </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(853,951</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;TOTAL COST OF
      SALES </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(58,296,408</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(46,321,251</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(36,243,778</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>GROSS PROFIT </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>36,019,092 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>30,711,310 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>15,606,534 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>ADVERTISING </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(268,222</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(112,263</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(46,492</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>COMMISSION </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(84,982</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(574,262</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(134,989</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>SELLING EXPENSES </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(49,800</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(81,415</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(2,187</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>BAD DEBT EXPENSE </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(207,523</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(1,198,942</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(245,243</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>GENERAL AND ADMINISTRATIVE EXPENSES </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(4,655,596</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(2,283,744</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(807,589</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>INCOME FROM OPERATIONS </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">30,752,969 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">26,460,684 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">14,370,034 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>OTHER REVENUES: </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Gain on business
      acquisition ("bargain purchase") </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>3,188,924 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>OTHER INCOME (EXPENSES) </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Miscellaneous
      income </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>327,294 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>91,945 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>10,280 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Interest expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(866,751</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(968,710</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(70,963</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(539,457</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(876,765</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(60,683</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">33,402,436 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">25,583,919 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">14,309,351 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>INCOME TAXES </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Current </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(369,660</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(5,350,455</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(5,090,161</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Deferred </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(8,688,566</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(1,251,739</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(9,058,226</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(6,602,194</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(5,090,161</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>INCOME BEFORE EXTRAORDINARY ITEM </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>24,344,210 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>18,981,725 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>9,219,190 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>EXTRAORDINARY ITEM (NET OF INCOME TAX OF
      $0) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>12,635,872 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>NET INCOME </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">24,344,210 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">31,617,597 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">9,219,190 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>OTHER COMPREHENSIVE INCOME: </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>FOREIGN CURRENCY TRANSLATION ADJUSTMENT </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>475,907 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>3,488,440 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2,107,856 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>COMPREHENSIVE INCOME </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;24,820,117 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;35,106,037 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;11,327,046 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>EARNINGS PER COMMON SHARE BASIC AND DILUTED </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;- Income
      before extraordinary item </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;0.24 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;0.19 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;- Extraordinary item </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;0.12 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;- Net
      income </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;0.24 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;0.31 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;921.92 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>WEIGHTED AVERAGE COMMON SHARES </TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">
    <p style="margin-left: 5pt">OUTSTANDING </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%" bgcolor="#E6EFFF"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%" bgcolor="#E6EFFF">102,566,690 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%" bgcolor="#E6EFFF"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%" bgcolor="#E6EFFF">102,566,690 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%" bgcolor="#E6EFFF"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%" bgcolor="#E6EFFF">10,000 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD></TR></TABLE>
<P align=center>See Accompanying Notes to Consolidated Financial Statements </P>
<P align=center>F-5 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-7></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
</B><BR><B>FOR THE YEARS ENDED DECEMBER 25, 2009, 2008, AND 2007 </B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"><B>Accumulated</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"><B>Appropriated&nbsp;</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"><STRONG>Unappropriated</STRONG></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"><B>Other</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"><B>Paid-in</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"><B>Retained</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"><B>Retained</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"><B>Comprehensive </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="9%"
    ><STRONG>Shareholders&#146;</STRONG>&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="9%"><B>Shares</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="9%"><B>Amount</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="9%"><B>Capital</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="9%"><B>Earnings</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="9%"><B>Earnings</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="9%"><B>Income</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="9%"><B>Equity</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance at December 25, 2006 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>10,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>1,282 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>11,860,978 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>2,684,678 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>13,768,318 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>969,143 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>29,284,399 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Elimination of investment in subsidiary
      against subsidiary equity (Note 1) </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%"
      bgColor=#e6efff>(13,165,828</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%"
      bgColor=#e6efff>(13,165,828</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
  </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Adjustments for the acquisition </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>407,880 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>(8,343</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>399,537 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net income </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>9,219,190 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>9,219,190 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Foreign currency translation adjustment
    </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>2,107,856 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>2,107,856 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Earnings appropriated in accordance
      with Chinese law </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>1,550,185 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>(1,550,185</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance at December 25, 2007, restated
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>1,282 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>(896,970</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>4,234,863 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>21,428,980 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>3,076,999 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>27,845,154 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Shareholder loan converted to shares
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>102,556,690
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>13,148,294
</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>13,148,294
</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Due to acquisition of subsidiaries </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="9%"
bgColor=#e6efff>(12,852,777</TD>
    <TD vAlign=bottom align=left width="2%"
      bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="9%"
bgColor=#e6efff>(12,852,777</TD>
    <TD vAlign=bottom align=left width="2%"
      bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net income </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>31,617,597 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>31,617,597 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Foreign currency translation adjustment
    </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>3,488,440 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>3,488,440 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Earnings appropriated in accordance
      with Chinese law </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>2,407,705 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>(2,407,705</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance at December 25, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>102,556,690 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>13,149,576 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>(13,749,747</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>6,642,568 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>50,638,872 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>6,565,439 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>63,246,708 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Due to acquisition of subsidiaries </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>6,284,121 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>6,284,121 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net income </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>24,344,210 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>24,344,210 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Foreign currency translation adjustment
    </TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff><BR></TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>475,907 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%" bgColor=#e6efff>475,907 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Earnings appropriated in accordance
      with Chinese law </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>3,656,132 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>(3,656,132</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="9%" bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp; </TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance at December 25, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>102,556,690 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>13,149,576 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>(7,465,626</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>10,298,700 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>71,326,950 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>7,041,346 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="9%" bgColor=#e6efff>94,350,946 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=center>See Accompanying Notes to Consolidated Financial Statements </P>
<P align=center>F-6 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-8></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>CONSOLIDATED STATEMENTS OF CASH FLOWS </B><BR><B>FOR THE YEARS ENDED
DECEMBER 25, 2009, 2008, AND 2007 </B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B><U>2009</U></B> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B><U>2008</U></B> </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B><U>2007</U></B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B>Restated</B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>CASH FLOWS FROM OPERATING ACTIVITIES </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Net income </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;24,344,210 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;31,617,597 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;9,219,190 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Adjustments to reconcile net income to net
      cash provided (used) by operating activities: </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Bad debt expense </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">207,523 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1,198,941 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">245,243 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Depreciation
      expense </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>245,388 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>246,400 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>205,366 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Amortization of land use rights
    </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">36,487 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Extraordinary
      items </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(12,635,872</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Gain on business acquisition </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(3,188,924</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Deferred tax
      expense </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>8,688,566 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,251,739 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Decrease (increase) in operating assets:
</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Restricted cash </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">192,911 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(1,564,681</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">26,465 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Revenue in
      excess of billings </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(4,040,467</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Contracts receivable </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(6,696,979</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1,633,906 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(5,108,372</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Related party
      receivable </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,286,347 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>75,695,314 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,857,517 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Inventories </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">24,608,287 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">25,990,884 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">26,040,584 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Other
      receivables </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>593,540 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,667,529 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,169,774</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Prepaid expenses </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">2,343,368 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(1,676,883</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">93,175 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Increase (decrease) in operating liabilities: </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Accounts payable
    </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(9,335,626</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,306,287</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>535,539 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Related party payable </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(17,180,260</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(10,185,449</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Customer
      deposits </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(37,961,384</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(56,452,177</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(33,248,166</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Other payable </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">138,975 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(509,459</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">44,656 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Taxes payable
</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,829,172 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>9,943,221 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>6,624,335 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Other current liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(4,087</TD>
    <TD align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">95,169 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(3,845</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Net cash
      provided by operating activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>11,250,820 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>61,015,081 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,212,951 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>CASH FLOWS FROM INVESTING ACTIVITIES </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Sale of short-term investment
</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">39,456 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Purchase of
      fixed assets </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(199,025</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(24,716</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(562,007</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Purchase of Oumei </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(13,167,110</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Purchase of
      subsidiaries </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(58,496,914</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Cash received from acquisition
      of subsidiaries </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">433,839 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Net cash
      provided (used) by investing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>234,814 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><U>(58,521,630</U></TD>
    <TD align=left width="2%" bgColor=#e6efff><U>)</U> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><U>(13,689,661</U></TD>
    <TD align=left width="2%" bgColor=#e6efff><U>)</U> </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>CASH FLOWS FROM FINANCING ACTIVITIES </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Capital contribution </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1,282 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Proceeds from
      note payable </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(41,048</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Net change in short-term
      borrowing </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(179,080</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(3,805,052</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">14,166,301 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Repayments of
      long-term borrowing </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(14,044,280</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Proceeds from long-term
      borrowing </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">4,398,000 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Net cash
      provided (used) by financing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(9,866,408</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(3,805,052</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>14,167,583 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Effect of exchange rate changes on cash </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>6,573 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>16,518 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>9,891 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>NET INCREASE (DECREASE) IN CASH </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,625,799 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,295,083</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,700,764 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>CASH AT BEGINNING OF YEAR </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">638,639 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,933,722 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">232,958 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>CASH AT END OF YEAR </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;2,264,438 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;638,639 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;1,933,722 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>SUPPLEMENTAL DISCLOSURES: </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Interest paid </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;3,195,886 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;3,737,121 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;756,839 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=center>F-7 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<p style="margin-top: 0; margin-bottom: 0">
<A name=page_F-9></A><BR>
</p>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Income taxes
      paid </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;260,255 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;1,301,525 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&nbsp;35,961 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Non-cash investing and financing
      activities: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land use rights
      purchased through the exchange of other receivables </TD>
    <TD align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" ></TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" ></TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">1,104,768 </TD>
    <TD vAlign=bottom align=left width="2%" ></TD></TR>
  <TR vAlign=top>
    <TD align=left
      bgColor=#e6efff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land use rights
      transferred to inventory as project development cost </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>11,036,630 </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff></TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff></TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
  bgColor=#e6efff></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
      consideration paid by Longhai Group for
      the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;subsidiaries'
      acquisition, resulting in a decrease in
      related&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;party
      receivable </TD>
    <TD align=left width="1%" ><BR><BR>$</TD>
    <TD vAlign=bottom align=right width="12%"><BR><BR>5,131,000 </TD>
    <TD vAlign=bottom align=left width="2%" ><BR><BR></TD>
    <TD vAlign=bottom align=left width="1%" ><BR><BR>$</TD>
    <TD vAlign=bottom align=right width="12%"><BR><BR>14,344,712 </TD>
    <TD vAlign=bottom align=left width="2%" ><BR><BR></TD>
    <TD vAlign=bottom align=left width="1%" ><BR><BR>$</TD>
    <TD vAlign=bottom align=right width="12%"><BR><BR>- </TD>
    <TD vAlign=bottom align=left width="2%"
  ><BR><BR></TD></TR></TABLE>
<P align=center>See Accompanying Notes to Consolidated Financial Statements </P>
<P align=center>F-8 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-10></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 1 - Organization</B></P>
<P align=justify>Qingdao Oumei Real Estate Development Co., Ltd (&#147;Oumei&#148;) was
incorporated as a limited liability company in Qingdao under the laws of the
People&#146;s Republic of China (<I>&#147;</I>PRC<I>&#148;</I> or <I>&#147;</I>China<I>&#148;</I>). Oumei
is engaged in the development and sale of residential and commercial real estate
properties located primarily in Pingdu, Laixi and Jimo cities of Shandong
Province, China.</P>
<P align=justify>Oumei was established by Mr. Zhang Weiqing (51%) and Mr. Wang
Shengguo (49%) on May 15, 2001 with a registered capital of approximately
$604,000. On February 9, 2002, Mr. Wang Shengguo sold his interest in Oumei to
Ms. Cheng Xiaoyan. Mr. Zhang and Ms. Cheng then increased their contribution to
Oumei in proportion to their ownership interests by approximately $6,200,000 and
$5,089,200 in 2003 and 2006, respectively. The equity interests percentages held
by these individuals were 51% and 49%, respectively.</P>
<P align=justify>On September 20, 2007, Mr. Zhang and Ms. Cheng sold all their
interests in Oumei to Leewell Investment Group Limited (&#147;the Company&#148; or
"Leewell") for $13,167,110. Leewell is a Hong Kong based company with an
authorized capital of HK$10,000 (approximately $1,282), and it was wholly owned
by Mr. Zhou Li as nominee for Mr. Antoine Cheng, the father of Ms. Cheng. until
October 2, 2009. On that date, all the outstanding shares of Leewell were sold
to Longhai Holdings Company Limited, a company controlled by Mr. Cheng (See Note
5). The acquisition of Oumei by Leewell is considered a combination under common
control. Acquired assets and liabilities are recorded at book value. Equity of
Leewell is shown as outstanding from the earliest period presented. The
financial statements of the two previously separate entities are retroactively
combined for all periods presented. Because cash was exchanged in the
transaction, an adjustment for $13,165,828 is shown in the consolidated
statement of changes in shareholders&#146; equity for the year ended December 25,
2007 to eliminate the difference between the total cash of $13,167,110 used to
purchase Oumei and the amount of Leewell's equity of $1,282. As a result of the
acquisition, Oumei became a wholly foreign-owned enterprise with limited
liability under the laws of China.</P>
<P align=justify>Since inception, the Company's activities have been limited to
organizational efforts, obtaining initial financing, and preparing to make
filings with the Securities and Exchange Commission ("SEC").</P>
<P align=justify>All significant intercompany transactions and balances are
eliminated on consolidation. </P>
<P align=justify><B>Note 2 - Acquisition of Subsidiaries</B></P>
<P align=justify>On January 19, 2008, Oumei reached agreements with the
shareholders of Weihai Huancui District Mingwei Industry Co., Ltd (&#147;Mingwei&#148;) to
acquire 100% of its equity interest by paying Chinese Yuan (&#147;CNY&#148;) 110,000,000
(approximately $15 million).</P>
<P align=justify>The following table summarizes the approximate estimated fair
values of the assets and liabilities acquired from Mingwei at acquisition date.
</P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Intangible assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;37,242,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current liabilities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(21,591,000</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net assets acquired at FMV </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >15,651,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    >14,960,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff >&nbsp;(691,000</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD></TR></TABLE></DIV>
<P align=justify>100% of the above difference was allocated to land use rights
and reduced the fair market value recorded. </P>
<P align=justify>On January 22, 2008, Oumei reached an agreement with the sole
shareholder of Longhai Hotel Co., Ltd (&#147;Longhai Hotel&#148;), to acquire 100% of its
equity interest by paying CNY110,000,000 (approximately $15 million). Longhai
Hotel is owned by Mr. Zhang Weiqing, who is also the former shareholder of Oumei
(See Note 1). The acquisition is a business combination under common control,
therefore, the Company accounted for this acquisition using the as if pooling of
interest method. The acquired businesses and net assets are recorded at book
value as if the businesses and net assets of Longhai Hotel have been owned by
the Group from the earliest comparative period presented. Accordingly, the
financial information for 2007 has been restated as follows: </P>
<P align=center>F-9 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-11></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 2 - Acquisition of Subsidiaries (Continued) </B></P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD colspan="7" align=center style="BORDER-BOTTOM: #000000 1px solid">Year
        ended December 25, 2007 </TD>
      <TD align=center width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="12%">&nbsp; </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">Acquisition </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="12%">Originally </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">of Longhai </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">stated </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">Hotel </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">Restated </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Sales </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;51,850,312 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>&nbsp;51,850,312 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Net income </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">9,334,303 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">(115,113</TD>
      <TD align=left width="2%" >) </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">9,219,190 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Net cash inflow from operating activities
      </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>1,212,951 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>1,212,951 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Net cash outflow from investing activities </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">(13,689,661</TD>
      <TD align=left width="2%" >) </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">(13,689,661</TD>
      <TD align=left width="2%" >) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Net cash inflow from financing activities
      </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>14,167,583 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>14,167,583 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Total current assets </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">69,443,412 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">69,443,412 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Total assets </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>73,677,803 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>14,144,985 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>87,822,788 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Total current liabilities </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">46,112,906 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">13,864,728 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">59,977,634 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Shareholders&#146; equity </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>27,564,897 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>280,257 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>27,845,154 </TD>
      <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>The following table summarizes the carryover historical costs
of the assets and liabilities of Longhai Hotel at acquisition date. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Fixed assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;2,782,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Intangible assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >11,367,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(13,869,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Net asset acquired at historical costs </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >280,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff >14,960,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    >&nbsp;14,680,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD></TR></TABLE></DIV>
<P align=justify>100% of the above difference was recorded in additional paid-in
capital as it was acquired from a related party with common interest. </P>
<P align=justify>On January 23, 2008, Oumei reached agreements with the
shareholders of Weihai Economic &amp; Technology Development Zone Longhai
Properties Co., Ltd (&#147;Longhai Properties&#148;) to acquire 100% of its equity
interest by paying CNY140,000,000 (approximately $19 million).</P>
<P align=justify>The following table summarizes the approximate estimated fair
values of the assets and liabilities of Longhai Properties at acquisition date.
</P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;41,339,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Fixed assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >15,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Intangible assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >10,224,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current liabilities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(32,901,000</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Long-term debt </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(2,992,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Net assets acquired at FMV </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >15,685,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff >19,040,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    >&nbsp;3,355,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD></TR></TABLE></DIV>
<P align=justify>100% of the above difference was recorded as goodwill.</P>
<P align=justify>On January 24, 2008, Oumei reached agreements with the
shareholders of Xudong Real Estate Development Co., Ltd (&#147;Xudong&#148;) to acquire
100% of its equity interest by paying CNY60,000,000 (approximately $8.3
million). Longhai Group, a related party, owned approximately 74% of Xudong (See
Notes 1 and 5). </P>
<P align=center>F-10 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-12></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 2 - Acquisition of Subsidiaries (Continued) </B></P>
<P align=justify>The following table summarizes the approximate estimated fair
values of the assets and liabilities of Xudong at acquisition date. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;54,319,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current liabilities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(17,599,000</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Long-term debt </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(27,700,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Net assets acquired at FMV </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >9,020,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff >8,310,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    >&nbsp;(710,000</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >) </TD></TR></TABLE></DIV>
<P align=justify>74% of the above difference, approximately $525,000, was
recorded in additional paid-in capital as it was acquired from a related party;
the remaining 26%, approximately $185,000, was recorded as extraordinary item in
2008. </P>
<P align=justify>On August 27, 2008, Oumei reached agreements with the
shareholders of Weifang Longhai Industry Co., Ltd. (&#147;Weifang Industry&#148;) to
acquire 100% of its equity interest by paying CNY30,000,000 (approximately $4.4
million). Longhai Group, a related party (See Note 5), owned approximately 95%
of Weifang Industry. </P>
<P align=justify>The following table summarizes the approximate estimated fair
values of the assets and liabilities of Weifang Industry at acquisition date.
</P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;23,147,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Fixed assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >9,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(15,983,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Net assets acquired at FMV </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >7,173,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff >4,386,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    >&nbsp;(2,787,000</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >) </TD></TR></TABLE></DIV>
<P align=justify>$9,000 of the above difference was allocated to fixed assets
and reduced the fair market value recorded. 95% of the remaining difference,
approximately $2,639,000 was recorded in additional paid-in capital as it was
acquired from a related party; 5% of the remaining difference, approximately
$139,000, was recorded as an extraordinary item in 2008. </P>
<P align=justify>On August 28, 2008, Oumei reached an agreement with the sole
shareholder of Weifang Longhai Zhiye Co., Ltd. (&#147;Weifang Zhiye&#148;) to acquire 100%
of its equity interest by paying CNY30,000,000 (approximately $4.4 million).
</P>
<P align=justify>The following table summarizes the approximate estimated fair
values of the assets and liabilities of Weifang Zhiye at acquisition date. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;21,707,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Fixed assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >10,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(13,034,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Net assets acquired at FMV </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >8,683,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff >4,392,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    >&nbsp;(4,291,000</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >) </TD></TR></TABLE></DIV>
<P align=justify>$10,000 of the above difference was allocated to fixed assets
and reduced the fair market value recorded. The remaining difference,
approximately $4,281,000, was recorded as an extraordinary item in 2008. </P>
<P align=center>F-11 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-13></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 2 - Acquisition of Subsidiaries (Continued) </B></P>
<P align=justify>On August 29, 2008, Oumei reached agreements with the
shareholders of Weifang Qi Lu Guo Tai Zhiye Co., Ltd. (&#147;Qi Lu Guo Tai&#148;) to
acquire 100% of its equity interest by paying CNY40,000,000 (approximately $5.8
million). </P>
<P align=justify>The following table summarizes the approximate estimated fair
values of the assets and liabilities of Qi Lu Guo Tai at acquisition date. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;50,076,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Fixed assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >24,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(32,032,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Long-term debt </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(3,897,000</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net assets acquired at FMV </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >14,171,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    >5,860,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff >&nbsp;(8,311,000</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD></TR></TABLE></DIV>
<P align=justify>$24,000 of the above difference was allocated to fixed assets
and reduced the fair market value recorded. The remaining difference,
approximately $8,287,000, was recorded as an extraordinary item in 2008. </P>
<P align=justify>The assets and liabilities of the acquired companies were
recorded at full fair value at the acquisition dates except Longhai Hotel. The
acquisition of Longhai Hotel was considered as an acquisition from a related
party under common control. Assets and liabilities are recognized at historical
carryover costs. No goodwill or extraordinary item was recognized. The
acquisitions of Xudong and Weifang Industry are considered as acquisitions from
related parties with no common control. The excess of net assets over the
purchase price has been recorded as an extraordinary item for the non-related
party portion and as additional paid-in-capital for the related party portion.
</P>
<P align=justify>The assets and liabilities of Mingwei, Longhai Properties,
Weifang Zhiye and Qi Lu Guo Tai were recorded at fair values at the acquisition
dates. Goodwill is recognized for the acquisition of Longhai Property as the
Company believes the value of Longhai Property was higher than the market price
at the date of acquisition. Longhai Property maintains a high profit level and
owns land in the city center of Weihai, which the Company considers a strategic
location for construction that has the potential to significantly increase the
profits of the Company. The combination of these factors is the reason for the
excess of the purchase price over the fair value of the tangible assets and
liabilities acquired. Extraordinary items are recognized for the acquisitions of
Weifang Zhiye and Qi Lu Guo Tai due to the excess of fair values over the
purchase prices. No extraordinary item is recognized for Mingwei since the
excess of fair value over the purchase price was absorbed by non-current assets.
</P>
<P align=justify>The acquisition increased the land reserve and expanded the
market share of the Company in Shandong Province. </P>
<P align=justify>On June 25, 2009, Oumei reached agreement with the shareholder
of Caoxian Industrial Co., Ltd (&#147;CXSY&#148;) to acquire 100% of its equity interest
by paying CNY15,000,000 (approximately $2.2 million). Longhai Group, a related
party (see Note 5), funded the purchase. This funding reduced the receivable due
from Longhai Group at the time of the acquisition. </P>
<P align=justify>The following table summarizes the approximate estimated fair
values of the assets and liabilities of CXSY at acquisition date. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;16,396,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Fixed assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >10,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(4,092,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Long-term debt </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(5,128,000</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net assets acquired at FMV </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >7,186,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    >2,197,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff >&nbsp;(4,989,000</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD></TR></TABLE></DIV>
<P align=center>F-12 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-14></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 2 - Acquisition of Subsidiaries (Continued) </B></P>
<P align=justify>90% of the above difference, approximately $4,490,000, was
recorded in additional paid-in capital as it was acquired from Longhai Group, a
related party (See Note 5); the remaining 10%, approximately $499,000, was
recorded as gain on business acquisition. </P>
<P align=justify>On September 25, 2009, Oumei reached agreement with the
shareholder of Longhai Real Estate Development Co., Ltd (&#147;LHFDC&#148;) to acquire
100% of its equity interest by paying CNY20,000,000 (approximately $2.9
million). Longhai Group, a related party (See Note 5), funded the purchase. This
funding reduced the receivable due from Longhai Group at the time of the
acquisition. </P>
<P align=justify>The following table summarizes the approximate estimated fair
values of the assets and liabilities of LHFDC at acquisition date. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;28,262,000
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current liabilities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(20,842,000</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net assets acquired at FMV </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >7,420,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cash consideration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    >2,934,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Difference </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff >&nbsp;(4,486,000</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD></TR></TABLE></DIV>
<P align=justify>40% of the above difference, approximately $1,794,000, was
recorded in additional paid-in capital as it was acquired from Longhai Group, a
related party (See Note 5); the remaining 60%, approximately $2,692,000, was
recorded as gain on business acquisition. </P>
<P align=justify>The acquisitions of CXSY and LHFDC are considered as
acquisitions from a related party; therefore, the cash consideration paid did
not represent the market value that would have been paid had the transaction
been at arm&#146;s length. </P>
<P align=justify>The amounts of revenue and earnings of CXSY since June 25, 2009
which were included in the Consolidated Statement of Income and Comprehensive
Income for 2009 were approximately $6,447,000 and $1,491,000, respectively.</P>
<P align=justify>The amounts of revenue and earnings of LHFDC since September
25, 2009 which were included in the Consolidated Statement of Income and
Comprehensive Income for 2009 were approximately $21,962,000 and $7,862,000,
respectively.</P>
<P align=justify>For the year ended December 25, 2008, the Consolidated
Statements of Income and Comprehensive Income included twelve months results of
operations of Mingwei, Longhai Hotel, Longhai Properties, Xudong and four months
results of operations of Weifang Industry, Weifang Zhiye and Qi Lu Guo Tai. </P>
<P align=justify>For the year ended December 25, 2009, the Consolidated
Statement of Income and Comprehensive Income included twelve months results of
operations of Mingwei, Longhai Hotel, Longhai Properties, Xudong, Weifang
Industry, Qi Lu Guo Tai, Weifang Zhiye and six months results of operations of
CXSY and three months results of operations of LHFDC. </P>
<P align=justify>Supplemental information on an unaudited pro forma basis, as if
the acquisitions of the subsidiaries had been consummated at the beginning of
each of the years presented, is as follows: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><B>2008</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Sales </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;94,315,500 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;77,032,561 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >Net income </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="17%">&nbsp;24,000,714 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="17%">&nbsp;30,621,973 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE></DIV>
<P align=justify>The unaudited pro forma supplemental information is based on
estimates and assumptions which the Company believes are reasonable. It is not
necessarily indicative of the consolidated financial position or results of
income in future periods or the results that actually would have been realized
had we been a combined company as of the beginning of the years presented. </P>
<P align=center>F-13 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-15></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 3 - Summary of Significant Accounting Policies</B></P>
<P align=justify><B>Basis of Presentation</B></P>
<P align=justify>The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America ("US GAAP").</P>
<P align=justify><B>Use of Estimates</B></P>
<P align=justify>The preparation of financial statements in conformity with US
GAAP 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. Significant estimates used
in the preparation of the financial statements include the selection of the
useful lives of property and equipment and the provision necessary for
uncollectible receivables. Management believes that the estimates utilized in
preparing its financial statements are reasonable and prudent. Actual results
could differ from those estimates. </P>
<P align=justify><B>Fair Value of Financial Instruments</B></P>
<P align=justify>Accounting Standards Codification (&#147;ASC&#148;) 820, <I>Fair Value
Measurements and Disclosures</I>, requires disclosing fair value to the extent
practicable for financial instruments that are recognized or unrecognized in the
balance sheet. Fair value of financial instruments is the amount at which the
instrument could be exchanged in a current transaction between willing parties.
The Company considers the carrying amounts of cash, restricted cash, revenue in
excess of billings, contracts receivable, related party and other receivables,
accounts payable, note payable, related party and other payables, customer
deposits, and short-term loans approximate their fair values because of the
short period of time between the origination of such instruments and their
expected realization. The Company considers the carrying amount of long-term
bank loans to approximate their fair values based on the interest rates of the
instruments and the current market rate of interest. </P>
<P align=justify><B>Reporting Currency and Foreign Currency Translation</B></P>
<P align=justify>The functional currency of Oumei and its subsidiaries is the
CNY and the Company&#146;s reporting currency is the United States Dollar (USD). The
assets and liabilities of Oumei and its subsidiaries are translated at the
exchange rate on the balance sheet date, shareholders&#146; equity is translated at
the historical rates and the revenues and expenses are translated at the
weighted average exchange rate for the year. The resulting translation
adjustments are reported under other comprehensive income in the Statements of
Income and Comprehensive Income in accordance with ASC 220, <I>Comprehensive
Income</I>. Transaction gains and losses that arise from exchange rate
fluctuations from transactions denominated in a currency other than the
functional currency are included in the Statements of Income and Comprehensive
Income as incurred. The transaction gains and losses were immaterial for the all
periods presented. </P>
<P align=justify>Since July 2005, the CNY is no longer pegged to the USD.
Although the People&#146;s Bank of China regularly intervenes in the foreign exchange
market to prevent significant short-term fluctuations in the exchange rate, the
CNY may appreciate or depreciate significantly in value against the USD in the
medium to long term. Moreover, it is possible that in the future, PRC
authorities may lift restrictions on fluctuations in the CNY exchange rate and
lessen intervention in the foreign exchange market. Therefore, the Company&#146;s
foreign currency exchange gains and losses may be magnified by PRC exchange
control regulations that restrict the Company&#146;s ability to convert CNY into
foreign currencies. </P>
<P align=center>F-14 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-16></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Revenue Recognition</B></P>
<P align=justify>Real estate sales are reported in accordance with the
provisions of ASC 360-20, <I>Property, Plant and Equipment, Real Estate Sales,
Sales Other Than Retail Land Sales</I>. Revenue from the sales of development
properties where the construction period is twelve months or less is recognized
by the full accrual method when the sale is consummated. A sale is not
considered consummated until (1) the parties are bound by the terms of a
contract or agreement, (2) all consideration has been exchanged, (3) any
permanent financing of which the seller is responsible has been arranged, (4)
all conditions precedent to closing have been performed, (5) the seller does not
have substantial continuing involvement with the property, and (6) the usual
risks and rewards of ownership have been transferred to the buyer. Revenue
recognized to date in excess of amounts received from customers is classified as
current assets under contracts receivable. Sales transactions not meeting all
the conditions of the full accrual method are accounted for using the deposit
method of accounting. Under the deposit method, all costs are capitalized as
incurred, and payments received from the buyer are recorded as a deposit
liability.</P>
<P align=justify>Effective December 26, 2008, the Company adopted the
percentage-of-completion method of accounting for revenue recognition for all
building construction projects in progress in which the construction period was
expected to be more than twelve months at that date. The full accrual method was
used before that date for all of our residential and commercial projects. The
Company changed to the percentage-of-completion method for contracts longer than
one year as this method more accurately reflects how revenue is earned on these
contracts, particularly for interim reporting purposes. </P>
<P align=justify>ASC 250 requires retrospective application of a change in
accounting principle unless impracticable. The change to the
percentage-of-completion method had no effect on our December 25, 2008 financial
statements and we found it was impracticable to determine the effect on the
December 25, 2007 financial statements as no progress reports detailing the
percentage-of-completion of our contracts were prepared for that year. </P>
<P align=justify>Revenue and profit from the sale of development properties
where the construction period is more than twelve months is recognized by the
percentage-of-completion method on the sale of individual units when the
following conditions are met: (1) construction is beyond a preliminary stage;
(2) the buyer is committed to the extent of being unable to require a refund
except for non-delivery of the unit; (3) sufficient units have already been sold
to assure that the entire property will not revert to rental property; (4) sales
prices are collectible and (5) aggregate sales proceeds and costs can be
reasonably estimated. If any of these criteria are not met, proceeds are
accounted for as deposits until the criteria are met and/or the sale
consummated.</P>
<P align=justify>Under the percentage of completion method, revenues from units
sold and related costs are recognized over the course of the construction
period, based on the completion progress of a project. In relation to any
project, revenue is determined by calculating the ratio of completion and
applying that ratio to the contracted sales amounts. This ratio of completion is
determined by an independent third party hired by the Company as the contractors
employed by the Company request advance payments and do not specifically
allocate these costs to the various projects. Cost of sales is recognized by
multiplying the ratio by the total budgeted costs. Changes to total estimated
contract costs or losses, if any, are recognized in the period in which they are
determined. Revenue recognized to date in excess of amounts received from
customers is classified as current assets under revenue in excess of billings.
Amounts received from customers in excess of revenue recognized to date are
classified as current liabilities under customer deposits.</P>
<P align=justify>Any losses incurred or identified on real estate transaction
  are recognized in the period in which the transaction occurs. </P>
<P align=justify><B>Real Estate Capitalization and Cost Allocation</B></P>
<P align=justify>Properties under construction or held for sale consist of
residential and commercial units under construction and units completed.</P>
<P align=justify>Properties under construction or held for sale are stated at
cost or estimated net realizable value, whichever is lower. Costs include costs
of land use rights, direct development costs, including predevelopment costs,
interest on indebtedness, construction overhead and indirect project costs.
Total estimated costs of multi-unit developments are allocated to individual
units based upon specific identification methods. Costs of land use rights
include land premiums and deed tax and are allocated to projects on the basis of
acreage and gross floor area. </P>
<P align=center>F-15 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-17></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Capitalization of Interest</B></P>
<P align=justify>In accordance with ASC 360, <I>Property, Plant and
Equipment</I>, interest incurred during construction is capitalized to
properties under construction. All other interest is expensed as incurred.</P>
<P align=justify>For the year ended December 25, 2009, total interest incurred
by the Company was $3,195,886 (2008: $3,737,121 and 2007 restated: $756,839), of
which capitalized interest was $2,329,135 (2008: $2,768,411, and 2007 restated:
$685,876).</P>
<P align=justify><B>Concentration of Risks</B></P>
<P align=justify>The Company sells residential and commercial units to residents
and small business owners. In 2009, the Company recorded approximately
$9,995,000 of sales and contracts receivable from the sales of affordable
housing to City Government of Qingdao for the Real-Estate Development Management
Bureau for a relocation program. Such sales are approximately 11% of the total
sales in 2009 and the related contracts receivable comprise about 80% of the
total contracts receivable as of December 25, 2009. </P>
<P align=justify>For the years ended December 25, 2009 and 2008, the Company had
two major constructors for most of its construction services and construction
materials: Qingdao Zhongxing Construction Ltd and Longhai Construction Ltd. In
2009 and 2008 Oumei made payments to Longhai Construction Ltd, a related party
(See Note 5), of approximately $13,784,000 and $9,008,000 respectively. For the
year ended December 25, 2007, Qingdao Zhongxing Construction Ltd was the only
constructor used by the Company. </P>
<P align=justify>The Company&#146;s operations are carried out in the PRC.
Accordingly, the Company&#146;s business, financial condition and results of
operations may be influenced by the political, economic and legal environments
in the PRC and by the general state of the PRC&#146;s economy. The Company&#146;s business
may be influenced by changes in governmental policies with respect to laws and
regulations, anti-inflationary measures, currency conversion and methods of
taxation, among other things. </P>
<P align=justify>The Company has a credit risk exposure of uninsured cash in
banks at December 25, 2009 of $3,906,216 (2008: $2,274,517). The Company has not
experienced any losses in such accounts and believes it is not exposed to any
risks on its cash in bank accounts. The Company does not require collateral or
other securities to support financial instruments that are subject to credit
risk. </P>
<P align=justify><B>Cash and Cash Equivalents</B></P>
<P align=justify>The Company considers all highly liquid investments with
original maturities of three months or less when purchased to be cash
equivalents. The Company maintains bank accounts in the PRC and Hong Kong. All
PRC bank balances are denominated in CNY. Hong Kong bank balances are
denominated in USD. At December 25, 2009 and 2008, the Company had no cash
equivalents.</P>
<P align=justify>Cash includes cash on hand and demand deposits in accounts
maintained with state-owned and private banks within the PRC and Hong Kong.</P>
<P align=justify><B>Restricted Cash</B></P>
<P align=justify>PRC banks grant mortgage loans to home purchasers and will
credit these amounts to the Company&#146;s bank account once title passes to the
purchasers. If the condominiums are not completed and the new homeowners have no
ownership documents to secure the loan, the bank will deduct 5% of the
homeowner&#146;s loan from the Company&#146;s bank account and transfer that amount to a
designated bank account classified on the balance sheet as restricted cash.
Interest earned on the restricted cash is credited to the Company&#146;s normal bank
account. The bank will release the restricted cash after home purchasers have
obtained the ownership documents to secure the mortgage loan. Total restricted
cash amounted to $1,641,778 as of December 25, 2009 (2008: $1,635,878).</P>
<P align=center>F-16 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-18></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Allowance for Doubtful Accounts</B></P>
<P align=justify>The Company recognizes an allowance for doubtful accounts to
ensure contracts receivable, related party receivables and other receivables are
not overstated due to uncollectability. Bad debt reserves are maintained for all
customers based on a variety of factors, including the length of time the
receivables are past due, significant one-time events and historical experience.
An additional reserve for individual accounts is recorded when the Company
becomes aware of a customer's or debtor's inability to meet its financial
obligation, such as in the case of bankruptcy filings or deterioration in the
customer's or debtor&#146;s operating results or financial position. If circumstances
related to customers or debtors change, estimates of the recoverability of
receivables would be further adjusted. As of December 25, 2009 and 2008, the
allowances for doubtful accounts are $1,617,114 and $1,033,520 for contracts
receivable, and $272,361 and $636,745 for other receivables, respectively.</P>
<P align=justify>An allowance for contracts receivable is established as
follows: 50% of the balances aged between one and two years and over CNY100,000
(approximately $15,000); 10% of the balances aged between one and two years and
under CNY100,000 (approximately $15,000); and 100% of the balances aged over two
years.</P>
<P align=justify><B>Inventory </B></P>
<P align=justify>Inventory is stated at the lower of cost or market, on a
specific identification basis. In addition to direct land acquisition, land
development and construction costs, costs include interest and direct overhead
which are capitalized to inventories during the period beginning with the
commencement of construction and ending with the completion of construction.
</P>
<P align=justify><B>Property, Plant and Equipment, Net</B></P>
<P align=justify>Property, plant and equipment are recorded at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets as follows: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="45%"
    ><B><I>Estimated Useful Lives</I></B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Buildings and improvements </TD>
    <TD align=left width="45%" bgColor=#e6efff >20 years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Vehicles </TD>
    <TD align=left width="45%" >5 years </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Office equipment and others </TD>
    <TD align=left width="45%" bgColor=#e6efff >5 years
  </TD></TR></TABLE></DIV>
<P align=justify>Maintenance, repairs and minor renewals are charged directly to
expenses as incurred. Major additions and betterments to property, plant and
equipment are capitalized and depreciated over the remaining useful life of the
assets.</P>
<P align=justify><B>Impairment of Long-lived Assets</B></P>
<P align=justify>The Company reviews its long-lived assets other than goodwill
whenever events or changes in circumstances indicate that the carrying amount of
an asset may no longer be recoverable. When these events occur, the Company
measures impairment by comparing the carrying value of the long-lived assets to
the estimated undiscounted future cash flows expected to result from the use of
the assets and their eventual disposition. If the sum of the expected
undiscounted cash flows is less than the carrying amount of the assets, the
Company would recognize an impairment loss based on the fair value of the
assets. There was no impairment loss recognized for long-lived assets for the
years ended December 25, 2009, 2008 and 2007. </P>
<P align=center>F-17 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-19></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Goodwill </B></P>
<P align=justify>The Company accounts for acquisitions of business in accordance
with ASC 805, <I>Business Combinations</I>, which results in the recognition of
goodwill when the purchase price exceeds the fair value of net assets acquired.
Goodwill is not subject to amortization but will be subject to at least an
annual evaluation for impairment. The Company has performed such annual
evaluation in 2009 and determined that goodwill was not impaired as of December
25, 2009. </P>
<P align=justify>Goodwill is stated in the consolidated balance sheet at cost
less accumulated impairment loss. An analysis of changes in goodwill is as
follows: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><B>December 25, 2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><B>December 25, 2008</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Opening balance </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;3,596,117 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >Acquisitions </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">3,596,117 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Effect of exchange rate
      change </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>24,553 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >Closing balance </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">3,620,670 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">3,596,117 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE></DIV>
<P align=justify><B>Land Use Rights</B></P>
<P align=justify>Land use rights are related to the development rights for acres
of land in various projects. These rights are capitalized until a development
project commences on the land for which the rights have been acquired. At this
time, the rights are transferred to properties under construction inventory.</P>
<P align=justify><B>Income Taxes</B></P>
<P align=justify>The Company follows ASC 740, <I>Income Taxes</I>, which
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred income taxes are
recognized for the tax consequences in future years of differences between the
tax bases of assets and liabilities and their financial reporting amounts at
each period end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to be realized.</P>
<P align=justify>The Company is governed by the Income Tax Laws of the PRC
concerning Chinese registered limited liability companies. Under the Income Tax
Laws of the PRC, Chinese enterprises are generally subject to an income tax at
an effective rate of 25% since January 1, 2008 and 33% prior to that date on
taxable income.</P>
<P align=justify>According to the Income Tax Laws of the PRC for real estate
developers, income tax of the Company is calculated by project. When all units
of a project are sold, the PRC tax department will assess the tax due on the
project and issue a tax due notification to the Company. The Company has to pay
the tax by the due date on the notification. If the Company does not pay the tax
by the due date, the tax department will charge the Company interest. The
Company includes any interest and penalties in general and administrative
expenses. </P>
<P align=justify>Deferred tax assets and liabilities are included in the
financial statements at currently enacted income tax rates applicable to the
period in which the deferred tax assets and liabilities are expected to be
realized or settled. As changes in tax laws or rates are enacted, deferred tax
assets and liabilities are adjusted through the provision for income taxes.</P>
<P align=justify>ASC 740 clarifies the accounting for uncertainty in income
taxes recognized in an enterprise&#146;s financial statements and it prescribes a
recognition threshold and measurement attributable for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. ASC 740 also provides guidance on derecognizing, classification,
interest and penalties, accounting in interim periods, disclosures and
transitions.</P>
<P align=justify>The Company recognizes that virtually all tax positions in the
PRC are not free of some degree of uncertainty due to tax law and policy changes
by the PRC government. However, the Company cannot reasonably quantify political
risk factors and thus must depend on guidance issued by current PRC government
officials. </P>
<P align=center>F-18 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-20></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Income Taxes (Continued) </B></P>
<P align=justify>Based on all known facts and circumstances and current tax law,
the Company believes that the total amount of unrecognized tax benefits as of
December 25, 2009 is not material to its results of operations, financial
condition or cash flows. The Company also believes that the total amount of
unrecognized tax benefits as of December 25, 2009, if recognized, would not have
a material effect on its effective tax rate. The Company further believes that
there are no tax positions for which it is reasonably possible, based on current
Chinese tax law and policy, that the unrecognized tax benefits will
significantly increase or decrease over the next 12 months producing,
individually or in the aggregate, a material effect on the Company&#146;s results of
operations, financial condition or cash flows. </P>
<P align=justify><B>Land Appreciation Tax (&#147;LAT&#148;)</B></P>
<P align=justify>In accordance with the relevant taxation laws in the PRC, the
Company is subject to LAT based on progressive rates ranging from 30% to 60% on
the appreciation of land value, which is calculated as the proceeds of sales of
properties less deductible expenditures, including borrowings costs and all
property development expenditures. The tax rules to implement the laws stipulate
that the whole project must be completed before the LAT obligation can be
assessed. Accordingly, the Company records the liability and the related expense
at the completion of a project, unless the tax authorities impose an assessment
at an earlier date. Deposits made against the eventual obligation are included
in prepaid expenses.</P>
<P align=justify><B>Accumulated Other Comprehensive Income</B></P>
<P align=justify>Accumulated other comprehensive income is defined to include
all changes in equity except those resulting from investments by owners and
distributions to owners. The Company&#146;s only components of comprehensive income
during the years ended December 25, 2009, 2008 and 2007 were net income and the
foreign currency translation adjustment.</P>
<P align=justify><B>Statement of Cash Flows</B></P>
<P align=justify>In accordance with ASC 230, <I>Statement of Cash Flows</I>,
cash flows from the Company&#146;s operations are calculated based upon the local
currencies. As a result, amounts related to assets and liabilities reported on
the statement of cash flows will not necessarily agree with changes in the
corresponding balances on the balance sheet.</P>
<P align=justify><B>Advertising Expenses </B></P>
<P align=justify>Advertising costs are expensed as incurred, or the first time
the advertising takes place, in accordance with ASC 720-35, <I>Advertising Costs</I>. </P>
<P align=justify>For the year ended December 25, 2009, the Company recorded an
advertising expense of $311,560 (2008: $242,021 and 2007 restated: $46,492).</P>
<P align=justify><B>Property Warranty</B></P>
<P align=justify>The Company and its subsidiaries provide customers with
warranties which cover major defects of building structure and certain fittings
and facilities of properties sold as stipulated in the relevant sales contracts.
The warranty period is one year. The Company constantly estimates potential
costs for materials and labor with regard to warranty-type claims expected to be
incurred subsequent to the delivery of a property.</P>
<P align=center>F-19 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-21></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Property Warranty (Continued) </B></P>
<P align=justify>Reserves are determined based on historical data and trends
with respect to similar property types and geographical areas. The Company
monitors the warranty reserve and makes adjustments to its pre-existing
warranties, if any, in order to reflect changes in trends and historical data as
information becomes available. The Company may seek further recourse against its
contractors or any related third parties if it can be proved that the faults are
caused by them. In addition, the Company also withholds up to 5% of the contract
cost from subcontractors for periods of two to five years. These amounts are
included in current liabilities, and are only paid to the extent that there have
been no warranty claims against the Company relating to the work performed or
materials supplied by the subcontractors. For the three years ended December 25,
2009, 2008 and 2007, the Company has not recognized any warranty liability or
incurred any warranty costs in excess of the amount retained from
subcontractors.</P>
<P align=justify><B>Note 4 - Contracts Receivable</B></P>
<P align=justify>Contracts receivable consists of balances due from customers
for the sale of residential and commercial units. In cases where the customers
deposit more than 50% of the total purchase price, the Company may defer the
remaining purchase price. These deferred balances are unsecured, bear no
interest and are due within 360 days from the date of the sale. Contracts
receivable are presented net of an allowance for doubtful accounts of $1,617,114
at December 25, 2009 (2008: $1,033,520).</P>
<P align=justify><B>Note 5 - Related Party Transactions</B></P>
<P align=justify>As of December 25, 2009, the Company has a total of $2,949,102
(2008: $15,279,068) due from and a total of $0 (2008: $0) due to Longhai Group
and its subsidiaries. Mr. Antoine Cheng is the controlling shareholder of
Longhai Group (See Notes 1 and 2). These balances have no stated terms for
repayment and are not interest bearing.</P>
<P align=justify>In 2009, the Company sold two floors of a project for office
use to Longhai Construction Ltd, a subsidiary of Longhai Group, for
approximately $3,274,000. </P>
<P align=justify><B>Note 6 - Inventories</B></P>
<P align=justify>Inventories include properties held for sales and properties
under construction. The following summarizes the components of real estate
inventories at December 25, 2009 and 2008:</P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%"><B>2008</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Properties held for sale </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;35,549,529 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;21,857,879 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >Properties under construction </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">33,552,748 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">13,302,752 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Properties held for sale
      pledged for mortgage loans </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>2,132,197 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>756,724 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >Properties under construction pledged for
      mortgage loans </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">35,218,228 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">41,091,328 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Total </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;106,452,702 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;77,008,683 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE></DIV>
<P align=justify><B>Note 7 - Other Receivables, Net </B></P>
<P align=justify>Other receivables consist of various cash advances to employees
and unrelated companies with which the Company has business relationships. These
amounts are unsecured, non-interest bearing and generally short term in nature.
As of December 25, 2009, the balance of other receivables was $1,634,987 (2008:
$367,836), which is net of an allowance for doubtful accounts of $272,361(2008:
$636,745).</P>
<P align=center>F-20 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-22></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 8 - Property and Equipment, Net</B></P>
<P align=justify>Property and equipment consist of the following at December 25,
2009 and 2008: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2008</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Buildings and improvements </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;3,756,672 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;2,466,129 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Vehicles </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">392,615 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">238,546 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Office equipment and others </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>67,938 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,389 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Idle assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,761,600 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">2,372,701 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Construction in progress </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>642,021 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;5,978,825 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;5,723,786 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Accumulated depreciation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(987,118</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(730,099</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Property and equipment, net </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;4,991,707 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;4,993,687 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE></DIV>
<P align=justify>Depreciation expense for the years ended December 25, 2009,
2008 and 2007 was $246,680, $246,400 and $205,366 (restated), respectively, and
is included in general and administrative expenses on the Statements of Income
and Comprehensive Income. </P>
<P align=justify><B>Note 9 - Accounts Payable</B></P>
<P align=justify>As of December 25, 2009, the Company has accounts payable
$487,238. There was no accounts payable as of December 25, 2008.</P>
<P align=justify><B>Note 10 - Customer Deposits</B></P>
<P align=justify>Customer deposits consist of amounts received from customers
relating to the sale of residential and commercial units in the PRC. In the PRC,
customers will generally obtain permanent financing for the purchase of their
residential unit prior to the completion of the project. The lending institution
will provide the funding to the Company upon the completion of the financing
rather than the completion of the project. The Company receives these funds and
recognizes them as a current liability until the revenue can be recognized. As
of December 25, 2009, the Company has received $19,780,472 deposits from
customers (2008: $42,980,448). </P>
<P align=justify><B>Note 11 - Other Payables</B></P>
<P align=justify>Other payables consist of various cash advances from unrelated
companies and individuals with which management of the Company has business
relationships. These amounts are unsecured, non-interest bearing and short term
in nature. As of December 25, 2009, the balance of other payables is $4,186,745
(2008: $3,287,869). </P>
<P align=justify><B>Note 12 - Taxes Payable</B></P>
<P align=justify>Taxes payable consist of the following at December 25, 2009 and
2008:</P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2008</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Business tax </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;6,461,389 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;3,353,457 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Income tax </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">18,847,145 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">18,621,457 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Others </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>741,422 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>243,006 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;26,049,956 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;22,217,920 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE></DIV>
<P align=justify>The Company prepaid LAT and other taxes of $1,461,670 in 2009
and $3,782,408 in 2008, which are classified as prepaid expenses. </P>
<P align=center>F-21 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-23></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 13 - Short-term Loans </B></P>
<P align=justify>As of December 25, 2009, the Company has several short-term
loans from banks and employees totaling $2,719,432 (2008: $2,879,010). The
weighted average interest rate for the short-term bank loans was approximately
5.82% in 2009 and 8.73% in 2008. The weighted average interest rate for employee
loans was approximately 5.64% in 2009 and 5.10% in 2008.</P>
<P align=justify>The short-term loans were borrowed from several financial
institutions. Interest expense incurred was $149,502, $110,719 and $70,963
(restated) for the years ended December 25, 2009, 2008 and 2007, respectively.
The capitalized interest from short-term loans was $3,751 in 2008, and there was
no capitalized interest from short-term loans in 2009 and 2007. </P>
<P align=justify>As of December 25, 2007, the Company had a loan of $15,000,000
from a potential investor. The loan was non-interest bearing and had no
repayment terms. On November 10, 2008, the Company paid $1,851,706 in cash in
partial settlement of the $15,000,000 investor loan. On November 18, 2008, the
Company, Mr. Zhou Li and the investor entered into an agreement stipulating that
Mr. Zhou Li was responsible for settling the remaining loan balance of
$13,148,294 and Mr. Zhou Li was entitled to seek reimbursement from the Company
for the repayment. In November 2008, the Company increased its authorized shares
from 10,000 to 150,000,000. At December 21, 2008, the $13,148,294 was converted
to 102,556,690 shares of common stock of the Company at $0.1282 (HK$ 1.00) per
share. </P>
<P align=justify><B>Note 14 - Long-term Debt </B></P>
<P align=justify>The Company has long-term loans from various financial
institutions totaling $39,621,320 at December 25, 2009 (2008: $43,843,494). The
payment schedule for the long-term loans is as following: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>For the year ended December 25, 2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="22%" bgColor=#e6efff >&nbsp;35,217,320
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>For the year ended December 25, 2011 </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="22%" >&nbsp;4,404,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE></DIV>
<P align=justify>All long-term loans are borrowed for construction projects. The
interest rates of the long-term loans ranged from approximately 5.31% to 14.74%
and 6.48% to 8.49% in 2009 and 2008, respectively. The interest rate for the
only long-term loan in 2007 was 9.83% . </P>
<P align=justify>Total interest incurred was $3,046,384, $3,626,402, and
$685,876 in 2009, 2008 and 2007, respectively, of which capitalized interest was
$2,329,135, $2,764,660, and $685,876 (restated), respectively. </P>
<P align=justify><B>Note 15 - Income Taxes </B></P>
<P align=justify>Beginning January 1, 2008, the new Chinese Enterprise Income
Tax (&#147;EIT&#148;) law replaced the former income tax laws for Domestic Enterprises
(&#147;DEs&#148;) and Foreign Invested Enterprises (&#147;FIEs&#148;). The new standard EIT rate of
25% replaced the 33% rate previously applicable to both DEs and FIEs.</P>
<P align=justify>A reconciliation between approximate taxes computed at the US
statutory rate of 34% and the Company's effective tax rate is as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>2007</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2008</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>Restated</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>At US statutory rate of 34% </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;11,357,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;8,699,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;4,865,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Tax effect of permanent difference </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">259,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Effect of statutory rate difference </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(3,046,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(2,303,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(143,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Change in valuation allowance </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">243,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">498,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expiration of net operating loss
      carryfowards </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>195,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Others </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">50,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(292,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">368,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income tax at effective rate </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;9,058,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;6,602,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;5,090,000 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=center>F-22 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-24></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 15 - Income Taxes (Continued) </B></P>
<P align=justify>The tax effects of temporary differences that give rise to the
following approximate deferred tax assets and liabilities as of December 25 are
presented below. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2008</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Deferred tax assets</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; Short-term deferred tax assets: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Allowance for bad debt </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;472,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;418,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Less: Valuation
      allowance </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(472,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(418,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; Long-term deferred tax assets: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Net operating loss carryfowards </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;378,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;412,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Combined effect due to
      reporting revenues and expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;differently for financial statement and
      income tax </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;purposes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>548,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Less: Valuation allowance </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(269,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(81,000</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;657,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;331,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Deferred tax liabilities</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Combined effect due to
      reporting revenues and expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;differently for financial statement and
      income tax </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;purposes </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;8,782,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>As of December 25, 2009, the Company has net operating loss
carryfowards of approximately $1,283,000, which expire at varying years through
2013, and net operating loss carryfowards of approximately $344,000, which will
not expire. </P>
<P align=justify><B>Note 16 - Appropriated Retained Earnings</B></P>
<P align=justify>In accordance with the PRC Company Law, the Company is required
to transfer 15% of its profit after tax, as determined in accordance with PRC
accounting standards and regulations, to the statutory surplus reserve (the
&#147;SSR&#148;) until such reserve reaches 50% of the registered capital of the
subsidiaries. Subject to certain restrictions set out in the PRC Company Law,
the SSR may be distributed to stockholders in the form of share bonus issues to
increase share capital, provided that the remaining balance after the
capitalization is not less than 25% of the registered capital.</P>
<P align=justify>For the year ended December 25, 2009, the Company appropriated
reserve funds in the amount of $3,656,132 (2008: $2,407,705).</P>
<P align=justify><B>Note 17 - Employee Welfare Plan</B></P>
<P align=justify>Regulations in the PRC require the Company to contribute to a
defined contribution retirement plan for all permanent employees. Pursuant to
the mandatory requirement from the local authority in the PRC, the retirement
pension insurance, unemployment insurance, health insurance, injury insurance
and pregnancy insurance are established for the employees during the term of
employment. For the year ended December 25, 2009, the Company contributed
$87,776 (2008: $50,759 and 2007 restated: $5,490). </P>
<P align=center>F-23 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-25></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 18 - Recent Pronouncements</B></P>
<P align=justify><B>ASU No. 2009-13,</B> <B><I>Revenue Recognition (Topic 605) &#150;
Multiple-Deliverable Revenue Arrangements &#150; a consensus of the FASB Emerging
Issues Task Force </I></B></P>
<P align=justify>This ASU addresses the accounting for multiple-deliverable
arrangements to enable vendors to account for products or services
(deliverables) separately rather than as a combined unit. The ASU is effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. </P>
<P align=justify><B>ASU No. 2009-14, <I>Software (Topic 985) &#150; Certain
Revenue Arrangements That Include Software Elements &#150; a consensus of the FASB
Emerging Issues Task Force</I></B></P>
<P align=justify>The amendments in this ASU change the accounting model for
revenue arrangements that include both tangible products and software elements.
The ASU is effective prospectively for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010. </P>
<P align=justify><B>ASU No. 2009-15,</B> <B><I>Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance or Other Financing
</I></B></P>
<P align=justify>This ASU concludes that at the date of issuance, a
share-lending arrangement entered into on an entity&#146;s own shares in
contemplation of a convertible debt offering or other financing is required to
be measured at fair value and recognized as issuance cost in the financial
statements of the entity. The ASU is effective for fiscal years beginning on or
after December 15, 2009, and interim periods within those fiscal years for
arrangements outstanding as of the beginning of those fiscal years. The ASU is
effective for interim or annual periods beginning on or after June 15, 2009, for
share-lending arrangements entered into in those periods. </P>
<P align=justify><B>ASU No. 2009-16, <I>Transfers and Servicing (Topic
860): Accounting for Transfers of Financial Assets</I></B></P>
<P align=justify>Among other provisions, this ASU eliminates the concept of a
&#147;qualifying special-purpose entity&#148; from SFAS No. 140 and removes the exception
from applying FIN No. 46(R) to qualifying special-purpose entities. This ASU is
effective at the beginning of a reporting entity&#146;s first fiscal year that begins
after November 15, 2009. </P>
<P align=justify><B>ASU No. 2009-17, <I>Consolidations (Topic 810):
Improvements to Financial Reporting by Enterprises Involved with Variable
Interest Entities</I></B></P>
<P align=justify>Among other provisions, this ASU amends FIN No. 46(R) to
require an enterprise to perform an analysis to determine whether the
enterprise&#146;s variable interest or interests give it a controlling financial
interest in a variable interest entity. This ASU is effective at the beginning
of a company&#146;s first fiscal year that begins after November 15, 2009. </P>
<P align=justify><B>ASU No. 2010-06, <I>Fair Value Measurements and
Disclosures (Topic 820) &#150; Improving Disclosures about Fair Value Measurements
</I> </B></P>
<P align=justify>This ASU affects all entities that are required to make
disclosures about recurring and nonrecurring fair value measurements under FASB
ASC Topic 820, originally issued as FASB Statement No. 157, <I>Fair Value
Measurements</I>. The ASU requires certain new disclosures and clarifies two
existing disclosure requirements. The new disclosures and clarifications of
existing disclosures are effective for interim and annual reporting periods
beginning after December 15, 2009, except for the disclosures about purchases,
sales, issuances, and settlements in the roll forward of activity in Level 3
fair value measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010, and for interim periods within those fiscal
years.</P>
<P align=center>F-24 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-26></A>
<P align=center><B>LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
</B><BR><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </B><BR><B>DECEMBER 25,
2009, 2008 AND 2007 </B><BR></P>
<P align=justify><B>Note 18 - Recent Pronouncements (Continued) </B></P>
<P align=justify><B>ASU No. 2010-08, <I>Technical Corrections to Various
Topics </I> </B></P>
<P align=justify>This ASU eliminates certain inconsistencies and outdated
provisions and provides needed clarifications. The changes are generally non
substantive in nature and will not result in pervasive changes to current
practice. However, the amendments that clarify the guidance on embedded
derivatives and hedging (ASC Subtopic 815-15) may cause a change in the
application of that Subtopic. The clarifications of the guidance on embedded
derivatives and hedging (Subtopic 815-15) are effective for fiscal years
beginning after December 15, 2009. The other amendments are effective as of the
first reporting period (including interim periods) beginning after February 2,
2010.</P>
<P align=justify><B>Note 19 - Potential Listing as a Public Company in the
United States (Unaudited) </B></P>
<P align=justify>As of the date of this report, the Company is negotiating an
agreement with Access American Fund, LP (&#147;AAI&#148;) to raise $15 million to $20
million in conjunction with an alternative public offering (&#147;APO&#148;). This APO is
a reverse merger of a foreign operating entity into a US public shell company,
accompanied by a simultaneous Private Investment in Public Equity (&#147;PIPE&#148;)
offering, a capital raise in which a publicly traded company sells its stock to
investors in a privately negotiated transaction. The detailed terms and final
agreement will be subject to a complete due diligence review. The Company will
file a Form 8-K with the Securities and Exchange Commission once the final
agreement is reached. </P>
<P align=justify><B>Note 20 - Subsequent Events</B></P>
<P align=justify>The Company has evaluated the subsequent events through March
23, 2010, the date the financial statements were issued.</P>
<P align=justify>The Company has paid back approximately $3 million of the
long-term debt as of March 23, 2010. </P>
<P align=justify><B>Note 21 &#150; Reclassifications </B></P>
<P align=justify>Certain reclassifications have been made to the December 25,
2008 and 2007 figures in order to conform them to the current year&#146;s
presentation. </P>
<P align=center>F-25 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-27></A>
<P align=center><B>DRAGON ACQUISITION CORPORATION </B><BR><B>UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION </B><BR><B>DECEMBER 31, 2009 </B><BR></P>
<P align=justify>On April 14, 2010, Dragon Acquisition Corporation ("Dragon")
issued 29,235,000 ordinary shares at par value of $0.002112 for all of the
outstanding ordinary shares of Leewell Investment Group Limited ("Leewell").<B>
</B></P>
<P align=justify>The unaudited pro forma information is based upon the
historical financial statements of Dragon and the consolidated historical
financial statements of Leewell after giving effect to pro forma adjustments
described below. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>To eliminate Leewell's common shares.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>To eliminate Dragon's accumulated deficit.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>To reflect the issuance of 29,235,000 shares by
      Dragon.</P></TD></TR></TABLE>
<P align=justify>The adjustments are based on currently available information
and certain estimates and assumptions. However, management believes that the
assumptions provide a reasonable basis for presenting the unaudited pro forma
financial information and that pro forma adjustments give effect to those
assumptions and are properly applied in the unaudited pro forma financial
information. </P>
<P align=justify>The following unaudited pro forma financial information
presents the effects of the transaction on equity as of December 31, 2009. </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Dragon</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Leewell</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="3%" >&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Pro Forma</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Historical</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Historical</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Adjustments</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="3%" >&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Combined</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%">$</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>$</B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">$</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="3%" >&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>$</B></TD>
    <TD align=center width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Common shares </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>2,112 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>13,149,576 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(13,149,576</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff >(1</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>63,856 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">61,744 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="3%" >(3</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Paid-in capital </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>45,238 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(7,465,626</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>13,149,576 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff >(1</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>5,610,215 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(57,229</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="3%" >(2</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(61,744</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff >(3</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Appropriated retained earnings </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">10,298,700 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="3%" >&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">10,298,700 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Unappropriated retained
      earnings/(Accumulated deficit) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(57,229</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>71,326,950 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>57,229 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff >(2</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>71,326,950 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Accumulated other comprehensive income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">7,041,346 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="3%" >&nbsp; </TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">7,041,346 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Shareholders' equity </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>(9,879</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>94,350,946 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#e6efff >&nbsp; </TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>94,341,067 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE></DIV>
<P align=center>F-26 </P>
</A>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_98></A>
<P align=center><B><FONT size=5>_______ Ordinary Shares</FONT></B></P>
<P align=center><IMG
src="logo.jpg" width="125" height="82"
border=0> </P>
<P align=center><B><FONT size=5>DRAGON ACQUISITION CORPORATION</FONT></B></P>
<P align=center><B><FONT size=5>Ordinary Shares </FONT></B></P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center><B><FONT size=5>__________________</FONT><BR><FONT
size=5><br>
PROSPECTUS </FONT><BR><FONT size=5>__________________</FONT></B></P>
<P align=center><B><FONT size=5>Brean Murray, Carret &amp; Co.</FONT></B></P>
<P align=center>&nbsp;</P>
<P align=center><B>, 2010</B><BR></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_99></A>&nbsp;
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD rowSpan=7><IMG src="sidebar2.jpg" width="73" height="733" border=0></TD>
    <TD colspan="2" align=left> <P align=center>[RESALE PROSPECTUS ALTERNATE PAGE]
      </P>
      <P align=center><B><I>PRELIMINARY PROSPECTUS </I></B></P>
      <P align=center><B><I><FONT color=#ff0000>Subject to completion, dated May
        7, 2010 </FONT></I></B></P>
      <P align=center><B>5,065,785 Ordinary Shares </B></P>
      <P align=center><IMG src="logo.jpg" width="125" height="82" border=0></P>
      <P align=center><B><font style="font-size: 16pt">DRAGON ACQUISITION CORPORATION</font></B></P>
      <P align=center>____________________________ </P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;This
        prospectus relates to 5,065,785 ordinary shares that may be sold from
        time to time by the selling stockholders named in this prospectus, which
        includes: </P></TD>
  </TR>
  <TR>
    <TD align=left width="5%">&nbsp;</TD>
    <TD align=left width="85%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="5%">&#8226;</TD>
    <TD align=left width="85%"> <P align=justify>765,000 ordinary shares; </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="5%">&#8226;</TD>
    <TD align=left width="85%"> <P align=justify>2,774,700 ordinary shares underlying
        the 6% Convertible Preference Shares, par value $0.002112 per share; and
      </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="5%">&#8226;</TD>
    <TD align=left width="85%"> <P align=justify>1,526,085 ordinary shares issuable
        to the selling stockholders upon the exercise of warrants. </P></TD>
  </TR>
  <TR>
    <TD align=left width="5%">&nbsp;</TD>
    <TD align=left width="85%">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan="2" align=left> <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;The selling stockholders may sell ordinary shares from time to time
        in the principal market on which the stock is traded at the prevailing
        market price or in negotiated transactions. We will not receive any proceeds
        from the sales of outstanding ordinary shares by the selling stockholders,
        but we will receive funds from the exercise of warrants held by the selling
        stockholders, if exercised for cash. </P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ordinary shares are not
        currently listed or quoted for trading on any national securities exchange
        or national quotation system. We intend to apply for the listing of our
        ordinary shares on the NASDAQ Global Market under the symbol &#147;OMEI&#148;.
        Once, and if, our ordinary shares are listed on the NASDAQ Global Market
        and there is an established market for these resale shares, the selling
        stockholders may sell the resale shares from time to time at the market
        price prevailing on the NASDAQ Global Market at the time of offer and
        sale, or at prices related to such prevailing market prices or in negotiated
        transactions or a combination of such methods of sale directly or through
        brokers. </P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The purchase of the securities
        involves a </B><B>high degree of risk. See section entitled &#147;Risk
        Factors&#148; beginning on page 8. </B></P>
      <P
      align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither
        the U.S. Securities and Exchange Commission nor any state securities commission
        has approved or disapproved of anyone&#146;s investment in these securities
        or determined if this prospectus is truthful or complete. Any representation
        to the contrary is a criminal offense. </B></P>
      <P align=center>_______________________</P>
      <P align=center>The date of this prospectus is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        , 2010. </P></TD>
  </TR>
</TABLE>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_100></A>
<P align=center>[resale prospectus alternate page] </P>
<P align=center><B><U>TABLE OF CONTENTS</U></B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 height="775">

  <TR vAlign=top>
    <TD align=left height="15">&nbsp; </TD>
    <TD align=right width="8%" height="15" ><B><U>Page</U></B> </TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_6"><B>PROSPECTUS
      SUMMARY</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_6"><B>1</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_13"><B>RISK
      FACTORS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_13"><B>8</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_27"><B>SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_27"><B>22</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="10"><A
      href="#page_28"><B>USE
      OF PROCEEDS </B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="10" ><b>
    <a href="#page_28">2A</a></b></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_29"><B>MARKET
      PRICE AND DIVIDENDS ON OUR COMMON EQUITY AND RELATED SHAREHOLDER</B>
      <B>MATTERS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_29"><B>24</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_29"><B>DIVIDEND
      POLICY</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_29"><B>24</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR>
    <TD align=left bgcolor="#EEEEEE" height="15" ><b>EXCHANGE RATE INFORMATION</b></TD>
    <TD align=right width="8%" bgcolor="#EEEEEE" height="15" ><b>28</b></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_33"><B>SELECTED
      CONSOLIDATED FINANCIAL DATA</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_33"><B>27</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_36"><B>MANAGEMENT&#146;S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF</B>
      <B>OPERATIONS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_36"><B>30</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_52"><B>QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_52"><B>46</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_52"><B>BUSINESS</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_52"><B>47</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_70"><B>HISTORY
      AND CORPORATE STRUCTURE</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_70"><B>64</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_73"><B>MANAGEMENT</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_73"><B>67</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_75"><B>EXECUTIVE
      COMPENSATION</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_75"><b>69</b>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="30"><A
      href="#page_78"><B>TRANSACTIONS
      WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS;</B>
      <B>CORPORATE GOVERNANCE</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="30" ><A
      href="#page_78"><B>72</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_79"><B>SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_79"><B>73</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_80"><B>DESCRIPTION
      OF SECURITIES</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_80"><B>74</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_86"><B>SHARES
      ELIGIBLE FOR FUTURE SALE</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_86"><B>80</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_103"><B>SELLING
      STOCKHOLDERS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_103"><B>3A</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_107"><B>PLAN
      OF DISTRIBUTION</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_107"><B>7A</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_94"><B>LEGAL
      MATTERS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_94"><B>9A</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_94"><B>EXPERTS</B>
      </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_94"><B>9A</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_95"><B>ADDITIONAL
      INFORMATION</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_95"><B>9A</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_96"><B>INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_96"><B>F-1</B>
      </A></TD></TR>
  <TR>
    <TD align=left height="15" ></TD>
    <TD align=right width="8%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee height="15"><A
      href="#page_111"><B>PART
      II INFORMATION NOT REQUIRED IN THE PROSPECTUS</B> </A></TD>
    <TD align=right width="8%" bgColor=#eeeeee height="15" ><A
      href="#page_111"><B>II-1</B>
      </A></TD></TR></TABLE>
<P align=center>i </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_101></A>
<P align=center>[RESALE PROSPECTUS ALTERNATE PAGE] </P>
<P align=center><B>The Offering </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>Ordinary shares offered by selling
      stockholders<SUP>(1)</SUP> </TD>
    <TD align=left width="2%"></TD>
    <TD align=center width="49%">
      <P align=justify>5,065,785 shares, consisting of 765,000 ordinary shares,
      2,774,700 ordinary shares underlying the Preference Shares, and 1,526,085
      ordinary shares issuable upon the exercise of warrants held by the selling
      stockholders. This number represents 14.35% of our current outstanding
      ordinary shares, on a fully diluted basis<SUP>(1)</SUP>. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Ordinary shares outstanding after the
      offering, assuming all the Preference Shares are converted into ordinary
      shares and all the warrants are exercised for cash<SUP>(2</SUP></TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=center width="49%" bgColor=#e6efff>
      <P align=justify>35,300,847 shares </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>Use of proceeds <BR></TD>
    <TD align=left width="2%"><BR></TD>
    <TD align=center width="49%">
      <P align=justify>We will not receive any proceeds from the sale of
      ordinary shares by the selling stockholders. We will, however, receive
      approximately $9.0 million from the exercise of the warrant held by the
      selling stockholders, if exercised for cash. <BR></P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Risk factors </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=center width="49%" bgColor=#e6efff>
      <P align=justify>See &#147;Risk Factors&#148; and other information included in this
      prospectus for a discussion of the risks you should carefully consider
      before deciding to invest in our ordinary shares. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>Trading market </TD>
    <TD align=left width="2%"></TD>
    <TD align=center width="49%">
      <P align=justify>We intend to apply for the listing of our ordinary shares
      on the NASDAQ Global Market under the symbol &#147;OMEI&#148;. There can, however,
      be no assurance that our ordinary shares will be accepted for listing on
      the NASDAQ Global Market. </P></TD></TR></TABLE>
<P align=justify>(1) Based on 31,000,062 ordinary shares issued and outstanding
as of May 5, 2010. </P>
<P align=justify>(2) Excludes
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares
(excluding an underwriters&#146; option to purchase
additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary
shares to cover over-allotments) to be offered by us in a firm commitment public
offering concurrently herewith and (ii) the underwriters&#146; warrants to purchase
up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ordinary shares.</P>
<P align=center>1A </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_102></A>
<P align=center>[RESALE PROSPECTUS ALTERNATE PAGE]<BR></P>
<P align=center><B>USE OF PROCEEDS</B><BR></P>
<P align=justify>We will not receive any proceeds from the sale of the ordinary
shares by the selling stockholders. If the warrants are exercised for cash, then
we will receive the proceeds of payable by the selling stockholders upon
exercise of the warrants. </P>
<P align=center>2A</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_103></A>
<P align=center>[RESALE PROSPECTUS ALTERNATE PAGE]<BR></P>
<P align=center><B>SELLING STOCKHOLDERS</B><BR></P>
<P align=justify>This prospectus relates to the resale by the selling
stockholders named below from time to time of up to a total of 5,065,785
ordinary shares that were issued or are issuable to selling stockholders
pursuant to transactions exempt from registration under the Securities Act. All
of the ordinary shares offered by this prospectus is being offered by the
selling stockholders for their own accounts.</P>
<P align=justify>On April 14, 2010, we completed a private placement transaction
with a group of accredited investors. Pursuant to the Subscription Agreement
with the investors, we issued to the investors an aggregate of 2,774,700 Units,
for an aggregate purchase price of $11,098,800, or $4.00 per Unit. Each Unit
consists of one share of our Preference Shares and one Warrant to purchase 0.5
ordinary shares. The Warrants have a term of 5 years, bear an exercise price of
$6.00 per share (subject to customary adjustments), are exercisable on a net
exercise or cashless basis and are exercisable by investors at any time after
the closing date. The foregoing securities were issued pursuant to the exemption
from registration provided by Section 4(2) of the Securities Act for the offer
and sale of securities not involving a public offering and Rule 506 of
Regulation D promulgated thereunder. </P>
<P align=justify>Pursuant to the Subscription Agreement, we are obligated to
file a registration statement covering the resale of the ordinary shares
underlying the Preference Shares and the Warrants no later than thirty (30) days
following the closing date.</P>
<P align=justify>On April 14, 2010, we also issued an aggregate of 300,000
ordinary shares and warrants for the purchase of an aggregate of 138,735
ordinary shares, exercisable for a period of 3 years at an exercise price of
$5.00 per share, to Brean Murray, Carret &amp; Co., LLC and/or its designees, as
partial compensation for services provided by them in connection with the
private placement transaction. Brean Murray, Carret &amp; Co., LLC also received
a cash fee of $775,759.39 for its services in connection with the private
placement. The issuance of these securities was made in reliance upon exemptions
provided by Section 4(2) of the Securities Act for the offer and sale of
securities not involving a public offering and Regulation D promulgated
thereunder. We are under the contractual obligation to register the ordinary
shares as well as ordinary shares issuable upon exercise of the warrants we
issued to Brean Murray, Carret &amp; Co., LLC within a pre-defined period. </P>
<P align=justify>On April 14, 2010, we also issued an aggregate of 465,000
ordinary shares to Beijing Allstar Business Consulting, Inc. and/or its
designees, as partial compensation for services provided by them in connection
with the reverse acquisition of Leewell and the private placement transaction.
The issuance of these securities was made in reliance upon exemptions provided
by Section 4(2) of the Securities Act for the offer and sale of securities not
involving a public offering and Regulation D promulgated thereunder. We are
under the contractual obligation to register the ordinary shares within a
pre-defined period. </P>
<P align=justify><B><I>Selling Stockholders</I></B><BR></P>
<P align=justify>The following table sets forth certain information regarding
the selling stockholders and the shares offered by it in this prospectus.
Beneficial ownership is determined in accordance with the rules of the SEC. In
computing the number of shares beneficially owned by a selling stockholder and
the percentage of ownership of that selling stockholder, ordinary shares
underlying the Preference Shares and Warrants held by that selling stockholder
that are convertible or exercisable, as the case may be, within 60 days of May
5, 2010 are included. Those shares, however, are not deemed outstanding for the
purpose of computing the percentage ownership of any other selling stockholder.
Each selling stockholder&#146;s percentage of ownership in the following table is
based upon 31,000,062 ordinary shares outstanding as of May 5, 2010. </P>
<P align=justify>None of the selling stockholders has held a position as an
officer or director of the Company, nor has any material relationship of any
kind with us or any of our affiliates. All information with respect to share
ownership has been furnished by the selling stockholders. The shares being
offered are being registered to permit public secondary trading of the shares
and the selling stockholders may offer all or part of the shares owned for
resale from time to time. In addition, none of the selling stockholders has any
family relationships with our officers, directors or controlling stockholders.
Furthermore, no selling stockholder is a registered broker-dealer or an
affiliate of a registered broker-dealer except Brean Murray, Carret &amp; Co.,
LLC and Access America Fund, LP. </P>
<P align=center>3A</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_104></A>
<P align=justify>The term &#147;selling stockholders&#148; also includes any transferees,
pledges, donees, or other successors in interest to the selling stockholders
named in the table below. To our knowledge, subject to applicable community
property laws, each person named in the table has sole voting and investment
power with respect to the ordinary shares set forth opposite such person&#146;s name.
We will file a supplement to this prospectus (or a post-effective amendment
hereto, if necessary) to name successors to any named selling stockholder who is
able to use this prospectus to resell the securities registered hereby. </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top>
    <TD align=left ><BR><BR><BR><BR><BR><B>Name and Address</B>
    </TD>
    <TD align=center width="19%"><BR><BR><B>Number of Ordinary</B>
      <BR><B>Shares Beneficially</B> <BR><B>Owned Prior to the</B>
      <BR><B>Offering</B><B><SUP>(1)</SUP></B> </TD>
    <TD align=center width="19%"><B>Number of</B> <BR><B>Ordinary</B>
      <BR><B>Shares</B> <BR><B>Included in</B> <BR><B>Prospectus</B> <BR><B>for
      Resale</B> </TD>
    <TD align=center width="19%"><BR><BR><B>Beneficial</B>
      <BR><B>Ownership</B> <BR><B>After the</B> <BR><B>Offering
      </B><B><SUP>(2)</SUP></B> </TD>
    <TD align=center width="19%"><B>Percentage of</B> <BR><B>Ordinary</B>
      <BR><B>Shares</B> <BR><B>Beneficially</B> <BR><B>Owned After</B>
      <BR><B>Offering </B><B><SUP>(3)</SUP></B> </TD></TR>
    <TR vAlign=top bgcolor="#CCFFCC">
      <TD align=left bgcolor="#E6EFFF" >Access America Fund, LP<SUP>(4)</SUP> </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">779,164 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">562,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">216,664 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left >Taylor International Fund, Ltd.
      <SUP>(5)</SUP> </TD>
    <TD align=center width="19%">779,164 </TD>
    <TD align=center width="19%">562,500 </TD>
    <TD align=center width="19%">216,664 </TD>
    <TD align=center width="19%">* </TD></TR>
    <TR bgcolor="#CCFFCC">
      <TD bgcolor="#E6EFFF" >Hua-Mei 21st Century Partners, LP<SUP>(6)</SUP> </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">921,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">712,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">209,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left >Guerrilla Partners, LP<SUP>(7)</SUP> </TD>
    <TD align=center width="19%">671,000 </TD>
    <TD align=center width="19%">412,500 </TD>
    <TD align=center width="19%">121,000 </TD>
    <TD align=center width="19%">* </TD></TR>
    <TR vAlign=top bgcolor="#CCFFCC">
      <TD align=left bgcolor="#E6EFFF" >Jayhawk Private Equity Fund II, L.P. <SUP>(8)</SUP> </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">1,125,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">1,125,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left >Straus Partners, L.P. <SUP>(9)</SUP> </TD>
    <TD align=center width="19%">187,500 </TD>
    <TD align=center width="19%">187,500 </TD>
    <TD align=center width="19%">0 </TD>
    <TD align=center width="19%">* </TD></TR>
    <TR vAlign=top bgcolor="#CCFFCC">
      <TD align=left bgcolor="#E6EFFF" >New York Liberty Fund LLC<SUP>(10)</SUP> </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">75,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">75,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left >Trillion Growth China LP<SUP>(11)</SUP> </TD>
    <TD align=center width="19%">187,500 </TD>
    <TD align=center width="19%">187,500 </TD>
    <TD align=center width="19%">0 </TD>
    <TD align=center width="19%">* </TD></TR>
    <TR vAlign=top bgcolor="#CCFFCC">
      <TD align=left bgcolor="#E6EFFF" >Paragon Capital LP<SUP>(12)</SUP> </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">112,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">112,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left >Equity Trust Company Custodian <BR>FBO Thomas
      G. Berlin IRA<SUP>(13)</SUP> </TD>
    <TD vAlign=center align=center width="19%">93,750 </TD>
    <TD vAlign=center align=center width="19%">93,750 </TD>
    <TD vAlign=center align=center width="19%">0 </TD>
    <TD vAlign=center align=center width="19%">* </TD></TR>
    <TR bgcolor="#CCFFCC">
      <TD bgcolor="#E6EFFF" >DNST Properties, LLC<SUP>(14)</SUP> </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">75,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">75,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR>
    <TD >Dr. Deborah Tekdogan<SUP>(15)</SUP> </TD>
    <TD align=center width="19%">3,900 </TD>
    <TD align=center width="19%">3,900 </TD>
    <TD align=center width="19%">0 </TD>
    <TD align=center width="19%">* </TD></TR>
    <TR bgcolor="#CCFFCC">
      <TD bgcolor="#E6EFFF" >Mary Beth Shea<SUP>(16)</SUP> </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">19,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">19,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR>
    <TD >Thomas E. Nolan Living Trust<SUP>(17)</SUP> </TD>
    <TD align=center width="19%">7,800 </TD>
    <TD align=center width="19%">7,800 </TD>
    <TD align=center width="19%">0 </TD>
    <TD align=center width="19%">* </TD></TR>
    <TR bgcolor="#CCFFCC">
      <TD bgcolor="#E6EFFF" >Robert C. Stendel<SUP>(18)</SUP> </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">5,850 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">5,850 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR>
    <TD >J&amp;S Spitzer Family LLC<SUP>(19)</SUP> </TD>
    <TD align=center width="19%">18,750 </TD>
    <TD align=center width="19%">18,750 </TD>
    <TD align=center width="19%">0 </TD>
    <TD align=center width="19%">* </TD></TR>
    <TR bgcolor="#CCFFCC">
      <TD bgcolor="#E6EFFF" >Mu Zhang </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">10,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">10,000 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR>
    <TD >First Prestige Inc. </TD>
    <TD align=center width="19%">24,475 </TD>
    <TD align=center width="19%">24,475 </TD>
    <TD align=center width="19%">0 </TD>
    <TD align=center width="19%">* </TD></TR>
    <TR bgcolor="#CCFFCC">
      <TD bgcolor="#E6EFFF" >JD Infinity Holdings, Inc. </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">99,012 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">99,012 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">* </TD>
    </TR>
  <TR>
    <TD >Catalpa Holdings, Inc. </TD>
    <TD align=center width="19%">99,013 </TD>
    <TD align=center width="19%">99,013 </TD>
    <TD align=center width="19%">0 </TD>
    <TD align=center width="19%">* </TD></TR></TABLE></DIV>
<P align=center>4A</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_105></A><BR>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top bgcolor="#CCFFCC">
      <TD align=left bgcolor="#E6EFFF" >Bin Huang </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">232,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">232,500 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF">0 </TD>
      <TD width="19%" align=center bgcolor="#E6EFFF" >* </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left >Brean Murray, Carret &amp; Co., LLC <SUP>(20)
      </SUP></TD>
    <TD align=center width="19%">438,735 </TD>
    <TD align=center width="19%">438,735 </TD>
    <TD align=center width="19%">0 </TD>
    <TD align=center width="19%" >* </TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF" ><B>TOTAL: </B></TD>
    <TD align=center width="19%" bgcolor="#E6EFFF">5,966,613 </TD>
    <TD align=center width="19%" bgcolor="#E6EFFF">5,065,785 </TD>
    <TD align=center width="19%" bgcolor="#E6EFFF">763,328 </TD>
    <TD align=center width="19%" bgcolor="#E6EFFF"
>&nbsp;</TD></TR></TABLE></DIV>* Less than 1%. <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><SUP>(1) </SUP></TD>
    <TD align=left width="95%" >
      <P align=justify>Represents total ownership with respect to all shares of
      our issued and outstanding ordinary shares, ordinary shares underlying the
      warrants and Preference Shares, as a single class and on an &#147;as converted&#148;
      basis. </P></TD></TR>
  <TR>
    <TD><SUP>&nbsp; </SUP></TD>
    <TD width="95%" >
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left><SUP>(2) </SUP></TD>
    <TD align=left width="95%" >
      <P align=justify>Assumes that all securities offered are sold. </P></TD></TR>
  <TR>
    <TD><SUP>&nbsp; </SUP></TD>
    <TD width="95%" >
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left><SUP>(3) </SUP></TD>
    <TD align=left width="95%" >
      <P align=justify>As of May 5, 2010, a total of 31,000,062 ordinary shares
      are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1). The
      number of our ordinary shares excludes (i) up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares to be
      offered by us in a firm commitment public offering concurrently herewith
      (excluding the underwriters&#146; over-allotment of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares), (ii)
      1,526,085 ordinary shares that are issuable upon the exercise of
      outstanding warrants we issued on April 14, 2010 and (iii) 2,774,700
      Preference Shares issued and outstanding as of May 5, 2010, each of which
      is convertible into one (1) ordinary share (subject to customary
      adjustments for stock splits, combinations, or equity dividends on
      ordinary shares). For each beneficial owner above, any options or warrants
      exercisable within 60 days have been included in the denominator.
  </P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><SUP>(4) </SUP></TD>
    <TD>
      <P align=justify>Includes 375,000 ordinary shares underlying the
      Preference Shares and 187,500 shares underlying a warrant to purchase our
      ordinary shares. Christopher Efird is the Managing Partner of Access
      America Fund, LP and has voting and dispositive control over securities
      held by it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(5) </SUP></TD>
    <TD>
      <P align=justify>Includes 375,000 ordinary shares underlying the
      Preference Shares and 187,500 shares underlying a warrant to purchase our
      ordinary shares. Robert J. Kirkland is the President of Taylor Asset
      Management, Inc., the general partner of Taylor International Fund, Ltd.,
      and has voting and dispositive control over securities held by
  it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(6) </SUP></TD>
    <TD>
      <P align=justify>Includes 475,000 ordinary shares underlying the
      Preference Shares and 237,500 shares underlying a warrant to purchase our
      ordinary shares. Peter Siris is the Managing Director of Hua-Mei 21st
      Century Partners, LP and has voting and dispositive control over
      securities held by it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(7) </SUP></TD>
    <TD>
      <P align=justify>Includes 275,000 ordinary shares underlying the
      Preference Shares and 137,500 shares underlying a warrant to purchase our
      ordinary shares. Peter Siris is the Managing Director of Guerrilla
      Partners, LP and has voting and dispositive control over securities held
      by it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(8) </SUP></TD>
    <TD>
      <P align=justify>Includes 750,000 ordinary shares underlying the
      Preference Shares and 375,000 shares underlying a warrant to purchase our
      ordinary shares. Kent C. McCarthy has sole voting and dispositive power
      over securities held by Jayhawk Private Equity Fund II, L.P.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(9) </SUP></TD>
    <TD>
      <P align=justify>Includes 125,000 ordinary shares underlying the
      Preference Shares and 62,500 shares underlying a warrant to purchase our
      ordinary shares. Melville Straus is the Managing Principal of Straus
      Partners, L.P. and has voting and dispositive control over securities held
      by it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(10) </SUP></TD>
    <TD>
      <P align=justify>Includes 50,000 ordinary shares underlying the Preference
      Shares and 25,000 shares underlying a warrant to purchase our ordinary
      shares. Song Ge Teng is the Partner (Member) of New York Liberty Fund LLC
      and has voting and dispositive control over securities held by
  it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(11) </SUP></TD>
    <TD>
      <P align=justify>Includes 125,000 ordinary shares underlying the
      Preference Shares and 62,500 shares underlying a warrant to purchase our
      ordinary shares. Corey Mitchell is the President of Trillion Growth China
      GP, the manager of Trillion Growth China LP and has voting and dispositive
      control over securities held by it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(12) </SUP></TD>
    <TD>
      <P align=justify>Includes 75,000 ordinary shares underlying the Preference
      Shares and 37,500 shares underlying a warrant to purchase our ordinary
      shares. Alan P. Donenfeld is the General Partner of Paragon Capital LP and
      has voting and dispositive control over securities held by it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(13) </SUP></TD>
    <TD>
      <P align=justify>Includes 62,500 ordinary shares underlying the Preference
      Shares and 31,250 shares underlying a warrant to purchase our ordinary
      shares. Thomas G. Berlin is the owner of Equity Trust Company Custodian
      FBO Thomas G. Berlin IRA and has voting and dispositive control over
      securities held by it.</P></TD></TR></TABLE>
<P align=center>5A</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_106></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><SUP>(14) </SUP></TD>
    <TD>
      <P align=justify>Includes 50,000 ordinary shares underlying the Preference
      Shares and 25,000 shares underlying a warrant to purchase our ordinary
      shares. Michael D Aufrecht has voting and dispositive control over
      securities held by it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(15) </SUP></TD>
    <TD>
      <P align=justify>Includes 2,600 ordinary shares underlying the Preference
      Shares and 1,300 shares underlying a warrant to purchase our ordinary
      shares.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(16) </SUP></TD>
    <TD>
      <P align=justify>Includes 13,000 ordinary shares underlying the Preference
      Shares and 6,500 shares underlying a warrant to purchase our ordinary
      shares.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(17) </SUP></TD>
    <TD>
      <P align=justify>Includes 5,200 ordinary shares underlying the Preference
      Shares and 2,600 shares underlying a warrant to purchase our ordinary
      shares. Thomas Nolan is the signatory of Thomas E. Nolan Living Trust and
      has voting and dispositive control over securities held by it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(18) </SUP></TD>
    <TD>
      <P align=justify>Includes 3,900 ordinary shares underlying the Preference
      Shares and 1,950 shares underlying a warrant to purchase our ordinary
      shares.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(19) </SUP></TD>
    <TD>
      <P align=justify>Includes 12,500 ordinary shares underlying the Preference
      Shares and 6,250 shares underlying a warrant to purchase our ordinary
      shares. M. James Spitzer is the Manager owner of J&amp;S Spitzer Family
      and has voting and dispositive control over securities held by
  it.</P></TD></TR>
  <TR>
    <TD width="5%"><SUP>&nbsp;</SUP></TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><SUP>(20) </SUP></TD>
    <TD>
      <P align=justify>Includes 300,000 ordinary shares underlying the
      Preference Shares and 138,735 shares underlying a warrant to purchase our
      ordinary shares. William J. McCluskey is the president and CEO of Brean
      Murray, Carret &amp; Co., LLC and has voting power and investment power of
      securities held by Brean Murray, Carret &amp; Co., LLC. Brean Murray,
      Carret &amp; Co., LLC is a broker-dealer.</P></TD></TR></TABLE>
<P align=justify>We will not receive any proceeds from the sale of any shares by
the selling stockholders but we will receive funds from the exercise of the
warrants held by the selling stockholders if and when those warrants are
exercised for cash. We have agreed to bear expenses incurred by the selling
stockholders that relate to the registration of the shares being offered and
sold by the selling stockholders, including the SEC registration fee and legal,
accounting, printing and other expenses of this offering. </P>
<P align=center>6A</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_107></A>
<P align=center>[RESALE PROSPECTUS ALTERNATE PAGE]</P>
<P align=center><B>PLAN OF DISTRIBUTION</B></P>
<P align=justify>The selling stockholders may, from time to time, sell, transfer
or otherwise dispose of any or all of their ordinary shares or interests in the
ordinary shares on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These dispositions may be at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market price, at varying prices determined at the time of sale,
or at negotiated prices.</P>
<P align=justify>The selling stockholders may use any one or more of the
following methods when disposing of shares or interests therein:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>ordinary brokerage transactions and transactions in which the broker-dealer
  solicits purchasers; </P>
  <LI>
  <P>block trades in which the broker-dealer will attempt to sell the shares as
  agent, but may position and resell a portion of the block as principal to
  facilitate the transaction; </P>
  <LI>
  <P>purchases by a broker-dealer as principal and resale by the broker-dealer
  for its account; </P>
  <LI>
  <P>an exchange distribution in accordance with the rules of the applicable
  exchange; </P>
  <LI>
  <P>privately negotiated transactions; </P>
  <LI>
  <P>short sales effected after the date the registration statement of which
  this prospectus is a part is declared effective by the SEC; </P>
  <LI>
  <P>through the writing or settlement of options or other hedging transactions,
  whether through an options exchange or otherwise; </P>
  <LI>
  <P>broker-dealers may agree with the selling stockholders to sell a specified
  number of such shares at a stipulated price per share; and </P>
  <LI>
  <P>a combination of any such methods of sale. </P></LI></UL>
<P align=justify>The selling stockholders also may resell all or a portion of
the shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided that they meet the criteria and conform to the
requirements of that rule.</P>
<P align=justify>The selling stockholders may, from time to time, pledge or
grant a security interest in some or all of our ordinary shares owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the ordinary shares, from time to
time, under this prospectus, or under an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling
stockholders also may transfer the ordinary shares in other circumstances, in
which case the transferees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.</P>
<P align=justify>In connection with the sale of our ordinary shares or interests
therein, the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the ordinary shares in the course of hedging the positions they
assume. The selling stockholders may also sell shares of our ordinary shares
short and deliver these securities to close out their short positions, or loan
or pledge the ordinary shares to broker-dealers that in turn may sell these
securities. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).</P>
<P align=justify>The aggregate proceeds to the selling stockholders from the
sale of the ordinary shares offered by them will be the purchase price of the
ordinary shares less discounts or commissions, if any. Each of the selling
stockholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of ordinary
shares to be made directly or through agents. We will not receive any of the
proceeds from this offering.</P>
<P align=center>7A</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_108></A>
<P align=justify>Broker-dealers engaged by the selling stockholders may arrange
for other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchase of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.</P>
<P align=justify>Brean Murray, Carret &amp; Co., underwriters of up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary
shares (excluding an underwriters&#146; option to purchase an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary
shares to cover over-allotments) to be offered by us in a public offering
concurrently herewith, may dispose of shares on behalf of its account holders
who are also selling stockholders. The maximum commission or discount to be
received by Brean Murray, Carret &amp; Co. will not be greater than eight
percent (8%) for the sale of any securities being registered hereunder.
Additionally, any securities acquired by any participating FINRA members during
the 180-day period preceding the date of the filing of the prospectus with the
SEC will be subject to lock-up restrictions under FINRA Rule 5110(g), unless an
exemption is available under FINRA Rule 5110(g)(2). FINRA Rule 5110(g) provides
that such securities shall not be sold during our public offering or sold,
transferred, assigned, pledged or hypothecated, or be the subject of any
hedging, short sale, derivative, put or call transaction that would result in
the effective economic disposition of the securities by any person for a period
of 180 days immediately following the date of effectiveness of sales of our
public offering. </P>
<P align=justify>The broker-dealers or agents that participate in the sale of
the ordinary shares or interests therein and the selling stockholders who are
affiliates of broker-dealers may be &#147;underwriters&#148; within the meaning of Section
2(11) of the Securities Act. Any discounts, commissions, concessions or profit
they earn on any resale of the shares may be underwriting discounts and
commissions under the Securities Act. Selling stockholders who are
&#147;underwriters&#148; within the meaning of Section 2(11) of the Securities Act will be
subject to the prospectus delivery requirements of the Securities Act. We know
of no existing arrangements between any of the selling stockholders and any
other stockholder, broker, dealer, underwriter, or agent relating to the sale or
distribution of the shares, nor can we presently estimate the amount, if any, of
such compensation. See &#147;Selling Stockholders&#148; for description of any material
relationship that a stockholder has with us and the description of such
relationship.</P>
<P align=justify>In order to comply with the securities laws of some states, if
applicable, the ordinary shares may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states, the
ordinary shares may not be sold unless it has been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with.</P>
<P align=justify>We have advised the selling stockholders that the
anti-manipulation rules of Regulation M under the Securities Exchange Act of
1934, as amended, may apply to sales of shares in the market and to the
activities of the selling stockholders and their affiliates. In addition, we
will make copies of this prospectus (as it may be supplemented or amended from
time to time) available to the selling stockholders for the purpose of
satisfying the prospectus delivery requirements of the Securities Act. The
selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.</P>
<P align=justify>We have agreed to pay certain fees and expenses incurred by us
incident to the registration of the shares. We have agreed to indemnify the
selling stockholders against liabilities, including liabilities under the
Securities Act and state securities laws, relating to the registration of the
shares offered by this prospectus.</P>
<P align=center>8A</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_109></A>
<P align=center>[RESALE PROSPECTUS ALTERNATE PAGE]</P>
<P align=center><B>LEGAL MATTERS</B></P>
<P align=justify>The validity of the ordinary shares offered by this prospectus
and certain other legal matters as to Cayman Islands will be passed upon for us
by Maples and Calder. Legal matters as to PRC law will be passed upon for us by
Deheng Law Firm.</P>
<P align=center><B>EXPERTS</B></P>
<P align=justify>The audited consolidated financial statements of Leewell as of
December 25, 2009 and 2008 and for the fiscal years ended December 25, 2009,
2008, and 2007, appearing in this prospectus and registration statement have
been audited by MSPC, Certified Public Accountants and Advisors, A Professional
Corporation, an independent registered public accounting firm, as set forth in
their report thereon appearing elsewhere herein and in the registration
statement, and are included in reliance upon such report given on the authority
of such firm as experts in accounting and auditing. </P>
<P align=center><B>ADDITIONAL INFORMATION</B></P>
<P align=justify>We filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended, for the
ordinary shares in this offering. This prospectus does not contain all of the
information in the registration statement and the exhibits and schedule that
were filed with the registration statement. For further information with respect
to us and our ordinary shares, we refer you to the registration statement and
the exhibits and schedule that were filed with the registration statement.
Statements contained in this prospectus about the contents of any contract or
any other document that is filed as an exhibit to the registration statement are
not necessarily complete, and we refer you to the full text of the contract or
other document filed as an exhibit to the registration statement. A copy of the
registration statement and the exhibits and schedules that were filed with the
registration statement may be inspected without charge at the Public Reference
Room maintained by the Securities and Exchange Commission at 100 F Street, N.E.
Washington, DC 20549, and copies of all or any part of the registration
statement may be obtained from the Securities and Exchange Commission upon
payment of the prescribed fee. Information regarding the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC. The address of the
website is www.sec.gov. </P>
<P align=justify>We file periodic reports under the Securities Exchange Act of
1934, including annual, quarterly and special reports, and other information
with the SEC. These periodic reports, and other information, are available for
inspection and copying at the regional offices, public reference facilities and
website of the SEC referred to above. </P>
<P align=center>9A</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_110></A>
<P align=center><FONT size=3>[RESALE PROSPECTUS ALTERNATE PAGE] </FONT></P>
<P align=center><B><FONT size=5>5,065,785 Ordinary Shares</FONT></B></P>
<P align=center><IMG
src="logo.jpg" width="125" height="82"
border=0> </P>
<P align=center><B><FONT size=5>DRAGON ACQUISITION CORPORATION</FONT></B></P>
<P align=center><B><FONT size=3>Ordinary Share, Par Value $0.002112 Per Share
</FONT></B></P>
<P align=center>&nbsp;</P>
<P align=center><FONT size=3>________________ </FONT></P>
<P align=center>
  <STRONG><FONT
size=3>PROSPECTUS</FONT><BR>
  </STRONG><FONT
size=3>________________ </FONT><BR></P>
<P align=center><B><FONT size=3>, 2010</FONT></B><BR></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_111></A>
<P align=center><B>PART II <BR></B><B>INFORMATION NOT REQUIRED IN THE
PROSPECTUS</B></P>
<P align=justify><B><I>Item 13. Other Expenses of Issuance and Distributions</I></B></P>
<P align=justify>The following table sets forth the costs and expenses, other
than underwriting discounts and commissions, payable by us in connection with
the sale of ordinary shares being registered. All amounts, other than the SEC
registration fee and FINRA filing fee, are estimates. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%" ><B>Amount to be Paid</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>SEC Registration Fee </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff >&nbsp;3,385 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Financial Industry Regulatory Authority, Inc. filing fee
</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(1</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>NASDAQ Stock Market listing fee </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(1</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Printing Fees and Expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(1</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Legal Fees and Expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(1</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Accounting Fees and Expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(1</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Transfer Agent and Registrar Fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff >(1</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Miscellaneous </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%" >(1</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="17%" >&nbsp;(1</TD>
    <TD align=left width="2%" >) </TD></TR></TABLE>
<P align=justify>________________ <BR>(1) To be added by amendment.</P>
<P align=justify><B><I>Item 14. Indemnification of Directors and Officers
</I></B></P>
<P align=justify>The Companies Law of the Cayman Islands does not limit the
extent to which a company&#146;s memorandum and articles of association may provide
for indemnification of officers and directors. However, such provision may be
held by the Cayman Islands courts to be contrary to be unenforceable, to the
extent it seeks to indemnify or exculpate a fiduciary in respect of their actual
fraud or willful default, or for the consequences of committing a crime. Our
memorandum and articles of association provides for indemnification of officers
and directors for losses, damages, costs and expenses incurred in their
capacities as such and no such director or officer shall be liable to us except
through their own dishonesty.</P>
<P align=justify>Insofar as indemnification by us for liabilities arising under
the Securities Act may be permitted to our directors, officers or persons
controlling the company pursuant to provisions of our articles of association,
or otherwise, we have been advised that in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification by
such director, officer or controlling person of us in the successful defense of
any action, suit or proceeding is asserted by such director, officer or
controlling person in connection with the securities being offered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
</P>
<P align=justify>At the present time, there is no pending litigation or
proceeding involving a director, officer, employee or other agent of ours in
which indemnification would be required or permitted. We are not aware of any
threatened litigation or proceeding, which may result in a claim for such
indemnification.</P>
<P align=justify><B><I>Item 15. Recent Sales of Unregistered
Securities</I></B><BR></P>
<P align=justify>On April 14, 2010, we issued 29,235,000 ordinary shares to
Longhai Holdings, the sole shareholder of Leewell. The total consideration for
the 29,235,000 ordinary shares was 102,566,690 ordinary shares of Leewell, which
is all the issued and outstanding capital stock of Leewell. The number of our
shares issued to Longhai Holdings was determined based on an arms-length
negotiation. The issuance of our shares to these shareholders was made in
reliance on the exemption provided by Section 4(2) of the Securities Act for the
offer and sale of securities not involving a public offering and Regulation D
promulgated thereunder. </P>
<P align=center>II-1</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_112></A>
<P align=justify>On April 14, 2010, we also completed a private placement
transaction with a group of accredited investors, pursuant to which we issued to
the investors an aggregate of 2,774,700 Units for a purchase price of
$11,098,800, or $4.00 per Unit. Each Unit consists of one Preference Share and
one Warrant to purchase 0.5 ordinary shares. The Warrants have a term of 5
years, bear an exercise price of $6.00 per share (subject to customary
adjustments), are exercisable on a net exercise or cashless basis and are
exercisable by investors at any time after the closing date. The foregoing
securities were issued pursuant to the exemption from registration provided by
Section 4(2) of the Securities Act for the offer and sale of securities not
involving a public offering and Rule 506 of Regulation D promulgated
thereunder.</P>
<P align=justify>On April 14, 2010, we also issued an aggregate of 300,000
ordinary shares and warrants for the purchase of an aggregate of 138,735
ordinary shares, exercisable for a period of 3 years at an exercise price of
$5.00 per share, to Brean Murray, Carret &amp; Co., LLC and/or its designees, as
partial compensation for services provided by them in connection with the
private placement transaction. Brean Murray, Carret &amp; Co., LLC also received
a cash fee of $775,759.39 for its services in connection with the private
placement. The issuance of these securities was made in reliance upon exemptions
provided by Section 4(2) of the Securities Act for the offer and sale of
securities not involving a public offering and Regulation D promulgated
thereunder. </P>
<P align=justify>On April 14, 2010, we also issued an aggregate of 465,000
ordinary shares to Beijing Allstar Business Consulting, Inc. and/or its
designees, as partial compensation for services provided by them in connection
with the reverse acquisition of Leewell and the private placement transaction.
The issuance of these securities was made in reliance upon exemptions provided
by Section 4(2) of the Securities Act for the offer and sale of securities not
involving a public offering and Regulation D promulgated thereunder.</P>
<P align=justify>In instances described above where we issued securities in
reliance upon Regulation D, we relied upon Rule 506 of Regulation D of the
Securities Act. These stockholders who received the securities in such instances
made representations that (a) the shareholder is acquiring the securities for
his, her or its own account for investment and not for the account of any other
person and not with a view to or for distribution, assignment or resale in
connection with any distribution within the meaning of the Securities Act, (b)
the shareholder agrees not to sell or otherwise transfer the purchased shares
unless they are registered under the Securities Act and any applicable state
securities laws, or an exemption or exemptions from such registration are
available, (c) the shareholder has knowledge and experience in financial and
business matters such that he, she or it is capable of evaluating the merits and
risks of an investment in us, (d) the shareholder had access to all of our
documents, records, and books pertaining to the investment and was provided the
opportunity ask questions and receive answers regarding the terms and conditions
of the offering and to obtain any additional information which we possessed or
were able to acquire without unreasonable effort and expense, and (e) the
shareholder has no need for the liquidity in its investment in us and could
afford the complete loss of such investment. Management made the determination
that the investors in instances where we relied on Regulation D are accredited
investors (as defined in Regulation D) based upon management&#146;s inquiry into
their sophistication and net worth. In addition, there was no general
solicitation or advertising for securities issued in reliance upon Regulation D.
</P>
<P align=justify>In instances described above where we indicate that we relied
upon Section 4(2) of the Securities Act in issuing securities, our reliance was
based upon the following factors: (a) the issuance of the securities was an
isolated private transaction by us which did not involve a public offering; (b)
there were only a limited number of offerees; (c) there were no subsequent or
contemporaneous public offerings of the securities by us; (d) the securities
were not broken down into smaller denominations; and (e) the negotiations for
the sale of the stock took place directly between the offeree and us. </P>
<P align=justify><B><I>Item 16. Exhibits and Financial Statement
Schedules</I></B><BR></P>
<P align=justify>The following exhibits are included as part of this Form
S-1.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No.</B>
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="88%"
    ><B>Description</B> </TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="88%"  >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>1.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Underwriting Agreement** </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>2.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Exchange Agreement, dated April 14, 2010, by and
      among the Company, Leewell Investment Group Limited, Longhai Holdings
      Company Limited and its shareholder [incorporated by reference to Exhibit
      2.1 to the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
      </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>3.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Memorandum of Association of the Company [incorporated by
      reference to Exhibit 3.2 to the Company&#146;s Registration Statement on Form
      10 filed on July 14, 2006] </P></TD></TR></TABLE>
<P align=center>II-2</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_113></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No.</B>
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="88%"
    >
      <P align=justify><B>Description</B> </P></TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="88%" >
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>3.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Articles of Association of the Company [incorporated by
      reference to Exhibit 3.3 to the Company&#146;s Registration Statement on Form
      10 filed on July 14, 2006] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>4.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Investor Warrant, issued April 14, 2010
      [incorporated by reference to Exhibit 4.1 to the Company&#146;s Current Report
      on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>4.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Underwriters&#146; Warrant** </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>5.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Opinion of Maples and Calder** </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>5.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Opinion of Pillsbury Winthrop Shaw Pittman LLP regarding
      the enforceability of Underwriters&#146; Warrant** </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Subscription Agreement, dated April 14, 2010
      [incorporated by reference to Exhibit 10.1 to the Company&#146;s Current Report
      on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Make Good Escrow Agreement, dated April 14, 2010, by and
      among the Company, Longhai Holdings Company Limited, Access America
      Investments, LLC and Collateral Agents, LLC, as escrow agent [incorporated
      by reference to Exhibit 10.2 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.3 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Holdback Escrow Agreement, dated April 14, 2010, by and
      among the Company, Brean Murray, Carret &amp; Co., LLC, Access America
      Investments, LLC and Collateral Agents, LLC, as escrow agent [incorporated
      by reference to Exhibit 10.3 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.4 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Investor Relations Escrow Agreement, dated April 14,
      2010, by and among the Company, Brean Murray, Carret &amp; Co., LLC,
      Access America Investments, LLC and Collateral Agents, LLC, as escrow
      agent [incorporated by reference to Exhibit 10.4 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.5 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Lockup Agreement, dated April 14, 2010
      [incorporated by reference to Exhibit 10.5 to the Company&#146;s Current Report
      on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.6 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated September 5, 2007,
      between Zhang Weiqing and Leewell Investment Group Limited (English
      Translation) [incorporated by reference to Exhibit 10.6 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.7 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated September 5, 2007,
      between Cheng Xiaoyan and Leewell Investment Group Limited (English
      Translation) [incorporated by reference to Exhibit 10.7 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.8 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated January 19, 2008, among
      Cheng Defeng, Wang Yingchun and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.8 to
      the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
  </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.9 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated January 22, 2008, between
      Zhang Weiqing and Qingdao Oumei Real Estate Development Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.9 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.10 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated January 23, 2008, among
      Cheng Defeng, Miao Shuangji and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.10 to
      the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
  </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.11 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated January 24, 2008, among
      Li Jie, Li Keyu, Liu Fangyu, Wang Meiling, Jiang Guo, Qingdao Longhai
      Investment Group and Qingdao Oumei Real Estate Development Co., Ltd.
      (English Translation) [incorporated by reference to Exhibit 10.11 to the
      Company&#146;s Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.12 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated August 27, 2008, among
      Qingdao Longhai Investment Group, Qingdao Longhai Luqiao Co., Ltd, Gao
      Xuling and Qingdao Oumei Real Estate Development Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.12 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.13 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated August 28, 2008, between
      Qingdao Pingdu Xinyuan Real Estate Development Co., Ltd and Qingdao Oumei
      Real Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.13 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR></TABLE>
<P align=center>II-3<BR></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_114></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No.</B>
    </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="88%"><B>Description</B> </TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%">
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.14 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Share Purchase Agreement, dated August 29, 2008, among
      Qingdao Hexiang Fuzhuang Ltd, Qingdao Fuhai Fangzhi Ltd and Qingdao Oumei
      Real Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.4 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.15 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Share Purchase Agreement, dated June 25, 2009, among
      Qingdao Longhai Investment Group, Wang Hongde and Qingdao Oumei Real
      Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.15 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.16 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Share Purchase Agreement, dated September 25, 2009, among
      Wang Yingchun, Wang Jinghua and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.16 to
      the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
  </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.17 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Construction Contact, dated April 11, 2009, between
      Weihai Economic &amp; Technology Development Zone Longhai Properties Co.,
      Ltd. and Shanghai Baogang Construction Engineering Corporation (English
      Translation) [incorporated by reference to Exhibit 10.17 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.18 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Construction Contract, dated October 8, 2006, between
      Qingdao Xudong Real Estate Development Co., Ltd. and Qingdao Longhai
      Construction Group Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.18 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.19 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Construction Contract, dated July 26, 2006, between
      Weihai Economic &amp; Technology Development Zone Longhai Properties Co.,
      Ltd. and Qingdao Longhai Construction Group Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.19 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.20 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Construction Contract, dated April 23, 2004, between
      Weifang Longhai Zhiye Co., Ltd. and Qingdao Zhongxin Construction Group
      Co., Ltd. (English Translation) [incorporated by reference to Exhibit
      10.20 to the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
      </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.21 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Construction Supervision Contract, dated August 21, 2009,
      between Weihai Economic &amp; Technology Development Zone Longhai
      Properties Co., Ltd. and Weihai Tianhen Project Consulting Management Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.21 to
      the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
  </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.22 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Form of Construction Contract (English Translation)
      [incorporated by reference to Exhibit 10.22 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.23 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Form of Sales Agent Agreement (English Translation)
      [incorporated by reference to Exhibit 10.23 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.24 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Loan Agreement, dated November 30, 2009, between Weihai
      Economic &amp; Technology Development Zone Longhai Properties Co., Ltd.
      and China Construction Bank, Weihai Branch (English Translation)
      [incorporated by reference to Exhibit 10.24 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.25 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Loan Agreement, dated November 21, 2008, between Caoxian
      Industrial Properties Co., Ltd. and China Construction Bank, Caoxian
      Branch (English Translation) [incorporated by reference to Exhibit 10.25
      to the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
    </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.26 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Loan Agreement, dated May 28, 2007, between Qingdao
      Xudong Real Estate Development Co., Ltd. and Industrial and Commercial
      Bank of China, Qingdao Chengyang Branch (English Translation)
      [incorporated by reference to Exhibit 10.26 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.27 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Form of Employment Agreement (English Translation)
      [incorporated by reference to Exhibit 10.27 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.28 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Employment Agreement, dated June 28, 2007, between
      Qingdao Oumei Real Estate Development Co., Ltd. and Weiqing Zhang (English
      Translation) [incorporated by reference to Exhibit 10.28 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.29 </TD>
    <TD align=left width="2%" bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Employment Agreement, dated July 23, 2007, between
      Qingdao Oumei Real Estate Development </P></TD></TR></TABLE>
<P align=center>II-4<BR></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_115></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No.</B>
    </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="88%"><B>Description</B> </TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee></TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee> <P align=justify>Co., Ltd. and
        Yang Chen (English Translation) [incorporated by reference to Exhibit
        10.29 to the Company&#146;s Current Report on Form 8-K filed on April
        19, 2010] </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%"> <P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.30 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee> <P align=justify>Employment Agreement,
        dated August 25, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Zhongbo Zhou (English Translation) [incorporated by reference
        to Exhibit 10.30 to the Company&#146;s Current Report on Form 8-K filed
        on April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%"> <P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.31 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee> <P align=justify>Employment Agreement,
        dated August 20, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Yalei Chen (English Translation) [incorporated by reference to
        Exhibit 10.31 to the Company&#146;s Current Report on Form 8-K filed on
        April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%"> <P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>21 </TD>
    <TD align=left width="2%" bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee> <P align=justify>Subsidiaries
        of the Company [incorporated by reference to Exhibit 21 to the Company&#146;s
        Current Report on Form 8-K filed on April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%"> <P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit23-1.htm">23.1 </a></TD>
    <TD align=left width="2%" bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee> <P align=justify><a href="exhibit23-1.htm">Consent
        of MSPC, Certified Public Accountants and Advisors, A Professional Corporation*
        </a></P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%"> <P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>23.2 </TD>
    <TD align=left width="2%" bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee> <P align=justify>Consent of Deheng
        Law Firm** </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%"> <P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>23.3 </TD>
    <TD align=left width="2%" bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee> <P align=justify>Consent of Maples
        and Calder (contained in Exhibit 5.1)** </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="88%"> <P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>24.1 </TD>
    <TD align=left width="2%" bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee> <P align=justify>Power of Attorney
        (included in the signature page of this Registration Statement) </P></TD>
  </TR>
</TABLE>
<P align=justify>________________ <BR>* Filed herewith <BR>** To be filed by
amendment <BR></P>
<P align=justify><B><I>Item 17. Undertakings </I></B></P>
<P style="MARGIN-LEFT: 0%"
align=justify>(A)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Registrant
hereby undertakes: </P>
<P style="MARGIN-LEFT: 5%"
align=justify>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To file, during any period
in which offers or sales are being made, a post-effective amendment to this
Registration Statement: </P>
<P style="MARGIN-LEFT: 10%"
align=justify>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To include any prospectus
required by Section 10(a)(3) of the Securities Act; </P>
<P style="MARGIN-LEFT: 10%" align=justify>(ii)&nbsp;&nbsp; &nbsp;To reflect in
the prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate offering price
set forth in the &#147;Calculation of Registration Fee&#148; table in the effective
Registration Statement; and </P>
<P style="MARGIN-LEFT: 10%" align=justify>(iii)&nbsp;&nbsp; &nbsp;To include any
material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this Registration Statement; </P>
<P style="MARGIN-LEFT: 5%" align=justify>(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; That,
for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial <I>bona fide</I> offering
thereof. </P>
<P style="MARGIN-LEFT: 5%" align=justify>(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering. </P>
<P style="MARGIN-LEFT: 5%" align=justify>(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For
the purpose of determining liability under the Securities Act to any purchaser,
the undersigned registrant undertakes that</P>
<P style="MARGIN-LEFT: 10%"
align=justify>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the undersigned
registrant is relying on Rule 430B: </P>
<P align=center>II-5 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_116></A>
<P style="MARGIN-LEFT: 15%"
align=justify>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;each prospectus filed by
the undersigned registrant pursuant to Rule 424(b)(3) shall be deemed to be part
of the registration statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and </P>
<P style="MARGIN-LEFT: 15%"
align=justify>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each prospectus required to
be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act shall be deemed to be part of
and included in the registration statement as of the earlier of the date such
form of prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that
is at that date an underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such effective date; or </P>
<P style="MARGIN-LEFT: 10%"
align=justify>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the undersigned
registrant is subject to Rule 430C: </P>
<P style="MARGIN-LEFT: 15%"
align=justify>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an
offering, other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such date of first use. </P>
<P style="MARGIN-LEFT: 5%"
align=justify>(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For determining liability
of the undersigned registrant under the Securities Act to any purchaser in the
initial distribution of the securities, the undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to
sell the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to the purchaser: </P>
<P style="MARGIN-LEFT: 10%"
align=justify>(i).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In any preliminary
prospectus or prospectus of the undersigned registrant relating to the offering
required to be filed pursuant to Rule 424; </P>
<P style="MARGIN-LEFT: 10%" align=justify>(ii).&nbsp;&nbsp;&nbsp;&nbsp; Any free
writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned registrant;
</P>
<P style="MARGIN-LEFT: 10%" align=justify>(iii).<B>&nbsp;&nbsp;&nbsp; </B>The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and </P>
<P style="MARGIN-LEFT: 10%" align=justify>(iv).<B>&nbsp;&nbsp;&nbsp; </B>Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser. </P>
<P style="MARGIN-LEFT: 5%"
align=justify>(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of determining
any liability under the Securities Act, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the time it was
declared effective. </P>
<P align=center>II-6 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_117></A>
<P style="MARGIN-LEFT: 5%" align=justify>(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For
the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. </P>
<P style="MARGIN-LEFT: 5%" align=justify>(8)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For
the purpose of determining liability under the Securities Act to any purchaser,
each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness; provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use. </P>
<P align=justify>(B)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue. </P>
<P align=center>II-7</P>
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<A name=page_118></A>
<P align=center><B>SIGNATURES</B></P>
<P align=justify>Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Qingdao,
People&#146;s Republic of China, on the 7<SUP>th</SUP> day of May, 2010.</P>
<P style="MARGIN-LEFT: 50%" align=justify><B>Dragon Acquisition Corporation</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="7%" >By: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="43%"
    >/s/ Weiqing Zhang </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="7%" >Name: </TD>
    <TD align=left width="43%" >Weiqing Zhang </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="7%" >Title: </TD>
    <TD align=left width="43%" >Chief Executive Officer and
      President </TD></TR></TABLE>
<P align=center><B>POWER OF ATTORNEY</B></P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature to this
Registration Statement on Form S-1 appears below hereby constitutes and appoints
Weiqing Zhang and Yang Chen, and each or any of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to sign any registration statement for the
same offering covered by this Registration Statement that is to be effective on
filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, and
all post-effective amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or his substitute or their
substitutes, may lawfully do or cause to be done by virtue hereof. </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities indicated. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>SIGNATURE </TD>
    <TD align=left width="40%" >TITLE </TD>
    <TD align=left width="29%">DATE </TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="40%" >&nbsp;</TD>
    <TD align=left width="29%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><U>/s/ Antoine Cheng</U> </TD>
    <TD align=left width="40%" >Chairman </TD>
    <TD align=left width="29%">May 7, 2010 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Antoine Cheng</TD>
    <TD align=left width="40%" >&nbsp; </TD>
    <TD align=left width="29%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="40%" >&nbsp; </TD>
    <TD width="29%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><U>/s/ Weiqing Zhang</U> </TD>
    <TD align=left width="40%" >Chief Executive Officer,
      President and </TD>
    <TD align=left width="29%">May 7, 2010 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Weiqing Zhang </TD>
    <TD align=left width="40%" >Director (Principal Executive
      Officer) </TD>
    <TD align=left width="29%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="40%" >&nbsp; </TD>
    <TD width="29%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><U>/s/ Yang Chen</U> </TD>
    <TD align=left width="40%" >Chief Financial Officer and Vice
      President </TD>
    <TD align=left width="29%">May 7, 2010 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Yang Chen </TD>
    <TD align=left width="40%" >(Principal Financial and
      Accounting </TD>
    <TD align=left width="29%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="40%" >Officer) </TD>
    <TD align=left width="29%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="40%" >&nbsp; </TD>
    <TD width="29%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><U>/s/ Zhongbo Zhou</U> </TD>
    <TD align=left width="40%" >Director </TD>
    <TD align=left width="29%">May 7, 2010 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Zhongbo Zhou </TD>
    <TD align=left width="40%" >&nbsp; </TD>
    <TD align=left width="29%">&nbsp; </TD></TR></TABLE><BR>
<A name=page_119></A>

<A name=page_69></A>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-2></A>
<A name=page_F-28></A>

<P align=center><B>EXHIBIT INDEX </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No.</B>
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="88%"
    ><B>Description</B> </TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="88%"  >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>1.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Underwriting Agreement** </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>2.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Exchange Agreement, dated April 14, 2010, by and
      among the Company, Leewell Investment Group Limited, Longhai Holdings
      Company Limited and its shareholder [incorporated by reference to Exhibit
      2.1 to the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
      </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>3.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Memorandum of Association of the Company [incorporated by
      reference to Exhibit 3.2 to the Company&#146;s Registration Statement on Form
      10 filed on July 14, 2006] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>3.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Articles of Association of the Company [incorporated by
      reference to Exhibit 3.3 to the Company&#146;s Registration Statement on Form
      10 filed on July 14, 2006] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>4.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Investor Warrant, issued April 14, 2010
      [incorporated by reference to Exhibit 4.1 to the Company&#146;s Current Report
      on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>4.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Underwriters&#146; Warrant** </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>5.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Opinion of Maples and Calder** </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>5.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Opinion of Pillsbury Winthrop Shaw Pittman LLP regarding
      the enforceability of Underwriters&#146; Warrant** </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Subscription Agreement, dated April 14, 2010
      [incorporated by reference to Exhibit 10.1 to the Company&#146;s Current Report
      on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Make Good Escrow Agreement, dated April 14, 2010, by and
      among the Company, Longhai Holdings Company Limited, Access America
      Investments, LLC and Collateral Agents, LLC, as escrow agent [incorporated
      by reference to Exhibit 10.2 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.3 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Holdback Escrow Agreement, dated April 14, 2010, by and
      among the Company, Brean Murray, Carret &amp; Co., LLC, Access America
      Investments, LLC and Collateral Agents, LLC, as escrow agent [incorporated
      by reference to Exhibit 10.3 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.4 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Investor Relations Escrow Agreement, dated April 14,
      2010, by and among the Company, Brean Murray, Carret &amp; Co., LLC,
      Access America Investments, LLC and Collateral Agents, LLC, as escrow
      agent [incorporated by reference to Exhibit 10.4 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.5 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Lockup Agreement, dated April 14, 2010
      [incorporated by reference to Exhibit 10.5 to the Company&#146;s Current Report
      on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.6 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated September 5, 2007,
      between Zhang Weiqing and Leewell Investment Group Limited (English
      Translation) [incorporated by reference to Exhibit 10.6 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.7 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated September 5, 2007,
      between Cheng Xiaoyan and Leewell Investment Group Limited (English
      Translation) [incorporated by reference to Exhibit 10.7 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.8 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated January 19, 2008, among
      Cheng Defeng, Wang Yingchun and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.8 to
      the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
  </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.9 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated January 22, 2008, between
      Zhang Weiqing and Qingdao Oumei Real Estate Development Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.9 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.10 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated January 23, 2008, among
      Cheng Defeng, Miao Shuangji and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.10 to
      the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
  </P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No.</B>
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="88%"
    >
      <P align=justify><B>Description</B> </P></TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="88%"  >
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.11 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated January 24, 2008, among
      Li Jie, Li Keyu, Liu Fangyu, Wang Meiling, Jiang Guo, Qingdao Longhai
      Investment Group and Qingdao Oumei Real Estate Development Co., Ltd.
      (English Translation) [incorporated by reference to Exhibit 10.11 to the
      Company&#146;s Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.12 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated August 27, 2008, among
      Qingdao Longhai Investment Group, Qingdao Longhai Luqiao Co., Ltd, Gao
      Xuling and Qingdao Oumei Real Estate Development Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.12 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.13 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated August 28, 2008, between
      Qingdao Pingdu Xinyuan Real Estate Development Co., Ltd and Qingdao Oumei
      Real Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.13 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.14 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated August 29, 2008, among
      Qingdao Hexiang Fuzhuang Ltd, Qingdao Fuhai Fangzhi Ltd and Qingdao Oumei
      Real Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.4 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.15 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated June 25, 2009, among
      Qingdao Longhai Investment Group, Wang Hongde and Qingdao Oumei Real
      Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.15 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.16 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Share Purchase Agreement, dated September 25, 2009, among
      Wang Yingchun, Wang Jinghua and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.16 to
      the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
  </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.17 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Construction Contact, dated April 11, 2009, between
      Weihai Economic &amp; Technology Development Zone Longhai Properties Co.,
      Ltd. and Shanghai Baogang Construction Engineering Corporation (English
      Translation) [incorporated by reference to Exhibit 10.17 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.18 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Construction Contract, dated October 8, 2006, between
      Qingdao Xudong Real Estate Development Co., Ltd. and Qingdao Longhai
      Construction Group Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.18 to the Company&#146;s Current Report on Form 8-K
      filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.19 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Construction Contract, dated July 26, 2006, between
      Weihai Economic &amp; Technology Development Zone Longhai Properties Co.,
      Ltd. and Qingdao Longhai Construction Group Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.19 to the Company&#146;s
      Current Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.20 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Construction Contract, dated April 23, 2004, between
      Weifang Longhai Zhiye Co., Ltd. and Qingdao Zhongxin Construction Group
      Co., Ltd. (English Translation) [incorporated by reference to Exhibit
      10.20 to the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
      </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.21 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Construction Supervision Contract, dated August 21, 2009,
      between Weihai Economic &amp; Technology Development Zone Longhai
      Properties Co., Ltd. and Weihai Tianhen Project Consulting Management Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.21 to
      the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
  </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.22 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Construction Contract (English Translation)
      [incorporated by reference to Exhibit 10.22 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.23 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Form of Sales Agent Agreement (English Translation)
      [incorporated by reference to Exhibit 10.23 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.24 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee >
      <P align=justify>Loan Agreement, dated November 30, 2009, between Weihai
      Economic &amp; Technology Development Zone Longhai Properties Co., Ltd.
      and China Construction Bank, Weihai Branch (English Translation)
      [incorporated by reference to Exhibit 10.24 to the Company&#146;s Current
      Report on Form 8-K filed on April 19, 2010] </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" >
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.25 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee>
      <P align=justify>Loan Agreement, dated November 21, 2008, between Caoxian
      Industrial Properties Co., Ltd. and China Construction Bank, Caoxian
      Branch (English Translation) [incorporated by reference to Exhibit 10.25
      to the Company&#146;s Current Report on Form 8-K filed on April 19, 2010]
    </P></TD></TR></TABLE><BR>
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style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Exhibit No. </B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="88%"
    ><B>Description </B></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="88%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.26 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Loan Agreement,
        dated May 28, 2007, between Qingdao Xudong Real Estate Development Co.,
        Ltd. and Industrial and Commercial Bank of China, Qingdao Chengyang Branch
        (English Translation) [incorporated by reference to Exhibit 10.26 to the
        Company&#146;s Current Report on Form 8-K filed on April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.27 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Form of Employment
        Agreement (English Translation) [incorporated by reference to Exhibit
        10.27 to the Company&#146;s Current Report on Form 8-K filed on April
        19, 2010] </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.28 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Employment Agreement,
        dated June 28, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Weiqing Zhang (English Translation) [incorporated by reference
        to Exhibit 10.28 to the Company&#146;s Current Report on Form 8-K filed
        on April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.29 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Employment Agreement,
        dated July 23, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Yang Chen (English Translation) [incorporated by reference to
        Exhibit 10.29 to the Company&#146;s Current Report on Form 8-K filed on
        April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.30 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Employment Agreement,
        dated August 25, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Zhongbo Zhou (English Translation) [incorporated by reference
        to Exhibit 10.30 to the Company&#146;s Current Report on Form 8-K filed
        on April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>10.31 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Employment Agreement,
        dated August 20, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Yalei Chen (English Translation) [incorporated by reference to
        Exhibit 10.31 to the Company&#146;s Current Report on Form 8-K filed on
        April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>21 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee></TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Subsidiaries
        of the Company [incorporated by reference to Exhibit 21 to the Company&#146;s
        Current Report on Form 8-K filed on April 19, 2010] </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit23-1.htm">23.1 </a></TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify><a href="exhibit23-1.htm">Consent
        of MSPC, Certified Public Accountants and Advisors, A Professional Corporation*
        </a></P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>23.2 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Consent of Deheng
        Law Firm** </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>23.3 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Consent of Maples
        and Calder (contained in Exhibit 5.1)** </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="88%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>24.1 </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="88%" bgColor=#eeeeee > <P align=justify>Power of Attorney
        (included in the signature page of this Registration Statement) </P></TD>
  </TR>
</TABLE>
<P align=justify>________________ <BR>* Filed herewith <BR>** To be filed by
amendment<BR></P>
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{"company-data": {"conformed-name": "Dragon Acquisition CORP", "cik": "0001368192", "assigned-sic": "6770", "irs-number": "000000000", "state-of-incorporation": "E9", "fiscal-year-end": "1225"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-166658", "film-number": "10813350"}, "business-address": {"street1": "C/O STUARTS CORPORATE SERVICES LTD", "street2": "P.O BOX 2510 GT", "city": "GRAND CAYMAN", "state": "E9", "zip": "00000", "phone": "242-502-8879"}, "mail-address": {"street1": "C/O OCEAN BANK, TK HOUSE", "street2": "WEST BAY STREET & BLAKE ROAD", "city": "NASSAU", "state": "C5", "zip": "00000"}}
Dragon Acquisition Corporation - Form S-1 - Filed by newsfilecorp.com
As filed with the Securities and Exchange Commission on May 7,
2010
Registration No. 333 -
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM S-1
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
DRAGON ACQUISITION
CORPORATION
(Exact name of registrant as specified in its charter)
Cayman Islands
6552
N/A
(State or other jurisdiction of
(Primary Standard Industrial
(I.R.S. Employer
incorporation or organization)
Classification Code Number)
Identification No.)
Floor 28, Block C
Longhai Mingzhu
Building,
No.182 Haier Road, Qingdao 266000
People's
Republic of China
(86) 532 8099 7969
(Address
and telephone number of principal executive
offices)
____________________________
Copies to:
Louis A. Bevilacqua, Esq.
Joseph M. Lucosky, Esq.
Thomas M. Shoesmith, Esq.
Anslow & Jaclin, LLP
Joseph R. Tiano, Jr., Esq.
195 Route 9 South
Pillsbury Winthrop Shaw Pittman LLP
2nd Floor
2300 N Street, N.W.
Manalapan, NJ 07726
Washington, D.C. 20037
(732) 409-1212
(202) 663-8000
(Names, addresses and telephone numbers of agents for service)
____________________________
Approximate date of commencement of proposed sale to
public
: From time to time after the effective date of this Registration
Statement, as determined by market conditions and other factors.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant
to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
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 definitions of "large accelerated filer,"
"accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer  [   ]
Accelerated
      filer                  
      [X]
Non-accelerated filer   [   ]
Smaller reporting company [  
  ]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
Title of securities
Amount to be
Proposed maximum
Proposed maximum aggregate
Amount of
to be registered
registered
(1)
offering price per share
offering price
registration fee
Primary Offering
:
Ordinary Shares, $0.002112 par value per
      share
$23,000,000
(2)
$1,640
(3)
Underwriter's Warrants to
      Purchase Ordinary Shares
-
-
(4)
Ordinary Shares Underlying Underwriter's Warrants, $0.002112 par value per share
$1,250,000
$90
Secondary Offering:
Ordinary Shares, $0.002112 par value per
      share
765,000
(7)
$4.00
(5)
$3,060,000
$219
Ordinary Shares Underlying
      6% Convertible Preference
      Shares, $0.002112 par value per
      share
2,774,700
(8)
$4.00
(5)
$11,098,800
$792
Ordinary Shares Underlying Warrants, $0.002112 par
      value per share
1,387,350
(9)
$6.00
(6)
$8,324,100
$594
Ordinary Shares Underlying Warrants, $0.002112 par value per
      share
138,735
(10)
$5.00
(6)
$693,675
$50
TOTAL
$47,426,575
$3,385
(11)
(1) In accordance with Rule 416(a), the Registrant is also
registering hereunder an indeterminate number of additional Ordinary Shares that
may be issued and resold resulting from stock splits, stock dividends or similar
transactions.
(2) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(o).
(3) Calculated pursuant to Rule
457(o) based on an estimate of the proposed maximum aggregate offering price.
(4) No separate registration fee is required pursuant to Rule 457(g).
(5) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the last private sales price for ordinary shares
of the Registrant as there is currently no public market price for the
Registrant's ordinary shares. Management considered the total number of shares
outstanding post offering, the public offering of ordinary shares, estimated
market capitalization, forward looking net income, the targeted
price-to-earnings ratio and the effect of the current global economic crisis to
determine the offering price per share. Accordingly, taking the foregoing
factors into consideration, the Registrant arrived at the proposed offering
price per share, which is the effective price per share paid by the investors in
the Company's April 2010 private placement.
(6) Calculated in accordance
with Rule 457(g) based upon the exercise price of the Warrants held by selling
stockholders named in this registration statement.
(7) Represents the
Registrant's ordinary shares being registered for resale that have been issued
to the selling stockholders named in this registration statement.
(8)
Represents ordinary shares underlying 6% convertible preference shares being
registered for resale that have been issued to the selling stockholders named in
this registration statement.
(9) Represents ordinary shares issuable upon
exercise of five-year warrants to purchase ordinary shares held by certain
selling stockholders named in this registration statement.
(10) Represents
ordinary shares issuable upon exercise of three-year warrants to purchase
ordinary shares held by certain selling stockholder named in this registration
statement.
(11) Paid herewith.
The registrant hereby amends this registration
      statement on such date or dates as may be necessary to delay its effective
      date until the
registrant shall file a further amendment which
      specifically states that this registration statement shall hereafter
      become effective in
accordance with Section 8(a) of the Securities
      Act of 1933 or until the registration statement shall become effective on
      such date as the
Commission, acting pursuant to such Section 8(a),
      may determine.
EXPLANATORY NOTE
This Registration Statement contains two prospectuses, as set
forth below.
Public Offering Prospectus
. A prospectus, or the Public
  Offering Prospectus, to be used for the public offering of up to ordinary
  shares by us (in addition to ordinary shares that may be sold upon exercise of
  the underwriters' over-allotment option) through the underwriters named on the
  cover page of the Public Offering Prospectus. We are also registering the
  warrants and ordinary shares underlying the warrants to be received by the
  underwriters in this offering.
Resale Prospectus
. A prospectus, or the Resale Prospectus,
  to be used for the resale by selling stockholders of 765,000 ordinary shares
  and 2,774,700 ordinary shares underlying 6% convertible preference shares,
  $0.002112 par value per share, or Preference Shares. We are also registering
  1,526,085 ordinary shares that have been or may be acquired upon the exercise
  of warrants that have been previously issued to selling stockholders named in
  the Resale Prospectus.
The Public Offering Prospectus is substantively identical to the
Resale Prospectus, except for the following major items:
they contain different outside and inside front covers;
they contain different Offering sections in the Prospectus Summary section
  beginning on page 1 and page 1A respectively;
they contain different Use of Proceeds sections on page 23 and page 2A
  respectively;
the Capitalization and Dilution sections on page 25 and page 26,
  respectively, of the Public Offering Prospectus are deleted from the Resale
  Prospectus;
a Selling Stockholder section is included in the Resale Prospectus
  beginning on page 3A;
references in the Public Offering Prospectus to the Resale Prospectus will
  be deleted from the Resale Prospectus;
the Underwriting section from the Public Offering Prospectus on page 81
  is deleted from the Resale Prospectus and a Plan of Distribution is inserted
  in its place;
the Legal Matters section in the Resale Prospectus on page 9A deletes the
  reference to counsel for the underwriters; and
the outside back cover of the Public Offering Prospectus is different from
  the outside back cover of the Resale Prospectus.
We have included in this Registration Statement, after the
financial statements, a set of alternate pages to reflect the foregoing
differences of the Resale Prospectus as compared to the Public Offering
Prospectus.
PRELIMINARY PROSPECTUS
Subject to completion, dated May
        7, 2010
________ Ordinary Shares
DRAGON ACQUISITION CORPORATION
____________________________
We are offering             
        ordinary shares.
Our ordinary shares are not currently listed or quoted
        for trading on any national securities exchange or national quotation
        system. We intend to apply for the listing of our ordinary shares on the
        NASDAQ Global Market under the symbol "OMEI". There can, however,
        be no assurance that our listing application will be accepted by the NASDAQ
        Global Market.
Investing in our ordinary shares involves risks that
        are described in the "Risk Factors" section beginning on page
        8 of this prospectus.
Per
      Share
Total
Public offering price
$
$
Underwriting discount
$
$
Proceeds, before expenses, to Dragon
      Acquisition Corporation
$
$
The underwriters
        may also purchase up to an additional          ordinary shares from us at the public
        offering price, less the underwriting discount, within 30 days from the
        date of this prospectus to cover over-allotments, if any.
Neither the Securities and Exchange Commission nor any
        state securities commission has approved or disapproved of these securities
        or determined if this prospectus is truthful or complete. Any representation
        to the contrary is a criminal offense.
The ordinary shares are expected to be delivered on or
        about                          
         , 2010.
____________________________
Brean
Murray, Carret & Co.
____________________________
The date of this prospectus is                                
        , 2010.
TABLE OF CONTENTS
Page
PROSPECTUS
      SUMMARY
1
RISK
      FACTORS
8
SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS
22
USE
      OF PROCEEDS
23
MARKET
      PRICE AND DIVIDENDS ON OUR COMMON EQUITY AND RELATED SHAREHOLDER
      MATTERS
24
DIVIDEND
      POLICY
24
CAPITALIZATION
25
DILUTION
26
EXCHANGE
      RATE INFORMATION
26
SELECTED
      CONSOLIDATED FINANCIAL DATA
27
MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
30
QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
46
BUSINESS
47
HISTORY
      AND CORPORATE STRUCTURE
64
MANAGEMENT
67
EXECUTIVE
      COMPENSATION
69
TRANSACTIONS
      WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS;
CORPORATE GOVERNANCE
72
SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
73
DESCRIPTION
      OF SECURITIES
74
SHARES
      ELIGIBLE FOR FUTURE SALE
80
UNDERWRITING
81
LEGAL
      MATTERS
88
EXPERTS
88
ADDITIONAL
      INFORMATION
89
INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
PART
      II INFORMATION NOT REQUIRED IN THE PROSPECTUS
II-1
You should rely only on the information provided in this
prospectus. Neither we nor the selling stockholders have authorized anyone to
provide you with additional or different information. The selling stockholders
are not making an offer of these securities in any jurisdiction where the offer
is not permitted. You should assume that the information in this prospectus is
accurate only as of the date on the front of the document.
i
PROSPECTUS SUMMARY
The items in the following summary are described in more
detail later in this prospectus. Therefore, you should also read the more
detailed information set out in this prospectus, including the financial
statements, the notes thereto and matters set forth under "Risk Factors."
Except as otherwise indicated by the context, references in
this prospectus to "we," "us," "our," "our Company," or "the Company" are to the
combined business of Dragon Acquisition and its consolidated subsidiaries,
Leewell, Oumei, Caoxian Industrial, Longhai Hotel, Longhai Real Estate, Oumei
Real Estate, Qingdao Xudong, Weifang Longhai Industry, Weifang Longhai
Properties, Weifang Qilu, Weihai Economic and Weihai Mingwei.
In addition, unless the context otherwise requires and for the
purposes of this prospectus only:
"Caoxian Industrial" refers to Caoxian Industrial Properties Co., Ltd., a
  PRC limited company;
"Dragon Acquisition" refers to Dragon Acquisition Corporation, a Cayman
  Islands company;
"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;
"Leewell" refers to Leewell Investment Group Limited, a Hong Kong company;
"Longhai Hotel" refers to Longhai Hotel Co., Ltd., a PRC limited company;
"Longhai Real Estate" refers to Longhai Real Estate Properties Co., Ltd., a
  PRC limited company;
"Oumei" refers to Qingdao Oumei Real Estate Development Co., Ltd., a PRC
  limited company;
"PRC," "China," and "Chinese," refer to the People's Republic of China;
"Qingdao Xudong" refers to Qingdao Xudong Real Estate Development Co.,
  Ltd., a PRC limited company;
"Renminbi" and "RMB" refer to the legal currency of China;
"SEC" refers to the Securities and Exchange Commission;
"Securities Act" refers to the Securities Act of 1933, as amended;
"U.S. dollars," "dollars" and "$" refer to the legal currency of the United
  States;
"Weifang Longhai Industry" refers to Weifang Longhai Industry Co., Ltd., a
  PRC limited company;
"Weifang Longhai Zhiye" refers to Weifang Longhai Zhiye Co., Ltd., a PRC
  limited company;
"Weifang Qilu" refers to Weifang Qilu Guotai Properties Co., Ltd., a PRC
  limited company;
"Weihai Economic" refers to Weihai Economic & Technology Development
  Zone Longhai Properties Co., Ltd., a PRC limited company; and
"Weihai Mingwei" refers to Weihai Mingwei Industry Co., Ltd., a PRC limited
  company.
In this prospectus we are relying on and we refer to
information and statistics regarding the real estate industry in China that we
have obtained from various cited public sources. Any such information is
publicly available for free and has not been specifically prepared for us for
use or incorporation in this prospectus or otherwise.
1
The Company
Overview of Our Business
We are one of the leading real estate development companies
located in Qingdao, Shandong province, China. We began operation in 2001 and in
2008 we were recognized in the Qingdao Construction Committee's evaluation as
one of the top ten real estate developers in Qingdao, measured by a combination
of revenue, customer satisfaction, as well as several other factors.
We develop and sell residential and commercial properties,
targeting middle and upper income customers in the coastal region of the
Shandong peninsula (Greater Qingdao) located in northeastern China, including
the cities of Qingdao, Weihai and Yantai, as well as other inland locations,
including Weifang.
Since our inception, we have completed 15 projects having a
gross floor area, or GFA, of 1,191,722 square meters, of which more than 91.8%
has been sold. In addition, we have seven projects under construction with a
total GFA of 735,274 square meters.
In fiscal year 2009, our total sales increased 22.4% to $94.3
million from $77.0 million in fiscal year 2008. Our gross profit increased 17.3%
to $36.0 million in fiscal year 2009 from $30.7 million in fiscal year 2008,
while our net income before extraordinary item increased 27.9% to $24.3 million
in fiscal year 2009 from $19.0 million in fiscal year 2008.
Our Competitive Strengths
We believe the following strengths allow us to compete
effectively in the Chinese real estate development industry:
Proven track record of successful large-scale properties
  development
. Since our inception in 2001, we have successfully
  completed 15 projects having a GFA of 1,191,722 square meters, of which more
  than 91.8% has been sold. In addition, we have seven projects under
  construction with a total GFA of 735,274 square meters. All of our projects
  have featured modern facilities and attractive landscaping that provides
  comfortable and convenient lifestyles. Since our inception, we have focused on
  providing mid-sized apartments for middle-income residents and have gained an
  in-depth understanding of the preferences of our target customers. Most of the
  apartments we develop are units ranging from 40 square meters to 100 square
  meters, with an average price of less than RMB 4,000 per square meter
  (approximately $585 per square meter). Our ability to cater to our customers'
  preferences has been a major factor in the growth of our business. By
  leveraging our experience and track record, we believe that we can penetrate
  into the real estate markets in other tier two and tier three cities in China.
Widely recognized brand name in an attractive coastal market
.
  We have received many awards that acknowledge the quality of our real estate
  developments. For example, in 2008 we were recognized in the Qingdao
  Construction Committee's evaluation as one of the top ten real estate
  developers in Qingdao, measured by a combination of revenue, customer
  satisfaction, as well as several other factors. We believe that the quality of
  our real estate developments and the recognition of our brand name by our
  customers are important to our success.
Experienced management team
. Our Chairman, Mr. Antoine Cheng,
  has many years of experience in working with businesses and developed good
  business contacts, including in the real estate development business in China.
  Our senior managers have an average of more than 10 years of experience in the
  real estate industry and substantial management experience. All of them have
  bachelor's or master's degrees in business administration or accounting. In
  addition, our staff is well trained and is motivated by our incentive
  programs. We offer employees a variety of relevant training programs.
Substantial land reserves at premier locations for new development
  projects
. For our future development, we have acquired substantial
  land reserves at premier locations. Specific projects have been scheduled to
  be constructed on those lands. Please see "Projects" for details about our
  land reserves.
Strong financial profile and excellent credit record
. We have
  bank credit facilities with three top Chinese banks, which allow us to
  prudently use debt to leverage our business. We have received "AA" recognition from our top lender, Industrial and Commercial
  Bank of China, Chengyang Branch, in each of the past three years.
2
Compelling growth strategy
. We expect to continue our growth
  by: (i) achieving higher returns on projects by developing hotels and villas
  for upper income customers; (ii) continuing development of large middle income
  residential projects; (iii) expanding operations to other tier two and tier
  three cities in the Shandong Province and in other provinces in China; and
  (iv) acquiring projects from distressed developers.
Our Growth Strategy
We intend to increase our market share through aggressive
internal growth and prudent acquisitions that are primarily focused on
outstanding land or projects in the Shandong Province and in other provinces in
China. We intend to achieve this objective by pursuing the following
strategies:
Continue to expand in Shandong Province through new urban development
  projects
. In the next five years we will continue to focus on real
  estate development along the coastline of the Shandong peninsula, particularly
  in the Qingdao and Weihai regions. Given our knowledge and experience, we
  expect to increase our market share in those areas. For example, our strategic
  plan includes construction of an office building and a large upper-income
  community of villas in coastal Weihai. We also plan to create a high-rise
  resort hotel on the Stone Old Man beach in Qingdao, where we already own the
  land rights. We believe that the Qingdao-Weihai region is one of the most
  suitable and beautiful living areas in China. The region also features good
  economic growth. We believe that the real estate market in the Qingdao-Weihai
  region will remain strong over the next several years, not only due to the
  market awareness created by the global media coverage of Qingdao and its
  Olympic sailing events, but also because of the unique attraction the region
  holds for international customers, travelers and investors.
Continue to provide cost-effective properties for middle income
  customers
. The growing number of middle- income consumers in China has
  provided attractive and sustainable growth opportunities for real estate
  developers. As disposable incomes for urban residents increase, they have
  strong motivation and sufficient financial capacity to improve their living
  conditions by purchasing new or better properties. We intend to capitalize on
  the growth opportunities by continuing to offer high-quality mid-sized
  residential units featuring modern designs and convenient facilities at
  competitive prices.
Penetration of the high-end real estate market
. We intend to
  penetrate into the high-end real estate market by developing villas, hotels,
  and commercial and office buildings that generate high returns. We have three
  projects in planning in that category. The first is a large community of
  villas and hotel-serviced apartments on the beach in Weihai. The second is an
  office building in Weihai, the Longhai International Plaza, that we believe
  will generate both sales and continuing rental income for us. The third, the
  most interesting of our plans, is the luxury resort hotel, the Longhai Hotel,
  which will be located just across the street from the Stone Old Man beach in
  Qingdao. Construction for the hotel is expected to start in August 2011. The
  architectural and engineering firm we have selected is Epstein, headquartered
  in Chicago, a city famous for innovative architecture. We believe the upscale
  business and tourist volume in Qingdao will provide the sustained demand for
  such a beautiful luxury hotel. These high-end projects should generate higher
  returns on investment than middle-income residential properties.
Improve project management and cost control
. We will improve
  our project management by adopting more stringent financial disciplines in our
  operations at each stage that will help us to increase our returns on our
  project investments. We will use our capital more effectively by better
  managing our assets, receivables and expenditures to attain pre-set targets.
  We will better anticipate the best land rights reserves for development and
  will be able to capture them at the lowest prices to maximize our potential
  returns on our land and on our project investments. Further benefits should
  include a more consistent cash flow from our pre-sales to achieve both better
  cash availability for our projects and a prudent debt-to-total-capital ratio
  that will keep us in the optimum range for our cost of capital. The results
  should be lower effective interest rates on our debt and better cost
  competitiveness for our company.
Our Corporate History and Background
We organized under the laws of the Cayman Islands on March 10,
2006 as a blank check development stage company formed for the purpose of
acquiring an operating business, through a stock exchange, asset acquisition or
similar business combination. From our inception until we completed our reverse
acquisition of Leewell on April 14, 2010, our operations consisted entirely of
identifying, investigating and conducting due diligence on potential businesses
for acquisition.
3
On April 14, 2010, we completed a reverse acquisition transaction
  through a share exchange with Leewell whereby we acquired 100% of the issued
  and outstanding capital stock of Leewell. As a result of the reverse acquisition,
  Leewell became our wholly-owned subsidiary and Longhai Holdings Company Limited,
  or Longhai Holdings, the former shareholder of Leewell, became our controlling
  shareholder. The share exchange transaction with Leewell was treated as a reverse
  acquisition, with Leewell as the acquirer and Dragon Acquisition as the acquired
  party.
On April 14, 2010, we also completed a private placement
transaction with a group of accredited investors. Pursuant to a subscription
agreement with the investors, or the Subscription Agreement, we issued to the
investors an aggregate of 2,774,700 units, or the Units, for a purchase price of
$11,098,800, or $4.00 per Unit. Each Unit consists of one Preference Share, and
one warrant to purchase 0.5 ordinary shares, or the Warrants. The Warrants have
a term of 5 years, bear an exercise price of $6.00 per share (subject to
customary adjustments), are exercisable on a net exercise or cashless basis and
are exercisable by investors at any time after the closing date. See "History
and Corporate Structure" below for a detailed description of the reverse
acquisition and the private placement transaction.
Our Corporate Structure
All of our business operations are conducted through our
Chinese subsidiaries. The chart below presents our corporate structure:
4
Office Location
Our principal business office is located in China at Floor 28,
Block C Longhai Mingzhu Building, No.182 Haier Road, Qingdao 266000. The
telephone number at our executive offices is (86) 532 8099 7969. Our registered
office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands and
our registered agent is Maples Corporate Services Limited. We maintain a website
at
http://www.chinaoumeirealestate.com
that
contains information about our company, but that information is not part of this
prospectus.
5
The Offering
Ordinary shares offered
(1)
shares,
      (           
      shares, if the underwriters exercise the overallotment option)
Ordinary shares outstanding prior to the
      offering
shares
Ordinary shares outstanding after the
      offering
(2)
shares, (            shares, if the underwriters exercise the overallotment option)
Offering price
$         
      per share
Use of proceeds:
We intend to use the net proceeds from this
      offering for working capital and general corporate purposes. See "Use of
      Proceeds" on page 23 for more information on the use of proceeds.
Risk factors
See "Risk Factors" and other
      information included in this prospectus for a discussion of the risks you
      should carefully consider before deciding to invest in our ordinary
      shares.
Trading market and symbol
We intend to apply for the listing of our
      ordinary shares on the NASDAQ Global Market under symbol "OMEI". There
      can, however, be no assurance that our ordinary shares will be accepted
      for listing on the NASDAQ Global Market.
(1) Excludes up to         ordinary shares underlying warrants to be
received by the underwriters in this offering. We are also concurrently
registering for resale under a separate Resale Prospectus 765,000 ordinary
shares and 2,774,700 ordinary shares underlying the Preference Shares held by
the selling stockholders named under such prospectus and 1,526,085 ordinary
shares that have been or may be acquired upon the exercise of warrants that have
been previously issued to the selling stockholders named in such prospectus.
None of these securities registered under the Resale Prospectus are being
offered by us and we will not receive any proceeds from the sale of these
shares.
(2) Based on (i) 31,000,062 ordinary shares issued and outstanding
  as of the date of this prospectus and (ii)         ordinary shares issued in the public
  offering (excluding the underwriters' warrants to purchase up to         ordinary
  shares and 1,526,085 ordinary shares underlying warrants that were issued on
  April 14, 2010).
6
Summary Consolidated Financial Information
The following selected historical financial information should
be read in conjunction with our consolidated financial statements and related
notes and the information contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" below. The selected consolidated
statement of operations data and statement of cash flows data for the years
ended December 25, 2009, 2008, and 2007 and the selected balance sheet data as
of December 25, 2009 and 2008 are derived from the audited consolidated
financial statements of Leewell included elsewhere in this prospectus. The
selected consolidated financial data for the years ended December 25, 2006 and
2005 and the selected balance sheet data as of December 25, 2007, 2006 and 2005
are derived from the unaudited and unreviewed consolidated financial statements
of Leewell not included in this prospectus.
The audited consolidated financial statements of Leewell for
the fiscal years ended December 25, 2009, 2008, and 2007 are prepared and
presented in accordance with generally accepted accounting principles in the
United States, or U.S. GAAP. The selected financial data information is only a
summary and should be read in conjunction with the historical consolidated
financial statements and related notes of Leewell contained elsewhere herein.
The financial statements contained elsewhere fully represent our financial
condition and operations; however, they are not indicative of our future
performance.
U.S. dollars, except shares
Fiscal Year Ended December
      25,
2005
2006
2007
2008
2009
Statements of Operations Data
Total sales
$
42,984,961
$
54,291,244
$
51,850,312
$
77,032,561
$
94,315,500
Total cost of sales
(32,983,932
)
(33,703,168
)
(36,243,778
)
(46,321,251
)
(58,296,408
)
Gross profit
10,001,029
20,588,076
15,606,534
30,711,310
36,019,092
Advertising expenses
(81,549
)
(47,051
)
(46,492
)
(112,263
)
(268,222
)
Commission expenses
(312,425
)
(789,497
)
(134,989
)
(574,262
)
(84,982
)
Selling expenses
(293
)
(6,192
)
(2,187
)
(81,415
)
(49,800
)
Bad debt expense
-
(154,710
)
(245,243
)
(1,198,942
)
(207,523
)
General and administrative expenses
(3,212.,010
)
(4,092,355
)
(807,589
)
(2,283,744
)
(4,655,596
)
Income from operations
6,394,752
15,498,271
14,370,034
26,460,684
30,752,969
Income before income taxes and extraordinary item
6,185,453
15,392,696
14,309,351
25,583,919
33,402,436
Income taxes
(2,089,048
)
(5,130,644
)
(5,090,161
)
(6,602,194
)
(9,058,226
)
Income before extraordinary item
4,096,405
10,262,052
9,219,190
18,981,725
24,344,210
Extraordinary item, net
-
-
-
12,635,872
-
Net income
$
4,096,405
$
10,262,052
$
9,219,190
$
31,617,597
$
24,344,210
Basic and diluted earnings per common share
Income before extraordinary item
$
409.64
$
1,026.21
$
921.92
$
0.19
$
0.24
Extraordinary item
-
-
-
0.12
-
Net income
$
409.64
$
1,026.21
$
921.92
$
0.31
$
0.24
As of December 25
2005
2006
2007
2008
2009
Balance Sheet Data
Working capital
$
16,835,646
$
34,470,470
$
9,465,778
$
18,831,257
$
44,207,072
Total assets
53,886,321
94,711,799
87,822,788
178,648,355
196,332,843
Total liabilities
40,640,740
65,427,400
59,977,634
115,401,647
101,981,897
Stockholders' equity
$
13,245,581
$
29,284,399
$
27,845,154
$
63,246,708
$
94,350,946
7
RISK FACTORS
The ordinary shares being offered by us are highly
speculative in nature, involve a high degree of risk and should be purchased
only by persons who can afford to lose the entire amount invested in our
ordinary shares. Before purchasing any of our ordinary shares, you should
carefully consider the following factors relating to our business and prospects.
You should pay particular attention to the fact that we conduct all of our
operations in China and are governed by a legal and regulatory environment that
in some respects differs significantly from the environment that may prevail in
the U.S. and other countries. If any of the following risks actually occurs, our
business, financial condition or operating results will suffer, the trading
price of our ordinary shares could decline, and you may lose all or part of your
investment.
RISKS RELATED TO OUR BUSINESS
We face risks related to general domestic and global
economic conditions and to the recent credit crisis.
We currently generate sufficient operating cash flows, which
combined with access to the credit markets, provide us with significant
discretionary funding capacity.
However, the current uncertainty arising out of domestic and
global economic conditions, including the recent disruption in credit markets,
poses a risk to the economies in which we operate that has affected demand for
our products and services, and may affect our ability to manage normal
relationships with our customers, suppliers, and creditors. If the current
situation deteriorates significantly, our business could be materially
negatively affected, including such areas as reduced demand for our products and
services from a slow-down in the general economy, or supplier or customer
disruptions resulting from tighter credit markets. In addition, terrorist
activities may cause unpredictable or unfavorable economic conditions and could
have a material adverse effect on the Company's operating results and financial
condition.
Our sales and results of operations could decline due to
macro-economic and other factors outside of our control, such as changes in
consumer confidence and declines in employment levels.
Changes in national and regional economic conditions, as well
as local economic conditions where we conduct our operations and where
prospective purchasers of our properties live, may result in more caution on the
part of buyers and consequently fewer purchases. These economic uncertainties
involve, among other things, conditions of supply and demand in local markets
and changes in consumer confidence and income, employment levels, and government
regulations. These risks and uncertainties could periodically have an adverse
effect on consumer demand for and the pricing of our properties, which could
cause our operating revenues to decline. In addition, builders are subject to
various risks, many of them outside the control of the builder including
competitive overbuilding, availability and cost of building lots, materials and
labor, adverse weather conditions which can cause delays in construction
schedules, cost overruns, changes in government regulations, and increases in
real estate taxes and other local government fees. A reduction in the Company's
sales could in turn negatively affect the market price of its securities.
Our business is susceptible to fluctuations in the real
estate market of China, especially in certain areas of eastern China where our
operations are concentrated, which may adversely affect our sales and results of
operations.
Our business depends substantially on the conditions of the PRC
  real estate market. Demand for real estate in China has grown rapidly in the
  recent decade but such growth is often coupled with volatility in market conditions
  and fluctuations in real estate prices. For example, the rapid expansion of
  the real estate market in major provinces and cities in China in the early 1990s,
  such as Shanghai, Beijing and Guangdong province, led to an oversupply in the
  mid-1990s and a corresponding fall in real estate values and rentals in the
  second half of the decade. Following a period of rising real estate prices and
  transaction volume in most major cities, the industry experienced a severe downturn
  in 2008, with transaction volume in many major cities declining by more than
  40% compared to 2007.
Average selling prices also declined in many cities during
2008. Fluctuations of supply and demand in China's real estate market are caused
by economic, social, political and other factors. To the extent fluctuations in
the real estate market adversely affect real estate transaction volumes or
prices, our financial condition and results of operations may be materially and
adversely affected.
Almost all of our operations are concentrated in Shandong
province, where the real estate market continued to grow in 2008 and 2009 despite the general downturn of the Chinese real
estate market mainly in 2008 and early 2009, however any decrease in demand or
real estate prices or any other adverse developments in this geographic region
would materially and adversely affect our sales and results of operations.
8
We are heavily dependent on the performance of the residential
  property market in China, which is at a relatively early development stage.
The residential property industry in the PRC is still in a
relatively early stage of development. Although demand for residential property
in the PRC has been growing rapidly in recent years, such growth is often
coupled with volatility in market conditions and fluctuation in property prices.
It is extremely difficult to predict how much and when demand will develop, as
many social, political, economic, legal, and other factors, most of which are
beyond our control, may affect the development of the market. The level of
uncertainty is increased by the limited availability of accurate financial and
market information and the overall low level of transparency in the PRC,
especially in tier-two cities that have lagged in progress in these aspects when
compared to tier-one cities.
The lack of a liquid secondary market for residential property
may discourage investors from acquiring new properties. The limited amount of
property mortgage financing available to PRC individuals may further inhibit
demand for residential developments.
Our business may be materially and adversely affected by
  government measures aimed at China's real estate industry.
The real estate industry in China is subject to government
regulations. Until 2008, the real estate markets in a number of major cities in
China had experienced rapid and significant growth. Before the global economic
crisis hit all the major economies worldwide in 2008, the PRC government had
adopted a series of measures to restrain what it perceived as unsustainable
growth in the real estate market. From 2003 to 2007, the PRC government
introduced a series of specific administrative and credit-control measures
including, but not limited to, setting minimum down payment requirements for
residential and commercial real estate transactions, limiting availability of
mortgage loans, and tightening the governmental approval process for certain
real estate transactions. For example, in 2006, the State Council and other
related government agencies introduced regulations that increased the mandatory
minimum down payment from 20% to 30% of the purchase price for properties with a
floor area of more than 90 square meters and imposed a business tax on total
proceeds from the resale of properties held for less than five years.
Since 2008, the PRC government has relaxed such restrictions
and introduced measures aimed at stimulating residential property purchases by
individuals and stabilizing the real estate market. On October 22, 2008, the
Ministry of Finance, the State Administration of Taxation and the People's Bank
of China, or PBOC, lowered transaction taxes, minimum down payment requirements,
and the mortgage interest rate for certain residential real estate transactions.
In December 2008, the General Office of the State Council promulgated rules that
exempted certain residential real estate transactions from business tax and
urban real estate tax.
However, despite the recent government measures aimed at
maintaining the long-term stability of the real estate market, we cannot assure
you that the PRC government will not adopt new measures in the future that may
result in short-term downward adjustments and uncertainty in the real estate
market. Our business may be materially and adversely affected as a result of
decreased transaction volumes or real estate prices that may follow these
adjustments or market uncertainty.
Our sales will be affected if mortgage financing becomes
  more costly or otherwise becomes less attractive.
Substantially all purchasers of our residential properties rely
on mortgages to fund their purchases. An increase in interest rates may
significantly increase the cost of mortgage financing, thus affecting the
affordability of residential properties. In 2008, PBOC changed the lending rates
five times. The benchmark lending rate for loans with a term of over five years,
which affects mortgage rates, was increased to 5.94% on December 31, 2008. The
PRC government and commercial banks may also increase the down payment
requirement, impose other conditions or otherwise change the regulatory
framework in a manner that would make mortgage financing unavailable or
unattractive to potential property purchasers. If the availability or
attractiveness of mortgage financing is reduced or limited, many of our
prospective customers may not be able to purchase our properties and, as a
result, our business, liquidity and results of operations could be adversely
affected.
9
In line with industry practice, we provide guarantees to PRC
banks with respect to loans procured by the purchasers of our properties for the total amount of mortgage loans. Such
guarantees expire upon the completion of the registration of the mortgage with
the relevant mortgage registration authorities. If there are changes in laws,
regulations, policies, and practices that would prohibit property developers
from providing guarantees to banks in respect of mortgages offered to property
purchasers and as a result, banks would not accept any alternative guarantees by
third parties, or if no third party is available or willing in the market to
provide such guarantees, it may become more difficult for property purchasers to
obtain mortgages from banks and other financial institutions during sales and
pre-sales of our properties. Such difficulties in financing could result in a
substantially lower rate of sale and pre-sale of our properties, which would
adversely affect our cash flow, financial condition, and results of operations.
We are not aware of any impending changes in laws, regulations, policies, or
practices that will prohibit such practice in China. However, there can be no
assurance that such changes in laws, regulations, policies, or practices will
not occur in China in the future.
We have significant short-term debt obligations, which
mature in less than one year. Failure to extend those maturities of, or to
refinance, that debt could result in defaults, and in certain instances,
foreclosures on our assets. Moreover, we may be unable to obtain financing to
fund ongoing operations and future growth.
The real estate development industry is capital intensive, and
development requires significant up-front expenditures to acquire land and begin
development. Accordingly, we incur substantial indebtedness to finance our
development activities.
At December 25, 2009, we had short-term bank loans outstanding
of $2,719,432, long-term bank loans of $35,217,320 maturing within one year,
long-term bank loans of $4,404,000 maturing in more than one year, and notes
payable of $146,800, which were secured by our land use rights and projects
under construction. Failure to obtain extensions of the maturity dates of, or to
refinance, these obligations or to obtain additional equity financing to meet
these debt obligations would result in an event of default with respect to such
obligations and could result in the foreclosure on the collateral. The sale of
such collateral at foreclosure would significantly disrupt our business, which
could significantly lower our sales and profitability. We may be able to
refinance or obtain extensions of the maturities of all or some of such debt
only on terms that significantly restrict our ability to operate, including
terms that place additional limitations on our ability to incur other
indebtedness, to pay dividends, to use our assets as collateral for other
financing, to sell assets or to make acquisitions or enter into other
transactions. Such restrictions may adversely affect our ability to finance our
future operations or to engage in other business activities. If we finance the
repayment of our outstanding indebtedness by issuing additional equity or
convertible debt securities, such issuances could result in substantial dilution
to our stockholders.
While we believe that our revenue growth projections and our
ongoing cost controls will allow us to generate cash and achieve profitability
in the foreseeable future, there is no assurance as to when or if we will be
able to achieve our projections. Our future cash flows from operations, combined
with our accessibility to cash and credit, may not be sufficient to allow us to
finance ongoing operations or to make required investments for future growth. We
may need to seek additional credit or access capital markets for additional
funds. There is no assurance that we would be successful in this regard.
Our practice of pre-selling projects may expose us to
substantial liabilities.
It is common practice by property developers in China,
including us, to pre-sell properties (while still under construction), which
involves certain risks. For example, we may fail to complete a property
development that may have been fully or partially pre-sold, which would leave us
liable to purchasers of pre-sold units for losses suffered by them without
adequate resources to pay the liability if funds have been used on the project.
In addition, if a pre-sold property development is not completed on time, the
purchasers of pre-sold units may be entitled to compensation for late delivery.
If the delay extends beyond a certain period, the purchasers may be entitled to
terminate the pre-sale agreement and pursue a claim for damages that exceeds the
amount paid and our ability to recoup the resulting liability from future sales.
We may not be able to successfully execute our strategy
of expanding into new geographical markets in China, which could have a material
adverse effect on our business and results of operations.
We plan to continue to expand our business into new
geographical areas in China. Since China is a large and diverse market, consumer
trends and demands may vary significantly by region and our experience in the
markets in which we currently operate may not be applicable in other parts of
China. As a result, we may not be able to leverage our experience to expand into other parts of China. When we enter
new markets, we may face intense competition from companies with greater
experience or an established presence in the targeted geographical areas or from
other companies with similar expansion targets. Therefore, we may not be able to
grow our sales in the new cities we enter due intense competitive pressures and
or the substantial costs involved.
10
We are dependent on third-party subcontractors, manufacturers,
  and distributors for all architecture, engineering and construction services,
  and construction materials. A discontinued supply of such services and materials
  will adversely affect our projects.
We are dependent on third-party subcontractors, manufacturers,
and distributors for all architecture, engineering and construction services,
and construction materials. Services and materials purchased from our five
largest subcontractors or suppliers accounted for 96.9% for the year ended
December 25, 2009. A discontinued supply of such services and materials will
adversely affect our construction projects and the success of the Company.
We are subject to extensive government regulation that
could cause us to incur significant liabilities or restrict our business
activities.
Regulatory requirements could cause us to incur significant
liabilities and operating expenses and could restrict our business activities.
We are subject to statutes and rules regulating, among other things, certain
developmental matters, building and site design, and matters concerning the
protection of health and the environment. Our operating expenses may be
increased by governmental regulations, such as building permit allocation
ordinances and impact and other fees and taxes, that may be imposed to defray
the cost of providing certain governmental services and improvements. Any delay
or refusal from government agencies to grant us necessary licenses, permits, and
approvals could have an adverse effect on our operations.
We depend on the availability of additional human resources
  for future growth.
We are currently experiencing a period of significant growth in
our sales volume. We believe that continued expansion is essential for us to
remain competitive and to capitalize on the growth potential of our business.
Such expansion may place a significant strain on our management and operations
and financial resources. As our operations continue to grow, we will have to
continually improve our management, operational, and financial systems,
procedures and controls, and other resources infrastructure, and expand our
workforce. There can be no assurance that our existing or future management,
operating and financial systems, procedures, and controls will be adequate to
support our operations, or that we will be able to recruit, retain, and motivate
our employees. Further, there can be no assurance that we will be able to
establish, develop, or maintain the business relationships beneficial to our
operations, or to do so or to implement any of the above activities in a timely
manner. Failure to manage our growth effectively could have a material adverse
effect on our business and the results of our operations and financial
condition.
We may be adversely affected by the fluctuation in raw
  material prices and selling prices of our products.
The land and raw materials used in our projects have
experienced significant price fluctuations in the past. There is no assurance
that they will not be subject to future price fluctuations or pricing control.
The land and raw materials used in our projects may experience price volatility
caused by events such as market fluctuations or changes in governmental
programs. The market price of land and raw materials may also experience
significant upward adjustment, if, for instance, there is a material
under-supply or over-demand in the market. These price changes may ultimately
result in increases in the selling prices of our products, and may, in turn,
adversely affect our sales volume, sales, operating income, and net income.
We face intense competition from other real estate developers.
The property industry in the PRC is highly competitive. In the
tier-two cities we focus on, local and regional property developers are our
major competitors, and an increasing number of large state-owned and private
national property developers have started entering these markets. Many of our
competitors, especially the state-owned and private national property
developers, are well capitalized and have greater financial, marketing, and
other resources than we have. Some also have larger land banks, greater
economies of scale, broader name recognition, a longer track record, and more
established relationships in certain markets. In addition, the PRC government's
recent measures designed to reduce land supply further increased competition for
land among property developers.
11
Competition among property developers may result in increased
costs for the acquisition of land for development, increased costs for raw
materials, shortages of skilled contractors, oversupply of properties, decrease
in property prices in certain parts of the PRC, a slowdown in the rate at which
new property developments will be approved and/or reviewed by the relevant
government authorities and an increase in administrative costs for hiring or
retaining qualified personnel, any of which may adversely affect our business
and financial condition. Furthermore, property developers that are better
capitalized than we are may be more competitive in acquiring land through the
auction process. If we cannot respond to changes in market conditions as
promptly and effectively as our competitors, or effectively compete for land
acquisition through the auction systems and acquire other factors of production,
our business and financial condition will be adversely affected.
In addition, risk of property over-supply is increasing in
parts of China, where property investment, trading and speculation have become
overly active. We are exposed to the risk that in the event of actual or
perceived over-supply, property prices may fall drastically, and our revenue and
profitability will be adversely affected.
We could be adversely affected by the occurrence of natural
  disasters.
From time to time, our developed sites may experience strong
winds, storms, flooding and earth quakes. Natural disasters could impede
operations, damage infrastructure necessary to our constructions and operations.
The occurrence of natural disasters could adversely affect our business, the
results of our operations, prospects and financial condition
.
We have limited insurance coverage against damages or
loss we might suffer.
The insurance industry in China is still in an early stage of
development and business interruption insurance available in China offers
limited coverage compared to that offered in many developed countries. We carry
insurance for potential liabilities related to our vehicles, but we do not carry
business interruption insurance and therefore any business disruption or natural
disaster could result in substantial damages or losses to us. In addition, there
are certain types of losses (such as losses from forces of nature) that are
generally not insured because either they are uninsurable or insurance cannot be
obtained on commercially reasonable terms. Should an uninsured loss or a loss in
excess of insured limits occur, our business could be materially adversely
affected. If we were to suffer any losses or damages to our properties, our
business, financial condition and results of operations would be materially and
adversely affected.
Our operating subsidiaries must comply with environmental
protection laws that could adversely affect our profitability.
We are required to comply with the environmental protection
laws and regulations promulgated by the national and local governments of the
PRC. Some of these regulations govern the level of fees payable to government
entities providing environmental protection services and the prescribed
standards relating to construction. Although our construction technologies allow
us to efficiently control the level of pollution resulting from our construction
process, due to the nature of our business, wastes are unavoidably generated in
the processes. If we fail to comply with any of these environmental laws and
regulations in the PRC, depending on the types and seriousness of the violation,
we may be subject to, among other things, warning from relevant authorities,
imposition of fines, specific performance and/or criminal liability, forfeiture
of profits made, or an order to close down our business operations and
suspension of relevant permits.
Our business depends substantially on the continuing
efforts of our senior executives and other key personnel, and our business may
be severely disrupted if we lost their services.
Our future success heavily depends on the continued service of
our senior executives and other key employees. In particular, we rely on the
expertise and experience of Mr. Antoine Cheng, our Chairman, Mr. Weiqing Zhang,
our Chief Executive Officer and President, and Mr. Yang Chen, our Chief
Financial Officer and Vice President. If one or more of our senior executives
are unable or unwilling to continue to work for us in their present positions,
we may have to spend a considerable amount of time and resources searching,
recruiting, and integrating the replacements into our operations, which would
substantially divert management's attention from our business and severely
disrupt our business. This may also adversely affect our ability to execute our
business strategy. Moreover, if any of our senior executives joins a competitor
or forms a competing company, we may lose customers, suppliers, know-how, and
key employees.
12
RISKS RELATED TO DOING BUSINESS IN CHINA
Changes in China's political or economic situation
  could harm us and our operating results.
Economic reforms adopted by the Chinese government have had a
positive effect on the economic development of the country, but the government
could change these economic reforms or any of the legal systems at any time.
This could either benefit or damage our operations and profitability. Some of
the things that could have this effect are:
Level of government involvement in the economy;
Control of foreign exchange;
Methods of allocating resources;
Balance of payments position;
International trade restrictions; and
International conflict.
The Chinese economy differs from the economies of most
countries belonging to the Organization for Economic Cooperation and
Development, or OECD, in many ways. For example, state-owned enterprises still
constitute a large portion of the Chinese economy, and weak corporate governance
and the lack of a flexible currency exchange policy still prevail in China. As a
result of these differences, we may not develop in the same way or at the same
rate as might be expected if the Chinese economy was similar to those of the
OECD member countries.
Uncertainties with respect to the PRC legal system could
  limit the legal protections available to you and us.
We conduct substantially all of our business through our
operating subsidiaries in the PRC. Our operating subsidiaries are generally
subject to laws and regulations applicable to foreign 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 involve 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, all of our executive officers and all of our 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 affect service of process in the United
States or to enforce a judgment obtained in the United States against our
Chinese operations and subsidiaries.
You may have difficulty enforcing judgments against us.
Most of our assets are located outside of 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 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 of 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. Our counsel as to PRC law,
has advised us that 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.
13
The PRC government exerts substantial influence over the
  manner in which we must conduct our business activities.
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.
Accordingly, government actions in the future, including any
decision not to continue to support recent economic reforms and to return to a
more centrally planned economy or regional or local variations in the
implementation of economic policies, could have a significant effect on economic
conditions in China or particular regions thereof and could require us to divest
ourselves of any interest we then hold in Chinese properties or joint
ventures.
Future inflation in China may inhibit our ability to conduct
  business in China.
In recent years, the Chinese economy has experienced periods of
rapid expansion and highly fluctuating rates of inflation. During the past ten
years, the rate of inflation in China has been as high as 5.9% and as low as
-0.8% . These factors have led to the adoption by the Chinese government, from
time to time, of various corrective measures designed to restrict the
availability of credit or regulate growth and contain inflation. High inflation
may in the future cause the Chinese government to impose controls on credit
and/or prices, or to take other action, which could inhibit economic activity in
China, and thereby harm the market for our products and our company.
Restrictions on currency exchange may limit our ability
to receive and use our sales effectively.
The majority of our sales will be settled in RMB and U.S.
dollars, and any future restrictions on currency exchanges may limit our ability
to use revenue generated in RMB to fund any future business activities outside
China or to make dividend or other payments in U.S. dollars. Although the
Chinese government introduced regulations in 1996 to allow greater
convertibility of the RMB for current account transactions, significant
restrictions still remain, including primarily the restriction that
foreign-invested enterprises may only buy, sell or remit foreign currencies
after providing valid commercial documents, at those banks in China authorized
to conduct foreign exchange business. In addition, conversion of RMB for capital
account items, including direct investment and loans, is subject to governmental
approval in China, and companies are required to open and maintain separate
foreign exchange accounts for capital account items. We cannot be certain that
the Chinese regulatory authorities will not impose more stringent restrictions
on the convertibility of the RMB.
Fluctuations in exchange rates could adversely affect our
  business and the value of our securities.
The value of our ordinary shares will be indirectly affected by
the foreign exchange rate between the U.S. dollar and RMB and between those
currencies and other currencies in which our sales may be denominated.
Appreciation or depreciation in the value of the RMB relative to the U.S. dollar
would affect our financial results reported in U.S. dollar terms without giving
effect to any underlying change in our business or results of operations.
Fluctuations in the exchange rate will also affect the relative value of any
dividend we issue that will be exchanged into U.S. dollars, as well as earnings
from, and the value of, any U.S. dollar-denominated investments we make in the
future.
Since July 2005, the RMB has no longer been pegged to the U.S.
dollar. Although PBOC 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.
Very limited hedging transactions are available in China to
reduce 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 of these transactions may be
limited, and we may not be able to successfully hedge our exposure at all. In
addition, our foreign currency exchange losses may be magnified by PRC exchange
control regulations that restrict our ability to convert RMB into foreign
currencies.
14
Restrictions under PRC law on our PRC subsidiaries' ability
  to make dividends and other distributions could materially and adversely affect
  our ability to grow, make investments or acquisitions that could benefit our
  business, pay dividends to you, and otherwise fund and conduct our business.
Substantially all of our sales are earned by our PRC
subsidiaries. However, 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 dividends 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 our 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 our registered capital. Allocations to these statutory reserve funds 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.
Failure to comply with PRC regulations relating to the
  establishment of offshore special purpose companies by PRC residents may subject
  our PRC resident shareholders to personal liability, limit our ability to acquire
  PRC companies or to inject capital into our PRC subsidiaries, limit our PRC
  subsidiaries' ability to distribute profits to us or otherwise materially adversely
  affect us.
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; (3) covering the use of existing offshore entities for offshore
financings; (4) 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 (5) 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 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 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 asked our shareholders, who are PRC residents as
defined in Circular 75, to register with the relevant branch of SAFE, as
currently required, in connection with their equity interests in us and our
acquisitions of equity interests in our PRC subsidiaries. However, we cannot
provide any assurances that they can obtain the above SAFE registrations
required by Circular 75 and Notice 106. Moreover, because of uncertainty over
how Circular 75 will be interpreted and implemented, and how or whether SAFE
will apply it to us, we cannot predict how it will affect our business
operations or future strategies. For example, our present and prospective PRC
subsidiaries' ability to conduct foreign exchange activities, such as the
remittance of dividends and foreign currency-denominated borrowings, may be
subject to compliance with Circular 75 and Notice 106 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 and
Notice 106. We also have little control over either our present or prospective
direct or indirect shareholders or the outcome of such registration procedures. A
failure by our PRC resident beneficial holders or future PRC resident
shareholders to comply with Circular 75 and Notice 106, if SAFE requires it,
could subject these PRC resident beneficial holders to fines or legal sanctions,
restrict our overseas or cross-border 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.
15
Our business and financial performance may be materially
adversely affected if the PRC regulatory authorities determine that our
acquisition of Oumei constitutes a Round-trip Investment without MOFCOM
approval.
On August 8, 2006, six PRC regulatory agencies promulgated the
Regulation on Mergers and Acquisitions of Domestic Companies by Foreign
Investors, or the 2006 M&A Rule, which became effective on September 8,
2006. According to the 2006 M&A Rule, a "Round-trip Investment" is defined
as having taken place when a PRC business that is owned by PRC individual(s) is
sold to a non-PRC entity that is established or controlled, directly or
indirectly, by those same PRC individual(s). Under the 2006 M&A Rules, any
Round-trip Investment must be approved by MOFCOM, and any indirect arrangement
or series of arrangements which achieves the same end result without the
approval of MOFCOM is a violation of PRC law.
Oumei was acquired in 2007 by Leewell, which was then owned and
controlled by Li Zhou, a citizen of the Commonwealth of Australia. Mr. Zhou
acted as a nominee of Antoine Cheng, the relative of one of a former shareholder
and director of Oumei. Mr. Cheng was a PRC citizen at the time but has since
become a Philippine citizen. The acquisition was approved by the appropriate
Chinese authorities. Li Zhou also founded Longhai Holdings, a BVI company. In
September 2009, ownership of Longhai Holdings was transferred to Antoine Cheng,
who became our Chairman. After Mr. Cheng acquired ownership of Longhai Holdings,
Longhai Holdings acquired all of the equity interest of Li Zhou in Leewell. The
PRC regulatory authorities may take the view that these transactions and the
Share Exchange Agreement are part of an overall series of arrangements which
constitute a Round-trip Investment, because at the end of the transactions,
Antoine Cheng became a majority owner and effective controlling party of a
foreign entity that acquired ownership of our Chinese subsidiaries. If the PRC
regulatory authorities take this view, we cannot assure you we may be able to
obtain the approval required from MOFCOM. It is also possible that the PRC
regulatory authorities could invalidate our acquisition and ownership of our
Chinese subsidiaries, and that these transactions require the prior approval of
the China Securities Regulatory Commission, or CSRC, before MOFCOM approval is
obtained.
We believe that if these regulatory actions occur, we may be
able to find a way to re-establish control of our Chinese subsidiaries' business
operations through a series of contractual arrangements rather than an outright
purchase of our Chinese subsidiaries. But we cannot assure you that such
contractual arrangements will be protected by PRC law or that the registrant can
receive as complete or effective economic benefit and overall control of our
Chinese subsidiaries' business than if the Company had direct ownership of our
Chinese subsidiaries. In addition, we 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 do so,
and if we cannot put in place or 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 affected.
Under the New Enterprise Income Tax 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 shareholders.
China passed a New Enterprise Income Tax Law, or the New EIT
Law, and its implementing rules, both of which became effective on January 1,
2008. Under the New EIT Law, an enterprise established outside of China with "de
facto management bodies" within China is considered a "resident enterprise,"
meaning that it can be treated in a manner similar to a Chinese enterprise for
enterprise income tax purposes. The implementing rules of the New EIT Law define
de facto management as "substantial and overall management and control over the
production and operations, personnel, accounting, and properties" of the
enterprise. In addition, a recent circular issued by the State Administration of
Taxation on April 22, 2009 regarding the standards used to classify certain
Chinese-invested enterprises controlled by Chinese enterprises or Chinese group
enterprises and established outside of China as "resident enterprises" clarified
that dividends and other income paid by such "resident enterprises" will be
considered to be PRC source income, subject to PRC withholding tax, currently at
a rate of 10%, when recognized by non-PRC enterprise shareholders. This recent
circular also subjects such "resident enterprises" to various reporting
requirements with the PRC tax authorities.
16
In addition, the recent circular mentioned above sets out
criteria for determining whether "de facto management bodies" are located in
China for overseas incorporated, domestically controlled enterprises. However,
as this circular only applies to enterprises established outside of China that
are controlled by PRC enterprises or groups of PRC enterprises, it remains
unclear how the tax authorities will determine the location of "de facto
management bodies" for overseas incorporated enterprises that are controlled by
individual PRC residents like us and some of our subsidiaries.
Therefore, although substantially all of our management is
currently located in the PRC, it remains unclear whether the PRC tax authorities
would require or permit our overseas registered entities to be treated as PRC
resident enterprises. We do not currently consider our company to be a PRC
resident enterprise. However, if the PRC tax 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 offering proceeds and non-China source income
would be subject to PRC enterprise income tax at a rate of 25%. Second, although
under the New EIT Law and its implementing rules dividends paid to us from our
PRC subsidiaries would qualify as "tax-exempt income," we cannot guarantee that
such dividends will not be subject to a 10% withholding tax, as the PRC foreign
exchange control authorities, which enforce the withholding tax, have not yet
issued 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
shareholders and with respect to gains derived by our non-PRC shareholders from
transferring our shares.
In addition, under the New EIT law, the
Notice of the State
Administration of Taxation on Negotiated Reduction of Dividends and Interest
Rates
, or Notice 112, which was issued on January 29, 2008, the
Arrangement between the PRC and the Hong Kong Special Administrative Region
on the Avoidance of Double Taxation and Prevention of Fiscal Evasion
, or the
Double Taxation Arrangement (Hong Kong), which became effective on December 8,
2006, and the
Notice of the State Administration of Taxation Regarding
Interpretation and Recognition of Beneficial Owners under Tax Treaties
, or
Notice 601, which became effective on October 27, 2009, dividends from our PRC
operating subsidiaries paid to us through our Hong Kong subsidiary may be
subject to a withholding tax at a rate of 10%, or at a rate of 5% if our Hong
Kong subsidiary is considered a "beneficial owner" that is generally engaged
in
substantial business activities and entitled to treaty benefits under
the Double Taxation Arrangement (Hong Kong).
Furthermore, the ultimate
tax rate will be determined by treaty between the PRC and the tax residence of
the holder
of the PRC subsidiary. We are actively monitoring the proposed
withholding tax and are evaluating appropriate
organizational changes to
minimize the effect on corresponding tax.
Dividends declared and paid from before January 1, 2008 on
distributable profits are grandfathered under the New EIT Law and are not
subject to withholding tax.
We may be exposed to liabilities under the Foreign Corrupt
  Practices Act and Chinese anti-corruption laws, and any determination that we
  violated these laws could have a material adverse effect on our business.
We are subject to the Foreign Corrupt Practice Act, or FCPA,
and other laws that prohibit improper payments or offers of payments to foreign
governments and their officials and political parties by U.S. persons and
issuers as defined by the statute, for the purpose of obtaining or retaining
business. We have operations, agreements with third parties, and make most of
our sales in China. The PRC also strictly prohibits bribery of government
officials. Our activities in China create the risk of unauthorized payments or
offers of payments by the employees, consultants, sales agents, or distributors
of our Company, even though they may not always be subject to our control. It is
our policy to implement safeguards to discourage these practices by our
employees. However, our existing safeguards and any future improvements may
prove to be less than effective, and the employees, consultants, sales agents,
or distributors of our Company may engage in conduct for which we might be held
responsible. Violations of the FCPA or Chinese anti-corruption laws may result
in severe criminal or civil sanctions, and we may be subject to other
liabilities, which could negatively affect our business, operating results and
financial condition. In addition, the U.S. government may seek to hold our
Company liable for successor liability FCPA violations committed by companies in
which we invest or that we acquire.
17
RISKS RELATED TO THIS OFFERING AND THE MARKET FOR OUR
ORDINARY SHARES GENERALLY
There is no current trading market for our ordinary
shares, and there is no assurance of an established public trading market, which
would adversely affect the ability of our investors to sell their securities in
the public market.
Our ordinary shares are not currently listed or quoted for
trading on any national securities exchange or national quotation system. We
intend to apply for the listing of our ordinary shares on the NASDAQ Global
Market under the symbol "OMEI". There is no guarantee that the NASDAQ Global
Market, or any other exchange or quotation system, will permit our shares to be
listed and traded. If we fail to obtain a listing on the NASDAQ Global Market,
we may seek quotation on the OTC Bulletin Board. FINRA has enacted changes that
limit quotations on the OTC Bulletin Board to securities of issuers that are
current in their reports filed with the SEC. The effect on the OTC Bulletin
Board of these rule changes and other proposed changes cannot be determined at
this time. The OTC Bulletin Board is an inter-dealer, over-the-counter market
that provides significantly less liquidity than the NASDAQ Global Market. The
quotation of our shares on the OTC Bulletin Board may result in a less liquid
market available for existing and potential stockholders to trade our shares,
could depress the trading price of our ordinary shares and could have a
long-term adverse impact on our ability to raise capital in the future.
The price of our ordinary shares could be volatile and
could decline following this offering at a time when you want to sell your
holdings.
We intend to have our ordinary shares listed on the NASDAQ
Global Market under the symbol "OMEI" and the trading is expected to start upon
the effectiveness of this registration statement. Although we believe that this
offering and the NASDAQ listing will improve the liquidity for our ordinary
shares, there is no assurance that the offering will improve volume, reduce
volatility and stabilize our share price. Numerous factors, many of which are
beyond our control, may cause the market price of our ordinary shares to
fluctuate significantly. These factors include:
expiration of lock-up agreements;
our earnings releases, actual or anticipated changes in our earnings,
  fluctuations in our operating results or our failure to meet the expectations
  of financial market analysts and investors;
changes in financial estimates by us or by any securities analysts who
  might cover our stock;
speculation about our business in the press or the investment community;
significant developments relating to our relationships with our customers
  or suppliers;
stock market price and volume fluctuations of other publicly traded
  companies and, in particular, those that are in the steel industry;
customer demand for our products;
investor perceptions of the steel industry in general and our company in
  particular;
the operating and stock performance of comparable companies;
general economic conditions and trends;
major catastrophic events;
announcements by us or our competitors of new products, significant
  acquisitions, strategic partnerships or divestitures;
changes in accounting standards, policies, guidance, interpretation or
  principles;
loss of external funding sources;
failure to maintain compliance with NASDAQ rules;
sales of our ordinary shares, including sales by our directors, officers
  or significant shareholders; and
additions or departures of key personnel.
Securities class action litigation is often instituted against
companies following periods of volatility in their stock price. This type of
litigation could result in substantial costs to us and divert our management's
attention and resources.
Moreover, securities markets may from time to time experience
significant price and volume fluctuations for reasons unrelated to operating
performance of particular companies. For example, from September 2008 until June
2009, securities markets in the United States, China and throughout the world
experienced a historically large decline in share price. These market fluctuations may adversely affect the
price of our ordinary shares and other interests in our company at a time when
you want to sell your interest in us.
18
Future sales or perceived sales of our ordinary shares
could depress our stock price.
In addition to the ordinary shares offered in this offering,
the registration statement of which this prospectus is a party also covers
765,000 ordinary shares and 2,774,700 ordinary shares underlying the Preference
Shares and 1,526,085 ordinary shares underlying the Warrants issued in a private
placement closed on April 14, 2010. Each selling stockholder named in the
registration statement may sell or transfer any ordinary shares after the
effective date of the registration statement. Additionally, all of our executive
officers and directors and certain of our shareholders have agreed not to sell
shares of our ordinary shares for a period of 18 months starting on April 14,
2010. Ordinary shares subject to these lock-up agreements will become eligible
for sale in the public market upon expiration of these lock-up agreements,
subject to limitations imposed by Rule 144 under the Securities Act. See "Shares
Eligible for Future Sale." If the holders of these shares were to attempt to
sell a substantial amount of their holdings at once, the market price of our
ordinary shares could decline. Moreover, the perceived risk of this potential
dilution could cause shareholders to attempt to sell their shares and investors
to short the ordinary shares, a practice in which an investor sells shares that
he or she does not own at prevailing market prices, hoping to purchase shares
later at a lower price to cover the sale. As each of these events would cause
the number of shares of our ordinary shares being offered for sale to increase,
our ordinary shares market price would likely further decline. All of these
events could combine to make it very difficult for us to sell equity or
equity-related securities in the future at a time and price that we deem
appropriate.
We may be subject to penny stock regulations and
restrictions and you may have difficulty selling our ordinary shares.
The SEC has adopted regulations which generally define
so-called "penny stocks" as an equity security that has a market price of less
than $5.00 per share or an exercise price of less than $5.00 per share, subject
to certain exemptions. If our ordinary shares become a "penny stock", we may
become subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule.
This rule imposes additional sales practice requirements on broker-dealers that
sell such securities to persons other than established customers and "accredited
investors" (generally, individuals with a net worth in excess of $1,000,000 or
annual income exceeding $200,000, or $300,000 together with their spouses). For
transactions covered by Rule 15g-9, a broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
consent to the transaction prior to sale. As a result, this rule may affect the
ability of broker-dealers to sell our securities and may affect the ability of
purchasers to sell any of our securities in the secondary market.
For any transaction involving a penny stock, unless exempt, the
rules require delivery, prior to any transaction in a penny stock, of a
disclosure schedule prepared 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 statements are required to be sent disclosing
recent price information for the penny stock held in the account and information
on the limited market in penny stock.
There can be no assurance that our ordinary shares will qualify
for exemption from the Penny Stock Rule. In any event, even if our ordinary
shares were exempt from the Penny Stock Rule, we would remain subject to Section
15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any
person from participating in a distribution of penny stock if the SEC finds that
such a restriction would be in the public interest.
We may use these proceeds in ways with which you may not
agree.
While we currently intend to use the proceeds from this
offering for working capital and general corporate purposes, we have
considerable discretion in the application of the proceeds. You will not have
the opportunity, as part of your investment decision, to assess whether the
proceeds are being used in a manner agreeable to you. You must rely on our
judgment regarding the application of the net proceeds of this offering. The net
proceeds may be used for corporate purposes that do not immediately improve our
profitability or increase the price of our shares.
We do not intend to pay dividends for the foreseeable future.
For the foreseeable future, we intend to retain any earnings to
finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our
ordinary shares. Accordingly, investors must be prepared to rely on sales of
their ordinary shares after price appreciation to earn an investment return,
which may never occur. Investors seeking cash dividends should not purchase our
ordinary shares. 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 of directors deems relevant.
19
Holders of our ordinary shares may face difficulties in
  protecting their interests because we are incorporated under Cayman Islands
  law.
Our corporate affairs are governed by our memorandum and
articles of association, and by the Companies Law (2009 Revision) and the common
law of the Cayman Islands. The rights of our shareholders and the fiduciary
responsibilities of our directors under Cayman Islands law are not as clearly
established as under statutes or judicial precedent in existence in
jurisdictions in the United States. Therefore, shareholders may have more
difficulty in protecting their interests in the face of actions by our
management or board of directors than would shareholders of a corporation
incorporated in a jurisdiction in the United States, due to the comparatively
less developed nature of Cayman Islands law in this area.
Shareholders of Cayman Islands exempted companies have no
general rights under Cayman Islands law to inspect corporate records and
accounts or to obtain copies of lists of our shareholders. Our directors have
discretion under our articles of association to determine whether or not, and
under what conditions, our corporate records may be inspected by our
shareholders, but are not obliged to make them available to our shareholders.
This may make it more difficult for you to obtain the information needed to
establish any facts necessary for a shareholder motion or to solicit proxies
from other shareholders in connection with a proxy contest.
Provisions of our articles of association and Cayman
Islands corporate law may impede a takeover or make it more difficult for
shareholders to change the direction or management of the Company, which could
reduce shareholders' opportunity to influence management of the Company.
Our articles of association permit our board of directors to
issue up to 1,000,000 preference shares from time to time, with such rights and
preferences as they consider appropriate. These terms may include voting rights
including the right to vote as a series on particular matters, preferences as to
dividends and liquidation, conversion rights and redemption rights provisions.
The issuance of any preference shares could reduce the value of such ordinary
shares. In addition, specific rights granted to future holders of preference
shares could be used to restrict our ability to merge with, or sell assets to, a
third party. The ability of the board of directors to issue preference shares
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
shareholders from recognizing a gain in the event that a favorable offer is
extended and could materially and negatively affect the market price of our
ordinary shares.
We may be classified as a passive foreign investment
company, which could result in adverse United States federal income tax
consequences to U.S. shareholders.
We do not currently expect to be classified as a "passive
foreign investment company," or PFIC, for U.S. federal income tax purposes for
our taxable year ending December 25, 2010. This expectation is based, in part,
on our estimates of the fair market value of our assets (including goodwill).
However, the PFIC test is an annual test that, as discussed below, depends upon
the composition of our gross income for the year and the percentage, based on a
quarterly average for the year, of our gross assets that constitutes "passive"
assets. Accordingly, it is not possible to determine whether we will not be
classified as a PFIC for our tax year ending December 25, 2010 until after the
year has ended. In addition, even if we are not classified as a PFIC for our
taxable year ending December 25, 2010, because the PFIC test is annual, we
cannot assure you that we will not be a PFIC for any following tax year. Our
special U.S. counsel expresses no opinion with respect to our expectations
contained in this paragraph.
A non-U.S. corporation is considered to be a PFIC for any
taxable year if either: (1) at least 75% of its gross income is passive income,
or; (2) at least 50% of the value of its assets (based on an average of the
quarterly values of the assets during the taxable year) is attributable to
assets that produce or are held for the production of passive income.
We will be treated as owning our proportionate share of the
gross assets and earning our proportionate share of the gross income of any
other corporation in which we own, directly or indirectly, at least 25% (by
value) of the stock.
20
Subject to various exceptions, passive income generally
includes dividends, interest, rents, royalties and gains from the disposition of
assets that produce or are held for the production of passive income.
We must make a separate determination each year as to whether
we are a PFIC. As a result, our PFIC status may change. In addition, the
composition of our income and assets will be affected by, among other factors,
how, and how quickly, we spend the cash we raised in our recent private
placement. If we are a PFIC for any year during which you hold ordinary shares
or any other equity interest in the Company, then you generally will continue to
be treated as owning ordinary shares in a PFIC for all succeeding years during
which you hold ordinary shares even if we do not satisfy the PFIC income or
assets test for any particular succeeding taxable year. However, if we cease to
satisfy the PFIC income and assets test for a particular succeeding taxable
year, you may be able to avoid some of the adverse effects of the PFIC regime by
making a "deemed sale" election with respect to the ordinary shares.
If we are a PFIC for any taxable year during which you hold
ordinary shares, dividends paid by us to you that year and the following year
will not be eligible for the reduced rate of taxation applicable to
non-corporate U.S. holders, including individuals. Dividends that you receive
that do not constitute qualified dividend income are not eligible for taxation
at the 15% maximum rate applicable to qualified dividend income. Instead, you
must include the gross amount of any such dividend paid by us out of our current
or accumulated earnings and profits (as determined for U.S. federal income tax
purposes) in your gross income, and it will be subject to tax at rates
applicable to ordinary income. Additionally, you will be subject to special tax
rules with respect to any "excess distributions" that you receive and any gain
you realize from a sale or other disposition (including a pledge) of the
ordinary shares, unless a "mark-to-market" election is timely made, as discussed
below. Distributions you receive in a taxable year that are greater than 125% of
the average annual distributions you received during the shorter of the three
preceding taxable years or your holding period for the ordinary shares and any
gain from a sale or other disposition (including certain pledges) will generally
be treated as an excess distribution. Under these special tax rules:
the excess distribution will be allocated ratably over your holding period
  for the ordinary shares,
the amount allocated to the current taxable year, and any taxable year
  prior to the first taxable year in your holding period in which we became a
  PFIC, will be treated as ordinary income, and
the amount allocated to each other year will be subject to the highest
  applicable tax rate in effect for that year and the interest charge generally
  applicable to underpayments of tax will be imposed on the resulting tax
  attributable to each such year.
The tax liability for amounts allocated to years prior to the
year of disposition or "excess distribution" cannot be offset by any net
operating losses for such years, and gains (but not losses) realized on the sale
of the ordinary shares cannot be treated as capital gains, even if you hold the
ordinary shares as capital assets.
If we are a PFIC, you may be subject to the adverse tax
consequences described above with respect to the shares of any of our
subsidiaries that are also PFICs. You should consult your tax advisors regarding
the application of the PFIC rules to any of our subsidiaries.
If the Company is classified as a PFIC, a U.S. holder may
generally elect out of the treatment described above by making a timely
mark-to-market election if our ordinary shares meet certain regular trading
requirements. However, it should be noted that in such a case, because a
mark-to-market election cannot be made for equity interests in lower-tier PFICs
that we may be treated as owning, a U.S. holder may continue to be subject to
the PFIC rules with respect to its indirect interest in any investments held by
us that are treated as equity interests in a PFIC for U.S. federal income tax
purposes. U.S. holders should consult their tax advisors on the availability and
advisability of a mark-to-market election in the event that we are classified as
a PFIC. It should be noted that we do not currently intend to prepare or provide
the information that would enable you to make a "qualified electing fund"
election in the event that we were classified as a PFIC.
21
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. The
forward-looking statements are contained principally in the sections entitled
"Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and "Business". 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. These risks and uncertainties include, but are not
limited to, the factors described in the section captioned "Risk Factors"
above.
In some cases, you can identify forward-looking statements by
terms such as "anticipate," "believe," "could," "estimate," "expect," "intend,"
"may," "plan," "potential," "predict," "project," "should," "will," "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 anticipated growth strategies and our ability to manage the expansion
  of our business operations effectively;
our dependence on the growth of the real estate market in China and in the
  local areas in which we do business; and
our ability to maintain or increase our market share in the competitive
  markets in which we do business.
Also, forward-looking statements represent our estimates and
assumptions only as of the date of this prospectus. You should read this
prospectus and the documents that we reference in this prospectus, or that we
filed as exhibits to the registration statement of which this prospectus is a
part, 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.
22
USE OF PROCEEDS
We estimate that we will receive net proceeds from this offering
  of approximately $             million
  (approximately $             million
  if the underwriters exercise their overallotment option in full), based on the
  public offering price of $             ordinary
  share.
We intend to use the net proceeds from the offering for working
capital and general corporate purposes.
23
MARKET PRICE AND DIVIDENDS ON OUR COMMON EQUITY
AND
RELATED SHAREHOLDER MATTERS
Market Information
There currently is no market for our ordinary shares. We plan
to list our ordinary shares on the NASDAQ Global Market as soon as practicable.
However, we cannot assure you that we will be able to meet the initial listing
standards of the NASDAQ Global Market, or that we will be able to maintain any
such listing. Until our ordinary shares are listed on an exchange, we expect
that they would be eligible to be quoted on the over-the-counter bulletin board
maintained by the Financial Industry Regulatory Authority. In this venue,
however, an investor may find it difficult to obtain accurate quotations as to
the market value of our ordinary shares and trading of our ordinary shares may
be extremely sporadic. For example, several days may pass before any shares may
be traded. A more active market for our ordinary shares may never develop. In
addition, if we failed to meet the criteria set forth in SEC regulations,
various requirements would be imposed by law on broker-dealers who sell our
securities to persons other than established customers and accredited investors.
Consequently, such regulations may deter broker-dealers from recommending or
selling our ordinary shares, which may further affect its liquidity and could
make it more difficult for us to raise additional capital.
Holders
As of May 5, 2010 there were approximately 514 holders of
record of our ordinary shares. This number does not include shares held by
brokerage clearing houses, depositories or others in unregistered form.
Securities Authorized for Issuance Under Equity Compensation
Plans
We do not have in effect any compensation plans under which our
equity securities are authorized for issuance and we do not have any outstanding
stock options.
DIVIDEND POLICY
On December 10, 2008, our board of directors authorized a
special dividend to our shareholders of record of $166,075. Two of our
shareholders, Access America Fund, LP and Mid-Ocean Consulting Limited, did not
accept the dividend.
Other than this dividend, we have never declared or paid a cash
dividend. Any future decisions 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.
24
CAPITALIZATION
The following table sets forth our capitalization as of
December 25, 2009 (unaudited):
on a pro forma basis to give effect to our reverse acquisition of Leewell,
  pursuant to which we issued 29,235,000 ordinary shares to acquire 100% of the
  issued and outstanding capital stock of Leewell; and
on an adjusted basis to give effect to the receipt of estimated net
  proceeds of $         million from the sale of         ordinary shares in this offering at the
  assumed public offering price of $         per ordinary share, and after deducting
  estimated underwriting discounts and commissions and estimated expenses
  payable by us.
You should read this table in conjunction with the information
contained in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and our audited consolidated financial statements,
including the related notes, contained elsewhere in this prospectus.
As
      of December 25, 2009
Pro Forma,
Pro Forma
as Adjusted
(in thousands)
Cash and cash equivalents
$
2,284
$
Restricted Cash
1,642
Total Cash
3,926
$
Debt:
Short-term
      debt
$
2,719
$
Long-term debt (including
      current portion)
39,621
Total debt
$
42,340
$
Stockholders' equity:
Preference
      shares, $0.002112 par value, 20,000,000 shares authorized, none
      issued and outstanding
-
Ordinary shares, par value $0.002112 per share,
    authorized 100,000,000 shares, 30,235,062 shares issued and outstanding on a pro
      forma basis
(1)
, and shares issued and outstanding on a pro forma,
      as adjusted basis
(2)
$
64
$
Additional
      paid in capital
5,610
Appropriated
      retained earnings
10,299
Unappropriated
      retained earnings
71,327
Accumulated
      other comprehensive income
$
7,041
$
Total stockholders' equity
$
94,341
$
Total capitalization
$
136,681
$
_______________________________
(1) The number of our
ordinary shares shown above to be outstanding as of December 25, 2009 on a pro
forma basis is based on (i) 1,000,062 ordinary shares issued and outstanding as
of December 25, 2009 and (ii) 29,235,000 ordinary shares issued in connection
with the acquisition of Leewell on April 14, 2010.
(2) The number of our ordinary shares shown above to be
outstanding after this offering is based on (i) 1,000,062 ordinary shares issued
and outstanding as of December 25, 2009; (ii) 29,235,000 ordinary shares issued
in connection with the acquisition of Leewell on April 14, 2010;
(iii)            
ordinary shares to be issued in the public offering (excluding the underwriters'
over-allotment option of up
to                  
shares); and (iv) 765,000 ordinary shares issued in connection with the private
placement on April 14, 2010.
25
DILUTION
Our net tangible book value on December 25, 2009, on a pro
forma basis, was approximately $36.7 million, or $1.21 per ordinary share. For
the purpose of this prospectus, "Net
tangible book value" is total assets minus the sum of liabilities and intangible
assets on a pro forma basis. "Net tangible book value per share" is net tangible
book value divided by 30,235,062 ordinary shares issued and outstanding on a pro
forma basis on December 25, 2009.
After giving effect to the sale by us of         ordinary shares in
this offering at the assumed public offering price of $         per share and after
deducting the underwriting discounts and commissions and estimated expenses
related to this offering payable by us, our adjusted net tangible book value as
of December 25, 2009 would have been $         million, or $         per ordinary share. This
represents an immediate increase in net tangible book value of $         per share to
our existing stockholders and an immediate decrease in the net tangible book
value of $         per share to new investors. Dilution in the net tangible book value
per share to new investors represents the difference between the offering price
per share and the net tangible book value per ordinary share immediately after
this offering. The following table illustrates this per share dilution:
Assumed public offering price per share
$
Net tangible book value per share as of December 25, 2009
      on a pro forma basis
$
1.21
Increase in net tangible book value per
      share attributable to this offering
$
As adjusted net tangible book value per share as of
      December 25, 2009 after giving effect to this offering
$
Dilution per share to new investors in this
      offering
$
A $1.00 increase in the assumed public offering price of $         per
share would increase our adjusted net tangible book value per share after this
offering by $         per share and would increase the dilution per share to new
investors in this offering by $         per share, assuming that the number of shares
offered by us, as set forth on the cover page of this prospectus, remains the
same and after deducting the underwriting discounts and commissions and
estimated expenses related to this offering payable by us.
If the underwriters exercise their over-allotment option to
purchase up to         additional
ordinary shares  from us in full in this
offering at the assumed public offering price of $         per share, the adjusted net
tangible book value as of December 25, 2009 after giving effect to this offering
would increase to $         per share, and dilution per share to new investors in this
offering would be $         per share.
EXCHANGE RATE INFORMATION
Our business is primarily conducted in China, and the financial
records of our PRC subsidiaries are maintained in RMB, their functional
currency. However, we use the U.S. dollar as our reporting currency. The assets
and liabilities of our PRC subsidiaries are translated from RMB into U.S. dollar
at the exchange rates on the balance sheet date, shareholders' equity is
translated at the historical rates and the revenues and expenses are translated
at the weighted average exchange rate for the period. We make no representation
that any RMB or U.S. dollar amounts could have been, or could be, converted into
U.S. dollars or RMB, as the case may be, at any particular rate, or at all. The
PRC government imposes control over its foreign currency reserves in part
through direct regulation of the conversion of RMB into foreign exchange and
through restrictions on foreign trade. On April 30, 2010, the exchange rate was
¥ 6.8247 to $1.00.
The following table sets forth information concerning exchange
rates between the RMB and the U.S. dollar for the periods indicated.
26
Noon
        Buying Rate
(1)
Fiscal Year Ended December 25,
Year End
(2)
Weighted Average
(3)
(RMB per U.S. Dollar)
2005
8.0762
8.1840
2006
7.8153
7.9712
2007
7.3475
7.5936
2008
6.8355
6.9339
2009
6.8271
6.8301
2010
Through April 30, 2010
6.8247
6.8258
________________
(1) The exchange rates are based on the noon buying rate in the
city of New York for cable transfers of RMB as certified for customs purposes by
the Federal Reserve Bank of New York.
(2) All periods end December 25 of the
stated year.
(3) Weighted averages for a period are calculated by using the
average of the exchange rates on the end of each month during the period.
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected historical financial information should
be read in conjunction with our consolidated financial statements and related
notes and the information contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" below. The selected consolidated
statement of operations data and statement of cash flows data for the years
ended December 25, 2009, 2008, and 2007 and the selected balance sheet data as
of December 25, 2009 and 2008 are derived from the audited consolidated
financial statements of Leewell included elsewhere in this prospectus. The
selected consolidated financial data for the years ended December 25, 2006 and
2005 and the selected balance sheet data as of December 25, 2007, 2006 and 2005
are derived from the unaudited and unreviewed consolidated financial statements
of Leewell not included in this prospectus.
The audited consolidated financial statements of Leewell for
the fiscal years ended December 25, 2009, 2008, and 2007 are prepared and
presented in accordance with generally accepted accounting principles in the
United States, or U.S. GAAP. The selected financial data information is only a
summary and should be read in conjunction with the historical consolidated
financial statements and related notes of Leewell contained elsewhere herein.
The financial statements contained elsewhere fully represent our financial
condition and operations; however, they are not indicative of our future
performance.
27
U.S. dollars, except shares
Fiscal Year Ended December 25,
2009
2008
2007
2006
2005
Statements of Operations Data
(Unaudited)
(Unaudited)
Total sales
$
94,315,500
$
77,032,561
$
51,850,312
$
54,291,244
$
42,984,961
Total cost of sales
(58,296,408
)
(46,321,251
)
(36,243,778
)
(33,703,168
)
(32,983,932
)
Gross profit
36,019,092
30,711,310
15,606,534
20,588,076
10,001,029
Advertising expenses
(268,222
)
(112,263
)
(46,492
)
(47,051
)
(81,549
)
Commission expenses
(84,982
)
(574,262
)
(134,989
)
(789,497
)
(312,425
)
Selling expenses
(49,800
)
(81,415
)
(2,187
)
(6,192
)
(293
)
Bad debt expense
(207,523
)
(1,198,942
)
(245,243
)
(154,710
)
-
General and administrative
expenses
(4,655,596
)
(2,283,744
)
(807,589
)
(4,092,355
)
(3,212.,010
)
Income from operations
30,752,969
26,460,684
14,370,034
15,498,271
6,394,752
Gain on business acquisitions
(bargain purchase)
3,188,924
-
-
-
-
Miscellaneous income
327,294
91,945
10,280
16,022
(35,988
)
Interest expense
(866,751
)
(968,710
)
(70,963
)
(121,597
)
(173,311
)
Income before income taxes and
extraordinary item
33,402,436
25,583,919
14,309,351
15,392,696
6,185,453
Income taxes
(9,058,226
)
(6,602,194
)
(5,090,161
)
(5.130,644
)
(2,089,048
)
Income before extraordinary item
24,344,210
18,981,725
9,219,190
10,262,052
4,096,405
Extraordinary item, net
-
12,635,872
-
-
-
Net income
24,344,210
31,617,597
9,219,190
10,262,052
4.096.405
Foreign currency translation adjustment
475,907
3,488,440
2,107,856
687,566
281,009
Comprehensive income
$
24,820,117
$
35,106,037
$
11,327,046
$
10,949,618
$
4,377,414
Basic and diluted earnings per common share
Income before extraordinary
        item
$
0.24
$
0.19
$
921.92
$
1,026.21
$
409.64
Extraordinary item
-
0.12
-
-
-
Net income
$
0.24
$
0.31
$
921.92
$
1,026.21
$
409.64
Weighted average common
shares outstanding
102,566,690
102,566,690
10,000
10,000
10,000
Cash Flow Data
Net cash provided by (used in)
Operating Activities
$
11,250,820
$
61,015,081
$
1,212,951
$
(5,953,059
)
$
10,036,251
Investing Activities
234,814
(58,521,630
)
(13,689,661
)
(59,164
)
(14,539
)
Financing Activities
(9,866,408
)
(3,805,052
)
14,167,583
5,759,286
(13,067,679
)
Effect of exchange rate
changes
        on cash
6,573
16,518
9.891
(57,807
)
43,366
Net increase (decrease) in cash
$
1,625,799
$
(1,295,083
)
$
1,700,764
$
(310,744
)
$
(3,002,601
)
28
As of December 25
2009
2008
2007
2006
2005
Balance Sheet Data
Current assets
$
133,002,971
$
105,072,009
$
69,443,412
$
92,211,870
$
51,282,518
Long-term assets
63,329,872
73,576,346
18,379,376
2,499,929
2,603,803
Total assets
$
196,332,843
$
178,648,355
$
87,822,788
$
94,711,799
$
53,886,321
Current liabilities
$
88,795,899
$
86,240,752
$
59,977,634
$
57,741,400
$
34,446,872
Long-term liabilities
13,185,998
29,160,895
-
7.686,000
6,193,868
Total liabilities
101,981,897
115,401,647
59,977,634
65,427,400
40,640,740
Stockholders' equity
94,350,946
63,246,708
27,845,154
29,284,399
13,245,581
Total liabilities & stockholders'
        equity
$
196,332,843
$
178,648,355
$
87,822,788
$
94,711,799
$
53,886,321
Quarterly Financial Results
The following table presents our unaudited and unreviewed
quarterly consolidated statement of operations for the quarters presented. We
believe that the historical quarterly information has been prepared
substantially on the same basis as the audited consolidated financial
statements, and all necessary adjustments, consisting only of normal recurring
adjustments, have been included in the amounts below to state fairly the
unaudited quarterly results of operations data.
(All amounts in thousands of U.S. dollars; unaudited and
unreviewed)
Sep
Jun
Mar
Dec 25,
25,
Jun 25,
Mar 25,
Dec 25,
Sep 25,
25,
25,
2009
2009
2009
2009
2008
2008
2008
2008
Sales
$
54,106
$
9,266
$
10,848
$
16,821
$
46,046
$
13,273
$
17,006
$
707
Sales to related party
3,274
-
-
-
-
-
-
-
Total sales
57,380
9,266
10,848
16,821
46,046
13,273
17,006
707
Cost of sales
(35,266
)
(5,874
)
(6,144
)
(10,158
)
(27,177
)
(9,219
)
(9,657
)
(268
)
Cost of sales to
related party
(854
)
-
-
-
-
-
-
-
Total cost of sales
(36,120
)
(5,874
)
(6,144
)
(10,158
)
(27,177
)
(9,219
)
(9,657
)
(268
)
Gross profit
21,260
3,392
4,704
6,663
18,869
4,054
7,349
439
Advertising expenses
(16
)
(90
)
(4
)
(158
)
(79
)
(4
)
(7
)
(22
)
Commission expenses
-
-
(81
)
(4
)
(121
)
(45
)
(147
)
(261
)
Selling expenses
(19
)
(6
)
(16
)
(9
)
(50
)
(7
)
(14
)
(10
)
Bad debt expense
(207
)
-
-
(1,199
)
-
-
-
General and administrative expenses
(2,351
)
(956
)
(815
)
(534
)
(193
)
(1,031
)
(473
)
(587
)
Total operating expenses
(2,593
)
(1,052
)
(916
)
(705
)
(1,642
)
(1,087
)
(641
)
(880
)
Income from operations
18,667
2,340
3,788
5,958
17,227
2,967
6,708
(441
)
29
Sep
Jun
Mar
Dec 25,
25,
Jun 25,
Mar 25,
Dec 25,
Sep 25,
25,
25,
2009
2009
2009
2009
2008
2008
2008
2008
Gain on business acquisition (bargain purchase)
3,189
-
-
-
-
-
Miscellaneous income
152
(9
)
(7
)
191
(11
)
61
34
8
Interest expense
(34
)
(29
)
(340
)
(464
)
(247
)
(386
)
(235
)
(101
)
Income before income taxes and extraordinary items
21,974
2,302
3,441
5,685
16,969
2,642
6,507
(534
)
Income taxes – current & deferred
(9,058
)
-
-
-
(6,602
)
-
-
-
Income before extraordinary items
12,916
2,302
3,441
5,685
10,367
2,642
6,507
(534
)
Extraordinary items, net of income
      tax
-
-
-
-
12,636
-
-
-
Net income
$
12,916
$
2,302
$
3,441
$
5,685
$
23,003
$
2,642
$
6,507
$
(534
)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
We are one of the leading real estate development companies
located in Qingdao, Shandong province, China. In 2008, we were recognized in the
Qingdao Construction Committee's evaluation as one of the top ten real estate
developers in Qingdao, measured by a combination of revenue, customer
satisfaction, and several other factors.
Through our Chinese subsidiaries, we develop and sell
residential and commercial properties, targeting middle and upper income
customers in the coastal region of the Shandong peninsula (Greater Qingdao)
located in northeastern China, including the cities of Qingdao, Weihai, and
Yantai, as well as other inland locations, including Weifang.
Since our inception, we have completed 15 projects having a GFA
of 1,191,722 square meters, of which more than 91.8% has been sold. In addition,
we have seven projects under construction with a total GFA of 735,274 square
meters.
In fiscal year 2009, our total sales increased 22.4% to $94.3
million from $77.0 million in fiscal year 2008. Our gross profit increased 17.3%
to $36.0 million in fiscal year 2009 from $30.7 million in fiscal year 2008,
while our net income before extraordinary item increased 27.9% to $24.3 million
in fiscal year 2009 from $19.0 million in fiscal year 2008.
Our mission is to provide high-quality, comfortable, and
convenient living space to middle and upper income customers, primarily in
Shandong Province and in other provinces in China, while also earning for our
shareholders an internal rate of return that exceeds our cost of capital. We
expect to increase our market share through aggressive internal growth and
prudent acquisitions in Shandong Province and in other provinces in China. Our
goal is to be one of the top two real estate developers in Greater Qingdao in
the next five years by capturing and exploiting the growth opportunities in
Shandong Province and by providing the most desirable coastal and inland
apartments to middle and upper income customers, as well as by increasing our
development of commercial properties.
30
Recent Developments
Reverse Acquisition of Leewell
On April 14, 2010, we completed a reverse acquisition
transaction through a share exchange with Leewell whereby we acquired 100% of
the issued and outstanding capital stock of Leewell, in exchange for 29,235,000
ordinary shares, par value $0.002112 per share, which shares constituted 94.31%
of our issued and outstanding shares on a fully-diluted basis, as of and
immediately after the consummation of the reverse acquisition. As a result of
the reverse acquisition, Leewell became our wholly-owned subsidiary and Longhai
Holdings, the former shareholder of Leewell, became our controlling shareholder.
The share exchange transaction with Leewell was treated as a reverse acquisition
for accounting purposes, with Leewell as the acquirer and Dragon Acquisition as
the acquired party. Unless the context suggests otherwise, when we refer in this
prospectus 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 Leewell and its consolidated subsidiaries.
Upon the closing of the reverse acquisition on April 14, 2010,
Mr. David Richardson resigned from our board of directors, effective
immediately, and Mr. Joseph Rozelle submitted a resignation letter in which he
resigned from all offices that he held effective immediately and from his
position as our director effective on May 1, 2010.
Also upon the closing of the reverse acquisition, our board of
directors increased its size from two (2) to three (3) members and appointed Mr.
Antoine Cheng, Mr. Weiqing Zhang, and Mr. Zhongbo Zhou to fill the vacancies
created by the resignations of Messrs. Richardson and Rozelle and such increase.
Mr. Cheng's appointment became effective upon closing of the reverse acquisition
on April 14, 2010, while appointments of Messrs. Zhang and Zhou became effective
on May 1, 2010. In addition, our board of directors appointed Mr. Antoine Cheng
to serve as the Chairman of the Board, Mr. Weiqing Zhang to serve as our Chief
Executive Officer and President, and Mr. Yang Chen to serve as our Chief
Financial Officer and Vice President, effective immediately at the closing of
the reverse acquisition.
As a result of our acquisition of Leewell, we now own all of
the issued and outstanding capital stock of Leewell, which in turn owns Oumei
and its Chinese subsidiaries. Leewell was established in Hong Kong on August 10,
2007 to serve as an investment holding company. Oumei was established in the PRC
on May 15, 2001. Its principal activities include the development and sales of
residential and commercial properties in Qingdao and other cities in Shandong
Province, China, which we also refer to as Greater Qingdao.
On September 20, 2007, Leewell acquired 100% of the equity
interests in Oumei from its shareholders, including Mr. Weiqing Zhang, Oumei's
Chief Executive Officer and President, for RMB 97,010,000 (approximately $13.1
million). In October 2007, the acquisition was approved by the appropriate
Chinese authorities, and Oumei's status changed from a Chinese domestic company
to a wholly-owned foreign enterprise.
Oumei has three branch offices, located in Jimo, Pingdu, and
Laixi, and has purchased the following nine Chinese subsidiaries:
Weihai Mingwei, purchased on January 19, 2008 for RMB 110,000,000
  (approximately $15 million);
Longhai Hotel, purchased on January 22, 2008 for RMB 110,000,000
  (approximately $15 million);
Weihai Economic, purchased on January 23, 2008 for RMB 140,000,000
  (approximately $19 million);
Qingdao Xudong, purchased on January 24, 2008 for RMB 60,000,000
  (approximately $8.3 million);
Weifang Longhai Industry, purchased on August 27, 2008 for RMB 30,000,000
  (approximately $4.4 million);
Weifang Longhai Zhiye, purchased on August 28, 2008 for RMB 30,000,000
  (approximately $4.4 million);
Weifang Qilu, purchased on August 29, 2008 for RMB 40,000,000
  (approximately $5.8 million);
Caoxian Industrial, purchased on June 25, 2009 for RMB 15,000,000
  (approximately $2.2 million); and
Longhai Real Estate, purchased on September 25, 2009 for RMB 20,000,000
  (approximately $2.9 million).
As a result of our reverse acquisition of Leewell, we have
assumed the business and operations of Leewell and its Chinese subsidiaries. We plan to change our name to "China
Oumei Real Estate Inc." to more accurately reflect our new business operations.
31
Financing Transaction
On April 14, 2010, we also completed a private placement
transaction with a group of accredited investors. Pursuant to the Subscription
Agreement with the investors, we issued to the investors an aggregate of
2,774,700 Units for a purchase price of $11,098,800, or $4.00 per Unit. Each
Unit consists of one Preference Share and one Warrant to purchase 0.5 ordinary
shares. The Warrants have a term of 5 years, bear an exercise price of $6.00 per
share (subject to customary adjustments), are exercisable on a net exercise or
cashless basis and are exercisable by investors at any time after the closing
date. See "Description of Securities – Preference Shares" below for a
description of our Preference Shares.
Pursuant to the Subscription Agreement, we are obligated to
file a registration statement covering the resale of the ordinary shares
underlying the Preference Shares and the Warrants no later than thirty (30) days
following the closing date and shall use our best efforts to cause the
registration statement to be declared effective under the Securities Act as
promptly as possible, but in no event later than 180 days following the closing
date. If we do not timely file the required registration statement, or if it is
not declared effective by the SEC in a timely manner, then we are obligated to
pay to each investor a liquidated damages fee of 1% of such investor's
investment per month, for up to a maximum of 10% of each investor's investment
pursuant to the Subscription Agreement, except that we will not be obligated to
pay any such fee if we are unable to fulfill our registration obligations as a
result of rules, regulations, positions or releases issued or actions taken by
the SEC with respect to Rule 415 of the Securities Act, so long as we register
at such time the maximum number of securities permissible by the SEC.
In connection with the private placement, we entered into the
Make Good Escrow Agreement with Longhai Holdings, our controlling shareholder,
Collateral Agents, LLC, the escrow agent, and Access America Investments, LLC,
as representative of the investors, pursuant to which the parties agreed to
certain "make good" provisions in the event that we do not meet certain
financial performance thresholds for fiscal years 2010 and 2011. Pursuant to the
Make Good Escrow Agreement, the parties agreed to the establishment of an escrow
account and Longhai Holdings delivered into escrow certificates evidencing
7,500,000 ordinary shares held by it, to be held for the benefit of the
investors. Under the Make Good Escrow Agreement, we established minimum after
tax net income thresholds (as determined in accordance with GAAP and excluding
any non-cash expenses and one-time expenses related to the reverse acquisition
of Leewell and the private placement transaction) of $40 million for fiscal year
2010 and $60 million for fiscal year 2011 and minimum earnings per share
thresholds (calculated on a fully diluted basis and including adjustment for any
stock splits, stock combinations, stock dividends or similar transactions, and
for shares issued in one public offering or pursuant to the exercise of any
warrants, options, or other securities issued during or prior to the calculation
period) of $1.13 for fiscal year 2010 and $1.70 for fiscal year 2011. If our
after tax net income or earnings per share for either fiscal year 2010 or fiscal
year 2011 is less than 90% of the applicable performance threshold, then the
performance threshold will be deemed not to have been achieved, and the
investors will be entitled to receive ordinary shares based upon a pre-defined
formula agreed to between the parties. The parties agreed that, for purposes of
determining whether or not any of the performance thresholds is met, the release
of any of the escrowed shares and any related expense recorded under GAAP shall
not be deemed to be an expense, charge, or any other deduction from revenues
even if GAAP requires contrary treatment or the annual report for the respective
fiscal years filed with the SEC by the Company may report otherwise.
Also in connection with the private placement, we entered into
the Holdback Escrow Agreement with Collateral Agents, LLC, the escrow agent,
Brean Murray, Carret & Co., LLC, the placement agent, and Access America
Investments, LLC, as representative of the investors, pursuant to which
$2,219,760 was deposited with the escrow agent to be distributed upon the
satisfaction of certain covenants set forth in the Subscription Agreement.
Pursuant to the Holdback Escrow Agreement, $1,109,880 will be released to the
Company upon our satisfaction of a covenant regarding the composition of our
board of directors and $1,109,880 will be released to the Company upon our
satisfaction of a covenant regarding the hiring of a chief financial officer
meeting the requirements specified in the Subscription Agreement. Pursuant to
the Holdback Escrow Agreement, an additional $1,000,000 was deposited with the
escrow agent to be released to us in incremental amounts to pay for fees and
expenses relating to our obligations as a public company.
We also entered into the IR Escrow Agreement with Collateral
Agents, LLC, the escrow agent, Brean Murray, Carret & Co., LLC, the
placement agent, and Access America Investments, LLC, as representative of the
investors, pursuant to which $120,000 was deposited with the escrow agent to be
distributed in incremental amounts to pay our investor relations firm, the
choice of which is subject to the placement agent's approval.
32
In connection with the private placement, we also entered into
a Lockup Agreement with Longhai Holdings and each of our directors and officers,
pursuant to which each of them agreed not to transfer any of our capital stock
held directly or indirectly by them for an eighteen-month period following the
closing of the private placement.
Principal Factors Affecting Our Financial Performance
Our operating results are primarily affected by the following
  factors:
Growth in the Chinese economy
. We operate in China and derive
  almost all of our revenues from sales to customers in China. Economic
  conditions in China, therefore, affect virtually all aspects of our
  operations, including the demand for our properties, the availability and
  prices of our raw materials, and our other expenses. China has experienced
  significant economic growth, achieving a compound annual growth rate of more
  than 10% in gross domestic product from 1996 through 2008. China is expected
  to experience continued growth in all areas of investment and consumption.
  However, if the global economic recession were to become more protracted,
  China's growth might be somewhat more modest, since China has not been
  entirely immune to the global economic slowdown and has been experiencing a
  slowing in its growth rate.
Growth of the Chinese real estate market and the local markets in
  which our properties are sold
. China's real estate bull market began
  more than six years ago. According to the National Bureau of Statistics of
  China, the total GFA of residential and commercial properties sold increased
  from 224.1 million square meters in 2001 to 937.1 million square meters in
  2009, a compound annual growth rate of 19.6%. Qingdao's real estate market has
  also experienced strong growth since 2001. According to the Qingdao Statistics
  Yearbooks 2004-2008 and the Qingdao Municipal Bureau of Statistics, the
  compound annual growth rate, or CAGR, in Qingdao from 2003 to 2008 for GFA
  completed was 4.1%, the CAGR for GFA sold was 11.2%, and the CAGR for the
  average prices of properties in Qingdao was 16.6%. Weihai's real estate market
  has seen similar increases. According to the Weihai Statistics Yearbooks
  2004-2008 and the Qingdao Municipal Bureau of Statistics, the CAGR from 2003
  to 2008 of GFA completed was 12.8%, for the GFA sold was 18.5%, and for
  average prices of properties in Weihai was 12.4%. Despite moderations in
  growth caused by the current global economic weakness in 2008 and 2009, we
  believe the structural forces in China and in the markets in which we sell our
  properties support continuing good demand for real estate during the next 10
  years, however there can be no assurance that current trends will continue.
China's Economic Stimulus Programs
.
In response to the
  global financial and economic crisis, the Chinese government announced a RMB 4
  trillion stimulus program on November 27, 2008. Within the RMB 4 trillion
  package, about RMB 400 billion will go toward civil works, including
  low-income housing and renovation, which we believe will benefit the Shandong
  Province. Two additional categories (technology advances and industry
  restructuring, which together will be allocated RMB 370 billion, and
  infrastructure, which will be allocated RMB 1.5 trillion) are also expected to
  benefit industries in Qingdao, Weihai, Weifang, and the entire Shandong
  Province. On February 26, 2009, China's State Council reinforced China's 2008
  stimulus package by further measures to stimulate specific industries in 2009.
  The industries included automobile, iron and steel, textiles, equipment
  manufacturing, shipbuilding, electronics and information technology,
  petrochemicals, light industries, nonferrous metals, and logistics. We believe
  China's RMB 4 trillion stimulus package and its further efforts focused on 10
  industries will improve Greater Qingdao's economy, further strengthen the
  region's long-term competitive ability, and support the demand for middle and
  upper income housing, as well as the need for better commercial and office
  space, and a few world-class hotels. However, although individuals and
  governments around the world hope that government stimulus efforts are
  starting to have the desired effects, the true benefits of these and perhaps
  additional stimulus efforts by local, provincial, and national governments in
  China, as well as by other countries, is not yet assured, since the
  sustainability of the global economic recovery is yet to be proven.
Public and government reaction to a possible over-stimulated real
  estate market.
China's National People's Congress, or NPC, the
  nation's body that creates legally binding motions and laws, and the Chinese
  People's Political Consultative Conference, or CPPCC, the nation's top
  advisory (but not legally binding) body consisting of representatives from all
  regions and most walks of life in China, both met in early March 2010 in
  Beijing. On the agenda of the NPC and the CPPCC were subjects that included
  the real estate market, property prices, low-income housing,
mortgage controls, the rise in housing prices beyond affordability for some
people, the allocation of land for housing and commercial development, and the
current taxation system as it influences housing and private sector incentives
to develop affordable housing. The influence of these discussions on the
nation's real estate market and the effect on our business, if any, is not yet
known.
33
Taxation
Cayman Islands
The Government of the Cayman Islands does not, under existing
legislation, impose any income, corporate or capital gains tax, estate duty,
inheritance tax, gift tax or withholding tax upon us or our shareholders. The
Cayman Islands are not party to a double tax treaty with any country that is
applicable to any payments made to or by us.
We have received an undertaking from the Governor-in-Cabinet
  of the Cayman Islands that, in accordance with section 6 of the Tax Concessions
  Law (1999 Revision) of the Cayman Islands, for a period of 20 years from April
  2006 no law which is enacted in the Cayman Islands imposing any tax to be levied
  on profits, income, gains or appreciations shall apply to us or our operations
  and, in addition, that no tax to be levied on profits, income, gains or appreciations
  or which is in the nature of estate duty or inheritance tax shall be payable
  (i) on or in respect of our shares, debentures or other obligations or (ii)
  by way of the withholding in whole or in part of a payment of dividend or other
  distribution of income or capital by us to our shareholders or a payment of
  principal or interest or other sums by us due under a debenture or other obligation.
Hong Kong
Our indirect subsidiary, Leewell, was incorporated in Hong Kong
and under the current laws of Hong Kong, is subject to Profits Tax of 16.5% . No
provision for Hong Kong Profits Tax has been made as Leewell has no taxable
income.
China
Before the implementation of the New EIT Law, FIEs established
in the PRC, unless granted preferential tax treatments by the PRC government,
were generally subject to an earned income tax, or EIT, rate of 33.0%, which
included a 30.0% state income tax and a 3.0% local income tax. On March 16,
2007, the National People's Congress of China passed the New EIT Law, and on
November 28, 2007, the State Council of China passed the EIT Law Implementing
Rules which took effect on January 1, 2008. The EIT Law and its implementing
rules impose a unified EIT of 25.0% on all domestic-invested enterprises and
FIEs, unless they qualify under certain limited exceptions.
In addition to the changes to the current tax structure, under
the New 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
New Enterprise Income Tax 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 shareholders."
In addition, the New 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.
Oumei is considered an FIE and is directly held by our subsidiary in Hong Kong.
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 Leewell by Oumei, but this treatment will depend on our status
as a non-resident enterprise.
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.
34
Results of Operations
Year Ended December 25, 2009 Compared With Year Ended
December 25, 2008
The following table shows key components of our results of
operations during the fiscal years ended December 25, 2009 and 2008, in both
dollars and as a percentage of our total sales.
Fiscal Year Ended
Fiscal Year Ended
U.S. dollars, except percentages
December 25, 2009
December 25, 2008
Percent of
Percent of
Dollars
Total Sales
Dollars
Total Sales
Sales
$
91,041,042
96.5%
$
77,032,561
100.0%
Sales to related party
3,274,458
3.5%
-
-
Total sales
94,315,500
100.0%
77,032,561
100.0%
Cost of sales
(57,442,457
)
(60.9)%
(46,321,251
)
(60.1)%
Cost of sales to related party
(853,951
)
(0.9)%
-
-
Total cost of sales
(58,296,407
)
(61.8)%
(46,321,251
)
(60.1)%
Gross profit
36,019,092
38.2%
30,711,310
39.9%
Advertising expenses
(268,222
)
(0.3)%
(112,263
)
(0.1)%
Commission expenses
(84,982
)
(0.1)%
(574,262
)
(0.7)%
Selling expenses
(49,800
)
(0.1)%
(81,415
)
(0.1)%
Bad debt expense
(207,523
)
(0.2)%
(1,198,942
)
(1.6)%
General and administrative expenses
(4,655,596
)
(4.9)%
(2,283,744
)
(3.0)%
Income from operations
30,752,970
32.6%
26,460,684
34.4%
Gain on business acquisitions (bargain purchase)
3,188,924
3.4%
-
-
Miscellaneous income
327,294
0.3%
91,945
0.1%
Interest expense
(866,751
)
(0.9)%
(968,710
)
(1.3)%
Income before income taxes and extraordinary items
33,402,436
35.4%
25,583,919
33.2%
Income taxes
(9,058,226
)
(9.6)%
(6,602,194
)
(8.6)%
Income before extraordinary items
24,344,210
25.8%
18,981,725
24.6%
Extraordinary items, net
-
-
12,635,872
16.4%
Net income
24,344,210
25.8%
31,617,597
41.0%
Foreign currency translation adjustment
475,907
0.5%
3,488,440
4.6%
Comprehensive income
$
24,820,117
26.3%
$
35,106,037
45.6%
Sales
. Our total sales increased 22.4% to $94.3
million in the fiscal year ended December 25, 2009 from $77.0 million in the
fiscal year ended December 25, 2008, mainly due to sales related to the
acquisition of two project development companies, the completion and sales of
the Xingfu Renjia project phase 1 and the Fuxiang Huayuan project phase 2, in
addition to a higher average selling price per square meter for both residential
and commercial properties delivered in fiscal year 2009 compared with fiscal
year 2008. Effective December 26, 2008, we adopted the percentage of completion
method of accounting for revenue recognition for all building construction
projects in progress in which the construction period was expected to be more
than 12 months at that date. The full accrual method was used before that date
for all of our residential and commercial projects. We changed to the percentage
of completion method for contracts longer than one year because this method more
accurately reflects how revenue is earned on these contracts, particularly for
interim reporting purposes. ASC 250 requires retrospective application of a
change in accounting principle unless impracticable. The change to the
percentage of completion method had no effect on our December 25, 2008 financial
statements and we found it was impracticable to determine the effect on the
December 25, 2007 financial statements as no progress reports detailing the
percentage of completion of our contracts were prepared for that year.
35
Cost of sales
. Our total cost of sales increased
25.9% to $58.3 million in the fiscal year 2009 from $46.3 million in the fiscal
year 2008, mainly in support of the increase in sales, plus higher costs in
constructing high rise tower office buildings in fiscal year 2009, which are
more expensive to construct than the low rise buildings completed in fiscal year
2008.
Gross profit and gross profit margin
. Our gross
profit increased 17.3% to $36.0 million in the fiscal year 2009 from $30.7
million in the fiscal year 2008. The gross profit margin (gross profit as a
percentage of total sales) was 38.2% for the fiscal year 2009 and 39.9% for the
fiscal year 2008. The decline in the gross margin was primarily due to the
Fuxiang Garden Phase 2 and the Xingfu Renjia Phase 1 projects, both of which had
lower than average selling prices. Additionally, the costs of construction of
high rise office tower buildings in fiscal year 2009 are relatively higher than
the projects sold in fiscal year 2008.
Advertising expenses
. Advertising expenses
increased 138.9% to $0.3 million in the fiscal year 2009 from $0.1 million in
the fiscal year 2008, mainly due to our increased advertising efforts to create
buyer awareness and interest in our newly available properties at our Qilu
Textile Center and Weihai Longhai International Plaza projects, as well as in
our Xingfu Renjia residential project.
39
Commission expenses
.
Commissions
paid to independent sales agents decreased 85.2% between fiscal year 2009 and
fiscal year 2008 since we used temporary independent sales agents to maximize
our pre-sales in the first phase of sales for residential and commercial
properties in 2008. In 2009, we did not rely as heavily on these temporary sales
agents.
Selling expenses
. Our selling expenses decreased
38.8% to $0.05 million in the fiscal year 2009 from $0.08 million in the fiscal
year 2008, mainly due to the absence in 2009 of the sales and marketing
materials purchased for the intense selling effort in the first phase of
pre-sales for residential and commercial properties in 2008.
Bad debt expense
. Our bad debt expense declined
82.7% in fiscal year 2009 from fiscal year 2008, primarily due to the write back
of an allowance against other receivables which was recorded in 2008. This was
partially offset by an additional provision for doubtful accounts receivable
made in accordance with the Company's bad debt allowance policy.
General and administrative expenses
. General and
administrative expenses increased 103.9% in fiscal year 2009 from fiscal year
2008, primarily due to the increase in Land Appreciation Tax and the expenses
incurred in anticipation of the reverse acquisition transaction with Leewell and
related private placement.
Gain on business acquisitions (bargain
purchases)
. In fiscal year 2009, a new accounting standard issued by the
Financial Accounting Standards Board revised the recognition and presentation of
gains on acquisitions in the statement of operations. Any such gains are no
longer considered extraordinary items. The gain on business acquisitions
(bargain purchase) of $3.2 million in 2009 represents the difference between the
amounts paid for two companies and their market values. Please see Note 2 to the
consolidated Financial Statements for further details.
Interest expense
. Interest expense decreased
10.5% to $0.9 million in the fiscal year 2009 from $1.0 million in fiscal year
2008, primarily due to lower average borrowings in 2009.
Income taxes
. Income taxes increased 37.2% to
$9.1 million in the fiscal year 2009 from $6.6 million in the fiscal year 2008,
mainly due to higher income before taxes. Please see "Taxation" above for more
information.
Income before extraordinary items
. Income before
extraordinary items was up 28.3% to $24.3 million in the fiscal year 2009
compared with $19.0 million in 2008, as a result of the factors described above.
Extraordinary items, net
.
In fiscal
year 2008, we acquired four project companies (Qingdao Xudong, Weifang Longhai
Industry, Weifang Longhai Zhiye and Weifang Qilu) and recorded a gain of $12.6
million as an extraordinary item, based on the differences between our purchase
prices and the estimated fair market values of the acquisitions.
Net income
. Net income decreased 23.0% to $24.3
million in fiscal year 2009 from $31.6 million in 2008, primarily due the
absence in fiscal year 2009 of a gain from extraordinary items that occurred in
fiscal year 2008, and due to higher income taxes in 2009.
Year Ended December 25, 2008 Compared With Year Ended December
  25, 2007
The following table shows key components of our results of
operations during the fiscal years ended December 25, 2008 and 2007, both in
dollars and as a percentage of our total sales.
40
Fiscal Year Ended
Fiscal Year Ended
U.S. dollars, except percentages
December
      25, 2008
December
      25, 2007
Percent of
Percent of
Dollars
Total Sales
Dollars
Total Sales
Total sales
$
77,032,561
100.0%
$
51,850,312
100.0%
Cost of total sales
(46,321,251
)
(60.1)%
(36,243,778
)
(69.9)%
Gross profit
30,711,310
39.9%
15,606,534
30.1%
Advertising expenses
(112,263
)
(0.1)%
(46,492
)
(0.0)%
Commission expenses
(574,262
)
(0.7)%
(134,989
)
(0.3)%
Selling expenses
(81,415
)
(0.1)%
(2,187
)
(0.0)%
Bad debt expense
(1,198,942
)
(1.6)%
(245,243
)
(0.5)%
General and administrative expenses
(2,283,744
)
(3.0)%
(807,589
)
(1.6)%
Income from operations
26,460,684
34.4%
14,370,034
27.7%
Miscellaneous income
91,945
0.1%
10,280
0.0%
Interest expense
(968,710
)
(1.3)%
(70,963
)
(0.1)%
Income before income taxes and extraordinary items
25,583,919
33.2%
14,309,351
27.6%
Income taxes
(6,602,194
)
(8.6)%
(5,090,161
)
(9.8)%
Income before extraordinary items
18,981,725
24.6%
9,219,190
17.8%
Extraordinary items, net
12,635,872
16.4%
-
-
Net income
31,617,597
41.0%
9,219,190
17.8%
Foreign currency translation adjustment
3,488,440
4.6%
2,107,856
4.0%
Comprehensive income
$
35,106,037
45.6%
$
11,327,046
21.8%
Sales
. Total sales increased 48.6% to $77.0
million in the fiscal year 2008 from $51.9 million in the fiscal year 2007. The
increase in sales was mainly due to the inclusion of seven project companies
acquired as subsidiaries in 2008, which were not part of the company in 2007.
Our internal growth, excluding the acquisitions in 2008, also contributed to the
sales increase, mainly due to the completion of project buildings, as we
expanded our operations into a wider geographic market.
Cost of sales
. Total cost of sales increased
27.8% to $46.3 million in fiscal year 2008 from $36.2 million in fiscal year
2007, in support of the higher sales.
Gross profit and gross profit margin
. Gross
profit increased 96.8% to $30.7 million in fiscal year 2008 from $15.6 million
in fiscal year 2007. The gross profit margin (gross profit as a percent of total
sales) was 39.9% in 2008 compared with 30.1% in 2007, mainly due to a higher
portion of sales in 2008 that were in higher-margin commercial and residential
projects, compared with the lower-margin residential and commercial buildings
completed in 2007. We also had higher selling prices in 2008 compared to 2007.
Advertising expenses
. Advertising expenses
increased 141.5% to $0.1 million in 2008 from $0.05 million in 2007, mainly due
to an aggressive marketing campaign to attract potential customers at the start
of the pre-sales periods.
Commissions
.
Commissions paid to
independent professional sales representatives increased 325.4% to $0.6 million
in the fiscal year 2008 from $0.1 million in the fiscal year 2007, due to the
temporary use of independent sales representatives needed to grow sales rapidly
in the beginning phase of the pre-sales of apartments in our buildings, which
helps to create the sales momentum so that most apartments in the buildings will
be sold as construction progresses.
Selling expenses
. Our selling expenses increased
3,622.7% to $0.081 million in the fiscal year 2008 from $0.002 million in the
fiscal year 2007, mainly due to a much greater effort to create pre-sales. Eight
of our companies, including seven subsidiaries, were in the selling phase of
construction in 2008, compared with only one company in 2007.
41
Bad debt expense
. Our bad debt expense increased
388.9% in the fiscal year 2008 to $1.2 million from $0.2 million in the fiscal
year 2007, primarily due to an expense of approximately $0.6 million for other
receivables and an additional allowance for doubtful accounts receivable of
approximately $0.6 million in accordance with the Company's policy.
General and administrative expenses
. General and
administrative expenses increased 182.8% to $2.3 million in the fiscal year 2008
from $0.8 million in the fiscal year 2007, mainly due to the expansion of our
operations by way of the acquisition of seven companies in 2008.
Interest expense
. Interest expense increased
1,265.1% to $0.9 million in the fiscal year 2008 from $0.07 million in the
fiscal year 2007, primarily due to higher average borrowings in 2008 compared
with 2007. The consolidation of the seven subsidiaries acquired in 2008, with
most having some amount of debt, was the primary cause of the higher interest
expense in 2008.
Income taxes
. Income taxes increased 29.7% to
$6.6 million in the fiscal year 2008 from $5.1 million in the fiscal year 2007,
mainly due to higher income before taxes.
Income before extraordinary items, net
.
Income before extraordinary items was up 105.9% to $19.0 million in the
fiscal year 2008 compared with $9.2 million in the fiscal year 2007, as a result
of the factors described above.
Extraordinary items, net
.
In fiscal
year 2008, we acquired four project companies (Qingdao Xudong, Weifang Longhai
Industry, Weifang Longhai Zhiye and Weifang Qilu) and recorded a gain of $12.6
million as an extraordinary item, based on the differences between our purchase
prices and the estimated fair market values of the acquisitions. There were no
extraordinary items in fiscal year 2007.
Net Income
. Net income increased 243.0% to $31.6
  million in fiscal year 2008 from $9.2 million in fiscal year 2007, primarily
  due higher sales and operating income, and the gain from extraordinary items
  in 2008, partly offset by higher interest expense, and a lower income tax rate.
Liquidity and Capital Resources
As of December 25, 2009, we had cash and cash equivalents of
$2.3 million. The following table provides a summary of our net cash flows from
operating, investing, and financing activities. To date, we have financed our
operations primarily through net cash flow from operations, augmented by
short-term bank borrowings and equity contributions by our shareholders.
U.S. Dollars
Year
      Ended December 25
,
2009
2008
2007
Net cash provided by operating activities
$
11,250,820
$
61,015,081
$
1,212,951
Net cash provided by (used in) investing activities
234,814
(58,521,630
)
(13,689,661
)
Net cash provided by (used in) financing activities
(9,866,408
)
(3,805,052
)
14,167,583
Effects of exchange rate change in cash
6,573
16,518
9,891
Net increase (decrease) in cash and cash equivalents
1,625,799
(1,295,083
)
1,700,764
Cash and cash equivalents at beginning of the year
638,639
1,933,722
232,958
Cash and cash equivalent at end of the year
$
2,264,438
638,639
$
1,933,722
Net cash flow from operating activities
In accordance with Accounting Standards Codification, or ASC,
  230,
Statement of Cash Flows
, cash flows from our operations are calculated
  based upon the local currencies. As a result, amounts related to assets and
  liabilities reported on the statement of cash flows will not necessarily agree
  with changes in the corresponding balances on the balance sheet.
Net cash provided by operating activities was $11.3 million in
the fiscal year 2009, compared with $61.0 million provided by operating
activities in the fiscal year 2008. Net income after adjustment for noncash
items was $30.3 million in the fiscal year 2009. This increase was augmented by
a reduction in inventories of $24.6 million, related party receivables collected
of $7.3 million, expenditures made in previous years but expensed in the fiscal
year 2009 of $2.3 million, and an increase in taxes incurred but not paid of
$3.8 million. This total increase of $68.3 million was offset by a decrease in deposits received from customers of
$38.0 million, income recognized of $10.7 million but either not billed or
received in cash, and payments for accounts payable of $9.3 million.
42
Net cash provided by operating activities was $61.0 million in
the fiscal year 2008 compared with $1.2 million in the fiscal year 2007. Net
income after adjustment for noncash items was $21.7 million in the fiscal year
2008. This increase was augmented by a net collection from related parties of
$58.5 million, a decrease in inventories of $26.0 million, an increase in taxes
incurred but not paid of $9.9 million, collection of other receivables of $4.7
million, and collection of contracts receivable of $1.6 million. This total
increase of $122.4 million was offset by a decrease in deposits received from
customers of $56.5 million, expenditures made but not expensed in the fiscal
year 2008 of $1.7 million, and payments for accounts payable of $1.3
million.
Net cash flow from investing activities
Net cash provided by investing activities in the fiscal year
2009 was $0.2 million, compared with $58.5 million net cash used in investing
activities in the fiscal year 2008. The increase was mainly due to the absence
in the fiscal year 2009 of the purchase of four subsidiaries acquired in the
fiscal year 2008.
Net cash used in investing activities in the fiscal year 2008
was $58.5 million, compared with $13.7 million used in the fiscal year 2007. The
increase in the net cash used in investing activities was mainly due to
acquisition of four subsidiaries in the fiscal year 2008.
Net cash flow from financing activities
Net cash used in financing activities in the fiscal year 2009
was $9.9 million, compared with $3.8 net cash used in financing activities in
the fiscal year 2008. The increase was mainly due to repayments of long-term
borrowings in the fiscal year 2009, partly offset by proceeds received from
long-term borrowings in 2009.
Net cash used in financing activities in the fiscal year 2008
was $3.8 million, compared with $14.2 million of net cash provided by financing
activities in the fiscal year 2007. The decrease was mainly due to a net
reduction in short-term borrowing in 2008 and a net increase in short-term
borrowing in 2007.
As of December 25, 2009, the amount, maturity date and term of
each of our bank loans were as follows:
Bank
Amount outstanding as of
      December 25, 2009
Maturity Date
Duration
Rural Credit Cooperatives
Fangzi Branch
RMB 15,309,428
      (approximately $2,247,424)
Jan 13, 2011
1 year
China Agricultural Bank Jimo
Branch
RMB 2,203,982 (approximately
      $323,545)
January, 2013
10 years
China Agricultural Bank Laixi
Branch
RMB 1,011,330
      (approximately $148,463)
November 2015
10 years
China Construction Bank
Caoxian Branch
RMB 35,000,000 (approximately
      $5,138,000)
May 27, 2010
1 year, 7 months
China Industry and Commercial
Bank Chengyang Branch
RMB 200,000,000
      (approximately $29,360,000)
May 2010
3 years
China Construction Bank
Weihai Branch
RMB 30,000,000 (approximately
      $4,404,000)
December 2011
2 years
China Construction Bank
Gaomi Branch
RMB 4,900,000
      (approximately $719,320)
February, 2010
3 years
TOTAL
RMB 288,424,740 (approximately
      $42,340,752)
We believe that our currently available working capital,
including the aggregate proceeds of our capital raising activities and the
credit facilities referred to above, should be adequate to sustain our
operations at our current levels through at least the next twelve months. We
may, however, in the future, require additional cash resources due to changed
business conditions, implementation of our strategy to expand our production
capacity, or other investments or acquisitions we may decide to pursue. If our
own financial resources are insufficient to satisfy our capital requirements, we
may seek to sell additional equity or debt securities or obtain additional
credit facilities. The sale of additional equity securities could result in
dilution to our shareholders. The incurrence of indebtedness would result in
increased debt service obligations and could require us to agree to operating
and financial covenants that would restrict our operations. Financing may not be available in amounts or on
terms acceptable to us, if at all. Any failure by us to raise additional funds
on terms favorable to us, or at all, could limit our ability to expand our
business operations and could harm our overall business prospects.
43
Obligations Under Material Contracts
The table below shows our contractual obligations as of December
  25, 2009.
U.S. Dollars
Payments Due by Period
Less than
More than
Contractual Obligations
Total
1
        year
1-3 years
3-5 years
5
        years
Long-term debt obligations
$
39,621,320
$
35,217,320
$
4,404,000
$
-
$
-
Other obligations
-
-
-
-
-
Total
$
39,621,320
$
35,217,320
$
4,404,000
$
-
$
-
Inflation
Inflation 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 the foreseeable future. However, our
management will closely monitor price changes in the Chinese economy and the
real estate industry and continually maintain effective cost controls in
operations.
Off Balance Sheet Arrangements
We 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, sales or expenses, results of
operations, liquidity or capital expenditures, or capital resources that are
material to an investment in our securities.
Seasonality
Our operating results and operating cash flows historically
have not been subject to dramatic seasonal variations, although there is an
increase in advertising and selling expenses when we begin pre-sales of new
projects under construction. New market opportunities or new project
introductions could change any perceived patterns, seasonal or operational.
Critical Accounting Policies
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires our
management to make assumptions, estimates, and judgments that affect the amounts
reported, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We have identified certain accounting policies that
are significant to the preparation of our financial statements. These accounting
policies are important for an understanding of our financial condition and
results of operations. Critical accounting policies are those that are most
important to the portrayal of our financial condition and results of operations
and require management's difficult, subjective, or complex judgment, often as a
result of the need to make estimates about the effect of matters that are
inherently uncertain and may change in subsequent periods. Certain accounting
estimates are particularly sensitive because of their significance to financial
statements and because of the possibility that future events affecting the
estimate may differ significantly from management's current judgments. We
believe the following critical accounting policies involve the most significant
estimates and judgments used in the preparation of our financial statements:
Revenue Recognition
Real estate sales are reported in accordance with the
provisions of ASC 360-20,
Property, Plant and Equipment, Real Estate Sales,
Sales Other Than Retail Land Sales
. Revenue from the sales of development
properties where the construction period is twelve months or less is recognized
by the full accrual method when the sale is consummated. A sale is not
considered consummated until (1) the parties are bound by the terms of a
contract or agreement, (2) all consideration has been exchanged, (3) any
permanent financing of which the seller is responsible has been arranged, (4)
all conditions precedent to closing have been performed, (5) the seller does not
have substantial continuing involvement with the property, and (6) the usual risks and
rewards of ownership have been transferred to the buyer. Revenue recognized to
date in excess of amounts received from customers is classified as current
assets under contracts receivable. Sales transactions not meeting all the
conditions of the full accrual method are accounted for using the deposit method
of accounting. Under the deposit method, all costs are capitalized as incurred,
and payments received from the buyer are recorded as a deposit liability.
44
Effective December 26, 2008, the Company adopted the
percentage-of-completion method of accounting for revenue recognition for all
building construction projects in progress in which the construction period was
expected to be more than twelve months at that date. The full accrual method was
used before that date for all of our residential and commercial projects. The
Company changed to the percentage-of-completion method for contracts longer than
one year as this method more accurately reflects how revenue is earned on these
contracts, particularly for interim reporting purposes.
ASC 250 requires retrospective application of a change in
accounting principle unless impracticable. The change to the
percentage-of-completion method had no effect on our December 25, 2008 financial
statements and we found it was impracticable to determine the effect on the
December 25, 2007 financial statements as no progress reports detailing the
percentage-of-completion of our contracts were prepared for that year.
Revenue and profit from the sale of development properties
where the construction period is more than twelve months is recognized by the
percentage-of-completion method on the sale of individual units when the
following conditions are met: (1) construction is beyond a preliminary stage;
(2) the buyer is committed to the extent of being unable to require a refund
except for non-delivery of the unit; (3) sufficient units have already been sold
to assure that the entire property will not revert to rental property; (4) sales
prices are collectible and (5) aggregate sales proceeds and costs can be
reasonably estimated. If any of these criteria are not met, proceeds are
accounted for as deposits until the criteria are met and/or the sale
consummated.
Under the percentage of completion method, revenues from units
sold and related costs are recognized over the course of the construction
period, based on the completion progress of a project. In relation to any
project, revenue is determined by calculating the ratio of completion and
applying that ratio to the contracted sales amounts. This ratio of completion is
determined by an independent third party hired by the Company as the contractors
employed by the Company request advance payments and do not specifically
allocate these costs to the various projects. Cost of sales is recognized by
multiplying the ratio by the total budgeted costs. Changes to total estimated
contract costs or losses, if any, are recognized in the period in which they are
determined. Revenue recognized to date in excess of amounts received from
customers is classified as current assets under revenue in excess of billings.
Amounts received from customers in excess of revenue recognized to date are
classified as current liabilities under customer deposits.
Any losses incurred or identified on real estate transaction
are recognized in the period in which the transaction occurs.
Real Estate Capitalization and Cost Allocation
Properties under construction or held for sale consist of
residential and commercial units under construction and units completed.
Properties under construction or held for sale are stated at
cost or estimated net realizable value, whichever is lower. Costs include costs
of land use rights, direct development costs, including predevelopment costs,
interest on indebtedness, construction overhead and indirect project costs.
Total estimated costs of multi-unit developments are allocated to individual
units based upon specific identification methods. Costs of land use rights
include land premiums and deed tax and are allocated to projects on the basis of
acreage and GFA.
Allowance for Doubtful Accounts
The Company recognizes an allowance for doubtful accounts to
ensure contracts receivable, related party receivables and other receivables are
not overstated due to uncollectability. Bad debt reserves are maintained for all
customers based on a variety of factors, including the length of time the
receivables are past due, significant one-time events and historical experience.
An additional reserve for individual accounts is recorded when the Company
becomes aware of a customer's or debtor's inability to meet its financial
obligation, such as in the case of bankruptcy filings or deterioration in the
customer's or debtor's operating results or financial position. If circumstances
related to customers or debtors change, estimates of the recoverability of
receivables would be further adjusted.
45
Land Appreciation Tax ("LAT")
In accordance with the relevant taxation laws in the PRC, the
Company is subject to LAT based on progressive rates ranging from 30% to 60% on
the appreciation of land value, which is calculated as the proceeds of sales of
properties less deductible expenditures, including borrowings costs and all
property development expenditures. The tax rules to implement the laws stipulate
that the whole project must be completed before the LAT obligation can be
assessed. Accordingly, the Company records the liability and the related expense
at the completion of a project, unless the tax authorities impose an assessment
at an earlier date. Deposits made against the eventual obligation are included
in prepaid expenses.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
Interest Rate Risk
We are exposed to interest rate risk primarily with respect to
our short-term bank loans and long-term bank loans. Although the interest rates,
which are based on the banks' prime rates with respect to our short-term loans
are fixed for the terms of the loans, the terms are typically three to twelve
months for short-term bank loans and interest rates are subject to change upon
renewal. There were no material changes in interest rates for short-term bank
loans renewed during the year ended December 25, 2009.
A hypothetical 1.0% increase in the annual interest rates for
all of our credit facilities under which we had outstanding borrowings as of
December 25, 2009, would decrease net income before provision for income taxes
by approximately $0.34 million for the year ended December 25, 2009. Management
monitors the banks' prime rates in conjunction with our cash requirements to
determine the appropriate level of debt balances relative to other sources of
funds. We have not entered into any hedging transactions in an effort to reduce
our exposure to interest rate risk.
Foreign Exchange Risk
While our reporting currency is the U.S. Dollar, all of our
consolidated sales and consolidated costs and expenses are denominated in RMB.
All of our assets are denominated in RMB except for cash. As a result, we are
exposed to foreign exchange risk as our sales and results of operations may be
affected by fluctuations in the exchange rate between U.S. Dollars and RMB. If
RMB depreciates against the U.S. Dollar, the value of our RMB sales, earnings
and assets as expressed in our U.S. Dollar financial statements will decline.
Assets and liabilities are translated at exchange rates at the balance sheet
dates and revenue and expenses are translated at the average exchange rates and
shareholders' equity is translated at historical exchange rates. Any resulting
translation adjustments are not included in determining net income but are
included in determining other comprehensive income, a component of shareholders'
equity. We have not entered into any hedging transactions in an effort to reduce
our exposure to foreign exchange risk.
The value of the RMB against the U.S. dollar and other
currencies is affected by, among other things, changes in China's political and
economic conditions. Since July 2005, the RMB has not been 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 or Euro in the medium to long term. Moreover, it is possible that in
the future, PRC authorities may lift restrictions on fluctuations in RMB
exchange rate and lessen intervention in the foreign exchange market.
Inflation
Inflationary factors such as increases in the cost of our
product and overhead costs may adversely affect our operating results. Although
we do not believe that inflation has had a material effect on our financial
position or results of operations to date, a high rate of inflation in the
future may have an adverse effect on our ability to maintain current levels of
gross margin and selling, general and administrative expenses as a percentage of
net sales if the selling prices of our products do not increase with these
increased costs.
46
BUSINESS
Business Overview
We are one of the leading real estate development companies
located in Qingdao, Shandong province, China. We began operation in 2001 and in
2008, we were recognized in the Qingdao Construction Committee's evaluation as
one of the top ten real estate developers in Qingdao, measured by a combination
of revenue, customer satisfaction, as well as several other factors.
We develop and sell residential and commercial properties,
targeting middle and upper income customers in the coastal region of the
Shandong peninsula (Greater Qingdao) located in northeastern China, including
the cities of Qingdao, Weihai and Yantai, as well as other inland locations,
including Weifang.
Since our inception, we have completed 15 projects having a
gross floor area, or GFA, of 1,191,722square meters, of which more than 91.8%
has been sold. In addition, we have seven projects under construction with a
total GFA of 735,274 square meters.
In fiscal year 2009, our total sales increased 22.4% to $94.3
million from $77.0 million in fiscal year 2008. Our gross profit increased 17.3%
to $36.0 million in fiscal year 2009 from $30.7 million in fiscal year 2008,
while our net income before extraordinary item increased 27.9% to $24.3 million
in fiscal year 2009 from $19.0 million in fiscal year 2008.
Our mission is to provide high-quality, comfortable, and
convenient living space to middle and upper income customers, primarily in
Shandong Province and in other provinces in China, while also earning for our
shareholders an internal rate of return that exceeds our cost of capital. We
expect to increase our market share through aggressive internal growth and
prudent acquisitions in Shandong Province and in other provinces in China. Our
goal is to be one of the top two real estate developers in Greater Qingdao in
the next five years by capturing and exploiting the growth opportunities in
Shandong Province and by providing the most desirable coastal and inland
apartments to middle and upper income customers, as well as by increasing our
development of commercial properties.
Our Industry
The Real Estate Industry in China
China's real estate sector is in the early stage of a long-term
growth cycle, supported by growth in its gross domestic product, or GDP, rising
demand for housing, and substantial structural changes.
China has experienced rapid economic growth in the last 20
years. According to China's Department of Commercial Affairs, China's GDP
achieved an annual growth rate of 17.1% from 2004 to 2008. According to the
National Statistics Bureau of China, China's GDP in 2009 was RMB 33.5 trillion,
up 8.7% from 2008. The official per capita data for 2008 and 2009 is not yet
available as of the date of this prospectus.
47
Despite the recent global economic recession, China is expected
to achieve relatively good economic growth in the next several years, compared
to many other major economies in the world.
China's real estate bull market began more than six years
  ago. Despite the moderations in growth caused by the global economic weakness
  in 2008 and 2009, we believe the structural forces in China support continuing
  good demand for real estate in China during the next 10 years. The two primary
  drivers for this long-term real estate demand in China are urbanization (which
  includes both the expansion and development of cities and the dramatic migration
  of people from rural to urban areas) and the rising disposable income per capita
  in the cities.
Increasing Urbanization
China is continuing its rapid urbanization. In 2009, more than
622 million people were living in urban areas, accounting for 46.6% of total
population of 1.33 billion, according to the National Bureau of Statistics of
China. The State Council of China estimated in 2007 that China's urban
population in 2020 would be approximately 870 million people, or approximately
60% of the total population of 1.45 billion.
Another source, the United Nations'
State of World
Population 2007
, reported that approximately 18 million people in China are
expected to migrate from rural to urban areas each year, and that the urban
population would reach about 877 million people in the next 10 years.
The rural to urban migration is likely to continue, both
because of the potential for higher income and greater wealth accumulation, and
because of the evolution of China's farming toward larger-scale and more
efficient methods that require fewer people to do the agricultural work.
48
With the substantial housing demand created by the structural
shift of the migration, the urban real estate market has been thriving. That
long-term trend is expected to continue.
Increasing Disposable Incomes
Disposable income per capita in urban areas between 2001 and
2009 has grown at a compound average annual growth rate of 12.2%, from RMB 6,860
(approximately $1,009) in 2001 to RMB 17,175 (approximately $2,510) in 2009. As
disposable income per capital increases, urban residents have strong motivation
to improve their living conditions by purchasing new or larger properties,
demonstrated by the urban living expenses per capita in the same years that have
steadily increased at a compound annual growth rate of 10.2%, from RMB 548.0
(approximately $81) in 2001 to RMB 982.3 (approximately $145) in 2007, which is
the most recent year available for this measure.
Rural dwellers are drawn to cities primarily by the potential
of higher incomes and greater wealth, because urban jobs generally pay higher
wages and salaries.
The latest data from the National Bureau of Statistics of China
shows that both disposable income and wealth accumulation are higher for urban
dwellers and confirms the economic attractiveness of the migration from rural to
urban areas.
Annual per capita disposable income
        and expenses
(RMB)
2002
2003
2004
2005
2006
2007
Urban per capita
Disposable income of urban households
7,703
8,472
9,422
10,493
11,760
13,786
Consumption expenditures of urban households
6,030
6,511
7,182
7,943
8,697
9,998
Net increase in wealth, urban
1,673
1,961
2,240
2,550
3,063
3,789
Rural per capita
Net income of rural households
2,476
2,622
2,936
3,255
3,587
4,140
Living expenditures of rural households
1,834
1,943
2,185
2,555
2,829
3,224
Net increase in wealth, rural
642
679
751
700
758
917
Source: The National Bureau of Statistics of China
Growth of the Chinese Real Estate Industry
The growth in China's real estate industry is reflected in the
growth of investment in real estate development, total GFA sold, and average
home prices. Total investment on real estate development in 2009 was RMB 3623.2
billion, up 16.1% from 2008.
According to the National Bureau of Statistics of China, the
total GFA of residential and commercial properties sold increased from 224.1
million square meters in 2001 to 937.1 million square meters in 2009, a compound
annual growth rate of 19.6% .
49
Despite significant appreciation of real estate prices in China
in recent years, comparative analysis of fundamental factors indicate that
prices are still reasonable. Studies have shown that a key underlying driver for
real estate market growth is GDP per capita. Recent International Monetary Fund
studies report that China's recent real estate appreciation is supported by
strong per capita economic growth. When compared using "price per capita GDP" in
the U.S. and India, China's real estate market appears undervalued. For example,
although Shanghai represents the most expensive real estate market in China,
India's Mumbai (Bombay) has seen real estate prices grow to more than twice
those of Shanghai, even though China has higher economic growth.
Rising disposable income in the second-tier cities has lured
top luxury goods manufacturers, including LVMH Group (one of the world's largest
luxury goods companies), to expand aggressively into key second-tier cities. The
Chinese government has also been instrumental in stimulating regional growth by
designating certain second-tier regions as priority zones. These actions are
benefitting the Greater Qingdao area, our primary market. In 2008 and 2009,
Qingdao's urban disposable income per capita grew 14.6% and 13.8%, compared with
8.4% and 9.8% for all of China.
50
Shandong Province
We conduct most of our operations in Shandong Province,
including the city of Qingdao and two other smaller cities, Weihai and Weifang.
Shandong Province, which includes Greater Qingdao, is located in northeastern
China, on the gulf called the Bohai Sea and on the Yellow Sea. It includes the
Shandong peninsula in the east and a central hilly complex surrounded by part of
the intensively cultivated northern China Plain. The flood-prone Yellow River
crosses northern sections. Wheat and soybeans are the chief crops, and wild silk
is important on the peninsula. Major resources are the Shengli petroleum fields
in the north and extensive coal deposits at Zibo, Boshan, and Zaozhuang. Jinan,
the capital, and the Qingdao and Zibo municipalities are major urban areas.
Settled as early as the 3rd century BC, Shandong was part of China during the
Shang dynasty and played a major role in ancient Chinese history. It was
venerated as the birthplace of the philosophers Confucius and Mencius.
Shandong Province is approximately 153,300 square kilometers in
area, with a population density of 1,859.9 people per square kilometer.
Greater Qingdao
Greater Qingdao includes the cities of Qingdao, Jimo, Laixi,
Pingdu, and three smaller cities. Located in the China-Japan-Korea triangle,
Qingdao is a one-hour flight from Seoul and a two-hour flight from Tokyo.
Qingdao is a major naval base, an industrial center, and a port
on the Yellow Sea at the entrance to sheltered Jiaozhou Bay. The port, which
rarely freezes over, serves the industrialized northern China Plain and was
expanded in 1976 to include an oil terminal for large tankers on Huang
Island.
The leading manufactured goods of the city include textiles,
railroad equipment, rubber goods, fertilizer, and chemicals. Tsingtao beer,
brewed here since Germany leased the Kiaochow territory (1898-1914), is sold
around the world. Qingdao was transformed by the Germans from a small fishing
village into a modern European-style industrial port in the early 20th century.
As a result of the reform and industrial restructuring in the past two decades,
major industries, including electronics and information technology, appliances,
engineered materials, brewing, automobiles, and shipbuilding, have grown
dramatically in Qingdao. The Shandong Oceanography College is also located here.
Qingdao is considered one of best places to live in China as
reported by various Chinese media outlets including CCTV. As one of China's top
ten economically dynamic cities ranked by National Statistics Bureau, Qingdao
has an excellent environment for investment and living. It offers
fairly priced markets, good infrastructure facilities, comfortable living
conditions, efficient government operations, sound public security, good
personal and property safety, and glorious days in the city, at the beach,
sailing, or hiking in the mountains.
51
Economic Growth
Shandong has experienced rapid economic growth in the last 20
years. According to National Bureau of Statistics of China, Shandong's GDP per
capita increased from RMB 10,195 (approximately $1,500) in 2001 to 35,796
(approximately $5,232) in 2009, a compound annual growth rate of 17.0% .
Qingdao is the leading city in the Shandong peninsula, measured
by GDP and the GDP growth rate. As one of China's top ten economically dynamic
cites, GDP per capita in Qingdao exceeded $8,000 in 2009, making it the eighth
largest city economy in China.
Compared to tier-one cities, we believe Qingdao will continue
its growth momentum for quite a few years. Its strong economic fundamentals
should provide a solid foundation for growth in the real estate sector.
Qingdao hosted the sailing competitions of the Olympic and
Paralympic Games in August and September 2008, which boosted the city's economy
due to the Olympic participants and visitors, as well as to the new fixed assets
built to support the Olympic games and festivities, especially the Qingdao
International Marina & Olympic Sailing Center. Built on the site of the
former Beihai shipyard on Fushan Bay, the new Qingdao International Marina &
Olympic Sailing Center covers a total area of 450,000 square meters,
plus major and secondary breakwaters, an embankment, a quay, and the renovation
of the shore wall. The facility serves as the home port of several sailing
organizations. Qingdao hosted the Volvo Ocean Race 2008-2009 as the Chinese port
city on the world circuit.
52
Economic Stimulus Plans
In response to the global financial and economic crisis, the
Chinese government announced a RMB 4 trillion stimulus program on November 27,
2008. Subsequently, on March 6, 2009, the National Development and Reform
Commission Director announced a reshaping of that economic stimulus package that
retained the investment total of RMB 4 trillion but adjusted its focus. Within
the RMB 4 trillion package, about RMB 400 billion will go toward civil works,
including low-income housing and renovation, which we believe will benefit
Shandong Province. Two additional categories (technology advances & industry
restructuring for RMB 370 billion and infrastructure for RMB 1.5 trillion) are
also expected to benefit industries in Qingdao, Weihai, Weifang, and the entire
Shandong Province.
On February 26, 2009, China's State Council reinforced China's
2008 stimulus package by further measures to stimulate specific industries in
2009. The industries include automobile, iron and steel, textiles, equipment
manufacturing, shipbuilding, electronics and information technology,
petrochemicals, light industries, nonferrous metals, and logistics.
We believe China's RMB 4 trillion stimulus package and its
  further efforts focused on 10 industries will improve Qingdao's economy,
  further strengthen the region's long-term competitive ability, and support
  the demand for middle and upper income housing, as well as the need for better
  commercial and office space, and a few world-class hotels. However, although
  individuals and governments around the world hope that government stimulus efforts
  will have the desired effects, the true benefit from these and perhaps additional
  stimulus efforts by local, provincial, and national governments in China, as
  well as by other countries, still remain uncertain.
The Qingdao Real Estate Market
Qingdao's real estate market has experienced strong growth
since 2001. The table below shows housing demand in Qingdao between 2003 and
2008. In 2009, GFA completed was 8.14 million square meters, and GFA sold was
12.62 million square meters. Average price data is not yet available for 2009.
2003
2004
2005
2006
2007
2008
CAGR
GFA completed (millions m
2
)
5.37
6.35
8.11
6.52
6.40
6.57
4.1%
GFA sold (millions m
2
)
4.53
5.16
7.4
7.36
8.33
7.69
11.2%
Average price (RMB)
2,350
2,965
3,604
4,254
5,202
5,074
16.6%
Source: Qingdao Statistics Yearbook 2004-2008 & Qingdao
Municipal Bureau of Statistics
Compared to tier-one cities, the affordability of Qingdao has
remained essentially constant over the past few years. It is the most affordable
of the major cities shown in the graph below, which illustrates affordability
based upon the most recent data available.
53
Good demographic and economic factors, including emerging
high-tech industries and increasing foreign capital inflow, bode well for
Qingdao's future growth.
Growth factors include the transition of certain industries to
higher value-added business (especially high-technology and services), rising
GDP per capita, increasing foreign investment, and expanding foreign retailing
and hotel operations. Between 2002 and 2007, Qingdao's GDP per capita achieved a
19.3% compound annual growth rate, while Qingdao's urban disposable income per
capita grew at a point-to-point compound annual growth rate of 15.3% from 2002
to 2008.
In addition, efforts by Qingdao's local government to create
clear strategies, institute attractive policies, and invest in the necessary
infrastructure are focused on creating favorable investment environments.
Qingdao is focused on expanding its three relatively new
industries: its modernized seaport, tourism, and marine science. The city also
continues to enlarge its traditional industries of electronics and home
appliances; petrochemicals; automobile; locomotive; ship building; and
engineered materials. With Qingdao's base as a seaport, this robust city is also
building a regional shipping center, a logistics center, a service center, a
financial center, and a high-technology industry development center.
Qingdao's thrust to expand its industries and its recent
experience as the world's host for the sailing events of the Olympics and
Paralympics are combining to grow this energetic city as it increases its role
in the global marketplace. Qingdao's development is based on the concept of
"three-point layout," "one-line planning," and "group development strategy."
54
The "three-point layout" refers to the development of the
Jiaozhou Bay region relying on the three basic points of the old urban districts
of Qingdao, Huangdao, and Hongdao, and the construction of the new urban
district by connecting the three points with a transoceanic bridge or undersea
tunnel and the Jiaozhou Bay Expressway.
The "one-line planning" refers to building a coastal highway
from Langyatai in Jiaonan to Tianhengdao Island in Jimo, which will connect all
parts of the city to form a main urban development belt.
The "group development strategy" refers to the expansion of
business groups on both sides of the coastal highway. There will be seven
development groups respectively in Tianhengdao Island, Aoshan, Zhucheng,
Hongdao, Huangdao, Jiaonan, and Langyatai, which will push forward the
urbanization of the adjacent regions. To carry out the west coast development
strategy and construct those seven areas, the municipal government will relocate
ports to the western coast, and plans to establish an international port and an
international transshipment port.
The Qingdao Economic and Technological Development Zone, or
QETDZ, is one of the state-level economic and technological development zones
approved by China's State Council. The zone is located on the west coast of
Jiaozhou Bay, which is connected to the Bohai Sea Economic Belt. It is in the
center of the Greater Qingdao strategy that aims to create huge development
potential. According to a recent comprehensive evaluation on the investment
environment from China's Ministry of Commerce, or MOFCOM, QETDZ ranks fourth
overall, first in social and environment, and third in human resources, supply
level, and technical innovation, among all the 54 state-level development zones.
So far, a total of RMB 20 billion has been invested in the
construction of infrastructure facilities in the zone. The Qianwan international
port, inside the QETDZ, has a 100 million ton capacity, is the largest modern
container deep-water dock in China, and links with more than 100 shipping routes
to all parts of the world.
With the approval of the Shandong Provincial Government,
Qingdao has established six provincial-level economic and technological
development zones, including the development zones in Jimo, Laixi, Pingdu,
Jiaonan, and Jiaozhou, and the Coastal economic and technology development zone.
These development zones have complete infrastructure facilities with beneficial
investment policies and convenient transportation.
The Weihai Real Estate Market
According to the Weihai Bureau of Statistics, approximately 2.3
million square meters of residential GFA was sold in Weihai in 2007, up 46% from
2006; approximately 3.5 million square meters were sold in 2008, up 52.1% from
2007; and approximately 5.6 million square meters were sold in 2009, up 40.9%
from 2008.
The table below shows Weihai's recent total GFA completed,
total GFA sold, and average price per square meter for all commercial and
residential property transactions in the city. In 2009, GFA completed was 5.8
million square meters, and GFA sold was 5.6 million square meters. Average price
data is not yet available for 2009.
2003
2004
2005
2006
2007
2008
2009
CAGR
GFA completed (millions m
2
)
1.7
1.6
1.9
2.3
2.6
3.1
5.8
22.7%
GFA sold (millions m
2
)
1.5
2.0
1.9
2.3
3.3
3.5
5.6
24.6%
Average price (RMB)
1,653
1,765
1,952
2,260
2,793
2,964
*
12.4%*
* Average price per square meter in RMB is not yet available
        for 2009.
Source: Weihai Statistical Yearbooks 2004 to 2008 &
Weihai Municipal Bureau of Statistics
As reflected in the above chart, supply and demand have been
almost matched in Weihai's property market and both have increased over the last
five years.
With total GFA sold of about 5.6 million square meters in 2009,
the Weihai housing market has grown at a compound annual growth rate of 24.6% in
the six years between 2003 and 2009.
Our Competitive Strengths
We believe the following strengths allow us to compete
effectively in the Chinese real estate development industry:
55
Proven track record of successful large-scale properties
  development
. Since our inception in 2001, we have successfully
  completed 15 projects having a GFA of 1,191,722 square meters, of which more
  than 91.8% has been sold. In addition, we have seven projects under
  construction with a total GFA of 735,274 square meters. All of our projects
  have featured modern facilities and attractive landscaping that provides
  comfortable and convenient lifestyles. Since our inception, we have focused on
  providing mid-sized apartments for middle-income residents and have gained an
  in-depth understanding of the preferences of our target customers. Most of the
  apartments we develop are units ranging from 40 square meters to 100 square
  meters, with an average price of less than RMB 4,000 per square meter
  (approximately $585 per square meter). Our ability to cater to our customers'
  preferences has been a major factor in the growth of our business. By
  leveraging our experience and track record, we believe that we can penetrate
  into the real estate markets in other tier two and tier three cities in China.
Widely recognized brand name in an attractive coastal market
.
  We have received many awards that acknowledge the quality of our real estate
  developments. For example, in 2008 we were recognized in the Qingdao
  Construction Committee's evaluation as one of the top ten real estate
  developers in Qingdao, measured by a combination of revenue, customer
  satisfaction, as well as several other factors. We believe that the quality of
  our real estate developments and the recognition of our brand name by our
  customers are important to our success.
Experienced management team
. Our Chairman, Mr. Antoine Cheng,
  has many years of experience in working with businesses and developed good
  business contacts, including in the real estate development business in China.
  Our senior managers have an average of more than 10 years of experience in the
  real estate industry and substantial management experience. All of them have
  bachelor's or master's degrees in business administration or accounting. In
  addition, our staff is well trained and is motivated by our incentive
  programs. We offer employees a variety of relevant training programs.
Substantial land reserves at premier locations for new development
  projects
. For our future development, we have acquired substantial
  land reserves at premier locations. Specific projects have been scheduled to
  be constructed on those lands. Please see "Projects" for details about our
  land reserves.
Strong financial profile and excellent credit record
. We have
  bank credit facilities with three top Chinese banks, which allow us to
  prudently use debt to leverage our business. We have received "AA" recognition
  from our top lender, Industrial and Commercial Bank of China, Chengyang
  Branch, in each of the past three years.
Compelling growth strategy
. We expect to continue our growth
  by: (i) achieving higher returns on projects by developing hotels and villas
  for upper income customers; (ii) continuing development of large middle income
  residential projects; (iii) expanding operations to other tier two and tier
  three cities in the Shandong Province and in other provinces in China; and
  (iv) acquiring projects from distressed developers.
Our Growth Strategy
We intend to increase our market share through aggressive
internal growth and prudent acquisitions that are primarily focused on
outstanding land or projects in the Shandong Province and in other provinces in
China. We intend to achieve this objective by pursuing the following
strategies:
Continue to expand in Shandong Province through new urban
  development projects
. In the next five years we will continue to focus
  on real estate development along the coastline of the Shandong peninsula,
  particularly in the Qingdao and Weihai regions. Given our knowledge and
  experience, we expect to increase our market share in those areas. For
  example, our strategic plan includes construction of an office building and a
  large upper-income community of villas in coastal Weihai. We also plan to
  create a high-rise resort hotel on the Stone Old Man beach in Qingdao, where
  we already own the land rights. We believe that the Qingdao-Weihai region is
  one of the most suitable and beautiful living areas in China. The region also
  features good economic growth. We believe that the real estate market in the
  Qingdao-Weihai region will remain strong over the next several years, not only
  due to the market awareness created by the global media coverage of Qingdao
  and its Olympic sailing events, but also because of the unique attraction the
  region holds for international customers, travelers and investors.
56
Continue to provide cost-effective properties for middle income
  customers
. The growing number of middle- income consumers in China has
  provided attractive and sustainable growth opportunities for real estate
  developers. As disposable incomes for urban residents increase, they have
  strong motivation and sufficient financial capacity to improve their living
  conditions by purchasing new or better properties. We intend to capitalize on
  the growth opportunities by continuing to offer high-quality mid-sized
  residential units featuring modern designs and convenient facilities at
  competitive prices.
Penetration of the high-end real estate market
. We intend to
  penetrate into the high-end real estate market by developing villas, hotels,
  and commercial and office buildings that generate high returns. We have three
  projects in planning in that category. The first is a large community of
  villas and hotel-serviced apartments on the beach in Weihai. The second is an
  office building in Weihai, the Longhai International Plaza, that we believe
  will generate both sales and continuing rental income for us. The third, the
  most interesting of our plans, is the luxury resort hotel, the Longhai Hotel,
  which will be located just across the street from the Stone Old Man beach in
  Qingdao. Construction for the hotel is expected to start in August 2011. The
  architectural and engineering firm we have selected is Epstein, headquartered
  in Chicago, a city famous for innovative architecture. We believe the upscale
  business and tourist volume in Qingdao will provide the sustained demand for
  such a beautiful luxury hotel. These high-end projects should generate higher
  returns on investment than middle-income residential properties.
Improve project management and cost control
. We will improve
  our project management by adopting more stringent financial disciplines in our
  operations at each stage that will help us to increase our returns on our
  project investments. We will use our capital more effectively by better
  managing our assets, receivables and expenditures to attain pre-set targets.
  We will better anticipate the best land rights reserves for development and
  will be able to capture them at the lowest prices to maximize our potential
  returns on our land and on our project investments. Further benefits should
  include a more consistent cash flow from our pre-sales to achieve both better
  cash availability for our projects and a prudent debt-to-total-capital ratio
  that will keep us in the optimum range for our cost of capital. The results
  should be lower effective interest rates on our debt and better cost
  competitiveness for our company.
Project Development Process
We have adopted a systematic approach to real estate
development that includes land rights acquisition, site planning and
development, architecture and engineering, construction, marketing and
pre-sales.
We acquire land rights by (1) participating in public tender,
auction, and listing for sales of land; (2) mergers or acquisitions of
companies, including related companies, owning land use rights; and (3)
purchasing distressed projects that have not been completed. After we have
obtained the development rights for land, we usually are required to pay a land
premium to acquire the land rights, in accordance with laws and regulations.
In the past, we acquired most of our land rights from companies
owned by Longhai Group, a company controlled by Mr. Antoine Cheng, our Chairman.
Longhai Group's primary business is infrastructure and building construction.
Through its infrastructure construction business, Longhai Group works with local
governments and often finances (by agreeing to be paid sometime following the
completion of construction instead of being paid as construction progresses) the
government's public infrastructure projects that can include old city relocation
projects. In exchange for such financing, the local governments invite Longhai
Group to bid for premium parcels of land for residential use at public auction
or grant Longhai Group the right of first refusal to bid for industrial parcels
for which the Longhai Group already has land use rights, but whose use has been
changed to real estate development. Since Longhai Group does not have the
necessary license to engage in residential development in China, it typically
sold companies owning these land use rights to us so that we could develop these
parcels using our real estate development license.
We usually finance our real estate development projects through
a combination of four sources: company cash, capital from investors, bank loans,
and cash paid by customers when they sign pre-sales purchase agreements for
their apartments. The proportion of the funding sources varies by project.
First, we select the site, acquire the land use rights, and
cover the preliminary development costs using our own cash and capital from
investors.
57
We next obtain loans from commercial banks and/or from
investors to continue the project.
As our construction progresses, we reach the stage where we are
permitted to begin selling the apartments and to complete pre-sales agreements
with our customers. Our customers, in most cases, pay 100% of the apartment
price in cash (including their mortgage financing, if needed) when they sign the
purchase agreement. We have access to 95% of that cash, with 5% of the price
retained by the bank until the apartment ownership is transferred to the buyer.
The cash payments by our customers provide the remaining cash needed to complete
the project.
The net proceeds from the sales of the properties are used to
compensate investors and to add to our retained earnings. The cash cycle then
begins again with the selection of new sites and the acquisition of the
development and land rights.
Projects
Since our inception, we have completed 15 projects having a GFA
of 1,191,722 square meters, of which more than 91.8% has been sold. All of our
housing projects have featured secured parking, cable TV access, hot water,
heating systems, and access to natural gas. Sales from those 15 projects have
totaled $250 million.
We have seven residential and commercial project phases under
construction with a total GFA of 735,274 square meters and expected sales of
$266.2 million.
We have significant land use rights, consisting of six
properties with a total land area of 387,127 square meters. On these properties,
we plan to construct, among others, a luxury high-rise beach hotel, high-rise
residential and commercial buildings, residential villas, and a high-rise office
building.
We classify our projects into three categories:
Projects in planning, where we have obtained the land use rights and the
  construction has yet to start;
Projects under construction, in which all buildings have not been
  completed; and
Completed projects, where the construction of all buildings has been
  finished.
Projects in planning
Our projects in planning, including land reserves, total five
properties with a land area of 329,276 square meters.
Planned projects include a luxury high-rise beach hotel,
high-rise residential and commercial buildings, residential villas, and a
high-rise office building.
Projects in Planning
U.S. dollars in millions
Estimated
Total
Total
Net profit
Land
GFA
sales
profit
margin
Project Name
Location
Type
sq. m.
sq. m.
$
$
%
1
Longhai Hotel
Qingdao
Hotel
7,572
80,000
400.0
180.0
45.0
2
Weihai Beach Resort
Weihai
Villas
127,082
81,200
190.3
56.5
29.7
3
Dongli Garden Phase 2
Qingdao
Residences
67,700
245,900
204.9
40.2
19.6
4
Xingfu Renjia Phase 2
Caoxian
Residences
99,234
100,000
23.7
7.1
30.0
5
Jiangshan Dijing
Laixi
Residences
27,688
70,687
25.9
7.5
29.0
329,276
577,787
844.8
291.3
34.5
Land reserves are essential for our future developments.
Currently we have in inventory six parcels for which we own the land use rights.
Those land use rights were acquired mainly through our purchase in 2008 of our
project companies and subsidiaries that already owned the rights. The
registration of those land use rights was completed in August 2008. Some of the
land has been selected for specific projects while the projects for the other
parcels are to be determined. The following table lists the land rights we
own.
Our land reserves shown below include some of the projects in
planning shown in the table above.
58
Land Reserves for Projects in Planning
U.S. dollars in millions
Estimated
Land
Land cost
market value
Land or Project Name
Location
Type
sq. m.
$
$
1
Longhai Hotel
Qingdao
Hotel
7,572
25.5
159.3
2
Weihai Beach Resort
Weihai
Villas
127,082
40.1
142.7
3
Dongli Garden Phase 2
Qingdao
Residences
67,700
58.6
87.5
4
Xingfu Renjia Phase 2
Caoxian
Residences
99,234
2.1
26
5
Jiangshan Dijing
Laixi
Residences
27,688
0.5
7.8
6
Huashan Town
Jimo
Residences
57,851
12.9
387,127
139.7
423.3
Projects under construction
We have seven residential and commercial project phases under
construction with a total GFA of 735,274 square meters and expected sales of
$266.2 million.
Projects Under Construction
U.S. dollars in millions
Estimated
Total
Total
Net
      profit
Land
GFA
Total
Units
sales
profit
margin
Project Name
Location
Start
Finish
sq. m.
sq. m.
units
sold
$
$
%
1
Longhai Lidu 1 & 2
Weifang
2006.06
2012.06
120,170
130,698
1,572
1,303
45.9
20.0
43.6
2
Qilu Textile Centre commercial
Weifang
2005.08
2010.12
128,924
142,499
1,371
1,142
30.1
9.9
33.0
3
Qilu Textile Centre residential
Weifang
2007.03
2010.06
72,056
71,456
740
288
16.3
5.6
34.2
4
Weihai International
      Plaza
Weihai
2009.09
2011.06
9,058
54,817
430
-
51.9
15.1
29.0
5
Oumei Complex 2
Weifang
2010.03
2012.12
42,544
70,587
566
-
18.6
6.1
32.7
6
Dongli Garden Phase 1
Qingdao
2008.12
2010.12
175,508
213,315
2274
1317
58.6
14.7
25.0
7
Longhai Mingzhu
Qingdao
2006.09
2010.05
9,700
51,902
340
163
44.8
13.9
31.0
557,960
735,274
7,293
4,213
266.2
85.3
32.0
Completed projects
Since our inception, we had completed 15 projects having a
total GFA of 1,191,722 square meters, of which more than 91.8% has been sold.
Sales from those projects totaled $250 million, net profit was $88.6 million,
and the projects earned a consolidated return on investment of 113%.
All projects have included secured parking, cable TV, hot
water, heating systems, and access to natural gas.
59
Completed Projects
U.S. dollars in millions
Sources of funding
Total
Net
Total
Pre-
Total
Total
net
profit
capital
sale
Bank
Oumei
Land
GFA
Total
cost
sales
profit
margin
required
cash
loans
cash
Project Name
City
Type
Finish
sq. m.
sq. m.
units
$
$
$
%
$
$
$
$
1
Jiangnan Garden 1, 2 & 3
Jimo
Apts
2004.11
61,230
91,539
762
13.8
20.9
7.1
34.0
13.8
3.0
4.4
6.4
2
Decorative Materials Center
Jimo
Apts
2004.12
75,466
38,868
223
7.6
11.7
4.1
35.0
7.6
3.4
4.2
3
Jiangnan Garden 6
Jimo
Apts
2005.05
11,773
109,094
785
19.0
32.0
13.0
40.6
19.0
4.9
5.9
8.2
4
Sunshine
Jimo
Apts
2005.07
8,010
11,548
99
1.8
3.3
1.5
45.5
1.8
0.8
1.0
5
Shanghai Garden 1 & 2
Laixi
Apts
2005.12
57,401
104,084
910
11.7
18.8
7.1
37.8
11.7
5.2
6.5
6
Fenglin Oasis
Laixi
Apts
2006.06
78,636
97,568
844
11.9
19.3
7.4
38.3
11.9
5.5
6.4
7
Yuyuan Fengjing
Laixi
Apts
2006.09
89,323
125,706
1,054
14.5
19.8
5.3
26.8
14.5
5.4
9.1
8
Jiangnan Garden 7
Jimo
Apts
2006.10
3,553
12,936
90
2.4
5.7
3.3
57.9
2.4
1.0
1.4
9
Shanshui Longyuan
Pingdu
Apts
2007.10
225,914
257,762
1,830
41.5
55.3
13.8
25.0
41.5
9.6
13.2
18.7
10
Longze Yuyuan
Laixi
Apts
2007.10
120,223
78,146
804
11.3
17.9
6.6
36.9
11.3
0.9
8.8
1.6
11
Shanghai Garden 3
Laixi
Apts
2007.12
11,055
16,055
125
1.7
4.2
2.5
59.5
1.7
0.7
1.0
12
Fuxiang Huayuan 1
Weifang
Apts
2008.12
44,075
52,700
430
9.0
14.4
5.4
37.5
9.0
3.9
5.1
13
Fuxiang Huayuan 2
Weifang
Apts
2009.12
10,400
18,392
125
3.1
5.1
2.0
39.2
3.1
1.4
1.7
14
Oumei Complex 1
Weifang
Apts
2009.12
55,303
91,778
708
8.5
15.8
7.3
46.2
8.5
3.8
4.7
15
Xingfu Renjia 1
Caoxian
Apts
2009.12
80,000
85,546
828
4.2
6.4
2.2
34.4
4.2
1.8
2.4
932,362
1,191,722
9,617
162
250
88.6
35.4
162
51.3
32.3
78.4
Architecture, Engineering and Construction
We outsource the architecture, engineering, and construction of
our projects.
We work with several architecture and engineering companies. We
collaborate with them on the site and building designs and rely on them for the
detailed execution of the design concepts.
We also outsource our project construction to qualified
subcontractors who are the winners in our competitive bidding process, which is
based on required quality and lowest price. Our contracts, typically
fixed-priced, provide for periodic payments during construction.
Below is a list of some of the key companies to whom we
outsource these services.
Name of
      Company
Services Provided
Qingdao Zhongxing Construction Ltd.
Construction
Longhai Construction Ltd.
Construction
Quality and Performance
We and our chosen architects and engineers supervise the
construction by our contractors. In addition to the construction, our
contractors are responsible for purchasing all building materials, including the
two main building materials, steel and concrete. Contractors are required to
perform to their working plan and adhere to the specifications in our
construction plans and contracts. We have delivered all our projects to our
customers on or before the due date and at or above the quality specified in the
customers' purchase agreements.
60
Our finished construction includes the completed buildings with
all public portions of the buildings fully finished and all of the common
grounds landscaped. The apartment interiors typically are finished to the gray
shell stage. This permits the apartment buyers to select their own interior
design and finishing companies, so they can get all the features, fixtures,
fittings, furnishings, textures, and colors they prefer. This separation of
responsibilities between the real estate developer and the independent interior
designers and finishers is traditional in China.
Sales and Marketing
In marketing our properties, we use our own marketing team, but
occasionally outsource our marketing and sales efforts to independent sales
agents. To market our properties, we use a combination of advertisements in
newspapers, magazines, television, and outdoor billboards, in addition to news
releases that generate media stories about our projects.
To help customers choose among the apartment layouts that we
offer, we usually create fully finished and furnished show rooms that give them
a sound basis for deciding exactly what they want. We pay for the completion of
these marketing show rooms. After most of the units in the development have been
sold, we sell the show rooms as residences, usually at premium prices.
Competition
The real estate development business in China is organized into
four qualification levels under Certificates of the Qualifications of Real
Property Development Enterprises issued by the Ministry of Housing and
Urban-Rural Development.
The starting qualification level is Level 4 (see table below).
A company may rise in its qualification level, depending on its registered
capital, the number of years of industry experience, the area of land it has
developed, and its safety record. Only one level may be ascended each year.
Registered
Developed
Time for
Capital
Experience
Area
Other
License to be
($ millions)
(years)
(square feet)
Requirements
Authorized
Level 1
6.25
5
3,229,278
No Severe Accident
20 Days
Level 2
2.5
3
1,614,639
No Severe Accident
20 Days
Level 3
1.0
2
538,213
No Severe Accident
20 Days
Level 4
0.125
1
not applicable
We obtained the Level 1 Certificate of the Qualifications of
Real Property Development Enterprises on November 11, 2008, which is valid until
November 7, 2011. We gained Level 2 Qualification in 2006.
The real estate market in which we operate is highly
competitive. Typically, the housing and land development industry is a regional
business with mostly local players competing with us for small- to medium-size
projects. Our major competitors are other large-scale local real estate
companies that include state-owned and private real estate developers. In
addition, some large-scale national real estate developers are entering the
Greater Qingdao market. Based on the Qingdao Construction Committee's rakings,
in 2008, we ranked as one of the top ten real estate developers in Qingdao,
measured by a combination of sales, customer satisfaction, and several other
factors.
Our major competitors include:
Hisense Real Estate Development Co., Ltd.
Hisense Real
  Estate Development Co., Ltd., or Hisense, was founded in 1995 and is the
  strongest real estate company with the highest development capacity among the
  top 10 in the Qingdao market. Hisense holds a Level 1 Qualification
  Certificate for real estate development, a Level 1 Qualification for property
  management, and Class A Certificate for design. It has developed more than 1
  million square meters of projects each year for several years. Its completed
  development projects include Hisense-Huiyuan housing, Hisense-Yandao
  international apartments, Hisense-Qingquan villas, a high-end office building,
  and the Hisense information technology industrial park, plus other similar
  developments. Hisense is focused on land reserves and projects in Qingdao and
  is absent in other cities in the Shandong Province and in other provinces in
  China.
61
Haier Real Estate Development Co., Ltd.
Established in 2002,
  Haier Real Estate Development Co., Ltd., or Haier, is engaged in real estate
  development and investment within the Haier Group and has embraced the Haier
  group's beliefs, spirit, style, focus on clients, and objectives that include
  creating a solid foundation for long-term development. At the end of 2007, the
  company had seven real estate development subsidiaries, one property
  management company, and one branch company. Haier's real estate development
  and investment projects are located in Qingdao, as well as in Jinan, Beijing,
  Chongqing, Taiyuan, Suzhou, and other locations. In these cities, Haier owns a
  number of land reserves and has more than 10 projects competed or under
  construction. Haier ranks second in Qingdao's top 10 real estate development
  companies, according to the government's comprehensive competitiveness
  evaluation. We believe that Haier's real estate weaknesses include (1) its
  relative inexperience in real estate in Greater Qingdao due to a rather recent
  start in the region and (2) its subordination to the Haier Group, which we
  believe has led to a complicated management structure and a decision-making
  system burdened by unnecessary complexity and lengthy processing time, both of
  which are likely to limit Haier's effectiveness and growth in the Qingdao real
  estate market.
Qingdao Construction Corporation of China
. Qingdao
  Construction Corporation of China, or Qingdao Construction, is a government
  owned construction company. In the last few years, Qingdao Construction has
  expanded into real estate development, which has become the company's second
  biggest operation, but is still a modest business. It mainly focuses on the
  construction of affordable low-income and low-rent apartments. Although it has
  been ranked by the government among the top 10 developers in Qingdao recently,
  primarily due to its construction business, Qingdao Construction still lacks
  extensive experience in real estate development. We believe the company will
  continue to expand its real estate development operations, but its market
  share in real estate development appears to be insufficient at the moment for
  sustainable operations as a stand-alone business.
Tiantai Group.
Tiantai Group, or Tiantai, was an early
  participant in the real estate development business and is quite mature in its
  operations in Qingdao. It ranks about fifth among Qingdao's top 10 developers,
  according to the government. Tiantai has focused on a branding and high-level
  development strategy, therefore its output and market share are relatively
  low. Founded 15 years ago, Tiantai has developed only seven projects with a
  total GFA of 1.3 million square meters. So far, Tiantai has kept its focus on
  the Qingdao city market.
Some of our competitors have greater financial and marketing
resources than we do. Some also have larger land reserves, greater economies of
scale, broader name recognition, and longer track records. For example, a major
rival, Tiantai, is a large-scale private real estate developer engaged in real
estate development and real estate management, with a proven track record and
annual development GFA of about 700,000 square meters.
We differentiate ourselves from our competitors by (1)
conducting much of our operations in second-tier and third-tier cities, (2)
focusing on middle-income families in those second-tier and third-tier cities,
(3) offering mid-sized apartments that range from 40 to 100 square meters and
(4) leveraging our relationship with our affiliate, Longhai Group, as described
above under "Project Development Process."
We believe that these four strategies have given us a
competitive advantage over other companies that can result in sustainable
long-term growth and attractive returns on investment. Those advantages also
build a base on which we are expanding into new geographic markets and into the
upper income segments of our current markets.
We expect to increase our market share and return on investment
by leveraging our premium land reserves by (1) continuing to build middle income
housing, (2) developing high-end residential and commercial projects and
landmark buildings, (3) broadening our geographic diversification, and (4)
strengthening our brand recognition and reputation for high quality.
Employees
As of December 25, 2009, we had a total of 216 employees. The
following table shows the number of our employees by function.
62
Function
Number Of Employees
Senior Management
17
Sales and Marketing
28
Development Strategies Department
48
Engineering Department
64
Quality Control
9
Human Resource & Administration
6
Accounting
44
Total
216
Subdivided by educational achievement, 2% of our employees hold
advanced degrees, 20% have bachelor's degrees, and 26% hold technical or
vocational training certificates.
To increase the knowledge and performance of our employees, we
have established an employee training and development program, which ranges from
recruiting to advanced training. Our employee incentive plans and programs
encourage and reward superior performance. In the next five years, three major
employee development plans will be implemented to attract more talented and
bilingual management staff and experienced sales people, to enhance employees'
on-the-job training, and to establish company-wide, performance-oriented
incentive plans that may include stock awards or stock options.
We maintain a satisfactory working relationship with our employees,
  and we have not experienced any significant labor disputes or any difficulty
  in recruiting staff for our operations. None of our employees is represented
  by a labor union.
Our employees in China participate in a state pension plan
organized by Chinese municipal and provincial governments. We are required to
make monthly contributions to the plan for each employee at the rate of 23% of
his or her average assessable salary. In addition, we are required by Chinese
law to cover employees in China with various types of social insurance. We
believe that we are in material compliance with the relevant PRC laws.
Intellectual Property
We do not own or license any material intellectual property
rights.
PRC Government Regulations
Permits and Certificates
As part of the project development process, we are required to
obtain a number of certificates, permits, and licenses from different government
agencies, including among others:
Land Use Rights Certificate that certifies the right of a party to use
  land;
Construction Land Planning Permit that authorizes a developer to begin the
  land survey, planning, and design for the land;
Construction Works Planning Permit that indicates the government's approval
  of a developer's overall planning and design for the project and allows the
  developer to apply for a Work Commencement Permit;
Work Commencement Permit that authorizes a developer to begin excavation
  and construction; and
Pre-sales Permit that authorizes a developer to begin completing pre-sales
  purchase agreements with customers and collect their cash for the apartments
  still under construction.
Housing and land development sales companies are regulated by
the Ministry of Land & Natural Resources and authorized by the local office
of the Ministry. Each project also has to be authorized and must obtain a
"Commercial License for Housing Sale" from the Real Estate Bureau.
63
Environmental Regulations
The major environmental regulations applicable to us include
the PRC Environmental Protection Law, the PRC Law on the Prevention and Control
of Water Pollution, the PRC Law on the Prevention and Control of Air Pollution,
the PRC Law on the Prevention and Control of Solid Waste Pollution, and the PRC
Law on the Prevention and Control of Noise Pollution.
Taxation
For a detailed discussion of PRC tax regulations, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations – Taxation – China."
Foreign Currency Exchange
Under the PRC foreign currency exchange regulations applicable
to us, RMB is convertible for current account items, including the distribution
of dividends, interest payments, trade and service-related foreign exchange
transactions. Conversion of RMB for capital account items, such as direct
investment, loan, security investment and repatriation of investment, however,
is still subject to the approval of the PRC State Administration of Foreign
Exchange, or SAFE. Foreign invested enterprises, or FIEs, established in the PRC
may only buy, sell and/or remit foreign currencies at those banks authorized to
conduct foreign exchange business after providing valid commercial documents
and, in the case of capital account item transactions, obtaining approval from
the SAFE. Capital investments by FIEs outside of China are also subject to
limitations, which include approvals by MOFCOM, SAFE and the State Reform and
Development Commission.
Dividend Distributions
Under applicable PRC regulations, FIEs in China may pay
dividends only 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.
Properties
All land in China is owned by the State. Individuals and
companies are permitted to acquire rights to use land or land use rights for
specific purposes. In the case of land used for industrial purposes, the land
use rights are granted for a period of 50 years. This period may be renewed at
the expiration of the initial and any subsequent terms. Granted land use rights
are transferable and may be used as security for borrowings and other
obligations.
We have a bank of land use rights, consisting of six properties
with a total land area of 387,127 square meters. On these properties, we plan to
construct, among others, a luxury high-rise beach hotel, high-rise residential
and commercial buildings, residential villas, and a high-rise office building.
Please see "Description of Business - Projects" for details about our land
reserves.
Legal Proceedings
From time to time, we may become involved in various lawsuits
and legal proceedings which 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 affect on our business, financial condition or operating
results.
HISTORY AND CORPORATE STRUCTURE
General
We organized under the laws of the Cayman Islands on March 10,
2006 as a blank check development stage company formed for the purpose of
acquiring an operating business, through a stock exchange, asset acquisition or
similar business combination. From our inception until we completed our reverse
acquisition of Leewell on April 14, 2010, our operations consisted entirely of
identifying, investigating and conducting due diligence on potential businesses
for acquisition.
64
Reverse Acquisition of Leewell
On April 14, 2010, we completed a reverse acquisition
transaction through a share exchange with Leewell whereby we acquired 100% of
the issued and outstanding capital stock of Leewell, in exchange for 29,235,000
ordinary shares, par value $0.002112 per share, which shares constituted 94.31%
of our issued and outstanding shares on a fully-diluted basis, as of and
immediately after the consummation of the reverse acquisition. As a result of
the reverse acquisition, Leewell became our wholly-owned subsidiary and Longhai
Holdings, the former shareholder of Leewell, became our controlling shareholder.
The share exchange transaction with Leewell was treated as a reverse
acquisition, with Leewell as the acquirer and Dragon Acquisition as the acquired
party. Unless the context suggests otherwise, when we refer in this prospectus
to business and financial information for periods prior to the consummation of
the reverse acquisition for accounting purposes, we are referring to the
business and financial information of Leewell and its consolidated
subsidiaries.
Upon the closing of the reverse acquisition on April 14, 2010,
Mr. David Richardson resigned from our board of directors, effective
immediately, and Mr. Joseph Rozelle submitted a resignation letter in which he
resigned from all offices that he held effective immediately and from his
position as our director on May 1, 2010.
Also upon the closing of the reverse acquisition, our board of
directors increased its size from two (2) to three (3) members and appointed Mr.
Antoine Cheng, Mr. Weiqing Zhang, and Mr. Zhongbo Zhou to fill the vacancies
created by the resignations of Messrs. Richardson and Rozelle and such increase.
In addition, our board of directors appointed Mr. Antoine Cheng to serve as the
Chairman of the Board, Mr. Weiqing Zhang to serve as our Chief Executive Officer
and President, and Mr. Yang Chen to serve as our Chief Financial Officer and
Vice President, effective immediately at the closing of the reverse
acquisition.
As a result of our acquisition of Leewell, we now own all of
the issued and outstanding capital stock of Leewell, which in turn owns Oumei
and its Chinese subsidiaries. Leewell was established in Hong Kong on August 10,
2007 to serve as an investment holding company. Oumei was established in the PRC
on May 15, 2001. Its principal activities include the development and sales of
residential and commercial properties in Qingdao and its nearby cities, or
Greater Qingdao, and other cities in Shandong Province, China.
On September 20, 2007, Leewell acquired 100% of the equity
interests in Oumei from its shareholders, including Mr. Weiqing Zhang, Oumei's
Chief Executive Officer and President, for RMB 97,010,000 (approximately $13.1
million). In October 2007, the acquisition was approved by the appropriate
Chinese authorities, and Oumei's status changed from a Chinese domestic company
to a wholly-owned foreign enterprise.
Oumei has three branch offices, located in Jimo, Pingdu, and
Laixi, and has purchased the following nine Chinese subsidiaries:
Weihai Mingwei, purchased on January 19, 2008 for RMB 110,000,000
  (approximately $15 million);
Longhai Hotel, purchased on January 22, 2008 for RMB 110,000,000
  (approximately $15 million);
Weihai Economic, purchased on January 23, 2008 for RMB 140,000,000
  (approximately $19 million);
Qingdao Xudong, purchased on January 24, 2008 for RMB 60,000,000
  (approximately $8.3 million);
Weifang Longhai Industry, purchased on August 27, 2008 for RMB 30,000,000
  (approximately $4.4 million);
Weifang Longhai Zhiye, purchased on August 28, 2008 for RMB 30,000,000
  (approximately $4.4 million);
Weifang Qilu, purchased on August 29, 2008 for RMB 40,000,000
  (approximately $5.8 million);
Caoxian Industrial, purchased on June 25, 2009 for RMB 15,000,000
  (approximately $2.2 million); and
Longhai Real Estate, purchased on September 25, 2009 for RMB 20,000,000
  (approximately $2.9 million).
As a result of our reverse acquisition of Leewell, we have
assumed the business and operations of Leewell and its Chinese subsidiaries. We
plan to change our name to "China Oumei Real Estate Inc." to more accurately
reflect our new business operations.
65
Financing Transaction
On April 14, 2010, we also completed a private placement
transaction with a group of accredited investors. Pursuant to the Subscription
Agreement with the investors, we issued to the investors an aggregate of
2,774,700 Units for a purchase price of $11,098,800, or $4.00 per Unit. Each
Unit consists of one Preference Share and one Warrant to purchase 0.5 ordinary
shares. The Warrants have a term of 5 years, bear an exercise price of $6.00 per
share (subject to customary adjustments), are exercisable on a net exercise or
cashless basis and are exercisable by investors at any time after the closing
date. See "Description of Securities – Preference Shares" below for a
description of our Preference Shares.
Pursuant to the Subscription Agreement, we are obligated to
file a registration statement covering the resale of the ordinary shares
underlying the Preference Shares and the Warrants no later than thirty (30) days
following the closing date and shall use our best efforts to cause the
registration statement to be declared effective under the Securities Act as
promptly as possible, but in no event later than 180 days following the closing
date. If we do not timely file the required registration statement, or if it is
not declared effective by the SEC in a timely manner, then we are obligated to
pay to each investor a liquidated damages fee of 1% of such investor's
investment per month, for up to a maximum of 10% of each investor's investment
pursuant to the Subscription Agreement, except that we will not be obligated to
pay any such fee if we are unable to fulfill our registration obligations as a
result of rules, regulations, positions or releases issued or actions taken by
the SEC with respect to Rule 415 of the Securities Act, so long as we register
at such time the maximum number of securities permissible by the SEC.
In connection with the private placement, we entered into the
Make Good Escrow Agreement with Longhai Holdings, our controlling shareholder,
Collateral Agents, LLC, the escrow agent, and Access America Investments, LLC,
as representative of the investors, pursuant to which the parties agreed to
certain "make good" provisions in the event that we do not meet certain
financial performance thresholds for fiscal years 2010 and 2011. Pursuant to the
Make Good Escrow Agreement, the parties agreed to the establishment of an escrow
account and Longhai Holdings delivered into escrow certificates evidencing
7,500,000 ordinary shares held by it, to be held for the benefit of the
investors. Under the Make Good Escrow Agreement, we established minimum after
tax net income thresholds (as determined in accordance with GAAP and excluding
any non-cash expenses and one-time expenses related to the reverse acquisition
of Leewell and the private placement transaction) of $40 million for fiscal year
2010 and $60 million for fiscal year 2011 and minimum earnings per share
thresholds (calculated on a fully diluted basis and including adjustment for any
stock splits, stock combinations, stock dividends or similar transactions, and
for shares issued in one public offering or pursuant to the exercise of any
warrants, options, or other securities issued during or prior to the calculation
period) of $1.13 for fiscal year 2010 and $1.70 for fiscal year 2011. If our
after tax net income or earnings per share for either fiscal year 2010 or fiscal
year 2011 is less than 90% of the applicable performance threshold, then the
performance threshold will be deemed not to have been achieved, and the
investors will be entitled to receive ordinary shares based upon a pre-defined
formula agreed to between the parties. The parties agreed that, for purposes of
determining whether or not any of the performance thresholds is met, the release
of any of the escrowed shares and any related expense recorded under GAAP shall
not be deemed to be an expense, charge, or any other deduction from revenues
even if GAAP requires contrary treatment or the annual report for the respective
fiscal years filed with the SEC by the Company may report otherwise.
Also in connection with the private placement, we entered into
the Holdback Escrow Agreement with Collateral Agents, LLC, the escrow agent,
Brean Murray, Carret & Co., LLC, the placement agent, and Access America
Investments, LLC, as representative of the investors, pursuant to which
$2,219,760 was deposited with the escrow agent to be distributed upon the
satisfaction of certain covenants set forth in the Subscription Agreement.
Pursuant to the Holdback Escrow Agreement, $1,109,880 will be released to the
Company upon our satisfaction of a covenant regarding the composition of our
board of directors and $1,109,880 will be released to the Company upon our
satisfaction of a covenant regarding the hiring of a chief financial officer
meeting the requirements specified in the Subscription Agreement. Pursuant to
the Holdback Escrow Agreement, an additional $1,000,000 was deposited with the
escrow agent to be released to us in incremental amounts to pay for fees and
expenses relating to our obligations as a public company.
We also entered into the IR Escrow Agreement with Collateral
Agents, LLC, the escrow agent, Brean Murray, Carret & Co., LLC, the
placement agent, and Access America Investments, LLC, as representative of the
investors, pursuant to which $120,000 was deposited with the escrow agent to be
distributed in incremental amounts to pay our investor relations firm, the
choice of which is subject to the placement agent's approval.
66
In connection with the private placement, we also entered into
a Lockup Agreement with Longhai Holdings and each of our directors and officers,
pursuant to which each of them agreed not to transfer any of our capital stock
held directly or indirectly by them for an eighteen-month period following the
closing of the private placement.
Our Corporate Structure
All of our business operations are conducted through our
Chinese subsidiaries. The chart below presents our corporate structure:
MANAGEMENT
Directors and Executive Officers
The following sets forth information about our directors and
executive officers as of the date of this prospectus:
NAME
AGE
POSITION
Antoine Cheng
53
Chairman of the Board of
      Directors
Weiqing Zhang
36
Chief Executive Officer, President and Director
Yang Chen
38
Chief Financial Officer and
      Vice President
Zhongbo Zhou
34
Director
67
Mr. Antoine Cheng
. Mr. Cheng has been the Chairman of
our board of directors since the closing of our reverse acquisition of Leewell
on April 14, 2010 and has served as the Chairman of Oumei since 2006. Mr. Cheng
became Chairman of Oumei after he retired from government service. Prior to
joining Oumei, Mr. Cheng served as Chief Director of the Industry and Commerce
Department of the Qingdao (Pingdu and Jimo) Municipal Government from 1998 to
2006 and as Vice Chief Director of the Public Security Bureau of the Pingdu
Municipal Government from 1992 to 1998. Mr. Cheng received his Master's degree
in economics from Shandong Public Administration College in 2005.
Mr. Weiqing Zhang
. Mr. Zhang has served as our Chief
Executive Officer and President since the closing of our reverse acquisition of
Leewell on April 14, 2010 and became a member of our board of directors on May
1, 2010. Mr. Zhang has held the same positions with Oumei since its formation in
May 2001. Prior to joining Oumei, he was responsible for properties development
for Longhai Real Estate Development Co., Ltd., between August 1994 and May 2001.
With more than 15 years of experience in real estate development, Mr. Zhang has
successfully developed more than two million square meters of GFA and has also
served in strategic planning and general administration functions. He graduated
from Qingdao Construction Engineering College in 1994 with a Bachelor's degree
in Business.
Mr. Yang Chen
. Mr. Chen has served as our Chief
Financial Officer and Vice President since the closing of our reverse
acquisition of Leewell on April 14, 2010, and has held the same positions with
Oumei since January 2008. Mr. Chen has more than 17 years of experience in
accounting and financial management. Prior to joining Oumei, he served as chief
financial officer for several companies, including Mudanjiang Dongxing Group
Corporation, a retail-oriented diversified company (hotels, supermarkets,
villas, and electrical equipment) from 2004 to 2008 and Harbin Guangyun
Electrical Appliance Co., Ltd. prior to joining Mudanjiang Dongxing in 2004. Mr.
Chen graduated from Harbin Institute of Technology with a Bachelor's degree in
industrial accounting in 1992.
Mr. Zhongbo Zhou
. Mr. Zhou became a member of our board
of directors on May 1, 2010. Mr. Zhou also serves as the Vice General Manager of
Engineering Department of Oumei, where he is responsible for project and sales
management. He joined Oumei in 2001 and served as its Vice General Manager of
Administration from 2005 to 2007. Mr. Zhou holds a Bachelor's degree in civil
engineering of Qingdao Technical University.
Significant Employees
In addition to the foregoing named officers and directors, the
  following employees are also key to our business and operations:
NAME
AGE
POSITION
Zhongbo Zhou
34
Vice General
      Manager of Engineering Department of Oumei
Yalei Chen
33
Vice General Manager of
      Development Strategies Department of Oumei
Mr. Zhongbo Zhou
. Mr. Zhou has served as Oumei's Vice
General Manager of Engineering Department since 2007 and is responsible for
project and sales management. He joined Oumei in 2001 and served as its Vice
General Manager of Administration from 2005 to 2007. Mr. Zhou holds a Bachelor's
degree in civil engineering from Qingdao Technical University.
Mr. Yalei Chen
. Mr. Chen has served as Oumei's Vice
General Manager of Development Strategies Department since 2007 and is in charge
of its development strategies. He joined Oumei in 2001 as a technician and
assistant to General Manager. Prior to that, Mr. Chen worked as a technician in
Qingdao Pingdu Construction Group Company Factory and ZTE Corporation. He
graduated from China Agricultural University in 1997 with a college diploma.
Family Relationships
There are no family relationships among any of our officers or
directors.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or
executive officers 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 five 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, or a finding of any violation of federal or state securities
laws, except for matters that were dismissed without sanction or settlement.
Except as set forth in our discussion below in "Certain Relationships and
Related Transactions, and Director Independence – Transactions with Related
Persons," none of our directors, director nominees, or executive officers has
been involved in any transactions with us or any of our directors, executive
officers, affiliates, or associates which are required to be disclosed pursuant
to the rules and regulations of the SEC.
68
Board Composition and Committees
The board of directors is currently composed of three members,
Messrs. Antoine Cheng, Weiqing Zhang and Zhongbo Zhou. All Board action requires
the approval of a majority of the directors in attendance at a meeting at which
a quorum is present. We may increase the size of our board of directors in the
future but have not determined the approximate time to take such action.
We currently do not have standing audit, nominating or
compensation committees. Our board of directors handles the functions that would
otherwise be handled by each of the committees. We intend, however, to establish
an audit committee, a nominating committee and a compensation committee of the
board of directors as soon as practicable. We envision that the audit committee
will be primarily responsible for reviewing the services performed by our
independent auditors, evaluating our accounting policies and our system of
internal controls. The nominating committee would be primarily responsible for
nominating directors and setting policies and procedures for the nomination of
directors. The nominating committee would also be responsible for overseeing the
creation and implementation of our corporate governance policies and procedures.
The compensation committee will be primarily responsible for reviewing and
approving our compensation and benefit policies, including compensation of
executive officers.
Our board of directors has not made a determination as to
whether any member of our board is an audit committee financial expert. Upon the
establishment of an audit committee, the board will determine whether any of the
directors qualify as an audit committee financial expert.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Background and Compensation Philosophy
Prior to our reverse acquisition of Leewell, our operating
subsidiaries were private limited companies organized under the laws of the PRC,
and in accordance with PRC regulations, the salary of our executives was
determined by our shareholders.
In 2009, our named executive officers included Mr. Weiqing
Zhang, our Chief Executive Officer and President, and Mr. Yang Chen, our Chief
Financial Officer. Mr. Zhang is also a member of our board of directors. In
2009, our board of directors determined the compensation of our named executive
officers, based on our financial and operating performance and prospects, the
level of compensation paid to similarly situated executives in comparably sized
companies and the contributions made by each of the executive officers to our
success. As disclosed below, each of the named executive officers entered into
an employment agreement and their employment agreements govern the amount of
base salary the executives are paid.
As the membership of our board of directors increases, our
board of directors may form a compensation committee charged with the oversight
of our executive compensation plans, policies and programs and the authority to
determine and approve the compensation of our chief executive officer and make
recommendations with respect to the compensation of our other executive
officers.
Elements of Compensation
We provide our executive officers with a base salary and
discretionary bonuses to compensate them for services rendered during the year.
We believe that our policy of compensating our executives in this way has served
the company well and does not encourage unreasonable risk-taking.
69
Base Salary
. The base salary we provide is intended to equitably
  compensate the named executive officers based upon their level of
  responsibility, complexity and importance of role, leadership and growth
  potential, and experience. The base salary paid to our named executive
  officers is governed by their respective employment agreements and is
  reflected in the Summary Compensation Table below.
Discretionary Bonus
. We did not pay bonus compensation to our
  executive officers in 2009. If, in the future, our board of directors
  determines to provide bonus compensation as a regular part of our executive
  compensation package, our compensation committee or our board if we do not yet
  have a compensation committee, may adopt a formal incentive bonus plan, which
  will establish performance goals for each of the executive officers and
  maximum amounts that may be earned upon attainment of such performance goals.
Equity Incentives
. Presently, we do not have an equity based
  incentive program and we did not grant stock based awards as a component of
  compensation in 2009. In the future, we may adopt and establish an equity
  incentive plan pursuant to which awards may be granted and which will provide
  us with the ability to provide to our eligible employees, including each of
  our named executive officers, grants of stock compensation awards based on our
  shares if our compensation committee determines that such awards are in our
  and our shareholders' best interests.
Retirement Benefits
. Our executive officers are not presently
  entitled to company-sponsored retirement benefits.
Perquisites
. Historically, we have provided certain of our named
  executive officers with perquisites and other personal benefits that we
  believe are reasonable. We do not view perquisites as a significant element of
  our comprehensive compensation structure, but do believe they can be useful in
  attracting, motivating and retaining the executive talent for which we
  compete, especially for executives who perform services abroad as expatriates.
  We believe that these additional benefits assist our executives in performing
  their duties and provide time efficiencies for our executives. It is expected
  that our historical practices regarding perquisites will continue and will be
  subject to periodic review by our compensation committee.
Summary Compensation Table — Fiscal Years Ended December 25,
2009, 2008 and 2007
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. No other executive
officer received total annual salary and bonus compensation in excess of
$100,000.
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
All Other
Compensation
($)
Total
($)
Weiqing Zhang,
Chief Executive
      Officer
(1)
2009
15,812
0
0
0
0
15,812
2008
14,000
0
0
0
0
14,000
2007
9,000
0
0
0
0
9,000
Yang Chen,
Chief Financial
      Officer
(1)
2009
14,000
0
0
0
0
14,000
2008
14,000
0
0
0
0
14,000
2007
-
-
-
-
-
-
Joseph Rozelle,
Former
      President and Chief
Financial Officer
(2)
2009
0
0
0
0
0
0
2008
0
0
0
0
0
0
2007
0
0
0
0
0
0
(1)
On April 14, 2010, we acquired Leewell in a reverse
      acquisition transaction that was structured as a share exchange and in
      connection with that transaction, Mr. Weiqing Zhang became our Chief
      Executive Officer and President and Mr. Chen became our Chief Financial
      Officer and Vice President. Prior to the effective date of the reverse
      acquisition, Messrs. Zhang and Chen held the same positions with Leewell's
      subsidiary, Oumei. The annual, long-term, and other compensation shown in
      this table includes the amounts Messrs. Zhang and Chen received from Oumei
      prior to the consummation of the reverse acquisition. Mr. Chen was not
      employed by Oumei in 2007.
(2)
Mr. Joseph Rozelle resigned from all offices he held with
      us upon the closing of the reverse acquisition of Leewell on April 14,
      2010.
70
Summary of Employment Agreements and Material Terms
All of our employees, including Mr. Weiqing Zhang, our Chief
Executive Officer and President, and Mr. Yang Chen, our Chief Financial Officer
and Vice President, have executed our standard employment agreement. Our
employment agreements with our executives provide the amount of each executive
officer's salary and establish their eligibility to receive a bonus. Mr. Zhang's
employment agreement provides for an annual salary of RMB108,000 (approximately
$16,000) and expires on June 5, 2012, and Mr. Chen's employment agreement
provides for an annual salary of RMB96,000 (approximately $15,000) and expires
on July 1, 2012.
Other than the salary and necessary social benefits required by
the government, which are defined in the employment agreement, we currently do
not provide other benefits to our officers at this time. Our executive officers
are not entitled to severance payments upon the termination of their employment
agreements or following a change in control.
Grants of Plan-Based Awards
No plan-based awards were granted to any of our named executive
officers during the fiscal year ended December 25, 2009.
Outstanding Equity Awards at Fiscal Year End
No unexercised options or warrants were held by any of our
named executive officers at December 25, 2009. No equity awards were made during
the fiscal year ended December 25, 2009.
Option Exercises and Stock Vested
No options to purchase our capital stock were exercised by any
of our named executive officers, nor was any restricted stock held by such
executive officers vested during the fiscal year ended December 25, 2009.
Pension Benefits
No named executive officers received or held pension benefits
during the fiscal year ended December 25, 2009.
Nonqualified Deferred Compensation
No nonqualified deferred compensation was offered or issued to
any named executive officer during the fiscal year ended December 25, 2009.
Potential Payments Upon Termination or Change in Control
Our executive officers are not entitled to severance payments
upon the termination of their employment agreements or following a change in
control.
Compensation of Directors
No member of our board of directors received any compensation
for his services as a director during the fiscal year ended December 25,
2009.
Compensation Committee Interlocks and Insider Participation
During the fiscal year 2009 we did not have a standing
compensation committee. Our board of directors was responsible for the functions
that would otherwise be handled by the compensation committee. All directors
participated in deliberations concerning executive officer compensation,
including directors who were also executive officers, however, none of our
executive officers received any compensation during the last fiscal year. None
of our executive officers has served on the board of directors or compensation
committee (or other committee serving an equivalent function) of any other
entity, any of whose executive officers served on our Board or Compensation
Committee.
71
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN
CONTROL PERSONS;
CORPORATE GOVERNANCE
Transactions With Related Persons
The following includes a summary of transactions since the
beginning of the 2009 fiscal year, or any currently proposed transaction, in
which we were or are to be a participant and the amount involved exceeded or
exceeds $120,000 and in which any related person had or will have a direct or
indirect material interest (other than compensation described under "Executive
Compensation"). We believe the 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.
As of December 25, 2009 and 2008, we had a total of $2,949,102 and
  $15,279,068, respectively, due from Longhai Group and its subsidiaries. The
  Longhai Group is controlled by Mr. Antoine Cheng, our Chairman. These balances
  have no stated terms for repayment and are not interest bearing.
In 2009, we sold two floors of a project for office use to Longhai
  Construction Company, a subsidiary of Longhai Group, for approximately
  $3,274,000.
Policies and Procedures for Review, Approval or Ratification
of Transactions with Related Persons
As we increase the size of our board of directors and gain
independent directors, we expect to prepare and adopt a written related-person
transactions policy that sets forth our policies and procedures regarding the
identification, review, consideration and approval or ratification of
"related-persons transactions." For purposes of our policy only, a
"related-person transaction" will be a transaction, arrangement or relationship
(or any series of similar transactions, arrangements or relationships) in which
we and any "related person" are participants involving an amount that exceeds
$120,000. Transactions involving compensation for services provided to us as an
employee, director, consultant or similar capacity by a related person will not
be covered by this policy. A related person will be any executive officer,
director or a holder of more than five percent of our ordinary shares, including
any of their immediate family members and any entity owned or controlled by such
persons.
We anticipate that, where a transaction has been identified as
a related-person transaction, the policy will require management to present
information regarding the proposed related-person transaction to our audit
committee (or, where approval by our audit committee would be inappropriate, to
another independent body of our board of directors) for consideration and
approval or ratification. Management's presentation will be expected to include
a description of, among other things, the material facts, the direct and
indirect interests of the related persons, the benefits of the transaction to us
and whether any alternative transactions are available.
To identify related-person transactions in advance, we are
expected to rely on information supplied by our executive officers, directors
and certain significant shareholders. In considering related-person
transactions, our board of directors will take into account the relevant
available facts and circumstances including, but not limited to:
the risks, costs and benefits to us;
the effect on a director's independence in the event the related person is
  a director, immediate family member of a director or an entity with which a
  director is affiliated;
the terms of the transaction;
the availability of other sources for comparable services or products; and
the terms available to or from, as the case may be, unrelated third parties
  or to or from our employees generally.
We also expect that the policy will require any interested
director to excuse himself or herself from deliberations and approval of the
transaction in which the interested director is involved.
Promoters and Certain Control Persons
We did not have any promoters at any time during the past five
fiscal years.
72
Director Independence
We currently do not have any independent directors, as the term
"independent" is defined by the rules of the Nasdaq Stock Market.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information regarding beneficial
ownership of each class of our voting securities as of May 5, 2010 (i) by each
person who is known by us to beneficially own more than 5% of our voting
securities; (ii) by each of our officers and directors; and (iii) by all of our
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, Floor 28, Block
C, Longhai Mingzhu Building, No.182 Haier Road, Qingdao 266000, People's
Republic of China.
Name and Address of Beneficial
Owner
Office, If Any
Shares Beneficially Owned
(1)
Ordinary Shares
(2)
Preference Shares
(3)
% Total
Voting
Power
(4)
Shares
% of
Class
Shares
% of
Class
Directors
and Officers
Antoine Cheng
(5)
Chairman
27,143,000
87.56%
0
*
80.36%
Weiqing Zhang
(6)
CEO, President
and Director
10,000
*
0
*
*
Yang Chen
(7)
CFO & Vice
President
10,000
*
0
*
*
Zhongbo Zhou
(8)
Director
3,000
*
0
*
*
All officers and directors as a group
(4 persons named above)
27,166,000
87.63%
0
*
80.43%
5% Security Holders
Longhai Holdings Company Limited
(5)
27,143,000
87.56%
0
*
80.36%
Jayhawk Private Equity Fund II, L.P.
(9)
930 Tahoe Blvd., 802-281
Incline Village, NV 89451
375,000
1.20%
750,000
27.03%
3.29%
Access America Fund, LP
(10)
11200 Westheimer Rd., Suite 508
Houston, TX 77042
404,164
1.30%
375,000
13.51%
2.29%
Hua-Mei 21st Century Partners, LP
(11)
237 Park Avenue, 9th Floor
New York, NY 10017
446,500
1.43%
475,000
17.12%
2.71%
Guerrilla Partners, LP
(12)
237 Park Avenue, 9th Floor
New York, NY 10017
258,500
*
275,000
9.91%
1.57%
Taylor International Fund, Ltd.
(13)
714 S. Dearborn Street, 2nd Floor
Chicago, IL 60605
404,164
1.30%
375,000
13.51%
2.29%
* Less than 1%
(1)
Beneficial Ownership is determined in accordance with the
      rules of the SEC and generally includes voting or investment power with
      respect to securities. Each of the beneficial owners listed above has
      direct ownership of and sole voting power and investment power with
      respect to our ordinary shares. For each beneficial owner above, any
      options exercisable within 60 days have been included in the denominator.
(2)
Based on 31,000,062 ordinary
      shares issued and outstanding as of May 5, 2010.
73
(3)
Based on 2,774,700 Preference Shares issued and
      outstanding as of May 5, 2010. Each Preference Share is convertible into
      one (1) ordinary share (subject to customary adjustments for stock splits,
      combinations, or equity dividends on ordinary shares). Holders of
      Preference Shares vote with the holders of ordinary shares on all matters
      on an "as converted" basis. See "Description of Securities – Preference
      Shares" below for more information regarding our Preference
  Shares.
(4)
Percentage of Total Capital Stock represents total
      ownership with respect to all shares of our ordinary shares and Preference
      Shares, as a single class and on an "as converted" basis.
(5)
Includes 27,143,000 ordinary shares held by Longhai
      Holdings. Mr. Antoine Cheng is the sole shareholder and director of
      Longhai Holdings and has voting and dispositive control over the
      securities held by it. Pursuant to the Lock-up Agreement, all of the
      ordinary shares held by Longhai Holdings are subject to an eighteen-month
      lock-up period following the closing of the private placement on April 14,
      2010. In addition, pursuant to the Make Good Escrow Agreement, Longhai
      Holdings deposited 7,500,000 ordinary shares held by it into an escrow
      account for the benefit of the investors in the event that we fail to meet
      certain financial performance thresholds.
(6)
Pursuant to the Lock-up Agreement, all of the ordinary
      shares held by Mr. Weiqing Zhang are subject to an eighteen-month lock-up
      period following the closing of the private placement on April 14,
      2010.
(7)
Pursuant to the Lock-up Agreement, all of the ordinary
      shares held by Mr. Yang Chen are subject to an eighteen-month lock-up
      period following the closing of the private placement on April 14,
      2010.
(8)
Pursuant to the Lock-up Agreement, all of the ordinary
      shares held by Mr. Zhongbo Zhou are subject to an eighteen-month lock-up
      period following the closing of the private placement on April 14,
      2010.
(9)
Includes 375,000 shares underlying a warrant to purchase
      our ordinary shares. Kent C. McCarthy has sole voting and dispositive
      power over securities held by Jayhawk Private Equity Fund II,
  L.P.
(10)
Includes 187,500 shares underlying a warrant to purchase
      our ordinary shares. Christopher Efird is the Managing Partner of Access
      America Fund, LP and has voting and dispositive control over securities
      held by it.
(11)
Includes 237,500 shares underlying a warrant to purchase
      our ordinary shares. Peter Siris is the Managing Director of Hua-Mei 21st
      Century Partners, LP and has voting and dispositive control over
      securities held by it.
(12)
Includes 137,500 shares underlying a warrant to purchase
      our ordinary shares. Peter Siris is the Managing Director of Guerrilla
      Partners, LP and has voting and dispositive control over securities held
      by it.
(13)
Includes 187,500 shares underlying a warrant to purchase
      our ordinary shares. Robert J. Kirkland is the President of Taylor Asset
      Management, Inc., the general partner of Taylor International Fund, Ltd.,
      and has voting and dispositive control over securities held by
  it.
Changes in Control
We do not currently have any arrangements which if consummated
may result in a change of control of our Company.
DESCRIPTION OF SECURITIES
Our authorized share capital consists of 100,000,000 ordinary
shares, par value $0.002112 per share, and 20,000,000 preference shares, par
value $0.002112 per share.
We are a Cayman Islands exempted company and our affairs are
governed by our memorandum and articles of association, the Companies Law (2009
Revision) and the common law of the Cayman Islands. The following are summaries
of material provisions of our memorandum and articles of association and the
Companies Law insofar as they relate to the material terms of our ordinary
shares. Complete copies of our memorandum and articles of association are filed
as exhibits to our public filings.
74
Ordinary Shares
General
. All the issued and outstanding ordinary
shares are fully paid and non-assessable. Our ordinary shares are not entitled
to any sinking fund or pre-emptive rights. As of the date of this prospectus,
there are 31,000,062 ordinary shares issued and outstanding.
Dividends
. The holders of our ordinary shares are
entitled to such dividends as may be declared or paid by our board of directors
subject to our memorandum and articles of association and the Companies Law. No
dividend may be declared or paid unless our directors determine that immediately
after the payment, we will be able to satisfy our liabilities as they become due
in the ordinary course of business, and we have funds lawfully available for
such purpose.
Voting Rights
. The holders of our ordinary shares
have identical rights, as provided by our memorandum and articles of
association. General meetings of shareholders are expected to be held annually
and may be convened by the board of directors as it may consider necessary or
desirable or upon a request of one or more shareholders holding in the aggregate
not less than 10% of our voting share capital. If the board of directors does
not convene a requisitioned meeting within 21 days of the deposit of the
requisition notice, the requisitionists may themselves convene the general
meeting.
A quorum for a general meeting of shareholders is considered
present if there are one or more shareholders entitled to vote and present in
person or by proxy holding in aggregate more than 50% of our voting share
capital. If a quorum is not present within half an hour after the time appointed
for the general meeting, the general meeting shall stand adjourned to the same
day in the next week at the same time and place. If at such adjourned general
meeting a quorum is not present within half an hour from the time appointed for
holding the general meeting, the shareholder or shareholders present in person
or by proxy shall be a quorum and may transact the business for which the
general meeting was called.
An ordinary resolution to be passed by the shareholders
requires the affirmative vote of a simple majority of the votes attaching to our
shares cast in a general meeting, while a special resolution requires the
affirmative vote of no less than two-thirds of the votes cast attaching to our
shares. Pursuant to the Companies Law, special resolution is required for
important matters such as amending the memorandum and articles of association, a
change of name and winding up. Holders of our shares may affect certain changes
by ordinary resolution, including electing and removing directors.
Transfer of Shares
. Subject to our memorandum and
articles of association, as applicable, any of our shareholders may transfer all
or any of his or her ordinary shares by an instrument of transfer in the usual
or common form or any other form approved by our board. Our board of directors
may, in its sole discretion, decline to register any transfer of any ordinary
share for any or no reason. If our directors refuse to register a transfer, they
shall, within two months after the date on which the instrument of transfer was
lodged, send to each of the transferor and the transferee notice of such
refusal. The registration of transfers may be suspended and the register closed
at such times and for such periods as our board of directors may from time to
time determine; provided, however, that the registration of transfers shall not
be suspended nor the register closed for more than 45 days in any year.
Liquidation
. On a return of capital on winding up
or otherwise (other than on conversion, redemption or purchase of shares), after
payment in full of the amounts required to be paid to creditors and holders of
any issued and outstanding preference shares, if any, all holders of ordinary
shares are entitled to receive the same amount per share with respect to any
distribution of assets to holders of ordinary shares.
Calls on Ordinary Shares and Forfeiture of Ordinary
Shares
. Our board of directors may from time to time make calls upon
shareholders for any amounts unpaid on their ordinary shares in a notice served
to such shareholders at least 14 days prior to the specified time and place of
payment. The ordinary shares that have been called upon and remain unpaid on the
specified time are subject to forfeiture in accordance with the procedure under
our memorandum and articles of association.
Redemption of Ordinary Shares
. Ordinary shares
are not redeemable but, subject to the provisions of the Companies Law, we may
issue shares on terms that are subject to redemption, at our option or at the
option of the holders, on such terms and in such manner as may be determined
pursuant to our memorandum and articles of association.
75
Variations of Rights of Shares
. All or any of the
special rights attached to any class of shares may, subject to the provisions of
the Companies Law, be varied either with the consent of the holders of
two-thirds of the issued shares of that class or with the sanction of a special
resolution passed at a general meeting of the holders of the shares of that
class.
Inspection of Books and Records
.
Holders
of our ordinary shares will have no general right under Cayman Islands law to
inspect or obtain copies of our list of shareholders or our corporate records
(other than our memorandum and articles of association). However, we provide our
shareholders with annual audited financial statements.
Directors
. Unless the shareholders otherwise
decided by ordinary resolution, the minimum number of directors is one, and the
maximum number is unlimited. Our board of directors will consist of a single
class of directors who will serve until they resign or are removed in accordance
with the memorandum and articles of association. Our board has the power at any
time to appoint a person as a director either to fill a casual vacancy or as an
addition to the existing board. A director may be removed from office, with or
without cause, by an ordinary resolution of shareholders. A meeting of directors
is duly constituted if, at the commencement of the meeting, there are present,
in person or by proxy, not less than two directors (unless a different quorum
has otherwise been fixed by our board). Any resolution that may be passed by our
directors or a committee of directors at a meeting may also be passed by a
unanimous written resolution of the directors.
Preference Shares
On April 14, 2010, our board of directors established a series
of our preference shares, par value $0.002112 per share, designated as "6%
Convertible Preference Shares" (which we refer to herein as the Preference
Shares). As of the date of this prospectus, there are 2,774,700 Preference
Shares issued and outstanding. A summary of the Preference Shares is set forth
below:
Ranking
. With respect to rights upon liquidation,
winding-up or dissolution, the Preference Shares rank senior to our ordinary
shares and any other classes or series of stock of the Company not designated as
ranking senior to or
pari passu
with the Preference Shares.
Voting
. The holders of the Preference Shares will
vote on an "as converted" basis, together with the ordinary shares, as a single
class, in connection with any proposal submitted to our shareholders.
Conversion
. Each Preference Share is optionally
convertible into one (1) fully paid and non-assessable ordinary share.
Mandatory Conversion
. We have the right to
convert outstanding Preference Shares into ordinary shares if, for a period of
at least twenty (20) consecutive business days, (i) the volume weighted average
price of our ordinary shares equals or exceeds US$6.00, (ii) average daily
trading volume of our ordinary shares equals or exceeds 50,000 shares per day,
and (iii) trading volume of our ordinary shares equals or exceeds 30,000 shares
on every business day during this period.
Anti-Dilution
. The number of ordinary shares into
which each Preference Share may be converted into will be proportionally
adjusted in the event of any stock splits, combinations, or equity dividends on
ordinary shares. Upon certain reorganizations, reclassifications, mergers, or
consolidations, the holders of Preference Shares may convert their shares into
the securities or property that they would have been entitled to upon the
consummation of such transaction if the holder had converted the Preference
Shares immediately prior to such transaction.
Dividends
.
Each Preference Share will be
entitled to receive cumulative dividends at the annual rate of six percent (6%)
accruing on a daily basis on the purchase price of the Preference Share. Such
dividends will be payable in cash annually on January 1 beginning with the first
such date after April 14, 2010. If the six percent (6%) dividend is not timely
paid in full, any such unpaid dividend amount will be increased by 6% per year,
accruing on a daily basis.
Liquidation
.
In the event of the
liquidation, dissolution or winding up of the affairs of the Company, whether
voluntary or involuntary, the holders of the Preference Shares then outstanding
will be entitled to receive, out of the assets of the Company available for
distribution to its shareholders, an amount equal to the amount credited as paid
up on the Preference Shares plus accrued but unpaid dividends, before any
payment shall be made or any assets distributed to the holders of the ordinary
shares or any other class or series of stock issued by the Company not
designated as ranking senior to or
pari passu with
the Preference Shares
in respect of the right to participate in distributions or payments upon a liquidation event.
76
Warrant
In connection with our private placement which was closed on
April 14, 2010, we issued to the investors Warrants to purchase in aggregate
1,387,350 ordinary shares. The Warrants have a term of five years with an
exercise price of $6.00 per share (subject to customary adjustments) and are
exercisable by investors on a net exercise or cashless basis at any time after
the closing date.
On April 14, 2010, we also issued warrants for the purchase of
an aggregate of 138,735 ordinary shares, exercisable for a period of three years
at an exercise price of $5.00 per share, to Brean Murray, Carret & Co., LLC
and/or its designees, as partial compensation for services provided by them in
connection with the private placement transaction.
As of the date of this prospectus, none of the above warrants
have been exercised.
Corporate Law
The Companies Law differs from laws applicable to U.S.
corporations and their shareholders. Set forth below is a summary of the
significant differences between the provisions of the Companies Law applicable
to us and the laws applicable to companies incorporated in the United States and
their shareholders.
Director Independence
Neither Cayman Islands law nor our memorandum and articles of
association require that a majority of our directors be independent. As a matter
of Cayman Islands law, a director of a Cayman Islands company is in the position
of a fiduciary with respect to the company, and therefore it is considered that
he owes the following duties to the company—a duty to act bona fide in the best
interests of the company, a duty not to make a profit based on his position as
director (unless the company permits him or her to do so) and a duty not to put
himself or herself in a position where the interests of the company conflict
with his or her personal interest or his or her duty to a third party. The duty
of a director not to put himself or herself in a position of conflict may be
modified by the company's articles of association. Our articles of association
permit our directors to have such a conflict and to participate and vote in
respect of any decision in which they may have a conflict, provided their
conflicting interests are adequately disclosed. This does not modify the
directors' duty to act in a way they consider to be bona fide in the best
interests of the company.
A director of a Cayman Islands company owes to the company a
duty to act with skill and care. It was previously considered that a director
need not exhibit in the performance of his duties a greater degree of skill than
may reasonably be expected from a person of his knowledge and experience.
However, English and Commonwealth courts have moved towards a dual
objective/subjective standard with regard to the required skill and care, to the
effect that a director must exercise the skill and care of a reasonably diligent
person having both (a) the general knowledge, skill and experience that may
reasonably be expected of a person carrying out the same actions as our carried
out by that direction in relation to the company and (b) the general knowledge,
skill and experience that that particular director has. These authorities are
likely to be followed in the Cayman Islands.
Restrictions on Nonresident or Foreign Shareholders
Under Cayman Islands law, there are no limitations on the
rights of nonresident or foreign shareholders to hold or vote our ordinary
shares.
Anti-Money Laundering — Cayman Islands
In order to comply with legislation or regulations aimed at the
prevention of money laundering, we may adopt and maintain anti-money laundering
procedures, and we may require shareholders to provide evidence to verify their
identity and source of funds. Where permitted, and subject to certain
conditions, we may also delegate the maintenance of our anti-money laundering
procedures (including the acquisition of due diligence information) to a
suitable person.
We reserve the right to request such information as is
necessary to verify the identity of a shareholder unless in the particular case
we are satisfied that an exemption applies under the Money Laundering
Regulations (2009 Revision) of the Cayman Islands, as amended and revised from time to time,
or the Regulations. Depending on the circumstances of each application, a
detailed verification of identity might not be required where:
77
the shareholder makes the payment for their investment from an account held
  in the applicant's name at a recognized financial institution; or
the shareholder is regulated by a recognized regulatory authority and is
  based or incorporated in, or formed under the law of, a recognized
  jurisdiction; or
the purchase of shares is made through an intermediary which is regulated
  by a recognized regulatory authority and is based in or incorporated in, or
  formed under the law of a recognized jurisdiction, and an assurance is
  provided in relation to the procedures undertaken on the underlying investors.
For the purposes of these exceptions, recognition of a
financial institution, regulatory authority or jurisdiction will be determined
in accordance with the Regulations by reference to those jurisdictions
recognized by the Cayman Islands Monetary Authority as having equivalent
anti-money laundering regulations.
In the event of delay or failure on the part of a shareholder
in producing any information required for verification purposes, we may refuse
to accept the application, in which case any funds received will be returned
without interest to the account from which they were originally debited.
We also reserve the right to refuse to make any redemption
payment to a shareholder if our directors suspect, or are advised that, the
payment of redemption proceeds to such shareholder might result in a breach of
applicable anti-money laundering or other laws or regulations by any person in
any relevant jurisdiction, or if such refusal is considered necessary or
appropriate to ensure the compliance by us with any such laws or regulations in
any applicable jurisdiction.
If any person resident in the Cayman Islands knows or suspects,
or has reasonable grounds for knowing or suspecting, that another person is
engaged in criminal conduct or is involved with terrorism or terrorist property,
and the information for that knowledge or suspicion came to their attention in
the course of business in the regulated sector, the person will be required to
report such knowledge or suspicion to (i) the Financial Reporting Authority of
the Cayman Islands, pursuant to the Proceeds of Crime Law, 2008 of the Cayman
Islands, if the disclosure relates to criminal conduct or money laundering, or
(ii) a police officer of the rank of constable or higher pursuant to the
Terrorism Law (2009 Revision) of the Cayman Islands, if the disclosure relates
to involvement with terrorism or terrorist financing and property. Such a report
shall not be treated as a breach of confidence or of any restriction upon the
disclosure of information imposed by any enactment or otherwise.
Mergers and Similar Arrangements
In certain circumstances, the Cayman Islands Companies Law
allows for mergers or consolidations between two Cayman Islands companies or
between a Cayman Islands company and a company incorporated in another
jurisdiction (provided that it is permitted by the laws of that other
jurisdiction).
Where the merger or consolidation is between two Cayman Islands
companies, the directors of each company must approve a written plan of merger
or consolidation containing certain prescribed information. That plan of merger
or consolidation must then be authorized by either (a) a special resolution
(usually a majority of 66 2/3% in value) of the shareholders of each company
voting together as one class if the shares to be issued to each shareholder in
the consolidated or surviving company will have the same rights and economic
value as the shares held in the relevant constituent company or (b) a
shareholder resolution of each company passed by a majority in number
representing 75% in value of the shareholders voting together as one class. A
shareholder has the right to vote on a merger or consolidation regardless of
whether the shares that he or she holds otherwise give him or her voting rights.
No shareholder resolution is required for a merger between a parent company
(i.e., a company that owns at least 90% of the issued shares of each class in a
subsidiary company) and its subsidiary company. The consent of each holder of a
fixed or floating security interest of a constituent company must be obtained
unless the court waives such requirement. If the Cayman Islands Registrar of
Companies is satisfied that the requirements of the Companies Law (which
includes certain other formalities) have been complied with, the Registrar of
Companies will register the plan of merger or consolidation.
78
Where the merger or consolidation involves a foreign
constituent company, and where the surviving company is a Cayman Islands company, the procedure is similar, save that,
with respect to the foreign constituent company, the director of the surviving
or consolidated company is required to make a declaration to the effect that,
having made due enquiry, he or she is of the opinion that the requirements set
out below have been met: (i) that the merger or consolidation is permitted, or
not prohibited, by the constitutional documents of the foreign company and by
the laws of the jurisdiction in which the foreign company is incorporated, and
that those laws, and any requirements of those constitutional documents have
been, or will be, complied with; (ii) that no petition or other similar
proceeding has been filed and remains outstanding or order made or resolution
adopted to wind up or liquidate the foreign company in any jurisdictions; (iii)
that no receiver, trustee, administrator or other similar person has been
appointed in any jurisdiction and is acting in respect of the foreign company,
its affairs or its property or any part thereof; (iv) that no scheme, order,
compromise or other similar arrangement has been entered into or made in any
jurisdiction whereby the rights of creditors of the foreign company are, and
continue to be, suspended or restricted; (v) that the foreign company is able to
pay its debts as they fall due and that the merger or consolidation is bona fide
and not intended to defraud unsecured creditors of the foreign company; (vi)
that in respect of the transfer of any security interest granted by the foreign
company to the surviving or consolidated company (a) consent or approval to the
transfer has been obtained, released or waived; (b) the transfer is permitted
by, and has been approved in accordance with, the constitutional documents of
the foreign company; and (c) the laws of the jurisdiction of the foreign company
with respect to the transfer have been ,or will be, complied with; (vii) that
the foreign company will, upon the merger or consolidation becoming effective,
cease to be incorporated, registered or exist under the laws of the relevant
foreign jurisdiction; and (viii) that there is no other reason why it would be
against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Law
provides for a right of dissenting shareholders to receive a payment of the fair
value of their shares upon their dissenting to the merger or consolidation if
they follow a prescribed procedure. In essence, that procedure is as follows:
(a) the shareholder must give his or her written objection to the merger or
consolidation to the constituent company before the vote on the merger or
consolidation, including a statement that the shareholder proposes to demand
payment for his or her shares if the merger or consolidation is authorized by
the vote; (b) within 20 days following the date on which the merger or
consolidation is approved by the shareholders, the constituent company must give
written notice to each shareholder who made a written objection; (c) a
shareholder must, within 20 days following receipt of such notice from the
constituent company, give the constituent company a written notice of his or her
intention to dissent, including, among other details, a demand for payment of
the fair value of his or her shares; (d) within seven days following the date of
the expiration of the period set out in paragraph (b) above, or seven days
following the date on which the plan of merger or consolidation is filed,
whichever is later, the constituent company, the surviving company or the
consolidated company must make a written offer to each dissenting shareholder to
purchase his or her shares at a price that the company determines is the fair
value and, if the company and the shareholder agree the price within 30 days
following the date on which the offer was made, the company must pay the
shareholder such amount; and (e) if the company and the shareholder fail to
agree a price within such 30-day period, within 20 days following the date on
which such 30-day period expires, the company (and any dissenting shareholder)
must file a petition with the Cayman Islands Grand Court to determine the fair
value and such petition must be accompanied by a list of the names and addresses
of the dissenting shareholders with whom agreements as to the fair value of
their shares have not been reached by the company. At the hearing of that
petition, the court has the power to determine the fair value of the shares
together with a fair rate of interest, if any, to be paid by the company upon
the amount determined to be the fair value. Any dissenting shareholder whose
name appears on the list filed by the company may participate fully in all
proceedings until the determination of fair value is reached. These rights of a
dissenting shareholder may not be available in certain circumstances, for
example, to dissenters holding shares of any class in respect of which an open
market exists on a recognized stock exchange or recognized interdealer quotation
system at the relevant date or where the consideration for such shares to be
contributed are shares of any company listed on a national securities exchange
or shares of the surviving or consolidated company.
Moreover, Cayman Islands law also has separate statutory
provisions that facilitate the reconstruction or amalgamation of companies and,
in certain circumstances, schemes of arrangement will generally be more suited
for complex mergers or other transactions involving widely-held companies,
commonly referred to in the Cayman Islands as a "scheme of arrangement", which
may be tantamount to a merger. In the event that a merger was sought pursuant to
a scheme of arrangement (the procedures of which are more rigorous, and take
longer to complete, than the procedures typically required to consummate a
merger in the United States), the arrangement in question must be approved by a
majority in number of each class of shareholders and creditors with whom the
arrangement is to be made and who must in addition represent three-fourths in
value of each such class of shareholders or creditors, as the case may be, that
are present and voting either in person or by proxy at a meeting. The convening
of the meetings and, subsequently, the terms of the arrangement, must be
sanctioned by the Grand Court of the Cayman Islands.
79
While a dissenting shareholder would have the right to express
to the court the view that the transaction should not be approved, the court can
be expected to approve the arrangement if it satisfies itself that:
we are not proposing to act illegally or beyond the scope of our corporate
  authority, and the statutory provisions as to majority vote have been complied
  with;
the shareholders have been fully informed and were fairly represented at
  the meeting in question;
the arrangement is such as a businessperson could reasonably approve; and
the arrangement would not amount to a "fraud on the minority."
If a scheme of arrangement or takeover offer (as described
below) is approved, any dissenting shareholder would have no rights comparable
to appraisal rights, which would otherwise ordinarily be available to dissenting
shareholders of United States corporations, providing rights to receive payment
in cash for the judicially determined value of the shares.
Further, transactions similar to a merger, reconstruction
and/or an amalgamation may, in some circumstances, be achieved through other
means to these statutory provisions, such as a share capital exchange, asset
acquisition or control, through contractual arrangements, of an operating
business.
Squeeze-out Provisions
When a takeover offer is made and accepted by holders of 90% of
the shares to whom the offer is made within four months, the offeror may, within
a two-month period, require the holders of the remaining shares to transfer such
shares on the terms of the offer. An objection can be made to the Grand Court of
the Cayman Islands, but this is unlikely to succeed unless there is evidence of
fraud, bad faith, collusion or inequitable treatment of the shareholders.
Shareholders' Suits
Our Cayman Islands counsel is not aware of any reported class
action having been brought in a Cayman Islands court. Derivative actions have
been brought in the Cayman Islands courts, and the Cayman Islands courts have
confirmed their availability for such actions. In most cases, we will be the
proper plaintiff in any claim based on a breach of duty owed to us, and a claim
against (for example) our officers or directors usually may not be brought by a
shareholder. However, based on English authorities, which would in all
likelihood be of persuasive authority and be applied by a court in the Cayman
Islands, exceptions to the foregoing principle apply in circumstances in which:
a company is acting, or proposing to act, illegally or beyond the scope of
  its authority;
the act complained of, although not beyond the scope of the authority,
  could be effected if duly authorized by more than the number of votes which
  have actually been obtained; or
those who control the company are perpetrating a "fraud on the minority."
A shareholder may have a direct right of action against us
where the individual rights of that shareholder have been infringed or are about
to be infringed.
Transfer Agent and Registrar
Our independent stock transfer agent is Interwest Transfer
Company, Inc., located in Salt Lake City, Utah. Their mailing address is 1981
East 4800 South, Suite 100, Salt Lake City, Utah 84117. Their phone number is
(801) 272-9294.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for our
ordinary shares. Future sales of substantial amounts of our ordinary shares in
the public market could adversely affect market prices. Upon completion of this
offering, we will have outstanding an aggregate of                        
ordinary shares, assuming no exercise of the underwriters' over-allotment
option. The                
ordinary shares sold in the offering and the 5,065,785 ordinary shares that we
are concurrently registering under a separate prospectus for resale by the
selling stockholders named in such prospectus, will be freely tradable without
restriction or further registration under the Securities Act, except that any
shares purchased by our "affiliates," as that term is defined in Rule 144 of the
Securities Act, may generally only be sold in compliance with the limitations of
Rule 144 described below.
80
All other outstanding shares not sold in this offering or
registered under a separate resale prospectus will be deemed "restricted
securities" under Rule 144. Restricted securities may be sold in the public
market only if registered or if they qualify for an exemption from registration
(under Rule 144 or otherwise) under the Securities Act. Rule 144 is described
below.
Rule 144
In general, under Rule 144 as currently in effect, a person (or
persons whose shares are aggregated) who is deemed to be an affiliate of ours at
the time of sale, or at any time during the preceding three months, and who has
beneficially owned restricted shares for at least six months, would be entitled
to sell within any three-month period a number of shares that does not exceed
the greater of 1% of the then outstanding shares or the average weekly trading
volume of shares during the four calendar weeks preceding such sale. Sales under
Rule 144 are subject to certain manner of sale provisions, notice requirements
and the availability of current public information about us. A person who has
not been our affiliate at any time during the three months preceding a sale, and
who has beneficially owned his shares for at least six months, would be entitled
under Rule 144 to sell such shares without regard to any manner of sale, notice
provisions or volume limitations described above. Any such sales must comply
with the public information provision of Rule 144 until our ordinary shares have
been held for one year.
Because we were a shell company with no operations prior to the
close of the share exchange transaction with Leewell, none of our ordinary
shares may be sold pursuant to Rule 144 until April 19, 2011, which is 12 months
after the filing of a current report on Form 8-K reporting the closing of the
share exchange transaction with Leewell.
Lock-Up Agreements
In connection with the private placement closed on April 14,
2010, we entered into the Lock-up Agreement, with Longhai Holdings and each of
our directors and officers, pursuant to which each of them agreed not to
transfer any of our capital stock held directly or indirectly by them for an
eighteen-month period following the closing of the private placement on April
14, 2010.
UNDERWRITING
Subject to the terms and conditions in the underwriting
agreement,
dated             
, 2010, by and among us and Brean Murray, Carret & Co., LLC, who is acting
as the representative of the underwriters of this offering, each underwriter
named below has severally agreed to purchase from us, on a firm commitment
basis, the number of ordinary shares set forth opposite its name below, at the
public offering price, less the underwriting discount set forth on the cover
page of this prospectus:
Number
Underwriter
of Shares
Brean Murray, Carret & Co., LLC
Total
The underwriters have agreed to purchase all of the shares
offered by this prospectus if they are purchased. Under the terms of the
underwriting agreement, if an underwriter defaults in its commitment to purchase
shares, the commitments of non-defaulting underwriters may be increased or the
underwriting agreement may be terminated, depending on the circumstances. The
underwriting agreement also provides that the obligations of the underwriters to
pay for and accept delivery of the shares are subject to the passing upon of
certain legal matters by counsel and certain conditions such as confirmation of
the accuracy of representations and warranties by us about our financial
condition and operations and other matters.
81
The shares should be ready for delivery on or
about                
 , 2010 against payment in immediately available funds. The underwriters
may reject all or part of any order.
Commissions and Discounts
The underwriters will initially offer the shares to be sold in
this offering directly to the public at the initial public offering price set
forth on the cover of this prospectus and to selected dealers at the initial
public offering price less a selling concession not in excess of
$         per share. After the offering,
the underwriters may change the offering price and other selling terms. No
change in those terms will change the amount of proceeds to be received by us as
set forth on the cover of this prospectus.
The following table shows the public offering price,
underwriting fees and expenses to be paid by us to the underwriters and the
proceeds of the public offering, before expenses, to us.
Per
      Share
Aggregate Amount
Public offering price
$
$
Underwriting discount
$
$
Non-accountable expense allowance (1)
Proceeds before other expenses (2)
$
$
(1) The non-accountable expense allowance
of            % of the
gross proceeds of the offering is not payable with respect to the ordinary shares sold upon exercise of the underwriters' over-allotment option.
(2) We estimate that the total expense of this offering
excluding the underwriters' discount and the non-accountable expense allowance
will be approximately
$               
.. These expenses include, but are not limited to, SEC registration fees,
Financial Industry Regulatory, Inc., or FINRA, filing fees, NASDAQ Global Market
filing fees, accounting fees and expenses, legal fees and expenses, printing and
engraving expenses and transfer agent fees.
The distribution of our securities will end upon the
underwriters' cessation of selling efforts and stabilization activities.
Overallotment Option
We have granted an option to the underwriters to purchase up
to          additional shares at
the public offering price, less the underwriting discount. The underwriters may
exercise this option for 30 days from the date of this prospectus solely to
cover overallotments. If this option is exercised in full, the total price to
the public will be
$             
million and the total proceeds to us will be
$            million. The
underwriters have severally agreed that, to the extent the over-allotment option
is exercised, they will each purchase a number of additional shares
proportionate to the underwriter's initial amount reflected in the table above.
Representative's Warrant
We have also agreed to issue to Brean Murray, & Carret Co.,
LLC, a  warrant to purchase a number of our ordinary shares
equal to an aggregate of five (5%) percent of the ordinary shares sold in the
offering. The warrant will have an exercise price equal to 125% of the offering
price of the shares sold in this offering. The warrants are exercisable for five
(5) years from the issue date. The warrant is not redeemable by us, and allows
for "cashless" exercise. The warrant also provides for unlimited "piggyback"
registration rights at our expense with respect to the underlying ordinary shares during the five (5) year period. Pursuant to the rules of the FINRA
(formerly the NASD), and in particular Rule 5110, the warrant (and underlying
shares) issued to Brean Murray, & Carret Co., LLC may not be sold,
transferred, assigned, pledged, or hypothecated, or the subject of any hedging,
short sale, derivative, put or call transaction that would result in the
effective disposition of the securities by any person for a period of 180 days
immediately following the date of delivery and payment for the shares offered;
provided, however
, that the warrant (and underlying shares) may be
transferred to officers or partners of Brean Murray, & Carret Co., LLC and
members of the underwriting syndicate as long as the warrants (and underlying
shares) remain subject to the lockup.
82
Other Terms
The underwriting agreement provides for indemnification between
us and the underwriters against specified liabilities, including liabilities
under the Securities Act, and for contribution by us and the underwriters to
payments that may be required to be made with respect to those liabilities. We
have been advised that, in the opinion of the SEC, indemnification liabilities
under the Securities Act is against public policy as expressed in the Securities
Act, and is therefore, unenforceable.
Price Stabilization, Short Positions
Until the distribution of the ordinary shares offered by this
prospectus is completed, rules of the SEC may limit the ability of the
underwriters to bid for and to purchase our ordinary shares. As an exception to
these rules, the underwriters may engage in transactions effected in accordance
with Regulation M under the Exchange Act that are intended to stabilize,
maintain or otherwise affect the price of our ordinary shares. The underwriters
may engage in over-allotment sales, syndicate covering transactions, stabilizing
transactions and penalty bids in accordance with Regulation M.
Stabilizing Transactions
. The underwriters may make bids or
  purchases for the purpose of pegging, fixing or maintaining the price of our
  securities, so long as stabilizing bids do not exceed the maximum price
  specified in Regulation M, which generally requires, among other things, that
  no stabilizing bid shall be initiated at or increased to a price higher than
  the lower of the offering price or the highest independent bid for the
  security on the principal trading market for the security.
Over-allotment Sales.
The underwriters may exercise the
  over-allotment option which involves sales by the underwriters of ordinary
  shares in excess of the number of ordinary shares the underwriters are
  obligated to purchase, which creates a short position. The short position may
  be either a covered short position or a naked short position. In a covered
  short position, the number of ordinary shares over-allotted by the
  underwriters is not greater than the number of ordinary shares that they may
  purchase in the over-allotment option. In a naked short position, the number
  of ordinary shares involved is greater than the number of shares in the
  over-allotment option. The underwriters may close out any covered short
  position by either exercising their over-allotment option or purchasing our
  ordinary shares in the open market.
Syndicate Coverage Transactions.
The underwriters may create a short
  position in our securities by selling more of our securities than are set
  forth on the cover page of this prospectus. If the underwriters create a short
  position during the offering, the representatives may engage in syndicate
  covering transactions by purchasing our securities in the open market.
Penalty Bids
. The representatives may reclaim a selling concession
  from a syndicate member when the units originally sold by the syndicate member
  is purchased in a stabilizing or syndicate covering transaction to cover
  syndicate short positions.
Stabilization, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of our ordinary
shares or preventing or retarding a decline in the market price of our ordinary
shares. As a result, the price of our ordinary shares may be higher than the
price that might otherwise exist in the open market.
Neither we nor the underwriters make any representation or
prediction as to the effect that the transactions described above may have on
the prices of our ordinary shares. These transactions may occur on the NASDAQ or
on any trading market. If any of these transactions are commenced, they may be
discontinued without notice at any time.
A prospectus in electronic format may be made available on a
website maintained by the representatives of the underwriters and may also be
made available on a website maintained by other underwriters. The underwriters
may agree to allocate a number of shares to underwriters for sale to their
online brokerage account holders. Internet distributions will be allocated by
the representatives of the underwriters to underwriters that may make Internet
distributions on the same basis as other allocations. In connection with the
offering, the underwriters or syndicate members may distribute prospectuses
electronically. No forms of prospectus other than printed prospectuses and
electronically distributed prospectuses that are printable in Adobe .PDF format
will be used in connection with this offering.
83
The underwriters have informed us that they do not expect to
confirm sales of ordinary shares offered by this prospectus to accounts over
which they exercise discretionary authority without obtaining the specific
approval of the account holder.
Foreign Regulatory Restrictions on Purchase of the Ordinary
Shares
No action may be taken in any jurisdiction other than the
United States that would permit a public offering of the ordinary shares or the
possession, circulation or distribution of this prospectus in any jurisdiction
where action for that purpose is required. Accordingly, the ordinary shares may
not be offered or sold, directly or indirectly, and neither the prospectus nor
any other offering material or advertisements in connection with the ordinary
shares may be distributed or published in or from any country or jurisdiction
except under circumstances that will result in compliance with any applicable
rules and regulations of any such country or jurisdiction.
In addition to the public offering of the shares in the United
States, the underwriters may, subject to the applicable foreign laws, also offer
the ordinary shares to certain institutions or accredited persons in the following
countries:
United Kingdom.
No offer of ordinary shares has been
made or will be made to the public in the United Kingdom within the meaning of
Section 102B of the Financial Services and Markets Act 2000, as amended, or
FSMA, except to legal entities which are authorized or regulated to operate in
the financial markets or, if not so authorized or regulated, whose corporate
purpose is solely to invest in securities or otherwise in circumstances which do
not require the publication by us of a prospectus pursuant to the Prospectus
Rules of the Financial Services Authority, or FSA. Each underwriter: (i) has
only communicated or caused to be communicated and will only communicate or
cause to be communicated an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of FSMA) to persons who have
professional experience in matters relating to investments falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 or in circumstances in which Section 21 of FSMA does not
apply to us; and (ii) has complied with, and will comply with all applicable
provisions of FSMA with respect to anything done by it in relation to the shares
in, from or otherwise involving the United Kingdom.
European Economic Area.
In relation to each member state
of the European Economic Area which has implemented the Prospectus Directive,
which we refer to as a Relevant Member State, with effect from and including the
date on which the Prospectus Directive is implemented in that Relevant Member
State, which we refer to as the Relevant Implementation Date, no offer of
ordinary shares has been made and or will be made to the public in that Relevant
Member State prior to the publication of a prospectus in relation to the
ordinary shares which has been approved by the competent authority in that
Relevant Member State or, where appropriate, approved in another Relevant Member
State and notified to the competent authority in that Relevant Member State, all
in accordance with the Prospectus Directive, except that, with effect from and
including the Relevant Implementation Date, an offer of ordinary shares may be
made to the public in that Relevant Member State at any time: (a) to legal
entities which are authorized or regulated to operate in the financial markets
or, if not so authorized or regulated, whose corporate purpose is solely to
invest in securities; (b) to any legal entity which has two or more of (i) an
average of at least 250 employees during the last financial year; (ii) a total
balance sheet of more than €43,000,000 and (iii) an annual net turnover of more
than €50,000,000, as shown in its last annual or consolidated accounts; or (c)
in any other circumstances which do not require the publication by us of a
prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes
of this provision, the expression an "offer of ordinary shares to the public" in
relation to any ordinary shares in any Relevant Member State means the
communication in any form and by any means of sufficient information on the
terms of the offer and the ordinary shares to be offered so as to enable an
investor to decide to purchase or subscribe the ordinary shares, as the same may
be varied in that Relevant Member State by any measure implementing the
Prospectus Directive in that Relevant Member State and the expression Prospectus
Directive means Directive 2003/71/ EC and includes any relevant implementing
measure in each Relevant Member State.
Germany.
Any offer or solicitation of ordinary shares
within Germany must be in full compliance with the German Securities Prospectus
Act (Wertpapierprospektgesetz — WpPG). The offer and solicitation of securities
to the public in Germany requires the approval of the prospectus by the German
Federal Financial Services Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht — BaFin). This prospectus has not been and will
not be submitted for approval to the BaFin. This prospectus does not constitute
a public offer under the German Securities Prospectus Act
(Wertpapierprospektgesetz). This prospectus and any other document relating to
the ordinary shares, as well as any information contained therein, must
therefore not be supplied to the public in Germany or used in connection with
any offer for subscription of the ordinary shares to the public in Germany, any
public marketing of the ordinary shares or any public solicitation for offers to subscribe for or
otherwise acquire the ordinary shares. The prospectus and other offering
materials relating to the offer of the ordinary shares are strictly confidential
and may not be distributed to any person or entity other than the designated
recipients hereof.
84
Greece.
This prospectus has not been approved by the
Hellenic Capital Markets Commission or another EU equivalent authority and
consequently is not addressed to or intended for use, in any way whatsoever, by
Greek residents. The ordinary shares have not been offered or sold and will not
be offered, sold or delivered directly or indirectly in Greece, except to (i)
"qualified investors" (as defined in article 2(f) of Greek Law 3401/2005) and/or
to (ii) less than 100 individuals or legal entities, who are not qualified
investors (article 3, paragraph 2(b) of Greek Law 3401/2005), or otherwise in
circumstances which will not result in the offer of the new ordinary shares
being subject to the Greek Prospectus requirements of preparing a filing a
prospectus (under articles 3 and 4 of Greek Law 3401/2005).
Italy.
This offering of the ordinary shares has not been
cleared by Consob, the Italian Stock Exchanges regulatory agency of public
companies, pursuant to Italian securities legislation and, accordingly, no
ordinary shares may be offered, sold or delivered, nor may copies of this
prospectus or of any other document relating to the ordinary shares be
distributed in Italy, except (1) to professional investors (operatori
qualificati); or (2) in circumstances which are exempted from the rules on
solicitation of investments pursuant to Decree No. 58 and Article 33, first
paragraph, of Consob Regulation No. 11971 of May 14, 1999, as amended. Any
offer, sale or delivery of the ordinary shares or distribution of copies of this
prospectus or any other document relating to the ordinary shares in Italy under
(1) or (2) above must be (i) made by an investment firm, bank or financial
intermediary permitted to conduct such activities in Italy in accordance with
the Decree No. 58 and Legislative Decree No. 385 of September 1, 1993, or the
Banking Act; and (ii) in compliance with Article 129 of the Banking Act and the
implementing guidelines of the Bank of Italy, as amended from time to time,
pursuant to which the issue or the offer of securities in Italy may need to be
preceded and followed by an appropriate notice to be filed with the Bank of
Italy depending, inter alia, on the aggregate value of the securities issued or
offered in Italy and their characteristics; and (iii) in compliance with any
other applicable laws and regulations.
Cyprus.
The Underwriter has agreed that (i) it will not
be providing from or within Cyprus any "Investment Services", "Investment
Activities" and "Non-Core Services" (as such terms are defined in the Investment
Firms Law 144(I) of 2007, (the "IFL") in relation to the ordinary shares, or
will be otherwise providing Investment Services, Investment Activities and
Non-Core Services to residents or persons domiciled in Cyprus. Each underwriter
has agreed that it will not be concluding in Cyprus any transaction relating to
such Investment Services, Investment Activities and Non-Core Services in
contravention of the IFL and/or applicable regulations adopted pursuant thereto
or in relation thereto; and (ii) it has not and will not offer any of the
ordinary shares other than in compliance with the provisions of the Public Offer
and Prospectus Law, Law 114(I)/2005.
Switzerland.
This document does not constitute a
prospectus within the meaning of Art. 652a of the Swiss Code of Obligations. The
ordinary shares may not be sold directly or indirectly in or into Switzerland
except in a manner which will not result in a public offering within the meaning
of the Swiss Code of Obligations. Neither this document nor any other offering
materials relating to the ordinary shares may be distributed, published or
otherwise made available in Switzerland except in a manner which will not
constitute a public offer of the ordinary shares of in Switzerland.
Norway.
This prospectus has not been approved or
disapproved by, or registered with, the Oslo Stock Exchange, the Norwegian
Financial Supervisory Authority (Kredittilsynet) nor the Norwegian Registry of
Business Enterprises, and the ordinary shares are marketed and sold in Norway on
a private placement basis and under other applicable exceptions from the
offering prospectus requirements as provided for pursuant to the Norwegian
Securities Trading Act.
Botswana.
The company hereby represents and warrants
that it has not offered for sale or sold, and will not offer or sell, directly
or indirectly the ordinary shares to the public in the Republic of Botswana, and
confirms that the offering will not be subject to any registration requirements
as a prospectus pursuant to the requirements and/or provisions of the Companies
Act, 2003 or the Listing Requirements of the Botswana Stock Exchange.
Hong Kong.
The ordinary shares may not be offered or
sold by means of any document other than (i) in circumstances which do not
constitute an offer to the public within the meaning of the Companies Ordinance
(Cap.32, Laws of Hong Kong), or (ii) to "professional investors" within the
meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and
any rules made thereunder, or (iii) in other circumstances which do not result
in the document being a "prospectus" within the meaning of the Companies
Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or
document relating to the ordinary shares may be issued or may be in the
possession of any person for the purpose of issue (in each case whether in Hong
Kong or elsewhere), which is directed at, or the contents of which are likely to
be accessed or read by, the public in Hong Kong (except if permitted to do so
under the laws of Hong Kong) other than with respect to ordinary shares which
are or are intended to be disposed of only to persons outside Hong Kong or only
to "professional investors" within the meaning of the Securities and Futures
Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
85
Singapore.
This prospectus has not been registered as a
prospectus with the Monetary Authority of Singapore. Accordingly, this
prospectus and any other document or material in connection with the offer or
sale, or invitation for subscription or purchase, of the ordinary shares may not
be circulated or distributed, nor may the ordinary shares be offered or sold, or
be made the subject of an invitation for subscription or purchase, whether
directly or indirectly, to persons in Singapore other than (i) to an
institutional investor under Section 274 of the Securities and Futures Act,
Chapter 289 of Singapore, or the SFA, (ii) to a relevant person, or any person
pursuant to Section 275(1A), and in accordance with the conditions, specified in
Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with
the conditions of, any other applicable provision of the SFA. Where the ordinary
shares are subscribed or purchased under Section 275 by a relevant person which
is: (a) a corporation (which is not an accredited investor) the sole business of
which is to hold investments and the entire share capital of which is owned by
one or more individuals, each of whom is an accredited investor; or (b) a trust
(where the trustee is not an accredited investor) whose sole purpose is to hold
investments and each beneficiary is an accredited investor, shares, debentures
and units of shares and debentures of that corporation or the beneficiaries'
rights and interest in that trust shall not be transferable for 6 months after
that corporation or that trust has acquired the ordinary shares under Section
275 except: (i) to an institutional investor under Section 274 of the SFA or to
a relevant person, or any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA; (ii) where no
consideration is given for the transfer or (iii) by operation of law.
People's Republic of China.
This prospectus has not been
and will not be circulated or distributed in the PRC, and ordinary shares may
not be offered or sold, and will not be offered or sold to any person for
re-offering or resale, directly or indirectly, to any resident of the PRC except
pursuant to applicable laws and regulations of the PRC. For the purpose of this
paragraph only, the PRC does not include Taiwan and the special administrative
regions of Hong Kong and Macau.
Israel.
This Prospectus does not constitute an offer to
sell the ordinary shares to the public in Israel or a prospectus under the
Israeli Securities Law, 5728-1968 and the regulations promulgated thereunder, or
the Israeli Securities Law, and has not been filed with or approved by the
Israel Securities Authority. In Israel, pursuant to an exemption afforded under
the Israeli Securities Law, this Prospectus may be distributed only to, and may
be directed only at, investors listed in the first addendum to the Israeli
Securities Law, or the Addendum, consisting primarily of certain mutual trust
and provident funds, or management companies thereto, banks, as defined under
the Banking (Licensing) Law, 5741-1981, except for joint service companies
purchasing for their own account or for clients listed in the Addendum,
insurers, as defined under the Supervision of Financial Services Law
(Insurance), 5741-1981, portfolio managers purchasing for their own account or
for clients listed in the Addendum, investment advisers purchasing for their own
account, Tel Aviv Stock Exchange members purchasing for their own account or for
clients listed in the Addendum, underwriters purchasing for their own account,
venture capital funds, certain corporations which primarily engage in the
capital market and fully-owned by investors listed in the Addendum and
corporations whose equity exceeds NIS250 Million, collectively referred to as
institutional investors. Institutional investors may be required to submit
written confirmation that they fall within the scope of the Addendum.
United Arab Emirates.
This document has not been
reviewed, approved or licensed by the Central Bank of the United Arab Emirates
(the "UAE"), Emirates Securities and Commodities Authority or any other relevant
licensing authority in the UAE including any licensing authority incorporated
under the laws and regulations of any of the free zones established and
operating in the territory of the UAE, in particular the Dubai International
Financial Services Authority (the "DFSA"), a regulatory authority of the Dubai
International Financial Centre (the "DIFC"). The issue of ordinary shares does
not constitute a public offer of securities in the UAE, DIFC and/or any other
free zone in accordance with the Commercial Companies Law, Federal Law No. 8 of
1984 (as amended), DFSA Offered Securities Rules and the Dubai International
Financial Exchange Listing Rules, accordingly, or otherwise. The ordinary shares
may not be offered to the public in the UAE and/or any of the free zones
including, in particular, the DIFC. The ordinary shares may be offered and this
document may be issued, only to a limited number of investors in the UAE or any
of its free zones (including, in particular, the DIFC) who qualify as
sophisticated investors under the relevant laws and regulations of the UAE or the free zone concerned.
Management of the company, and the representatives represent and warrant that
the ordinary shares will not be offered, sold, transferred or delivered to the
public in the UAE or any of its free zones including, in particular, the DIFC.
86
Oman.
For the attention of the residents of Oman:
The information contained in this memorandum neither
constitutes a public offer of securities in the Sultanate of Oman ("Oman") as
contemplated by the Commercial Companies Law of Oman (Sultani Decree 4/74) or
the Capital Market Law of Oman (Sultani Decree 80/98), nor does it constitute an
offer to sell, or the solicitation of any offer to buy non-Omani securities in
Oman as contemplated by Article 6 of the Executive Regulations to the Capital
Market Law of Oman (issued vide Ministerial Decision No 4/2001), and nor does it
constitute a distribution of non-Omani securities in Oman as contemplated under
the Rules for Distribution of Non-Omani Securities in Oman issued by the Capital
Market Authority of Oman ("CMA"). Additionally, this memorandum is not intended
to lead to the conclusion of any contract of whatsoever nature within the
territory of Oman.
This memorandum has been sent at the request of the investor in
Oman, and by receiving this memorandum, the person or entity to whom it has been
issued and sent understands, acknowledges and agrees that this memorandum has
not been approved by the CMA or any other regulatory body or authority in Oman,
nor has any authorization, license or approval been received from the CMA or any
other regulatory authority in Oman, to market, offer, sell, or distribute the
ordinary shares within Oman.
No marketing, offering, selling or distribution of any
financial or investment products or services has been or will be made from
within Oman and no subscription to any securities, products or financial
services may or will be consummated within Oman. The Underwriter is not a
company licensed by the CMA to provide investment advisory, brokerage, or
portfolio management services in Oman, nor banks licensed by the Central Bank of
Oman to provide investment banking services in Oman. The Underwriter does not
advise persons or entities resident or based in Oman as to the appropriateness
of investing in or purchasing or selling securities or other financial products.
Nothing contained in this memorandum is intended to constitute
Omani investment, legal, tax, accounting or other professional advice. This
memorandum is for your information only, and nothing herein is intended to
endorse or recommend a particular course of action. You should consult with an
appropriate professional for specific advice on the basis of your situation.
Any recipient of this memorandum and any purchaser of the
ordinary shares pursuant to this memorandum shall not market, distribute,
resell, or offer to resell the ordinary shares within Oman without complying
with the requirements of applicable Omani law, nor copy or otherwise distribute
this memorandum to others.
Canada.
Resale Restrictions
The distribution of our securities in Canada is being made only
on a private placement basis exempt from the requirement that we prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of our securities are made. Any resale of our securities in Canada
must be made under applicable securities laws that will vary depending on the
relevant jurisdiction, and which may require resales to be made under available
statutory exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of our securities.
Representations of Purchasers
By purchasing our securities in Canada and accepting a purchase
confirmation a purchaser is representing to us and the dealer from whom the
purchase confirmation is received that:
the purchaser is entitled under applicable provincial securities laws to
  purchase our securities without the benefit of a prospectus qualified under
  those securities laws;
87
where required by law, that the purchaser is purchasing as principal and
  not as agent;
the purchaser has reviewed the text above under Resale Restrictions; and
the purchaser acknowledges and consents to the provision of specified
  information concerning its purchase of our securities to the regulatory
  authority that by law is entitled to collect the information.
Further details concerning the legal authority for this
information are available on request.
Rights of Action — Ontario Purchasers Only
Under Ontario securities legislation, certain purchasers who
purchase a security offered by this prospectus during the period of distribution
will have a statutory right of action for damages, or while still the owner of
our securities, for rescission against us in the event that this prospectus
contains a misrepresentation without regard to whether the purchaser relied on
the misrepresentation. The right of action for damages is exercisable not later
than the earlier of 180 days from the date the purchaser first had knowledge of
the facts giving rise to the cause of action and three years from the date on
which payment is made for our securities. The right of action for rescission is
exercisable not later than 180 days from the date on which payment is made for
our securities. If a purchaser elects to exercise the right of action for
rescission, the purchaser will have no right of action for damages against us.
In no case will the amount recoverable in any action exceed the price at which
our securities were offered to the purchaser and if the purchaser is shown to
have purchased the securities with knowledge of the misrepresentation, we will
have no liability. In the case of an action for damages, we will not be liable
for all or any portion of the damages that are proven to not represent the
depreciation in value of our securities as a result of the misrepresentation
relied upon. These rights are in addition to, and without derogation from, any
other rights or remedies available at law to an Ontario purchaser. The foregoing
is a summary of the rights available to an Ontario purchaser. Ontario purchasers
should refer to the complete text of the relevant statutory provisions.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon us or
those persons. All or a substantial portion of our assets and the assets of
those persons may be located outside of Canada and, as a result, it may not be
possible to satisfy a judgment against us or those persons in Canada or to
enforce a judgment obtained in Canadian courts against us or those persons
outside of Canada.
Taxation and Eligibility for Investment
Canadian purchasers of our securities should consult their own
legal and tax advisors with respect to the tax consequences of an investment in
our securities in their particular circumstances and about the eligibility of
our securities for investment by the purchaser under relevant Canadian
legislation.
LEGAL MATTERS
Certain legal matters as to United States federal and New York
law will be passed upon for us by Pillsbury Winthrop Shaw Pittman LLP. Certain
legal matters in connection with the offering will be passed upon for the
underwriters by Anslow & Jaclin, LLP. The validity of the ordinary shares
offered in this offering and certain other legal matters as to Cayman Islands
law will be passed upon for us by Maples and Calder. Legal matters as to PRC law
will be passed upon for us by Deheng Law Firm and for the underwriters by         .
Pillsbury Winthrop Shaw Pittman LLP may rely upon Deheng Law Firm with respect
to matters governed by PRC law.
EXPERTS
The audited consolidated financial statements of Leewell as of
December 25, 2009 and 2008 and for the fiscal years ended December 25, 2009,
2008, and 2007, appearing in this prospectus and registration statement have
been audited by MSPC, Certified Public Accountants and Advisors, A
Professional Corporation, an independent registered public accounting firm, as
set forth in their report thereon appearing elsewhere herein and in the
registration statement, and are included in reliance upon such report given on
the authority of such firm as experts in accounting and auditing.
88
ADDITIONAL INFORMATION
We filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended, for the
ordinary shares in this offering. This prospectus does not contain all of the
information in the registration statement and the exhibits and schedule that
were filed with the registration statement. For further information with respect
to us and our ordinary shares, we refer you to the registration statement and
the exhibits and schedule that were filed with the registration statement.
Statements contained in this prospectus about the contents of any contract or
any other document that is filed as an exhibit to the registration statement are
not necessarily complete, and we refer you to the full text of the contract or
other document filed as an exhibit to the registration statement. A copy of the
registration statement and the exhibits and schedules that were filed with the
registration statement may be inspected without charge at the Public Reference
Room maintained by the Securities and Exchange Commission at 100 F Street, N.E.
Washington, DC 20549, and copies of all or any part of the registration
statement may be obtained from the Securities and Exchange Commission upon
payment of the prescribed fee. Information regarding the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC. The address of the
website is www.sec.gov.
We file periodic reports under the Securities Exchange Act of
1934, including annual, quarterly and special reports, and other information
with the SEC. These periodic reports, and other information, are available for
inspection and copying at the regional offices, public reference facilities and
website of the SEC referred to above.
89
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
CONSOLIDATED
      FINANCIAL STATEMENTS OF LEEWELL INVESTMENT GROUP
LIMITED FOR THE
      FISCAL YEARS ENDED DECEMBER 25, 2009, 2008 AND 2007
Report
      of Independent Registered Public Accounting Firm
F-3
Consolidated
      Balance Sheets
F-4
Consolidated
      Statements of Income and Comprehensive Income
F-5
Consolidated
      Statements of Changes in Shareholders' Equity
F-6
Consolidated
      Statements of Cash Flows
F-7
Notes
      to Consolidated Financial Statements
F-9
UNAUDITED
      PRO FORMA COMBINED FINANCIAL INFORMATION OF DRAGON
ACQUISITION
      CORPORATION AS OF DECEMBER 31, 2009
F-26
F-1
LEEWELL INVESTMENT GROUP LIMITED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 25, 2009, 2008 and 2007
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Leewell
Investment Group Limited and Subsidiaries
We have audited the accompanying consolidated balance sheets of
Leewell Investment Group Limited and Subsidiaries as of December 25, 2009 and
2008 and the related consolidated statements of income and comprehensive income,
changes in shareholders' equity, and cash flows for each of the three years in
the period ended December 25, 2009. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted 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 audits 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
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes 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.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Leewell Investment Group Limited and Subsidiaries as of December 25, 2009 and
2008 and the results of their operations and their cash flows for each of the
three years in the period ended December 25, 2009 in conformity with United
States generally accepted accounting principles.
MSPC
Certified Public Accountants and Advisors, A
Professional Corporation
New York, New York
March 23, 2010
F-3
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 25,
December 25,
2009
2008
ASSETS
CURRENT ASSETS
Cash
$
2,264,438
$
638,639
Restricted cash
1,641,778
1,635,878
Revenue in
      excess of billings
4,045,979
-
Contracts receivable, net
12,552,315
6,359,497
Related party
      receivable
2,949,102
15,279,068
Inventories
106,452,702
77,008,683
Other
      receivables, net
1,634,987
367,836
Prepaid expenses
1,461,670
3,782,408
Total Current Assets
133,002,971
105,072,009
PROPERTY, PLANT AND EQUIPMENT, NET
3,461,317
3,001,888
PROPERTY, PLANT AND EQUIPMENT, IDLE
1,530,390
1,991,799
GOODWILL
3,620,670
3,596,117
LAND USE RIGHTS, NET
54,060,495
64,655,669
DEFERRED TAX ASSETS
657,000
330,873
TOTAL ASSETS
$
196,332,843
$
178,648,355
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term
      debt
$
35,217,320
$
14,682,599
Short-term loans
2,719,432
2,879,010
Notes payable
146,800
-
Accounts payable
487,238
-
Customer deposits
19,780,472
42,980,448
Other payables
4,186,745
3,287,869
Taxes payable
26,049,956
22,217,920
Other current
      liabilities
207,936
192,906
Total
      Current Liabilities
88,795,899
86,240,752
LONG-TERM DEBT
4,404,000
29,160,895
LONG-TERM DEFERRED TAX LIABILITIES
8,781,998
-
SHAREHOLDERS' EQUITY
Common stock par value $0.1282 per
      share, 150,000,000 shares authorized,
102,566,690 issued and
      outstanding in 2009 and 2008
13,149,576
13,149,576
Paid-in capital
(7,465,626
)
(13,749,747
)
Appropriated
      retained earnings
10,298,700
6,642,568
Unappropriated retained earnings
71,326,950
50,638,872
Accumulated
      other comprehensive income
7,041,346
6,565,439
Total
      Shareholders' Equity
94,350,946
63,246,708
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
196,332,843
$
178,648,355
See Accompanying Notes to Consolidated Financial Statements
F-4
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
THE YEARS ENDED DECEMBER 25, 2009, 2008, AND 2007
2009
2008
2007
Restated
SALES
$
91,041,042
$
77,032,561
$
51,850,312
SALES TO RELATED PARTY
3,274,458
-
-
TOTAL SALES
94,315,500
77,032,561
51,850,312
COST OF SALES
(57,442,457
)
(46,321,251
)
(36,243,778
)
COST OF SALES TO RELATED PARTY
(853,951
)
-
-
TOTAL COST OF
      SALES
(58,296,408
)
(46,321,251
)
(36,243,778
)
GROSS PROFIT
36,019,092
30,711,310
15,606,534
ADVERTISING
(268,222
)
(112,263
)
(46,492
)
COMMISSION
(84,982
)
(574,262
)
(134,989
)
SELLING EXPENSES
(49,800
)
(81,415
)
(2,187
)
BAD DEBT EXPENSE
(207,523
)
(1,198,942
)
(245,243
)
GENERAL AND ADMINISTRATIVE EXPENSES
(4,655,596
)
(2,283,744
)
(807,589
)
INCOME FROM OPERATIONS
30,752,969
26,460,684
14,370,034
OTHER REVENUES:
Gain on business
      acquisition ("bargain purchase")
3,188,924
-
-
OTHER INCOME (EXPENSES)
Miscellaneous
      income
327,294
91,945
10,280
Interest expense
(866,751
)
(968,710
)
(70,963
)
(539,457
)
(876,765
)
(60,683
)
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM
33,402,436
25,583,919
14,309,351
INCOME TAXES
Current
(369,660
)
(5,350,455
)
(5,090,161
)
Deferred
(8,688,566
)
(1,251,739
)
-
(9,058,226
)
(6,602,194
)
(5,090,161
)
INCOME BEFORE EXTRAORDINARY ITEM
24,344,210
18,981,725
9,219,190
EXTRAORDINARY ITEM (NET OF INCOME TAX OF
      $0)
-
12,635,872
-
NET INCOME
24,344,210
31,617,597
9,219,190
OTHER COMPREHENSIVE INCOME:
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
475,907
3,488,440
2,107,856
COMPREHENSIVE INCOME
$
24,820,117
$
35,106,037
$
11,327,046
EARNINGS PER COMMON SHARE BASIC AND DILUTED
- Income
      before extraordinary item
$
0.24
$
0.19
$
-
- Extraordinary item
$
-
$
0.12
$
-
- Net
      income
$
0.24
$
0.31
$
921.92
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
102,566,690
102,566,690
10,000
See Accompanying Notes to Consolidated Financial Statements
F-5
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 25, 2009, 2008, AND 2007
Accumulated
Appropriated
Unappropriated
Other
Paid-in
Retained
Retained
Comprehensive
Shareholders'
Shares
Amount
Capital
Earnings
Earnings
Income
Equity
Balance at December 25, 2006
10,000
1,282
11,860,978
2,684,678
13,768,318
969,143
29,284,399
Elimination of investment in subsidiary
      against subsidiary equity (Note 1)
(13,165,828
)
(13,165,828
)
Adjustments for the acquisition
407,880
(8,343
)
399,537
Net income
9,219,190
9,219,190
Foreign currency translation adjustment
2,107,856
2,107,856
Earnings appropriated in accordance
      with Chinese law
1,550,185
(1,550,185
)
Balance at December 25, 2007, restated
10,000
1,282
(896,970
)
4,234,863
21,428,980
3,076,999
27,845,154
Shareholder loan converted to shares
102,556,690
13,148,294
13,148,294
Due to acquisition of subsidiaries
(12,852,777
)
(12,852,777
)
Net income
31,617,597
31,617,597
Foreign currency translation adjustment
3,488,440
3,488,440
Earnings appropriated in accordance
      with Chinese law
2,407,705
(2,407,705
)
Balance at December 25, 2008
102,556,690
13,149,576
(13,749,747
)
6,642,568
50,638,872
6,565,439
63,246,708
Due to acquisition of subsidiaries
6,284,121
6,284,121
Net income
24,344,210
24,344,210
Foreign currency translation adjustment
475,907
475,907
Earnings appropriated in accordance
      with Chinese law
3,656,132
(3,656,132
)
Balance at December 25, 2009
102,556,690
13,149,576
(7,465,626
)
10,298,700
71,326,950
7,041,346
94,350,946
See Accompanying Notes to Consolidated Financial Statements
F-6
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
DECEMBER 25, 2009, 2008, AND 2007
2009
2008
2007
Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$
24,344,210
$
31,617,597
$
9,219,190
Adjustments to reconcile net income to net
      cash provided (used) by operating activities:
Bad debt expense
207,523
1,198,941
245,243
Depreciation
      expense
245,388
246,400
205,366
Amortization of land use rights
-
-
36,487
Extraordinary
      items
-
(12,635,872
)
-
Gain on business acquisition
(3,188,924
)
-
-
Deferred tax
      expense
8,688,566
1,251,739
-
Decrease (increase) in operating assets:
Restricted cash
192,911
(1,564,681
)
26,465
Revenue in
      excess of billings
(4,040,467
)
-
-
Contracts receivable
(6,696,979
)
1,633,906
(5,108,372
)
Related party
      receivable
7,286,347
75,695,314
7,857,517
Inventories
24,608,287
25,990,884
26,040,584
Other
      receivables
593,540
4,667,529
(1,169,774
)
Prepaid expenses
2,343,368
(1,676,883
)
93,175
Increase (decrease) in operating liabilities:
Accounts payable
(9,335,626
)
(1,306,287
)
535,539
Related party payable
-
(17,180,260
)
(10,185,449
)
Customer
      deposits
(37,961,384
)
(56,452,177
)
(33,248,166
)
Other payable
138,975
(509,459
)
44,656
Taxes payable
3,829,172
9,943,221
6,624,335
Other current liabilities
(4,087
)
95,169
(3,845
)
Net cash
      provided by operating activities
11,250,820
61,015,081
1,212,951
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of short-term investment
-
-
39,456
Purchase of
      fixed assets
(199,025
)
(24,716
)
(562,007
)
Purchase of Oumei
-
-
(13,167,110
)
Purchase of
      subsidiaries
-
(58,496,914
)
-
Cash received from acquisition
      of subsidiaries
433,839
-
-
Net cash
      provided (used) by investing activities
234,814
(58,521,630
)
(13,689,661
)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contribution
-
-
1,282
Proceeds from
      note payable
(41,048
)
-
-
Net change in short-term
      borrowing
(179,080
)
(3,805,052
)
14,166,301
Repayments of
      long-term borrowing
(14,044,280
)
-
-
Proceeds from long-term
      borrowing
4,398,000
-
-
Net cash
      provided (used) by financing activities
(9,866,408
)
(3,805,052
)
14,167,583
Effect of exchange rate changes on cash
6,573
16,518
9,891
NET INCREASE (DECREASE) IN CASH
1,625,799
(1,295,083
)
1,700,764
CASH AT BEGINNING OF YEAR
638,639
1,933,722
232,958
CASH AT END OF YEAR
$
2,264,438
$
638,639
$
1,933,722
SUPPLEMENTAL DISCLOSURES:
Interest paid
$
3,195,886
$
3,737,121
$
756,839
F-7
Income taxes
      paid
$
260,255
$
1,301,525
$
35,961
Non-cash investing and financing
      activities:
Land use rights
      purchased through the exchange of other receivables
$
-
$
-
$
1,104,768
Land use rights
      transferred to inventory as project development cost
$
11,036,630
$
-
$
-
Cash
      consideration paid by Longhai Group for
      the
subsidiaries'
      acquisition, resulting in a decrease in
      related
party
      receivable
$
5,131,000
$
14,344,712
$
-
See Accompanying Notes to Consolidated Financial Statements
F-8
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 1 - Organization
Qingdao Oumei Real Estate Development Co., Ltd ("Oumei") was
incorporated as a limited liability company in Qingdao under the laws of the
People's Republic of China (
"
PRC
"
or
"
China
"
). Oumei
is engaged in the development and sale of residential and commercial real estate
properties located primarily in Pingdu, Laixi and Jimo cities of Shandong
Province, China.
Oumei was established by Mr. Zhang Weiqing (51%) and Mr. Wang
Shengguo (49%) on May 15, 2001 with a registered capital of approximately
$604,000. On February 9, 2002, Mr. Wang Shengguo sold his interest in Oumei to
Ms. Cheng Xiaoyan. Mr. Zhang and Ms. Cheng then increased their contribution to
Oumei in proportion to their ownership interests by approximately $6,200,000 and
$5,089,200 in 2003 and 2006, respectively. The equity interests percentages held
by these individuals were 51% and 49%, respectively.
On September 20, 2007, Mr. Zhang and Ms. Cheng sold all their
interests in Oumei to Leewell Investment Group Limited ("the Company" or
"Leewell") for $13,167,110. Leewell is a Hong Kong based company with an
authorized capital of HK$10,000 (approximately $1,282), and it was wholly owned
by Mr. Zhou Li as nominee for Mr. Antoine Cheng, the father of Ms. Cheng. until
October 2, 2009. On that date, all the outstanding shares of Leewell were sold
to Longhai Holdings Company Limited, a company controlled by Mr. Cheng (See Note
5). The acquisition of Oumei by Leewell is considered a combination under common
control. Acquired assets and liabilities are recorded at book value. Equity of
Leewell is shown as outstanding from the earliest period presented. The
financial statements of the two previously separate entities are retroactively
combined for all periods presented. Because cash was exchanged in the
transaction, an adjustment for $13,165,828 is shown in the consolidated
statement of changes in shareholders' equity for the year ended December 25,
2007 to eliminate the difference between the total cash of $13,167,110 used to
purchase Oumei and the amount of Leewell's equity of $1,282. As a result of the
acquisition, Oumei became a wholly foreign-owned enterprise with limited
liability under the laws of China.
Since inception, the Company's activities have been limited to
organizational efforts, obtaining initial financing, and preparing to make
filings with the Securities and Exchange Commission ("SEC").
All significant intercompany transactions and balances are
eliminated on consolidation.
Note 2 - Acquisition of Subsidiaries
On January 19, 2008, Oumei reached agreements with the
shareholders of Weihai Huancui District Mingwei Industry Co., Ltd ("Mingwei") to
acquire 100% of its equity interest by paying Chinese Yuan ("CNY") 110,000,000
(approximately $15 million).
The following table summarizes the approximate estimated fair
values of the assets and liabilities acquired from Mingwei at acquisition date.
Intangible assets
$
37,242,000
Current liabilities
(21,591,000
)
Net assets acquired at FMV
15,651,000
Cash consideration
14,960,000
Difference
$
(691,000
)
100% of the above difference was allocated to land use rights
and reduced the fair market value recorded.
On January 22, 2008, Oumei reached an agreement with the sole
shareholder of Longhai Hotel Co., Ltd ("Longhai Hotel"), to acquire 100% of its
equity interest by paying CNY110,000,000 (approximately $15 million). Longhai
Hotel is owned by Mr. Zhang Weiqing, who is also the former shareholder of Oumei
(See Note 1). The acquisition is a business combination under common control,
therefore, the Company accounted for this acquisition using the as if pooling of
interest method. The acquired businesses and net assets are recorded at book
value as if the businesses and net assets of Longhai Hotel have been owned by
the Group from the earliest comparative period presented. Accordingly, the
financial information for 2007 has been restated as follows:
F-9
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 2 - Acquisition of Subsidiaries (Continued)
Year
        ended December 25, 2007
Acquisition
Originally
of Longhai
stated
Hotel
Restated
Sales
$
51,850,312
$
-
$
51,850,312
Net income
9,334,303
(115,113
)
9,219,190
Net cash inflow from operating activities
1,212,951
-
1,212,951
Net cash outflow from investing activities
(13,689,661
)
-
(13,689,661
)
Net cash inflow from financing activities
14,167,583
-
14,167,583
Total current assets
69,443,412
-
69,443,412
Total assets
73,677,803
14,144,985
87,822,788
Total current liabilities
46,112,906
13,864,728
59,977,634
Shareholders' equity
27,564,897
280,257
27,845,154
The following table summarizes the carryover historical costs
of the assets and liabilities of Longhai Hotel at acquisition date.
Fixed assets
$
2,782,000
Intangible assets
11,367,000
Current liabilities
(13,869,000
)
Net asset acquired at historical costs
280,000
Cash consideration
14,960,000
Difference
$
14,680,000
100% of the above difference was recorded in additional paid-in
capital as it was acquired from a related party with common interest.
On January 23, 2008, Oumei reached agreements with the
shareholders of Weihai Economic & Technology Development Zone Longhai
Properties Co., Ltd ("Longhai Properties") to acquire 100% of its equity
interest by paying CNY140,000,000 (approximately $19 million).
The following table summarizes the approximate estimated fair
values of the assets and liabilities of Longhai Properties at acquisition date.
Current assets
$
41,339,000
Fixed assets
15,000
Intangible assets
10,224,000
Current liabilities
(32,901,000
)
Long-term debt
(2,992,000
)
Net assets acquired at FMV
15,685,000
Cash consideration
19,040,000
Difference
$
3,355,000
100% of the above difference was recorded as goodwill.
On January 24, 2008, Oumei reached agreements with the
shareholders of Xudong Real Estate Development Co., Ltd ("Xudong") to acquire
100% of its equity interest by paying CNY60,000,000 (approximately $8.3
million). Longhai Group, a related party, owned approximately 74% of Xudong (See
Notes 1 and 5).
F-10
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 2 - Acquisition of Subsidiaries (Continued)
The following table summarizes the approximate estimated fair
values of the assets and liabilities of Xudong at acquisition date.
Current assets
$
54,319,000
Current liabilities
(17,599,000
)
Long-term debt
(27,700,000
)
Net assets acquired at FMV
9,020,000
Cash consideration
8,310,000
Difference
$
(710,000
)
74% of the above difference, approximately $525,000, was
recorded in additional paid-in capital as it was acquired from a related party;
the remaining 26%, approximately $185,000, was recorded as extraordinary item in
2008.
On August 27, 2008, Oumei reached agreements with the
shareholders of Weifang Longhai Industry Co., Ltd. ("Weifang Industry") to
acquire 100% of its equity interest by paying CNY30,000,000 (approximately $4.4
million). Longhai Group, a related party (See Note 5), owned approximately 95%
of Weifang Industry.
The following table summarizes the approximate estimated fair
values of the assets and liabilities of Weifang Industry at acquisition date.
Current assets
$
23,147,000
Fixed assets
9,000
Current liabilities
(15,983,000
)
Net assets acquired at FMV
7,173,000
Cash consideration
4,386,000
Difference
$
(2,787,000
)
$9,000 of the above difference was allocated to fixed assets
and reduced the fair market value recorded. 95% of the remaining difference,
approximately $2,639,000 was recorded in additional paid-in capital as it was
acquired from a related party; 5% of the remaining difference, approximately
$139,000, was recorded as an extraordinary item in 2008.
On August 28, 2008, Oumei reached an agreement with the sole
shareholder of Weifang Longhai Zhiye Co., Ltd. ("Weifang Zhiye") to acquire 100%
of its equity interest by paying CNY30,000,000 (approximately $4.4 million).
The following table summarizes the approximate estimated fair
values of the assets and liabilities of Weifang Zhiye at acquisition date.
Current assets
$
21,707,000
Fixed assets
10,000
Current liabilities
(13,034,000
)
Net assets acquired at FMV
8,683,000
Cash consideration
4,392,000
Difference
$
(4,291,000
)
$10,000 of the above difference was allocated to fixed assets
and reduced the fair market value recorded. The remaining difference,
approximately $4,281,000, was recorded as an extraordinary item in 2008.
F-11
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 2 - Acquisition of Subsidiaries (Continued)
On August 29, 2008, Oumei reached agreements with the
shareholders of Weifang Qi Lu Guo Tai Zhiye Co., Ltd. ("Qi Lu Guo Tai") to
acquire 100% of its equity interest by paying CNY40,000,000 (approximately $5.8
million).
The following table summarizes the approximate estimated fair
values of the assets and liabilities of Qi Lu Guo Tai at acquisition date.
Current assets
$
50,076,000
Fixed assets
24,000
Current liabilities
(32,032,000
)
Long-term debt
(3,897,000
)
Net assets acquired at FMV
14,171,000
Cash consideration
5,860,000
Difference
$
(8,311,000
)
$24,000 of the above difference was allocated to fixed assets
and reduced the fair market value recorded. The remaining difference,
approximately $8,287,000, was recorded as an extraordinary item in 2008.
The assets and liabilities of the acquired companies were
recorded at full fair value at the acquisition dates except Longhai Hotel. The
acquisition of Longhai Hotel was considered as an acquisition from a related
party under common control. Assets and liabilities are recognized at historical
carryover costs. No goodwill or extraordinary item was recognized. The
acquisitions of Xudong and Weifang Industry are considered as acquisitions from
related parties with no common control. The excess of net assets over the
purchase price has been recorded as an extraordinary item for the non-related
party portion and as additional paid-in-capital for the related party portion.
The assets and liabilities of Mingwei, Longhai Properties,
Weifang Zhiye and Qi Lu Guo Tai were recorded at fair values at the acquisition
dates. Goodwill is recognized for the acquisition of Longhai Property as the
Company believes the value of Longhai Property was higher than the market price
at the date of acquisition. Longhai Property maintains a high profit level and
owns land in the city center of Weihai, which the Company considers a strategic
location for construction that has the potential to significantly increase the
profits of the Company. The combination of these factors is the reason for the
excess of the purchase price over the fair value of the tangible assets and
liabilities acquired. Extraordinary items are recognized for the acquisitions of
Weifang Zhiye and Qi Lu Guo Tai due to the excess of fair values over the
purchase prices. No extraordinary item is recognized for Mingwei since the
excess of fair value over the purchase price was absorbed by non-current assets.
The acquisition increased the land reserve and expanded the
market share of the Company in Shandong Province.
On June 25, 2009, Oumei reached agreement with the shareholder
of Caoxian Industrial Co., Ltd ("CXSY") to acquire 100% of its equity interest
by paying CNY15,000,000 (approximately $2.2 million). Longhai Group, a related
party (see Note 5), funded the purchase. This funding reduced the receivable due
from Longhai Group at the time of the acquisition.
The following table summarizes the approximate estimated fair
values of the assets and liabilities of CXSY at acquisition date.
Current assets
$
16,396,000
Fixed assets
10,000
Current liabilities
(4,092,000
)
Long-term debt
(5,128,000
)
Net assets acquired at FMV
7,186,000
Cash consideration
2,197,000
Difference
$
(4,989,000
)
F-12
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 2 - Acquisition of Subsidiaries (Continued)
90% of the above difference, approximately $4,490,000, was
recorded in additional paid-in capital as it was acquired from Longhai Group, a
related party (See Note 5); the remaining 10%, approximately $499,000, was
recorded as gain on business acquisition.
On September 25, 2009, Oumei reached agreement with the
shareholder of Longhai Real Estate Development Co., Ltd ("LHFDC") to acquire
100% of its equity interest by paying CNY20,000,000 (approximately $2.9
million). Longhai Group, a related party (See Note 5), funded the purchase. This
funding reduced the receivable due from Longhai Group at the time of the
acquisition.
The following table summarizes the approximate estimated fair
values of the assets and liabilities of LHFDC at acquisition date.
Current assets
$
28,262,000
Current liabilities
(20,842,000
)
Net assets acquired at FMV
7,420,000
Cash consideration
2,934,000
Difference
$
(4,486,000
)
40% of the above difference, approximately $1,794,000, was
recorded in additional paid-in capital as it was acquired from Longhai Group, a
related party (See Note 5); the remaining 60%, approximately $2,692,000, was
recorded as gain on business acquisition.
The acquisitions of CXSY and LHFDC are considered as
acquisitions from a related party; therefore, the cash consideration paid did
not represent the market value that would have been paid had the transaction
been at arm's length.
The amounts of revenue and earnings of CXSY since June 25, 2009
which were included in the Consolidated Statement of Income and Comprehensive
Income for 2009 were approximately $6,447,000 and $1,491,000, respectively.
The amounts of revenue and earnings of LHFDC since September
25, 2009 which were included in the Consolidated Statement of Income and
Comprehensive Income for 2009 were approximately $21,962,000 and $7,862,000,
respectively.
For the year ended December 25, 2008, the Consolidated
Statements of Income and Comprehensive Income included twelve months results of
operations of Mingwei, Longhai Hotel, Longhai Properties, Xudong and four months
results of operations of Weifang Industry, Weifang Zhiye and Qi Lu Guo Tai.
For the year ended December 25, 2009, the Consolidated
Statement of Income and Comprehensive Income included twelve months results of
operations of Mingwei, Longhai Hotel, Longhai Properties, Xudong, Weifang
Industry, Qi Lu Guo Tai, Weifang Zhiye and six months results of operations of
CXSY and three months results of operations of LHFDC.
Supplemental information on an unaudited pro forma basis, as if
the acquisitions of the subsidiaries had been consummated at the beginning of
each of the years presented, is as follows:
2009
2008
Sales
$
94,315,500
$
77,032,561
Net income
$
24,000,714
$
30,621,973
The unaudited pro forma supplemental information is based on
estimates and assumptions which the Company believes are reasonable. It is not
necessarily indicative of the consolidated financial position or results of
income in future periods or the results that actually would have been realized
had we been a combined company as of the beginning of the years presented.
F-13
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 3 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America ("US GAAP").
Use of Estimates
The preparation of financial statements in conformity with US
GAAP 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. Significant estimates used
in the preparation of the financial statements include the selection of the
useful lives of property and equipment and the provision necessary for
uncollectible receivables. Management believes that the estimates utilized in
preparing its financial statements are reasonable and prudent. Actual results
could differ from those estimates.
Fair Value of Financial Instruments
Accounting Standards Codification ("ASC") 820,
Fair Value
Measurements and Disclosures
, requires disclosing fair value to the extent
practicable for financial instruments that are recognized or unrecognized in the
balance sheet. Fair value of financial instruments is the amount at which the
instrument could be exchanged in a current transaction between willing parties.
The Company considers the carrying amounts of cash, restricted cash, revenue in
excess of billings, contracts receivable, related party and other receivables,
accounts payable, note payable, related party and other payables, customer
deposits, and short-term loans approximate their fair values because of the
short period of time between the origination of such instruments and their
expected realization. The Company considers the carrying amount of long-term
bank loans to approximate their fair values based on the interest rates of the
instruments and the current market rate of interest.
Reporting Currency and Foreign Currency Translation
The functional currency of Oumei and its subsidiaries is the
CNY and the Company's reporting currency is the United States Dollar (USD). The
assets and liabilities of Oumei and its subsidiaries are translated at the
exchange rate on the balance sheet date, shareholders' equity is translated at
the historical rates and the revenues and expenses are translated at the
weighted average exchange rate for the year. The resulting translation
adjustments are reported under other comprehensive income in the Statements of
Income and Comprehensive Income in accordance with ASC 220,
Comprehensive
Income
. Transaction gains and losses that arise from exchange rate
fluctuations from transactions denominated in a currency other than the
functional currency are included in the Statements of Income and Comprehensive
Income as incurred. The transaction gains and losses were immaterial for the all
periods presented.
Since July 2005, the CNY is no longer pegged to the USD.
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
CNY may appreciate or depreciate significantly in value against the USD in the
medium to long term. Moreover, it is possible that in the future, PRC
authorities may lift restrictions on fluctuations in the CNY exchange rate and
lessen intervention in the foreign exchange market. Therefore, the Company's
foreign currency exchange gains and losses may be magnified by PRC exchange
control regulations that restrict the Company's ability to convert CNY into
foreign currencies.
F-14
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Revenue Recognition
Real estate sales are reported in accordance with the
provisions of ASC 360-20,
Property, Plant and Equipment, Real Estate Sales,
Sales Other Than Retail Land Sales
. Revenue from the sales of development
properties where the construction period is twelve months or less is recognized
by the full accrual method when the sale is consummated. A sale is not
considered consummated until (1) the parties are bound by the terms of a
contract or agreement, (2) all consideration has been exchanged, (3) any
permanent financing of which the seller is responsible has been arranged, (4)
all conditions precedent to closing have been performed, (5) the seller does not
have substantial continuing involvement with the property, and (6) the usual
risks and rewards of ownership have been transferred to the buyer. Revenue
recognized to date in excess of amounts received from customers is classified as
current assets under contracts receivable. Sales transactions not meeting all
the conditions of the full accrual method are accounted for using the deposit
method of accounting. Under the deposit method, all costs are capitalized as
incurred, and payments received from the buyer are recorded as a deposit
liability.
Effective December 26, 2008, the Company adopted the
percentage-of-completion method of accounting for revenue recognition for all
building construction projects in progress in which the construction period was
expected to be more than twelve months at that date. The full accrual method was
used before that date for all of our residential and commercial projects. The
Company changed to the percentage-of-completion method for contracts longer than
one year as this method more accurately reflects how revenue is earned on these
contracts, particularly for interim reporting purposes.
ASC 250 requires retrospective application of a change in
accounting principle unless impracticable. The change to the
percentage-of-completion method had no effect on our December 25, 2008 financial
statements and we found it was impracticable to determine the effect on the
December 25, 2007 financial statements as no progress reports detailing the
percentage-of-completion of our contracts were prepared for that year.
Revenue and profit from the sale of development properties
where the construction period is more than twelve months is recognized by the
percentage-of-completion method on the sale of individual units when the
following conditions are met: (1) construction is beyond a preliminary stage;
(2) the buyer is committed to the extent of being unable to require a refund
except for non-delivery of the unit; (3) sufficient units have already been sold
to assure that the entire property will not revert to rental property; (4) sales
prices are collectible and (5) aggregate sales proceeds and costs can be
reasonably estimated. If any of these criteria are not met, proceeds are
accounted for as deposits until the criteria are met and/or the sale
consummated.
Under the percentage of completion method, revenues from units
sold and related costs are recognized over the course of the construction
period, based on the completion progress of a project. In relation to any
project, revenue is determined by calculating the ratio of completion and
applying that ratio to the contracted sales amounts. This ratio of completion is
determined by an independent third party hired by the Company as the contractors
employed by the Company request advance payments and do not specifically
allocate these costs to the various projects. Cost of sales is recognized by
multiplying the ratio by the total budgeted costs. Changes to total estimated
contract costs or losses, if any, are recognized in the period in which they are
determined. Revenue recognized to date in excess of amounts received from
customers is classified as current assets under revenue in excess of billings.
Amounts received from customers in excess of revenue recognized to date are
classified as current liabilities under customer deposits.
Any losses incurred or identified on real estate transaction
  are recognized in the period in which the transaction occurs.
Real Estate Capitalization and Cost Allocation
Properties under construction or held for sale consist of
residential and commercial units under construction and units completed.
Properties under construction or held for sale are stated at
cost or estimated net realizable value, whichever is lower. Costs include costs
of land use rights, direct development costs, including predevelopment costs,
interest on indebtedness, construction overhead and indirect project costs.
Total estimated costs of multi-unit developments are allocated to individual
units based upon specific identification methods. Costs of land use rights
include land premiums and deed tax and are allocated to projects on the basis of
acreage and gross floor area.
F-15
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Capitalization of Interest
In accordance with ASC 360,
Property, Plant and
Equipment
, interest incurred during construction is capitalized to
properties under construction. All other interest is expensed as incurred.
For the year ended December 25, 2009, total interest incurred
by the Company was $3,195,886 (2008: $3,737,121 and 2007 restated: $756,839), of
which capitalized interest was $2,329,135 (2008: $2,768,411, and 2007 restated:
$685,876).
Concentration of Risks
The Company sells residential and commercial units to residents
and small business owners. In 2009, the Company recorded approximately
$9,995,000 of sales and contracts receivable from the sales of affordable
housing to City Government of Qingdao for the Real-Estate Development Management
Bureau for a relocation program. Such sales are approximately 11% of the total
sales in 2009 and the related contracts receivable comprise about 80% of the
total contracts receivable as of December 25, 2009.
For the years ended December 25, 2009 and 2008, the Company had
two major constructors for most of its construction services and construction
materials: Qingdao Zhongxing Construction Ltd and Longhai Construction Ltd. In
2009 and 2008 Oumei made payments to Longhai Construction Ltd, a related party
(See Note 5), of approximately $13,784,000 and $9,008,000 respectively. For the
year ended December 25, 2007, Qingdao Zhongxing Construction Ltd was the only
constructor used by the Company.
The Company's operations are carried out 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 and by the general state of the PRC's economy. The Company's business
may be influenced by changes in governmental policies with respect to laws and
regulations, anti-inflationary measures, currency conversion and methods of
taxation, among other things.
The Company has a credit risk exposure of uninsured cash in
banks at December 25, 2009 of $3,906,216 (2008: $2,274,517). The Company has not
experienced any losses in such accounts and believes it is not exposed to any
risks on its cash in bank accounts. The Company does not require collateral or
other securities to support financial instruments that are subject to credit
risk.
Cash and Cash Equivalents
The Company considers all highly liquid investments with
original maturities of three months or less when purchased to be cash
equivalents. The Company maintains bank accounts in the PRC and Hong Kong. All
PRC bank balances are denominated in CNY. Hong Kong bank balances are
denominated in USD. At December 25, 2009 and 2008, the Company had no cash
equivalents.
Cash includes cash on hand and demand deposits in accounts
maintained with state-owned and private banks within the PRC and Hong Kong.
Restricted Cash
PRC banks grant mortgage loans to home purchasers and will
credit these amounts to the Company's bank account once title passes to the
purchasers. If the condominiums are not completed and the new homeowners have no
ownership documents to secure the loan, the bank will deduct 5% of the
homeowner's loan from the Company's bank account and transfer that amount to a
designated bank account classified on the balance sheet as restricted cash.
Interest earned on the restricted cash is credited to the Company's normal bank
account. The bank will release the restricted cash after home purchasers have
obtained the ownership documents to secure the mortgage loan. Total restricted
cash amounted to $1,641,778 as of December 25, 2009 (2008: $1,635,878).
F-16
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Allowance for Doubtful Accounts
The Company recognizes an allowance for doubtful accounts to
ensure contracts receivable, related party receivables and other receivables are
not overstated due to uncollectability. Bad debt reserves are maintained for all
customers based on a variety of factors, including the length of time the
receivables are past due, significant one-time events and historical experience.
An additional reserve for individual accounts is recorded when the Company
becomes aware of a customer's or debtor's inability to meet its financial
obligation, such as in the case of bankruptcy filings or deterioration in the
customer's or debtor's operating results or financial position. If circumstances
related to customers or debtors change, estimates of the recoverability of
receivables would be further adjusted. As of December 25, 2009 and 2008, the
allowances for doubtful accounts are $1,617,114 and $1,033,520 for contracts
receivable, and $272,361 and $636,745 for other receivables, respectively.
An allowance for contracts receivable is established as
follows: 50% of the balances aged between one and two years and over CNY100,000
(approximately $15,000); 10% of the balances aged between one and two years and
under CNY100,000 (approximately $15,000); and 100% of the balances aged over two
years.
Inventory
Inventory is stated at the lower of cost or market, on a
specific identification basis. In addition to direct land acquisition, land
development and construction costs, costs include interest and direct overhead
which are capitalized to inventories during the period beginning with the
commencement of construction and ending with the completion of construction.
Property, Plant and Equipment, Net
Property, plant and equipment are recorded at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets as follows:
Estimated Useful Lives
Buildings and improvements
20 years
Vehicles
5 years
Office equipment and others
5 years
Maintenance, repairs and minor renewals are charged directly to
expenses as incurred. Major additions and betterments to property, plant and
equipment are capitalized and depreciated over the remaining useful life of the
assets.
Impairment of Long-lived Assets
The Company reviews its long-lived assets other than goodwill
whenever events or changes in circumstances indicate that the carrying amount of
an asset may no longer be recoverable. When these events occur, the Company
measures impairment by comparing the carrying value of the long-lived assets to
the estimated undiscounted future cash flows expected to result from the use of
the assets and their eventual disposition. If the sum of the expected
undiscounted cash flows is less than the carrying amount of the assets, the
Company would recognize an impairment loss based on the fair value of the
assets. There was no impairment loss recognized for long-lived assets for the
years ended December 25, 2009, 2008 and 2007.
F-17
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Goodwill
The Company accounts for acquisitions of business in accordance
with ASC 805,
Business Combinations
, which results in the recognition of
goodwill when the purchase price exceeds the fair value of net assets acquired.
Goodwill is not subject to amortization but will be subject to at least an
annual evaluation for impairment. The Company has performed such annual
evaluation in 2009 and determined that goodwill was not impaired as of December
25, 2009.
Goodwill is stated in the consolidated balance sheet at cost
less accumulated impairment loss. An analysis of changes in goodwill is as
follows:
December 25, 2009
December 25, 2008
Opening balance
$
3,596,117
$
-
Acquisitions
-
3,596,117
Effect of exchange rate
      change
24,553
-
Closing balance
$
3,620,670
$
3,596,117
Land Use Rights
Land use rights are related to the development rights for acres
of land in various projects. These rights are capitalized until a development
project commences on the land for which the rights have been acquired. At this
time, the rights are transferred to properties under construction inventory.
Income Taxes
The Company follows ASC 740,
Income Taxes
, which
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred income taxes are
recognized for the tax consequences in future years of differences between the
tax bases of assets and liabilities and their financial reporting amounts at
each period end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to be realized.
The Company is governed by the Income Tax Laws of the PRC
concerning Chinese registered limited liability companies. Under the Income Tax
Laws of the PRC, Chinese enterprises are generally subject to an income tax at
an effective rate of 25% since January 1, 2008 and 33% prior to that date on
taxable income.
According to the Income Tax Laws of the PRC for real estate
developers, income tax of the Company is calculated by project. When all units
of a project are sold, the PRC tax department will assess the tax due on the
project and issue a tax due notification to the Company. The Company has to pay
the tax by the due date on the notification. If the Company does not pay the tax
by the due date, the tax department will charge the Company interest. The
Company includes any interest and penalties in general and administrative
expenses.
Deferred tax assets and liabilities are included in the
financial statements at currently enacted income tax rates applicable to the
period in which the deferred tax assets and liabilities are expected to be
realized or settled. As changes in tax laws or rates are enacted, deferred tax
assets and liabilities are adjusted through the provision for income taxes.
ASC 740 clarifies the accounting for uncertainty in income
taxes recognized in an enterprise's financial statements and it prescribes a
recognition threshold and measurement attributable for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. ASC 740 also provides guidance on derecognizing, classification,
interest and penalties, accounting in interim periods, disclosures and
transitions.
The Company recognizes that virtually all tax positions in the
PRC are not free of some degree of uncertainty due to tax law and policy changes
by the PRC government. However, the Company cannot reasonably quantify political
risk factors and thus must depend on guidance issued by current PRC government
officials.
F-18
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Income Taxes (Continued)
Based on all known facts and circumstances and current tax law,
the Company believes that the total amount of unrecognized tax benefits as of
December 25, 2009 is not material to its results of operations, financial
condition or cash flows. The Company also believes that the total amount of
unrecognized tax benefits as of December 25, 2009, if recognized, would not have
a material effect on its effective tax rate. The Company further believes that
there are no tax positions for which it is reasonably possible, based on current
Chinese tax law and policy, that the unrecognized tax benefits will
significantly increase or decrease over the next 12 months producing,
individually or in the aggregate, a material effect on the Company's results of
operations, financial condition or cash flows.
Land Appreciation Tax ("LAT")
In accordance with the relevant taxation laws in the PRC, the
Company is subject to LAT based on progressive rates ranging from 30% to 60% on
the appreciation of land value, which is calculated as the proceeds of sales of
properties less deductible expenditures, including borrowings costs and all
property development expenditures. The tax rules to implement the laws stipulate
that the whole project must be completed before the LAT obligation can be
assessed. Accordingly, the Company records the liability and the related expense
at the completion of a project, unless the tax authorities impose an assessment
at an earlier date. Deposits made against the eventual obligation are included
in prepaid expenses.
Accumulated Other Comprehensive Income
Accumulated other comprehensive income is defined to include
all changes in equity except those resulting from investments by owners and
distributions to owners. The Company's only components of comprehensive income
during the years ended December 25, 2009, 2008 and 2007 were net income and the
foreign currency translation adjustment.
Statement of Cash Flows
In accordance with ASC 230,
Statement of Cash Flows
,
cash flows from the Company's operations are calculated based upon the local
currencies. As a result, amounts related to assets and liabilities reported on
the statement of cash flows will not necessarily agree with changes in the
corresponding balances on the balance sheet.
Advertising Expenses
Advertising costs are expensed as incurred, or the first time
the advertising takes place, in accordance with ASC 720-35,
Advertising Costs
.
For the year ended December 25, 2009, the Company recorded an
advertising expense of $311,560 (2008: $242,021 and 2007 restated: $46,492).
Property Warranty
The Company and its subsidiaries provide customers with
warranties which cover major defects of building structure and certain fittings
and facilities of properties sold as stipulated in the relevant sales contracts.
The warranty period is one year. The Company constantly estimates potential
costs for materials and labor with regard to warranty-type claims expected to be
incurred subsequent to the delivery of a property.
F-19
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Property Warranty (Continued)
Reserves are determined based on historical data and trends
with respect to similar property types and geographical areas. The Company
monitors the warranty reserve and makes adjustments to its pre-existing
warranties, if any, in order to reflect changes in trends and historical data as
information becomes available. The Company may seek further recourse against its
contractors or any related third parties if it can be proved that the faults are
caused by them. In addition, the Company also withholds up to 5% of the contract
cost from subcontractors for periods of two to five years. These amounts are
included in current liabilities, and are only paid to the extent that there have
been no warranty claims against the Company relating to the work performed or
materials supplied by the subcontractors. For the three years ended December 25,
2009, 2008 and 2007, the Company has not recognized any warranty liability or
incurred any warranty costs in excess of the amount retained from
subcontractors.
Note 4 - Contracts Receivable
Contracts receivable consists of balances due from customers
for the sale of residential and commercial units. In cases where the customers
deposit more than 50% of the total purchase price, the Company may defer the
remaining purchase price. These deferred balances are unsecured, bear no
interest and are due within 360 days from the date of the sale. Contracts
receivable are presented net of an allowance for doubtful accounts of $1,617,114
at December 25, 2009 (2008: $1,033,520).
Note 5 - Related Party Transactions
As of December 25, 2009, the Company has a total of $2,949,102
(2008: $15,279,068) due from and a total of $0 (2008: $0) due to Longhai Group
and its subsidiaries. Mr. Antoine Cheng is the controlling shareholder of
Longhai Group (See Notes 1 and 2). These balances have no stated terms for
repayment and are not interest bearing.
In 2009, the Company sold two floors of a project for office
use to Longhai Construction Ltd, a subsidiary of Longhai Group, for
approximately $3,274,000.
Note 6 - Inventories
Inventories include properties held for sales and properties
under construction. The following summarizes the components of real estate
inventories at December 25, 2009 and 2008:
2009
2008
Properties held for sale
$
35,549,529
$
21,857,879
Properties under construction
33,552,748
13,302,752
Properties held for sale
      pledged for mortgage loans
2,132,197
756,724
Properties under construction pledged for
      mortgage loans
35,218,228
41,091,328
Total
$
106,452,702
$
77,008,683
Note 7 - Other Receivables, Net
Other receivables consist of various cash advances to employees
and unrelated companies with which the Company has business relationships. These
amounts are unsecured, non-interest bearing and generally short term in nature.
As of December 25, 2009, the balance of other receivables was $1,634,987 (2008:
$367,836), which is net of an allowance for doubtful accounts of $272,361(2008:
$636,745).
F-20
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 8 - Property and Equipment, Net
Property and equipment consist of the following at December 25,
2009 and 2008:
2009
2008
Buildings and improvements
$
3,756,672
$
2,466,129
Vehicles
392,615
238,546
Office equipment and others
67,938
4,389
Idle assets
1,761,600
2,372,701
Construction in progress
-
642,021
$
5,978,825
$
5,723,786
Accumulated depreciation
(987,118
)
(730,099
)
Property and equipment, net
$
4,991,707
$
4,993,687
Depreciation expense for the years ended December 25, 2009,
2008 and 2007 was $246,680, $246,400 and $205,366 (restated), respectively, and
is included in general and administrative expenses on the Statements of Income
and Comprehensive Income.
Note 9 - Accounts Payable
As of December 25, 2009, the Company has accounts payable
$487,238. There was no accounts payable as of December 25, 2008.
Note 10 - Customer Deposits
Customer deposits consist of amounts received from customers
relating to the sale of residential and commercial units in the PRC. In the PRC,
customers will generally obtain permanent financing for the purchase of their
residential unit prior to the completion of the project. The lending institution
will provide the funding to the Company upon the completion of the financing
rather than the completion of the project. The Company receives these funds and
recognizes them as a current liability until the revenue can be recognized. As
of December 25, 2009, the Company has received $19,780,472 deposits from
customers (2008: $42,980,448).
Note 11 - Other Payables
Other payables consist of various cash advances from unrelated
companies and individuals with which management of the Company has business
relationships. These amounts are unsecured, non-interest bearing and short term
in nature. As of December 25, 2009, the balance of other payables is $4,186,745
(2008: $3,287,869).
Note 12 - Taxes Payable
Taxes payable consist of the following at December 25, 2009 and
2008:
2009
2008
Business tax
$
6,461,389
$
3,353,457
Income tax
18,847,145
18,621,457
Others
741,422
243,006
Total
$
26,049,956
$
22,217,920
The Company prepaid LAT and other taxes of $1,461,670 in 2009
and $3,782,408 in 2008, which are classified as prepaid expenses.
F-21
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 13 - Short-term Loans
As of December 25, 2009, the Company has several short-term
loans from banks and employees totaling $2,719,432 (2008: $2,879,010). The
weighted average interest rate for the short-term bank loans was approximately
5.82% in 2009 and 8.73% in 2008. The weighted average interest rate for employee
loans was approximately 5.64% in 2009 and 5.10% in 2008.
The short-term loans were borrowed from several financial
institutions. Interest expense incurred was $149,502, $110,719 and $70,963
(restated) for the years ended December 25, 2009, 2008 and 2007, respectively.
The capitalized interest from short-term loans was $3,751 in 2008, and there was
no capitalized interest from short-term loans in 2009 and 2007.
As of December 25, 2007, the Company had a loan of $15,000,000
from a potential investor. The loan was non-interest bearing and had no
repayment terms. On November 10, 2008, the Company paid $1,851,706 in cash in
partial settlement of the $15,000,000 investor loan. On November 18, 2008, the
Company, Mr. Zhou Li and the investor entered into an agreement stipulating that
Mr. Zhou Li was responsible for settling the remaining loan balance of
$13,148,294 and Mr. Zhou Li was entitled to seek reimbursement from the Company
for the repayment. In November 2008, the Company increased its authorized shares
from 10,000 to 150,000,000. At December 21, 2008, the $13,148,294 was converted
to 102,556,690 shares of common stock of the Company at $0.1282 (HK$ 1.00) per
share.
Note 14 - Long-term Debt
The Company has long-term loans from various financial
institutions totaling $39,621,320 at December 25, 2009 (2008: $43,843,494). The
payment schedule for the long-term loans is as following:
For the year ended December 25, 2010
$
35,217,320
For the year ended December 25, 2011
$
4,404,000
All long-term loans are borrowed for construction projects. The
interest rates of the long-term loans ranged from approximately 5.31% to 14.74%
and 6.48% to 8.49% in 2009 and 2008, respectively. The interest rate for the
only long-term loan in 2007 was 9.83% .
Total interest incurred was $3,046,384, $3,626,402, and
$685,876 in 2009, 2008 and 2007, respectively, of which capitalized interest was
$2,329,135, $2,764,660, and $685,876 (restated), respectively.
Note 15 - Income Taxes
Beginning January 1, 2008, the new Chinese Enterprise Income
Tax ("EIT") law replaced the former income tax laws for Domestic Enterprises
("DEs") and Foreign Invested Enterprises ("FIEs"). The new standard EIT rate of
25% replaced the 33% rate previously applicable to both DEs and FIEs.
A reconciliation between approximate taxes computed at the US
statutory rate of 34% and the Company's effective tax rate is as follows:
2007
2009
2008
Restated
At US statutory rate of 34%
$
11,357,000
$
8,699,000
$
4,865,000
Tax effect of permanent difference
259,000
-
Effect of statutory rate difference
(3,046,000
)
(2,303,000
)
(143,000
)
Change in valuation allowance
243,000
498,000
-
Expiration of net operating loss
      carryfowards
195,000
-
-
Others
50,000
(292,000
)
368,000
Income tax at effective rate
$
9,058,000
$
6,602,000
$
5,090,000
F-22
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 15 - Income Taxes (Continued)
The tax effects of temporary differences that give rise to the
following approximate deferred tax assets and liabilities as of December 25 are
presented below.
2009
2008
Deferred tax assets
Short-term deferred tax assets:
Allowance for bad debt
$
472,000
$
418,000
Less: Valuation
      allowance
(472,000
)
(418,000
)
-
-
Long-term deferred tax assets:
Net operating loss carryfowards
$
378,000
$
412,000
Combined effect due to
      reporting revenues and expenses
differently for financial statement and
      income tax
purposes
548,000
-
Less: Valuation allowance
(269,000
)
(81,000
)
$
657,000
$
331,000
Deferred tax liabilities
Combined effect due to
      reporting revenues and expenses
differently for financial statement and
      income tax
purposes
$
8,782,000
$
-
As of December 25, 2009, the Company has net operating loss
carryfowards of approximately $1,283,000, which expire at varying years through
2013, and net operating loss carryfowards of approximately $344,000, which will
not expire.
Note 16 - Appropriated Retained Earnings
In accordance with the PRC Company Law, the Company is required
to transfer 15% of its profit after tax, as determined in accordance with PRC
accounting standards and regulations, to the statutory surplus reserve (the
"SSR") until such reserve reaches 50% of the registered capital of the
subsidiaries. Subject to certain restrictions set out in the PRC Company Law,
the SSR may be distributed to stockholders in the form of share bonus issues to
increase share capital, provided that the remaining balance after the
capitalization is not less than 25% of the registered capital.
For the year ended December 25, 2009, the Company appropriated
reserve funds in the amount of $3,656,132 (2008: $2,407,705).
Note 17 - Employee Welfare Plan
Regulations in the PRC require the Company to contribute to a
defined contribution retirement plan for all permanent employees. Pursuant to
the mandatory requirement from the local authority in the PRC, the retirement
pension insurance, unemployment insurance, health insurance, injury insurance
and pregnancy insurance are established for the employees during the term of
employment. For the year ended December 25, 2009, the Company contributed
$87,776 (2008: $50,759 and 2007 restated: $5,490).
F-23
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 18 - Recent Pronouncements
ASU No. 2009-13,
Revenue Recognition (Topic 605) –
Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging
Issues Task Force
This ASU addresses the accounting for multiple-deliverable
arrangements to enable vendors to account for products or services
(deliverables) separately rather than as a combined unit. The ASU is effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010.
ASU No. 2009-14,
Software (Topic 985) – Certain
Revenue Arrangements That Include Software Elements – a consensus of the FASB
Emerging Issues Task Force
The amendments in this ASU change the accounting model for
revenue arrangements that include both tangible products and software elements.
The ASU is effective prospectively for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010.
ASU No. 2009-15,
Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance or Other Financing
This ASU concludes that at the date of issuance, a
share-lending arrangement entered into on an entity's own shares in
contemplation of a convertible debt offering or other financing is required to
be measured at fair value and recognized as issuance cost in the financial
statements of the entity. The ASU is effective for fiscal years beginning on or
after December 15, 2009, and interim periods within those fiscal years for
arrangements outstanding as of the beginning of those fiscal years. The ASU is
effective for interim or annual periods beginning on or after June 15, 2009, for
share-lending arrangements entered into in those periods.
ASU No. 2009-16,
Transfers and Servicing (Topic
860): Accounting for Transfers of Financial Assets
Among other provisions, this ASU eliminates the concept of a
"qualifying special-purpose entity" from SFAS No. 140 and removes the exception
from applying FIN No. 46(R) to qualifying special-purpose entities. This ASU is
effective at the beginning of a reporting entity's first fiscal year that begins
after November 15, 2009.
ASU No. 2009-17,
Consolidations (Topic 810):
Improvements to Financial Reporting by Enterprises Involved with Variable
Interest Entities
Among other provisions, this ASU amends FIN No. 46(R) to
require an enterprise to perform an analysis to determine whether the
enterprise's variable interest or interests give it a controlling financial
interest in a variable interest entity. This ASU is effective at the beginning
of a company's first fiscal year that begins after November 15, 2009.
ASU No. 2010-06,
Fair Value Measurements and
Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements
This ASU affects all entities that are required to make
disclosures about recurring and nonrecurring fair value measurements under FASB
ASC Topic 820, originally issued as FASB Statement No. 157,
Fair Value
Measurements
. The ASU requires certain new disclosures and clarifies two
existing disclosure requirements. The new disclosures and clarifications of
existing disclosures are effective for interim and annual reporting periods
beginning after December 15, 2009, except for the disclosures about purchases,
sales, issuances, and settlements in the roll forward of activity in Level 3
fair value measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010, and for interim periods within those fiscal
years.
F-24
LEEWELL INVESTMENT GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 25,
2009, 2008 AND 2007
Note 18 - Recent Pronouncements (Continued)
ASU No. 2010-08,
Technical Corrections to Various
Topics
This ASU eliminates certain inconsistencies and outdated
provisions and provides needed clarifications. The changes are generally non
substantive in nature and will not result in pervasive changes to current
practice. However, the amendments that clarify the guidance on embedded
derivatives and hedging (ASC Subtopic 815-15) may cause a change in the
application of that Subtopic. The clarifications of the guidance on embedded
derivatives and hedging (Subtopic 815-15) are effective for fiscal years
beginning after December 15, 2009. The other amendments are effective as of the
first reporting period (including interim periods) beginning after February 2,
2010.
Note 19 - Potential Listing as a Public Company in the
United States (Unaudited)
As of the date of this report, the Company is negotiating an
agreement with Access American Fund, LP ("AAI") to raise $15 million to $20
million in conjunction with an alternative public offering ("APO"). This APO is
a reverse merger of a foreign operating entity into a US public shell company,
accompanied by a simultaneous Private Investment in Public Equity ("PIPE")
offering, a capital raise in which a publicly traded company sells its stock to
investors in a privately negotiated transaction. The detailed terms and final
agreement will be subject to a complete due diligence review. The Company will
file a Form 8-K with the Securities and Exchange Commission once the final
agreement is reached.
Note 20 - Subsequent Events
The Company has evaluated the subsequent events through March
23, 2010, the date the financial statements were issued.
The Company has paid back approximately $3 million of the
long-term debt as of March 23, 2010.
Note 21 – Reclassifications
Certain reclassifications have been made to the December 25,
2008 and 2007 figures in order to conform them to the current year's
presentation.
F-25
DRAGON ACQUISITION CORPORATION
UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION
DECEMBER 31, 2009
On April 14, 2010, Dragon Acquisition Corporation ("Dragon")
issued 29,235,000 ordinary shares at par value of $0.002112 for all of the
outstanding ordinary shares of Leewell Investment Group Limited ("Leewell").
The unaudited pro forma information is based upon the
historical financial statements of Dragon and the consolidated historical
financial statements of Leewell after giving effect to pro forma adjustments
described below.
(1)
To eliminate Leewell's common shares.
(2)
To eliminate Dragon's accumulated deficit.
(3)
To reflect the issuance of 29,235,000 shares by
      Dragon.
The adjustments are based on currently available information
and certain estimates and assumptions. However, management believes that the
assumptions provide a reasonable basis for presenting the unaudited pro forma
financial information and that pro forma adjustments give effect to those
assumptions and are properly applied in the unaudited pro forma financial
information.
The following unaudited pro forma financial information
presents the effects of the transaction on equity as of December 31, 2009.
Dragon
Leewell
Pro Forma
Historical
Historical
Adjustments
Combined
$
$
$
$
Common shares
2,112
13,149,576
(13,149,576
)
(1
)
63,856
61,744
(3
)
Paid-in capital
45,238
(7,465,626
)
13,149,576
(1
)
5,610,215
(57,229
)
(2
)
(61,744
)
(3
)
Appropriated retained earnings
-
10,298,700
10,298,700
Unappropriated retained
      earnings/(Accumulated deficit)
(57,229
)
71,326,950
57,229
(2
)
71,326,950
Accumulated other comprehensive income
-
7,041,346
7,041,346
Shareholders' equity
(9,879
)
94,350,946
94,341,067
F-26
_______ Ordinary Shares
DRAGON ACQUISITION CORPORATION
Ordinary Shares
__________________
PROSPECTUS
__________________
Brean Murray, Carret & Co.
, 2010
[RESALE PROSPECTUS ALTERNATE PAGE]
PRELIMINARY PROSPECTUS
Subject to completion, dated May
        7, 2010
5,065,785 Ordinary Shares
DRAGON ACQUISITION CORPORATION
____________________________
This
        prospectus relates to 5,065,785 ordinary shares that may be sold from
        time to time by the selling stockholders named in this prospectus, which
        includes:
•
765,000 ordinary shares;
•
2,774,700 ordinary shares underlying
        the 6% Convertible Preference Shares, par value $0.002112 per share; and
•
1,526,085 ordinary shares issuable
        to the selling stockholders upon the exercise of warrants.
The selling stockholders may sell ordinary shares from time to time
        in the principal market on which the stock is traded at the prevailing
        market price or in negotiated transactions. We will not receive any proceeds
        from the sales of outstanding ordinary shares by the selling stockholders,
        but we will receive funds from the exercise of warrants held by the selling
        stockholders, if exercised for cash.
Our ordinary shares are not
        currently listed or quoted for trading on any national securities exchange
        or national quotation system. We intend to apply for the listing of our
        ordinary shares on the NASDAQ Global Market under the symbol "OMEI".
        Once, and if, our ordinary shares are listed on the NASDAQ Global Market
        and there is an established market for these resale shares, the selling
        stockholders may sell the resale shares from time to time at the market
        price prevailing on the NASDAQ Global Market at the time of offer and
        sale, or at prices related to such prevailing market prices or in negotiated
        transactions or a combination of such methods of sale directly or through
        brokers.
The purchase of the securities
        involves a
high degree of risk. See section entitled "Risk
        Factors" beginning on page 8.
Neither
        the U.S. Securities and Exchange Commission nor any state securities commission
        has approved or disapproved of anyone's investment in these securities
        or determined if this prospectus is truthful or complete. Any representation
        to the contrary is a criminal offense.
_______________________
The date of this prospectus is                
        , 2010.
[resale prospectus alternate page]
TABLE OF CONTENTS
Page
PROSPECTUS
      SUMMARY
1
RISK
      FACTORS
8
SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS
22
USE
      OF PROCEEDS
2A
MARKET
      PRICE AND DIVIDENDS ON OUR COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
24
DIVIDEND
      POLICY
24
EXCHANGE RATE INFORMATION
28
SELECTED
      CONSOLIDATED FINANCIAL DATA
27
MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
30
QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
46
BUSINESS
47
HISTORY
      AND CORPORATE STRUCTURE
64
MANAGEMENT
67
EXECUTIVE
      COMPENSATION
69
TRANSACTIONS
      WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS;
CORPORATE GOVERNANCE
72
SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
73
DESCRIPTION
      OF SECURITIES
74
SHARES
      ELIGIBLE FOR FUTURE SALE
80
SELLING
      STOCKHOLDERS
3A
PLAN
      OF DISTRIBUTION
7A
LEGAL
      MATTERS
9A
EXPERTS
9A
ADDITIONAL
      INFORMATION
9A
INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
PART
      II INFORMATION NOT REQUIRED IN THE PROSPECTUS
II-1
i
[RESALE PROSPECTUS ALTERNATE PAGE]
The Offering
Ordinary shares offered by selling
      stockholders
(1)
5,065,785 shares, consisting of 765,000 ordinary shares,
      2,774,700 ordinary shares underlying the Preference Shares, and 1,526,085
      ordinary shares issuable upon the exercise of warrants held by the selling
      stockholders. This number represents 14.35% of our current outstanding
      ordinary shares, on a fully diluted basis
(1)
.
Ordinary shares outstanding after the
      offering, assuming all the Preference Shares are converted into ordinary
      shares and all the warrants are exercised for cash
(2
35,300,847 shares
Use of proceeds
We will not receive any proceeds from the sale of
      ordinary shares by the selling stockholders. We will, however, receive
      approximately $9.0 million from the exercise of the warrant held by the
      selling stockholders, if exercised for cash.
Risk factors
See "Risk Factors" and other information included in this
      prospectus for a discussion of the risks you should carefully consider
      before deciding to invest in our ordinary shares.
Trading market
We intend to apply for the listing of our ordinary shares
      on the NASDAQ Global Market under the symbol "OMEI". There can, however,
      be no assurance that our ordinary shares will be accepted for listing on
      the NASDAQ Global Market.
(1) Based on 31,000,062 ordinary shares issued and outstanding
as of May 5, 2010.
(2) Excludes
(i)          ordinary shares
(excluding an underwriters' option to purchase
additional           ordinary
shares to cover over-allotments) to be offered by us in a firm commitment public
offering concurrently herewith and (ii) the underwriters' warrants to purchase
up to            
ordinary shares.
1A
[RESALE PROSPECTUS ALTERNATE PAGE]
USE OF PROCEEDS
We will not receive any proceeds from the sale of the ordinary
shares by the selling stockholders. If the warrants are exercised for cash, then
we will receive the proceeds of payable by the selling stockholders upon
exercise of the warrants.
2A
[RESALE PROSPECTUS ALTERNATE PAGE]
SELLING STOCKHOLDERS
This prospectus relates to the resale by the selling
stockholders named below from time to time of up to a total of 5,065,785
ordinary shares that were issued or are issuable to selling stockholders
pursuant to transactions exempt from registration under the Securities Act. All
of the ordinary shares offered by this prospectus is being offered by the
selling stockholders for their own accounts.
On April 14, 2010, we completed a private placement transaction
with a group of accredited investors. Pursuant to the Subscription Agreement
with the investors, we issued to the investors an aggregate of 2,774,700 Units,
for an aggregate purchase price of $11,098,800, or $4.00 per Unit. Each Unit
consists of one share of our Preference Shares and one Warrant to purchase 0.5
ordinary shares. The Warrants have a term of 5 years, bear an exercise price of
$6.00 per share (subject to customary adjustments), are exercisable on a net
exercise or cashless basis and are exercisable by investors at any time after
the closing date. The foregoing securities were issued pursuant to the exemption
from registration provided by Section 4(2) of the Securities Act for the offer
and sale of securities not involving a public offering and Rule 506 of
Regulation D promulgated thereunder.
Pursuant to the Subscription Agreement, we are obligated to
file a registration statement covering the resale of the ordinary shares
underlying the Preference Shares and the Warrants no later than thirty (30) days
following the closing date.
On April 14, 2010, we also issued an aggregate of 300,000
ordinary shares and warrants for the purchase of an aggregate of 138,735
ordinary shares, exercisable for a period of 3 years at an exercise price of
$5.00 per share, to Brean Murray, Carret & Co., LLC and/or its designees, as
partial compensation for services provided by them in connection with the
private placement transaction. Brean Murray, Carret & Co., LLC also received
a cash fee of $775,759.39 for its services in connection with the private
placement. The issuance of these securities was made in reliance upon exemptions
provided by Section 4(2) of the Securities Act for the offer and sale of
securities not involving a public offering and Regulation D promulgated
thereunder. We are under the contractual obligation to register the ordinary
shares as well as ordinary shares issuable upon exercise of the warrants we
issued to Brean Murray, Carret & Co., LLC within a pre-defined period.
On April 14, 2010, we also issued an aggregate of 465,000
ordinary shares to Beijing Allstar Business Consulting, Inc. and/or its
designees, as partial compensation for services provided by them in connection
with the reverse acquisition of Leewell and the private placement transaction.
The issuance of these securities was made in reliance upon exemptions provided
by Section 4(2) of the Securities Act for the offer and sale of securities not
involving a public offering and Regulation D promulgated thereunder. We are
under the contractual obligation to register the ordinary shares within a
pre-defined period.
Selling Stockholders
The following table sets forth certain information regarding
the selling stockholders and the shares offered by it in this prospectus.
Beneficial ownership is determined in accordance with the rules of the SEC. In
computing the number of shares beneficially owned by a selling stockholder and
the percentage of ownership of that selling stockholder, ordinary shares
underlying the Preference Shares and Warrants held by that selling stockholder
that are convertible or exercisable, as the case may be, within 60 days of May
5, 2010 are included. Those shares, however, are not deemed outstanding for the
purpose of computing the percentage ownership of any other selling stockholder.
Each selling stockholder's percentage of ownership in the following table is
based upon 31,000,062 ordinary shares outstanding as of May 5, 2010.
None of the selling stockholders has held a position as an
officer or director of the Company, nor has any material relationship of any
kind with us or any of our affiliates. All information with respect to share
ownership has been furnished by the selling stockholders. The shares being
offered are being registered to permit public secondary trading of the shares
and the selling stockholders may offer all or part of the shares owned for
resale from time to time. In addition, none of the selling stockholders has any
family relationships with our officers, directors or controlling stockholders.
Furthermore, no selling stockholder is a registered broker-dealer or an
affiliate of a registered broker-dealer except Brean Murray, Carret & Co.,
LLC and Access America Fund, LP.
3A
The term "selling stockholders" also includes any transferees,
pledges, donees, or other successors in interest to the selling stockholders
named in the table below. To our knowledge, subject to applicable community
property laws, each person named in the table has sole voting and investment
power with respect to the ordinary shares set forth opposite such person's name.
We will file a supplement to this prospectus (or a post-effective amendment
hereto, if necessary) to name successors to any named selling stockholder who is
able to use this prospectus to resell the securities registered hereby.
Name and Address
Number of Ordinary
Shares Beneficially
Owned Prior to the
Offering
(1)
Number of
Ordinary
Shares
Included in
Prospectus
for
      Resale
Beneficial
Ownership
After the
Offering
(2)
Percentage of
Ordinary
Shares
Beneficially
Owned After
Offering
(3)
Access America Fund, LP
(4)
779,164
562,500
216,664
*
Taylor International Fund, Ltd.
(5)
779,164
562,500
216,664
*
Hua-Mei 21st Century Partners, LP
(6)
921,500
712,500
209,000
*
Guerrilla Partners, LP
(7)
671,000
412,500
121,000
*
Jayhawk Private Equity Fund II, L.P.
(8)
1,125,000
1,125,000
0
*
Straus Partners, L.P.
(9)
187,500
187,500
0
*
New York Liberty Fund LLC
(10)
75,000
75,000
0
*
Trillion Growth China LP
(11)
187,500
187,500
0
*
Paragon Capital LP
(12)
112,500
112,500
0
*
Equity Trust Company Custodian
FBO Thomas
      G. Berlin IRA
(13)
93,750
93,750
0
*
DNST Properties, LLC
(14)
75,000
75,000
0
*
Dr. Deborah Tekdogan
(15)
3,900
3,900
0
*
Mary Beth Shea
(16)
19,500
19,500
0
*
Thomas E. Nolan Living Trust
(17)
7,800
7,800
0
*
Robert C. Stendel
(18)
5,850
5,850
0
*
J&S Spitzer Family LLC
(19)
18,750
18,750
0
*
Mu Zhang
10,000
10,000
0
*
First Prestige Inc.
24,475
24,475
0
*
JD Infinity Holdings, Inc.
99,012
99,012
0
*
Catalpa Holdings, Inc.
99,013
99,013
0
*
4A
Bin Huang
232,500
232,500
0
*
Brean Murray, Carret & Co., LLC
(20)
438,735
438,735
0
*
TOTAL:
5,966,613
5,065,785
763,328
* Less than 1%.
(1)
Represents total ownership with respect to all shares of
      our issued and outstanding ordinary shares, ordinary shares underlying the
      warrants and Preference Shares, as a single class and on an "as converted"
      basis.
(2)
Assumes that all securities offered are sold.
(3)
As of May 5, 2010, a total of 31,000,062 ordinary shares
      are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1). The
      number of our ordinary shares excludes (i) up to         ordinary shares to be
      offered by us in a firm commitment public offering concurrently herewith
      (excluding the underwriters' over-allotment of         ordinary shares), (ii)
      1,526,085 ordinary shares that are issuable upon the exercise of
      outstanding warrants we issued on April 14, 2010 and (iii) 2,774,700
      Preference Shares issued and outstanding as of May 5, 2010, each of which
      is convertible into one (1) ordinary share (subject to customary
      adjustments for stock splits, combinations, or equity dividends on
      ordinary shares). For each beneficial owner above, any options or warrants
      exercisable within 60 days have been included in the denominator.
(4)
Includes 375,000 ordinary shares underlying the
      Preference Shares and 187,500 shares underlying a warrant to purchase our
      ordinary shares. Christopher Efird is the Managing Partner of Access
      America Fund, LP and has voting and dispositive control over securities
      held by it.
(5)
Includes 375,000 ordinary shares underlying the
      Preference Shares and 187,500 shares underlying a warrant to purchase our
      ordinary shares. Robert J. Kirkland is the President of Taylor Asset
      Management, Inc., the general partner of Taylor International Fund, Ltd.,
      and has voting and dispositive control over securities held by
  it.
(6)
Includes 475,000 ordinary shares underlying the
      Preference Shares and 237,500 shares underlying a warrant to purchase our
      ordinary shares. Peter Siris is the Managing Director of Hua-Mei 21st
      Century Partners, LP and has voting and dispositive control over
      securities held by it.
(7)
Includes 275,000 ordinary shares underlying the
      Preference Shares and 137,500 shares underlying a warrant to purchase our
      ordinary shares. Peter Siris is the Managing Director of Guerrilla
      Partners, LP and has voting and dispositive control over securities held
      by it.
(8)
Includes 750,000 ordinary shares underlying the
      Preference Shares and 375,000 shares underlying a warrant to purchase our
      ordinary shares. Kent C. McCarthy has sole voting and dispositive power
      over securities held by Jayhawk Private Equity Fund II, L.P.
(9)
Includes 125,000 ordinary shares underlying the
      Preference Shares and 62,500 shares underlying a warrant to purchase our
      ordinary shares. Melville Straus is the Managing Principal of Straus
      Partners, L.P. and has voting and dispositive control over securities held
      by it.
(10)
Includes 50,000 ordinary shares underlying the Preference
      Shares and 25,000 shares underlying a warrant to purchase our ordinary
      shares. Song Ge Teng is the Partner (Member) of New York Liberty Fund LLC
      and has voting and dispositive control over securities held by
  it.
(11)
Includes 125,000 ordinary shares underlying the
      Preference Shares and 62,500 shares underlying a warrant to purchase our
      ordinary shares. Corey Mitchell is the President of Trillion Growth China
      GP, the manager of Trillion Growth China LP and has voting and dispositive
      control over securities held by it.
(12)
Includes 75,000 ordinary shares underlying the Preference
      Shares and 37,500 shares underlying a warrant to purchase our ordinary
      shares. Alan P. Donenfeld is the General Partner of Paragon Capital LP and
      has voting and dispositive control over securities held by it.
(13)
Includes 62,500 ordinary shares underlying the Preference
      Shares and 31,250 shares underlying a warrant to purchase our ordinary
      shares. Thomas G. Berlin is the owner of Equity Trust Company Custodian
      FBO Thomas G. Berlin IRA and has voting and dispositive control over
      securities held by it.
5A
(14)
Includes 50,000 ordinary shares underlying the Preference
      Shares and 25,000 shares underlying a warrant to purchase our ordinary
      shares. Michael D Aufrecht has voting and dispositive control over
      securities held by it.
(15)
Includes 2,600 ordinary shares underlying the Preference
      Shares and 1,300 shares underlying a warrant to purchase our ordinary
      shares.
(16)
Includes 13,000 ordinary shares underlying the Preference
      Shares and 6,500 shares underlying a warrant to purchase our ordinary
      shares.
(17)
Includes 5,200 ordinary shares underlying the Preference
      Shares and 2,600 shares underlying a warrant to purchase our ordinary
      shares. Thomas Nolan is the signatory of Thomas E. Nolan Living Trust and
      has voting and dispositive control over securities held by it.
(18)
Includes 3,900 ordinary shares underlying the Preference
      Shares and 1,950 shares underlying a warrant to purchase our ordinary
      shares.
(19)
Includes 12,500 ordinary shares underlying the Preference
      Shares and 6,250 shares underlying a warrant to purchase our ordinary
      shares. M. James Spitzer is the Manager owner of J&S Spitzer Family
      and has voting and dispositive control over securities held by
  it.
(20)
Includes 300,000 ordinary shares underlying the
      Preference Shares and 138,735 shares underlying a warrant to purchase our
      ordinary shares. William J. McCluskey is the president and CEO of Brean
      Murray, Carret & Co., LLC and has voting power and investment power of
      securities held by Brean Murray, Carret & Co., LLC. Brean Murray,
      Carret & Co., LLC is a broker-dealer.
We will not receive any proceeds from the sale of any shares by
the selling stockholders but we will receive funds from the exercise of the
warrants held by the selling stockholders if and when those warrants are
exercised for cash. We have agreed to bear expenses incurred by the selling
stockholders that relate to the registration of the shares being offered and
sold by the selling stockholders, including the SEC registration fee and legal,
accounting, printing and other expenses of this offering.
6A
[RESALE PROSPECTUS ALTERNATE PAGE]
PLAN OF DISTRIBUTION
The selling stockholders may, from time to time, sell, transfer
or otherwise dispose of any or all of their ordinary shares or interests in the
ordinary shares on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These dispositions may be at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market price, at varying prices determined at the time of sale,
or at negotiated prices.
The selling stockholders may use any one or more of the
following methods when disposing of shares or interests therein:
ordinary brokerage transactions and transactions in which the broker-dealer
  solicits purchasers;
block trades in which the broker-dealer will attempt to sell the shares as
  agent, but may position and resell a portion of the block as principal to
  facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer
  for its account;
an exchange distribution in accordance with the rules of the applicable
  exchange;
privately negotiated transactions;
short sales effected after the date the registration statement of which
  this prospectus is a part is declared effective by the SEC;
through the writing or settlement of options or other hedging transactions,
  whether through an options exchange or otherwise;
broker-dealers may agree with the selling stockholders to sell a specified
  number of such shares at a stipulated price per share; and
a combination of any such methods of sale.
The selling stockholders also may resell all or a portion of
the shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided that they meet the criteria and conform to the
requirements of that rule.
The selling stockholders may, from time to time, pledge or
grant a security interest in some or all of our ordinary shares owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the ordinary shares, from time to
time, under this prospectus, or under an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling
stockholders also may transfer the ordinary shares in other circumstances, in
which case the transferees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.
In connection with the sale of our ordinary shares or interests
therein, the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the ordinary shares in the course of hedging the positions they
assume. The selling stockholders may also sell shares of our ordinary shares
short and deliver these securities to close out their short positions, or loan
or pledge the ordinary shares to broker-dealers that in turn may sell these
securities. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
The aggregate proceeds to the selling stockholders from the
sale of the ordinary shares offered by them will be the purchase price of the
ordinary shares less discounts or commissions, if any. Each of the selling
stockholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of ordinary
shares to be made directly or through agents. We will not receive any of the
proceeds from this offering.
7A
Broker-dealers engaged by the selling stockholders may arrange
for other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchase of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
Brean Murray, Carret & Co., underwriters of up to         ordinary
shares (excluding an underwriters' option to purchase an additional          ordinary
shares to cover over-allotments) to be offered by us in a public offering
concurrently herewith, may dispose of shares on behalf of its account holders
who are also selling stockholders. The maximum commission or discount to be
received by Brean Murray, Carret & Co. will not be greater than eight
percent (8%) for the sale of any securities being registered hereunder.
Additionally, any securities acquired by any participating FINRA members during
the 180-day period preceding the date of the filing of the prospectus with the
SEC will be subject to lock-up restrictions under FINRA Rule 5110(g), unless an
exemption is available under FINRA Rule 5110(g)(2). FINRA Rule 5110(g) provides
that such securities shall not be sold during our public offering or sold,
transferred, assigned, pledged or hypothecated, or be the subject of any
hedging, short sale, derivative, put or call transaction that would result in
the effective economic disposition of the securities by any person for a period
of 180 days immediately following the date of effectiveness of sales of our
public offering.
The broker-dealers or agents that participate in the sale of
the ordinary shares or interests therein and the selling stockholders who are
affiliates of broker-dealers may be "underwriters" within the meaning of Section
2(11) of the Securities Act. Any discounts, commissions, concessions or profit
they earn on any resale of the shares may be underwriting discounts and
commissions under the Securities Act. Selling stockholders who are
"underwriters" within the meaning of Section 2(11) of the Securities Act will be
subject to the prospectus delivery requirements of the Securities Act. We know
of no existing arrangements between any of the selling stockholders and any
other stockholder, broker, dealer, underwriter, or agent relating to the sale or
distribution of the shares, nor can we presently estimate the amount, if any, of
such compensation. See "Selling Stockholders" for description of any material
relationship that a stockholder has with us and the description of such
relationship.
In order to comply with the securities laws of some states, if
applicable, the ordinary shares may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states, the
ordinary shares may not be sold unless it has been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with.
We have advised the selling stockholders that the
anti-manipulation rules of Regulation M under the Securities Exchange Act of
1934, as amended, may apply to sales of shares in the market and to the
activities of the selling stockholders and their affiliates. In addition, we
will make copies of this prospectus (as it may be supplemented or amended from
time to time) available to the selling stockholders for the purpose of
satisfying the prospectus delivery requirements of the Securities Act. The
selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed to pay certain fees and expenses incurred by us
incident to the registration of the shares. We have agreed to indemnify the
selling stockholders against liabilities, including liabilities under the
Securities Act and state securities laws, relating to the registration of the
shares offered by this prospectus.
8A
[RESALE PROSPECTUS ALTERNATE PAGE]
LEGAL MATTERS
The validity of the ordinary shares offered by this prospectus
and certain other legal matters as to Cayman Islands will be passed upon for us
by Maples and Calder. Legal matters as to PRC law will be passed upon for us by
Deheng Law Firm.
EXPERTS
The audited consolidated financial statements of Leewell as of
December 25, 2009 and 2008 and for the fiscal years ended December 25, 2009,
2008, and 2007, appearing in this prospectus and registration statement have
been audited by MSPC, Certified Public Accountants and Advisors, A Professional
Corporation, an independent registered public accounting firm, as set forth in
their report thereon appearing elsewhere herein and in the registration
statement, and are included in reliance upon such report given on the authority
of such firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
We filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended, for the
ordinary shares in this offering. This prospectus does not contain all of the
information in the registration statement and the exhibits and schedule that
were filed with the registration statement. For further information with respect
to us and our ordinary shares, we refer you to the registration statement and
the exhibits and schedule that were filed with the registration statement.
Statements contained in this prospectus about the contents of any contract or
any other document that is filed as an exhibit to the registration statement are
not necessarily complete, and we refer you to the full text of the contract or
other document filed as an exhibit to the registration statement. A copy of the
registration statement and the exhibits and schedules that were filed with the
registration statement may be inspected without charge at the Public Reference
Room maintained by the Securities and Exchange Commission at 100 F Street, N.E.
Washington, DC 20549, and copies of all or any part of the registration
statement may be obtained from the Securities and Exchange Commission upon
payment of the prescribed fee. Information regarding the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC. The address of the
website is www.sec.gov.
We file periodic reports under the Securities Exchange Act of
1934, including annual, quarterly and special reports, and other information
with the SEC. These periodic reports, and other information, are available for
inspection and copying at the regional offices, public reference facilities and
website of the SEC referred to above.
9A
[RESALE PROSPECTUS ALTERNATE PAGE]
5,065,785 Ordinary Shares
DRAGON ACQUISITION CORPORATION
Ordinary Share, Par Value $0.002112 Per Share
________________
PROSPECTUS
________________
, 2010
PART II
INFORMATION NOT REQUIRED IN THE
PROSPECTUS
Item 13. Other Expenses of Issuance and Distributions
The following table sets forth the costs and expenses, other
than underwriting discounts and commissions, payable by us in connection with
the sale of ordinary shares being registered. All amounts, other than the SEC
registration fee and FINRA filing fee, are estimates.
Amount to be Paid
SEC Registration Fee
$
3,385
Financial Industry Regulatory Authority, Inc. filing fee
(1
)
NASDAQ Stock Market listing fee
(1
)
Printing Fees and Expenses
(1
)
Legal Fees and Expenses
(1
)
Accounting Fees and Expenses
(1
)
Transfer Agent and Registrar Fees
(1
)
Miscellaneous
(1
)
Total
$
(1
)
________________
(1) To be added by amendment.
Item 14. Indemnification of Directors and Officers
The Companies Law of the Cayman Islands does not limit the
extent to which a company's memorandum and articles of association may provide
for indemnification of officers and directors. However, such provision may be
held by the Cayman Islands courts to be contrary to be unenforceable, to the
extent it seeks to indemnify or exculpate a fiduciary in respect of their actual
fraud or willful default, or for the consequences of committing a crime. Our
memorandum and articles of association provides for indemnification of officers
and directors for losses, damages, costs and expenses incurred in their
capacities as such and no such director or officer shall be liable to us except
through their own dishonesty.
Insofar as indemnification by us for liabilities arising under
the Securities Act may be permitted to our directors, officers or persons
controlling the company pursuant to provisions of our articles of association,
or otherwise, we have been advised that in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification by
such director, officer or controlling person of us in the successful defense of
any action, suit or proceeding is asserted by such director, officer or
controlling person in connection with the securities being offered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
At the present time, there is no pending litigation or
proceeding involving a director, officer, employee or other agent of ours in
which indemnification would be required or permitted. We are not aware of any
threatened litigation or proceeding, which may result in a claim for such
indemnification.
Item 15. Recent Sales of Unregistered
Securities
On April 14, 2010, we issued 29,235,000 ordinary shares to
Longhai Holdings, the sole shareholder of Leewell. The total consideration for
the 29,235,000 ordinary shares was 102,566,690 ordinary shares of Leewell, which
is all the issued and outstanding capital stock of Leewell. The number of our
shares issued to Longhai Holdings was determined based on an arms-length
negotiation. The issuance of our shares to these shareholders was made in
reliance on the exemption provided by Section 4(2) of the Securities Act for the
offer and sale of securities not involving a public offering and Regulation D
promulgated thereunder.
II-1
On April 14, 2010, we also completed a private placement
transaction with a group of accredited investors, pursuant to which we issued to
the investors an aggregate of 2,774,700 Units for a purchase price of
$11,098,800, or $4.00 per Unit. Each Unit consists of one Preference Share and
one Warrant to purchase 0.5 ordinary shares. The Warrants have a term of 5
years, bear an exercise price of $6.00 per share (subject to customary
adjustments), are exercisable on a net exercise or cashless basis and are
exercisable by investors at any time after the closing date. The foregoing
securities were issued pursuant to the exemption from registration provided by
Section 4(2) of the Securities Act for the offer and sale of securities not
involving a public offering and Rule 506 of Regulation D promulgated
thereunder.
On April 14, 2010, we also issued an aggregate of 300,000
ordinary shares and warrants for the purchase of an aggregate of 138,735
ordinary shares, exercisable for a period of 3 years at an exercise price of
$5.00 per share, to Brean Murray, Carret & Co., LLC and/or its designees, as
partial compensation for services provided by them in connection with the
private placement transaction. Brean Murray, Carret & Co., LLC also received
a cash fee of $775,759.39 for its services in connection with the private
placement. The issuance of these securities was made in reliance upon exemptions
provided by Section 4(2) of the Securities Act for the offer and sale of
securities not involving a public offering and Regulation D promulgated
thereunder.
On April 14, 2010, we also issued an aggregate of 465,000
ordinary shares to Beijing Allstar Business Consulting, Inc. and/or its
designees, as partial compensation for services provided by them in connection
with the reverse acquisition of Leewell and the private placement transaction.
The issuance of these securities was made in reliance upon exemptions provided
by Section 4(2) of the Securities Act for the offer and sale of securities not
involving a public offering and Regulation D promulgated thereunder.
In instances described above where we issued securities in
reliance upon Regulation D, we relied upon Rule 506 of Regulation D of the
Securities Act. These stockholders who received the securities in such instances
made representations that (a) the shareholder is acquiring the securities for
his, her or its own account for investment and not for the account of any other
person and not with a view to or for distribution, assignment or resale in
connection with any distribution within the meaning of the Securities Act, (b)
the shareholder agrees not to sell or otherwise transfer the purchased shares
unless they are registered under the Securities Act and any applicable state
securities laws, or an exemption or exemptions from such registration are
available, (c) the shareholder has knowledge and experience in financial and
business matters such that he, she or it is capable of evaluating the merits and
risks of an investment in us, (d) the shareholder had access to all of our
documents, records, and books pertaining to the investment and was provided the
opportunity ask questions and receive answers regarding the terms and conditions
of the offering and to obtain any additional information which we possessed or
were able to acquire without unreasonable effort and expense, and (e) the
shareholder has no need for the liquidity in its investment in us and could
afford the complete loss of such investment. Management made the determination
that the investors in instances where we relied on Regulation D are accredited
investors (as defined in Regulation D) based upon management's inquiry into
their sophistication and net worth. In addition, there was no general
solicitation or advertising for securities issued in reliance upon Regulation D.
In instances described above where we indicate that we relied
upon Section 4(2) of the Securities Act in issuing securities, our reliance was
based upon the following factors: (a) the issuance of the securities was an
isolated private transaction by us which did not involve a public offering; (b)
there were only a limited number of offerees; (c) there were no subsequent or
contemporaneous public offerings of the securities by us; (d) the securities
were not broken down into smaller denominations; and (e) the negotiations for
the sale of the stock took place directly between the offeree and us.
Item 16. Exhibits and Financial Statement
Schedules
The following exhibits are included as part of this Form
S-1.
Exhibit No.
Description
1.1
Form of Underwriting Agreement**
2.1
Share Exchange Agreement, dated April 14, 2010, by and
      among the Company, Leewell Investment Group Limited, Longhai Holdings
      Company Limited and its shareholder [incorporated by reference to Exhibit
      2.1 to the Company's Current Report on Form 8-K filed on April 19, 2010]
3.1
Memorandum of Association of the Company [incorporated by
      reference to Exhibit 3.2 to the Company's Registration Statement on Form
      10 filed on July 14, 2006]
II-2
Exhibit No.
Description
3.2
Articles of Association of the Company [incorporated by
      reference to Exhibit 3.3 to the Company's Registration Statement on Form
      10 filed on July 14, 2006]
4.1
Form of Investor Warrant, issued April 14, 2010
      [incorporated by reference to Exhibit 4.1 to the Company's Current Report
      on Form 8-K filed on April 19, 2010]
4.2
Form of Underwriters' Warrant**
5.1
Opinion of Maples and Calder**
5.2
Opinion of Pillsbury Winthrop Shaw Pittman LLP regarding
      the enforceability of Underwriters' Warrant**
10.1
Form of Subscription Agreement, dated April 14, 2010
      [incorporated by reference to Exhibit 10.1 to the Company's Current Report
      on Form 8-K filed on April 19, 2010]
10.2
Make Good Escrow Agreement, dated April 14, 2010, by and
      among the Company, Longhai Holdings Company Limited, Access America
      Investments, LLC and Collateral Agents, LLC, as escrow agent [incorporated
      by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.3
Holdback Escrow Agreement, dated April 14, 2010, by and
      among the Company, Brean Murray, Carret & Co., LLC, Access America
      Investments, LLC and Collateral Agents, LLC, as escrow agent [incorporated
      by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.4
Investor Relations Escrow Agreement, dated April 14,
      2010, by and among the Company, Brean Murray, Carret & Co., LLC,
      Access America Investments, LLC and Collateral Agents, LLC, as escrow
      agent [incorporated by reference to Exhibit 10.4 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.5
Form of Lockup Agreement, dated April 14, 2010
      [incorporated by reference to Exhibit 10.5 to the Company's Current Report
      on Form 8-K filed on April 19, 2010]
10.6
Share Purchase Agreement, dated September 5, 2007,
      between Zhang Weiqing and Leewell Investment Group Limited (English
      Translation) [incorporated by reference to Exhibit 10.6 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.7
Share Purchase Agreement, dated September 5, 2007,
      between Cheng Xiaoyan and Leewell Investment Group Limited (English
      Translation) [incorporated by reference to Exhibit 10.7 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.8
Share Purchase Agreement, dated January 19, 2008, among
      Cheng Defeng, Wang Yingchun and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.8 to
      the Company's Current Report on Form 8-K filed on April 19, 2010]
10.9
Share Purchase Agreement, dated January 22, 2008, between
      Zhang Weiqing and Qingdao Oumei Real Estate Development Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.9 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.10
Share Purchase Agreement, dated January 23, 2008, among
      Cheng Defeng, Miao Shuangji and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.10 to
      the Company's Current Report on Form 8-K filed on April 19, 2010]
10.11
Share Purchase Agreement, dated January 24, 2008, among
      Li Jie, Li Keyu, Liu Fangyu, Wang Meiling, Jiang Guo, Qingdao Longhai
      Investment Group and Qingdao Oumei Real Estate Development Co., Ltd.
      (English Translation) [incorporated by reference to Exhibit 10.11 to the
      Company's Current Report on Form 8-K filed on April 19, 2010]
10.12
Share Purchase Agreement, dated August 27, 2008, among
      Qingdao Longhai Investment Group, Qingdao Longhai Luqiao Co., Ltd, Gao
      Xuling and Qingdao Oumei Real Estate Development Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.12 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.13
Share Purchase Agreement, dated August 28, 2008, between
      Qingdao Pingdu Xinyuan Real Estate Development Co., Ltd and Qingdao Oumei
      Real Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.13 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
II-3
Exhibit No.
Description
10.14
Share Purchase Agreement, dated August 29, 2008, among
      Qingdao Hexiang Fuzhuang Ltd, Qingdao Fuhai Fangzhi Ltd and Qingdao Oumei
      Real Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.4 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.15
Share Purchase Agreement, dated June 25, 2009, among
      Qingdao Longhai Investment Group, Wang Hongde and Qingdao Oumei Real
      Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.15 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.16
Share Purchase Agreement, dated September 25, 2009, among
      Wang Yingchun, Wang Jinghua and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.16 to
      the Company's Current Report on Form 8-K filed on April 19, 2010]
10.17
Construction Contact, dated April 11, 2009, between
      Weihai Economic & Technology Development Zone Longhai Properties Co.,
      Ltd. and Shanghai Baogang Construction Engineering Corporation (English
      Translation) [incorporated by reference to Exhibit 10.17 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.18
Construction Contract, dated October 8, 2006, between
      Qingdao Xudong Real Estate Development Co., Ltd. and Qingdao Longhai
      Construction Group Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.18 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.19
Construction Contract, dated July 26, 2006, between
      Weihai Economic & Technology Development Zone Longhai Properties Co.,
      Ltd. and Qingdao Longhai Construction Group Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.19 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.20
Construction Contract, dated April 23, 2004, between
      Weifang Longhai Zhiye Co., Ltd. and Qingdao Zhongxin Construction Group
      Co., Ltd. (English Translation) [incorporated by reference to Exhibit
      10.20 to the Company's Current Report on Form 8-K filed on April 19, 2010]
10.21
Construction Supervision Contract, dated August 21, 2009,
      between Weihai Economic & Technology Development Zone Longhai
      Properties Co., Ltd. and Weihai Tianhen Project Consulting Management Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.21 to
      the Company's Current Report on Form 8-K filed on April 19, 2010]
10.22
Form of Construction Contract (English Translation)
      [incorporated by reference to Exhibit 10.22 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.23
Form of Sales Agent Agreement (English Translation)
      [incorporated by reference to Exhibit 10.23 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.24
Loan Agreement, dated November 30, 2009, between Weihai
      Economic & Technology Development Zone Longhai Properties Co., Ltd.
      and China Construction Bank, Weihai Branch (English Translation)
      [incorporated by reference to Exhibit 10.24 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.25
Loan Agreement, dated November 21, 2008, between Caoxian
      Industrial Properties Co., Ltd. and China Construction Bank, Caoxian
      Branch (English Translation) [incorporated by reference to Exhibit 10.25
      to the Company's Current Report on Form 8-K filed on April 19, 2010]
10.26
Loan Agreement, dated May 28, 2007, between Qingdao
      Xudong Real Estate Development Co., Ltd. and Industrial and Commercial
      Bank of China, Qingdao Chengyang Branch (English Translation)
      [incorporated by reference to Exhibit 10.26 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.27
Form of Employment Agreement (English Translation)
      [incorporated by reference to Exhibit 10.27 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.28
Employment Agreement, dated June 28, 2007, between
      Qingdao Oumei Real Estate Development Co., Ltd. and Weiqing Zhang (English
      Translation) [incorporated by reference to Exhibit 10.28 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.29
Employment Agreement, dated July 23, 2007, between
      Qingdao Oumei Real Estate Development
II-4
Exhibit No.
Description
Co., Ltd. and
        Yang Chen (English Translation) [incorporated by reference to Exhibit
        10.29 to the Company's Current Report on Form 8-K filed on April
        19, 2010]
10.30
Employment Agreement,
        dated August 25, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Zhongbo Zhou (English Translation) [incorporated by reference
        to Exhibit 10.30 to the Company's Current Report on Form 8-K filed
        on April 19, 2010]
10.31
Employment Agreement,
        dated August 20, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Yalei Chen (English Translation) [incorporated by reference to
        Exhibit 10.31 to the Company's Current Report on Form 8-K filed on
        April 19, 2010]
21
Subsidiaries
        of the Company [incorporated by reference to Exhibit 21 to the Company's
        Current Report on Form 8-K filed on April 19, 2010]
23.1
Consent
        of MSPC, Certified Public Accountants and Advisors, A Professional Corporation*
23.2
Consent of Deheng
        Law Firm**
23.3
Consent of Maples
        and Calder (contained in Exhibit 5.1)**
24.1
Power of Attorney
        (included in the signature page of this Registration Statement)
________________
* Filed herewith
** To be filed by
amendment
Item 17. Undertakings
(A)      The undersigned Registrant
hereby undertakes:
(1)      To file, during any period
in which offers or sales are being made, a post-effective amendment to this
Registration Statement:
(i)      To include any prospectus
required by Section 10(a)(3) of the Securities Act;
(ii)    To reflect in
the prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii)    To include any
material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this Registration Statement;
(2)      That,
for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial
bona fide
offering
thereof.
(3)      To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4)      For
the purpose of determining liability under the Securities Act to any purchaser,
the undersigned registrant undertakes that
(i)      If the undersigned
registrant is relying on Rule 430B:
II-5
(a)      each prospectus filed by
the undersigned registrant pursuant to Rule 424(b)(3) shall be deemed to be part
of the registration statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
(b)      Each prospectus required to
be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act shall be deemed to be part of
and included in the registration statement as of the earlier of the date such
form of prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that
is at that date an underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such effective date; or
(ii)      If the undersigned
registrant is subject to Rule 430C:
(a)      Each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an
offering, other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such date of first use.
(5)      For determining liability
of the undersigned registrant under the Securities Act to any purchaser in the
initial distribution of the securities, the undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to
sell the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to the purchaser:
(i).      In any preliminary
prospectus or prospectus of the undersigned registrant relating to the offering
required to be filed pursuant to Rule 424;
(ii).     Any free
writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned registrant;
(iii).
The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv).
Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(6)      For purposes of determining
any liability under the Securities Act, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the time it was
declared effective.
II-6
(7)      For
the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(8)      For
the purpose of determining liability under the Securities Act to any purchaser,
each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness; provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
(B)      Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Qingdao,
People's Republic of China, on the 7
th
day of May, 2010.
Dragon Acquisition Corporation
By:
/s/ Weiqing Zhang
Name:
Weiqing Zhang
Title:
Chief Executive Officer and
      President
POWER OF ATTORNEY
KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature to this
Registration Statement on Form S-1 appears below hereby constitutes and appoints
Weiqing Zhang and Yang Chen, and each or any of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to sign any registration statement for the
same offering covered by this Registration Statement that is to be effective on
filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, and
all post-effective amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or his substitute or their
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities indicated.
SIGNATURE
TITLE
DATE
/s/ Antoine Cheng
Chairman
May 7, 2010
Antoine Cheng
/s/ Weiqing Zhang
Chief Executive Officer,
      President and
May 7, 2010
Weiqing Zhang
Director (Principal Executive
      Officer)
/s/ Yang Chen
Chief Financial Officer and Vice
      President
May 7, 2010
Yang Chen
(Principal Financial and
      Accounting
Officer)
/s/ Zhongbo Zhou
Director
May 7, 2010
Zhongbo Zhou
EXHIBIT INDEX
Exhibit No.
Description
1.1
Form of Underwriting Agreement**
2.1
Share Exchange Agreement, dated April 14, 2010, by and
      among the Company, Leewell Investment Group Limited, Longhai Holdings
      Company Limited and its shareholder [incorporated by reference to Exhibit
      2.1 to the Company's Current Report on Form 8-K filed on April 19, 2010]
3.1
Memorandum of Association of the Company [incorporated by
      reference to Exhibit 3.2 to the Company's Registration Statement on Form
      10 filed on July 14, 2006]
3.2
Articles of Association of the Company [incorporated by
      reference to Exhibit 3.3 to the Company's Registration Statement on Form
      10 filed on July 14, 2006]
4.1
Form of Investor Warrant, issued April 14, 2010
      [incorporated by reference to Exhibit 4.1 to the Company's Current Report
      on Form 8-K filed on April 19, 2010]
4.2
Form of Underwriters' Warrant**
5.1
Opinion of Maples and Calder**
5.2
Opinion of Pillsbury Winthrop Shaw Pittman LLP regarding
      the enforceability of Underwriters' Warrant**
10.1
Form of Subscription Agreement, dated April 14, 2010
      [incorporated by reference to Exhibit 10.1 to the Company's Current Report
      on Form 8-K filed on April 19, 2010]
10.2
Make Good Escrow Agreement, dated April 14, 2010, by and
      among the Company, Longhai Holdings Company Limited, Access America
      Investments, LLC and Collateral Agents, LLC, as escrow agent [incorporated
      by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.3
Holdback Escrow Agreement, dated April 14, 2010, by and
      among the Company, Brean Murray, Carret & Co., LLC, Access America
      Investments, LLC and Collateral Agents, LLC, as escrow agent [incorporated
      by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.4
Investor Relations Escrow Agreement, dated April 14,
      2010, by and among the Company, Brean Murray, Carret & Co., LLC,
      Access America Investments, LLC and Collateral Agents, LLC, as escrow
      agent [incorporated by reference to Exhibit 10.4 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.5
Form of Lockup Agreement, dated April 14, 2010
      [incorporated by reference to Exhibit 10.5 to the Company's Current Report
      on Form 8-K filed on April 19, 2010]
10.6
Share Purchase Agreement, dated September 5, 2007,
      between Zhang Weiqing and Leewell Investment Group Limited (English
      Translation) [incorporated by reference to Exhibit 10.6 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.7
Share Purchase Agreement, dated September 5, 2007,
      between Cheng Xiaoyan and Leewell Investment Group Limited (English
      Translation) [incorporated by reference to Exhibit 10.7 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.8
Share Purchase Agreement, dated January 19, 2008, among
      Cheng Defeng, Wang Yingchun and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.8 to
      the Company's Current Report on Form 8-K filed on April 19, 2010]
10.9
Share Purchase Agreement, dated January 22, 2008, between
      Zhang Weiqing and Qingdao Oumei Real Estate Development Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.9 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.10
Share Purchase Agreement, dated January 23, 2008, among
      Cheng Defeng, Miao Shuangji and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.10 to
      the Company's Current Report on Form 8-K filed on April 19, 2010]
Exhibit No.
Description
10.11
Share Purchase Agreement, dated January 24, 2008, among
      Li Jie, Li Keyu, Liu Fangyu, Wang Meiling, Jiang Guo, Qingdao Longhai
      Investment Group and Qingdao Oumei Real Estate Development Co., Ltd.
      (English Translation) [incorporated by reference to Exhibit 10.11 to the
      Company's Current Report on Form 8-K filed on April 19, 2010]
10.12
Share Purchase Agreement, dated August 27, 2008, among
      Qingdao Longhai Investment Group, Qingdao Longhai Luqiao Co., Ltd, Gao
      Xuling and Qingdao Oumei Real Estate Development Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.12 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.13
Share Purchase Agreement, dated August 28, 2008, between
      Qingdao Pingdu Xinyuan Real Estate Development Co., Ltd and Qingdao Oumei
      Real Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.13 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.14
Share Purchase Agreement, dated August 29, 2008, among
      Qingdao Hexiang Fuzhuang Ltd, Qingdao Fuhai Fangzhi Ltd and Qingdao Oumei
      Real Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.4 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.15
Share Purchase Agreement, dated June 25, 2009, among
      Qingdao Longhai Investment Group, Wang Hongde and Qingdao Oumei Real
      Estate Development Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.15 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.16
Share Purchase Agreement, dated September 25, 2009, among
      Wang Yingchun, Wang Jinghua and Qingdao Oumei Real Estate Development Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.16 to
      the Company's Current Report on Form 8-K filed on April 19, 2010]
10.17
Construction Contact, dated April 11, 2009, between
      Weihai Economic & Technology Development Zone Longhai Properties Co.,
      Ltd. and Shanghai Baogang Construction Engineering Corporation (English
      Translation) [incorporated by reference to Exhibit 10.17 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.18
Construction Contract, dated October 8, 2006, between
      Qingdao Xudong Real Estate Development Co., Ltd. and Qingdao Longhai
      Construction Group Co., Ltd. (English Translation) [incorporated by
      reference to Exhibit 10.18 to the Company's Current Report on Form 8-K
      filed on April 19, 2010]
10.19
Construction Contract, dated July 26, 2006, between
      Weihai Economic & Technology Development Zone Longhai Properties Co.,
      Ltd. and Qingdao Longhai Construction Group Co., Ltd. (English
      Translation) [incorporated by reference to Exhibit 10.19 to the Company's
      Current Report on Form 8-K filed on April 19, 2010]
10.20
Construction Contract, dated April 23, 2004, between
      Weifang Longhai Zhiye Co., Ltd. and Qingdao Zhongxin Construction Group
      Co., Ltd. (English Translation) [incorporated by reference to Exhibit
      10.20 to the Company's Current Report on Form 8-K filed on April 19, 2010]
10.21
Construction Supervision Contract, dated August 21, 2009,
      between Weihai Economic & Technology Development Zone Longhai
      Properties Co., Ltd. and Weihai Tianhen Project Consulting Management Co.,
      Ltd. (English Translation) [incorporated by reference to Exhibit 10.21 to
      the Company's Current Report on Form 8-K filed on April 19, 2010]
10.22
Form of Construction Contract (English Translation)
      [incorporated by reference to Exhibit 10.22 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.23
Form of Sales Agent Agreement (English Translation)
      [incorporated by reference to Exhibit 10.23 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.24
Loan Agreement, dated November 30, 2009, between Weihai
      Economic & Technology Development Zone Longhai Properties Co., Ltd.
      and China Construction Bank, Weihai Branch (English Translation)
      [incorporated by reference to Exhibit 10.24 to the Company's Current
      Report on Form 8-K filed on April 19, 2010]
10.25
Loan Agreement, dated November 21, 2008, between Caoxian
      Industrial Properties Co., Ltd. and China Construction Bank, Caoxian
      Branch (English Translation) [incorporated by reference to Exhibit 10.25
      to the Company's Current Report on Form 8-K filed on April 19, 2010]
Exhibit No.
Description
10.26
Loan Agreement,
        dated May 28, 2007, between Qingdao Xudong Real Estate Development Co.,
        Ltd. and Industrial and Commercial Bank of China, Qingdao Chengyang Branch
        (English Translation) [incorporated by reference to Exhibit 10.26 to the
        Company's Current Report on Form 8-K filed on April 19, 2010]
10.27
Form of Employment
        Agreement (English Translation) [incorporated by reference to Exhibit
        10.27 to the Company's Current Report on Form 8-K filed on April
        19, 2010]
10.28
Employment Agreement,
        dated June 28, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Weiqing Zhang (English Translation) [incorporated by reference
        to Exhibit 10.28 to the Company's Current Report on Form 8-K filed
        on April 19, 2010]
10.29
Employment Agreement,
        dated July 23, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Yang Chen (English Translation) [incorporated by reference to
        Exhibit 10.29 to the Company's Current Report on Form 8-K filed on
        April 19, 2010]
10.30
Employment Agreement,
        dated August 25, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Zhongbo Zhou (English Translation) [incorporated by reference
        to Exhibit 10.30 to the Company's Current Report on Form 8-K filed
        on April 19, 2010]
10.31
Employment Agreement,
        dated August 20, 2007, between Qingdao Oumei Real Estate Development Co.,
        Ltd. and Yalei Chen (English Translation) [incorporated by reference to
        Exhibit 10.31 to the Company's Current Report on Form 8-K filed on
        April 19, 2010]
21
Subsidiaries
        of the Company [incorporated by reference to Exhibit 21 to the Company's
        Current Report on Form 8-K filed on April 19, 2010]
23.1
Consent
        of MSPC, Certified Public Accountants and Advisors, A Professional Corporation*
23.2
Consent of Deheng
        Law Firm**
23.3
Consent of Maples
        and Calder (contained in Exhibit 5.1)**
24.1
Power of Attorney
        (included in the signature page of this Registration Statement)
________________
* Filed herewith
** To be filed by
amendment