Troops, Inc. /Cayman Islands/ - Annual Report: 2009 (Form 10-K)

Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

¨	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended ___________.

x	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from December 31, 2008 to June 30, 2009.

Commission File Number: 000-53122

HAMBRECHT ASIA ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

Cayman Islands		N/A
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

13/F Tower 2

New World Tower

18 Queens Road Central

Hong Kong

(Address of Principal Executive Offices including Zip Code)

852-2801-5383

(Registrant’s Telephone Number, Including Area Code)

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

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value

(Title of Class)

Common Stock Purchase Warrants

(Title of Class)

Units consisting of one share of Common Stock and one

Common Stock Purchase Warrant

(Title of Class)

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

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

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.

Large Accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨.

State the aggregate market value of the voting and non-voting common equity held by nonaffiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $39,416,688.

There were 5,299,125 shares of the Registrant’s common stock issued and outstanding as of January 21, 2010

Index to Form 10-K

		Page

Part I.		3

	Item 1. Business	3

	Item 1A. Risk Factors	7

	Item 1B. Unresolved Staff Comments	8

	Item 2. Properties	8

	Item 3. Legal Proceedings	8

	Item 4. Submission of Matters to a Vote of Security Holders	8

Part II.		9

	Item 5. Market for Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.	9

	Item 6. Selected Financial Data	11

	Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations	12

	Item 7A. Quantative and Qualative Disclosures About Market Risk	14

	Item 8. Financial Statements and Supplemental Data	14

	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	14

	Item 9A(T). Controls and Procedures	15

	Item 9B. Other Information	15

Part III		16

	Item 10. Directors, Executive Officers, and Corporate Governance	16

	Item 11. Executive Compensation	18

	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	18

	Item 13. Certain Relationships and Related Transactions, and Directors Independence	20

	Item 14. Principal Accountant Fees and Services	22

Part IV		24

	Item 15. Exhibits and Financial Statement Schedules	24

SIGNATURES		25

PART I

ITEM 1. BUSINESS

Overview

Hambrecht Asia Acquisition Corp. (“we”, “us”, “our” or the “Company”) is a Cayman Islands blank check company formed on July 18, 2007 to complete a business combination with one or more operating businesses that have its or their primary operations in the PRC. Our efforts in identifying a prospective target business will not be limited to a particular industry. We intend to effect a business combination using cash from the proceeds of our initial public offering and the private placements of the sponsors’ warrants, our capital stock, debt or a combination of cash, stock and debt. On March 7, 2008, we completed a private placement of 1,550,000 warrants (“Founder Warrants”). On March 12, 2008, we consummated our initial public offering of 4,000,000 units. On March 31, 2008, the underwriters of our initial public offering exercised their over-allotment option for a total of an additional 239,300 units (over and above the 4,000,000 units sold in the initial public offering) for an aggregate offering of 4,239,300 units (together the “IPO”). Each unit consists of one share of common stock and one redeemable common stock purchase warrant, resulting in a total of 4,239,300 common shares (“IPO Shares”) and 4,239,300 warrants (“IPO Warrants”) which are publicly held. The units were sold at an offering price of $8.00 per unit and the Founder Warrants we sold at an offering price of $1.00 per warrant, generating total gross proceeds of $35,464,400. Broadband Capital Management LLC acted as lead underwriter.

The net proceeds from the IPO and private placement, after deducting certain offering expenses of approximately $2,784,873 (including underwriting discounts of approximately $2,374,008), were approximately $32,679,527. Approximately $33,527,396 (or approximately $7.91 per IPO Share) of the proceeds from the IPO and the private placement was placed in a trust account for our benefit, which includes $1,187,004 of the underwriter’s compensation which will be paid to them only in the event of a business combination. The remaining $339,135 was not placed in the trust account. We will not be able to access the amounts held in the trust account until we consummate a business combination, except for up to $700,000 (plus up to an additional $350,000 if approved by our shareholders in connection with the extension of the period in which we must complete our initial business combination to March 12, 2011) in interest earned on the funds in the trust account, which may be released from the trust to us to be used for working capital. As of June 30, 2009, there was approximately $33,799,000 held in the trust account (or approximately $7.92 per IPO Share), and approximtely $286,000 of interest eanred on the trust account balance had been released to us for working capital purposes.

Investment Opportunities in China

Opportunities for market expansion have emerged for businesses with operations in China due to certain changes in the PRC’s political, economic and social policies as well as certain fundamental changes affecting the PRC and his neighboring countries. We believe that China represents both a favorable environment for making acquisitions and an attractive operating environment for a target business for several reasons, including:

prolonged economic expansion within China, including gross domestic product growth of approximately 16.5% on average over the last 25 years, including 17.7% in 2004, 15.0% in 2005 and 14.7% in 2006 (National Bureau of Statistics of China) (China Statistical Yearbook – 2007, http://www.stats.gov.cn/tjsj/ndsj/2007/indexeh.htm, viewed February 24, 2009);

increased government focus within China on privatizing assets, improving foreign trade and encouraging business and economic activity;

the recent entry of China into the World Trade Organization, the sole global international organization dealing with the rules of trade between nations, which may lead to a reduction on tariffs for industrial products, a reduction in trade restrictions and an increase in trading with the United States.

We believe that these factors and others should enable us to acquire a target business with growth potential on favorable terms.

Effecting a Business Combination

We intend to utilize the cash proceeds of the IPO and the private placement, our capital securities, debt or a combination of these as the consideration to be paid in a business combination. While substantially all of the net proceeds of the IPO are allocated to completing a business combination, the proceeds are not otherwise designated for more specific purposes. If the business combination is paid for using equity or debt securities, we may apply the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the acquired business or businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business combination, to fund the purchase of other companies, or for working capital. We may engage in a business combination with a company that does not require significant additional capital but is seeking a public trading market for its shares and that wants to merge with an already public company to add the experience of the public company’s management team to its company and to avoid the risk that market conditions will not be favorable for an initial public offering at the time this offering is ready to be sold, despite the fact that merging with us would require similar disclosures and, potentially, a similar timeframe as an initial public offering. We may seek to effect a business combination with more than one target business, although our limited resources may serve as a practical limitation on our ability to do so.

Prior to consummation of a business combination, we will seek to have all vendors, prospective target businesses or other entities that we may engage, which we refer to as potential contracted parties or a potential contracted party, execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders. There is no assurance that we will be able to get waivers from our vendors and there is no assurance that such waivers will be enforceable by operation of law or that creditors would be prevented from bringing claims against the trust. In the event that a potential contracted party were to refuse to execute such a waiver, we will execute an agreement with that entity only if our management first determines that we would be unable to obtain, on a reasonable basis, substantially similar services or opportunities from another entity willing to execute such a waiver. Examples of instances where we may engage a third party that refused to execute a waiver would be the engagement of a third party consultant whose particular expertise or skills are believed by management to be superior to those of other consultants that would agree to execute a waiver or a situation where management does not believe it would be able to find a provider of required services willing to provide the waiver. If we are unable to complete a business combination and are forced to dissolve and liquidate, each of our pre-initial public offering shareholders other than Stephen N. Cannon, will, by agreement, be personally liable (each in an amount proportional to the number of shares owned as compared to both of them as a group, except that John Wang and Robert Eu will indemnify us for the portion of the indemnification obligation attributable to the portion of our shares owned by Stephen N. Cannon) to ensure that the proceeds in the trust account are not reduced by the claims of prospective target businesses, vendors or other entities that are owed money by us for services rendered or products sold to us. Under these circumstances, our board of directors would have a fiduciary obligation to our shareholders to bring a claim against each of our pre-initial public offering shareholders other than Stephen N. Cannon to enforce their liability obligation.

Subject to the requirement that a target business or businesses have a fair market value of at least 80% of the balance in the trust account (excluding deferred underwriting discounts and commissions of $1,187,004 and taxes payable) at the time of our initial business combination, we have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses.

We focus on potential target businesses with valuations between $70 million and $150 million. We believe that our available working capital, together with the issuance of additional equity and/or the issuance of debt, would support the acquisition of such a target business. The mix of additional equity and/or debt would depend on many factors. The proposed funding for any such business combination would be disclosed in the proxy statement relating to the required shareholder approval.

After completion of the IPO, we began contacting investment bankers, private equity firms and other business contacts in order to generate ideas about a suitable business combination. We also received unsolicited inquiries from several investment banking firms, private equity firms and other business intermediaries. We informed these contacts that we were seeking an operating business for our initial business combination. We have not retained an investment banking firm or fairness or valuation advisor to conduct a formal search for a business combination. Criteria for suitability included our management’s assessment of the competitive strengths and weaknesses of the potential business targets, the strength of the management team, and the quality of the assets to be acquired.

We may pay fees or compensation to third parties for their efforts in introducing us to potential target businesses. We may seek to engage someone to assist in finding a potential target business if our management feels that they need assistance to find a suitable target business. If a finder approaches us on an unsolicited basis, our management would decide whether to work with that finder (and pay a finders’ fee) depending on the potential target business such finder proposes. Such payments are typically, although not always, calculated as a percentage of the dollar value of the transaction. We have not anticipated use of a particular percentage fee, but instead will seek to negotiate the smallest reasonable percentage fee consistent with the attractiveness of the opportunity and the alternatives, if any, that are then available to us. We may make such payments to entities we engage for this purpose or entities that approach us on an unsolicited basis. Payment of finders’ fees is customarily tied to consummation of a transaction and certainly would be tied to a completed transaction in the case of an unsolicited proposal. Although it is possible that we may pay finders’ fees in the case of an uncompleted transaction, we consider this possibility to be extremely remote. In no event will we pay any of our directors or officers or any entity with which they are affiliated any finder’s fee or other compensation for services rendered to us prior to or in connection with the consummation of a business combination. In addition, none of our officers or directors will receive any finder’s fee, consulting fees or any similar fees from any person or entity in connection with any business combination involving us. Following such business combination, however, our officers or directors may receive compensation or fees including compensation approved by the board of directors for customary director’s fees for our directors that remain following such business combination. Our directors have advised us that they will not take an offer regarding their compensation or fees following a business combination into consideration when determining which target businesses to pursue.

We anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business. We may, however, structure a business combination to acquire less than 100% of such interests or assets of the target business but will not acquire less than a controlling interest (which would be greater than 50% of the voting securities of the target business). If we acquire only a controlling interest in a target business or businesses, the portion of such business that we acquire must have a fair market value equal to at least 80% of the amount in the trust account, (excluding deferred underwriting discounts and commissions and taxes payable), as described above. If we determine to simultaneously acquire several businesses and such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of his business is contingent on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple acquisitions, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent integration of the operations and services or products of the acquired companies in a single operating business.

In recent months, there has been severe volatility and overall significant declines in the international capital markets and a freezing of the international credit markets that together have led to severe constraints in private flows of capital and an acutely negative impact on the operating results of companies in a wide range of industries and geographic sectors. Declining valuations of potential target businesses and uncertainty regarding the future may make it more difficult for us to reach agreement on a business combination that satisfies our requirements and the lack of available credit sources may adversely impact our ability to structure a transaction in the most advantageous manner. In addition, certain of our shareholders may experience pressure to vote against any business combination that we may propose in order to liquidate their investment and free up their capital, without regard to the merits of any such transaction.

Government regulations

Government regulations relating to foreign exchange controls

The principal regulation governing foreign exchange in China is the Foreign Currency Administration Rules (IPPS), as amended. Under these rules, the Renminbi, China’s currency, is freely convertible for trade and service related foreign exchange transactions (such as normal purchases and sales of goods and services from providers in foreign countries), but not for direct investment, loan or investment in securities outside of China without the prior approval of the State Administration for Foreign Exchange (“SAFE”) of China. Foreign investment enterprises (“FIEs”) are required to apply to the SAFE for “Foreign Exchange Registration Certificates for FIEs.” Following a business combination, involving a change of equity ownership of a PRC operating entity or through contractual arrangements with a PRC operating entity our subsidiary will likely be an FIE as a result of our ownership structure. With such registration certificates, which need to be renewed annually, FIEs are allowed to open foreign currency accounts including a “basic account” and “capital account.” Currency translation within the scope of the “basic account,” such as remittance of foreign currencies for payment of dividends, can be effected without requiring the approval of the SAFE. However, conversion of currency in the “capital account,” including capital items such as direct investment, loans and securities, still require approval of the SAFE. This prior approval may delay or impair our ability to operate following a business combination. On November 21, 2005, the SAFE issued Circular No. 75 on “Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Corporate Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles.” Circular No. 75 confirms that the use of offshore special purpose vehicles as holding companies for PRC investments are permitted as long as proper foreign exchange registrations are made with the SAFE.

Government regulations relating to taxation

Prior to January 1, 2008, the standard enterprise income tax rate was 33%, which consisted of a 30% national income tax and a 3% local surcharge, for a company’s domestic and overseas incomes.

A new tax law, the PRC Enterprise Income Tax Law (“New EIT Law”), took effect on January 1, 2008. Under the new tax law, companies are subject to a uniform tax rate of 25%. The New EIT Law provides a five-year transition period starting from its effective date for those enterprises which were established before the promulgation date of the new tax law and which were entitled to a preferential lower tax rate under the then-effective tax laws or regulations. The New EIT Law significantly curtails tax incentives granted to foreign-invested enterprises under the previous tax law. The New EIT Law, however, (i) reduces the top rate of EIT from 33% to 25%, (ii) permits companies to continue to enjoy their existing tax incentives, subject to certain transitional phase-out rules, and (iii) introduces new tax incentives, subject to various qualification criteria. The New EIT Law and its implementing rules permit certain “high and new technology enterprises” to enjoy a reduced 15% EIT rate. Under the phase-out rules, enterprises established before the promulgation date of the New EIT Law and which were granted preferential EIT treatment under the then effective tax laws or regulations may continue to enjoy their preferential tax treatments until their expiration and will gradually transition to the uniform 25% EIT rate over a five-year transition period.

Additionally, under the New EIT Law, an income tax rate for dividends payable to non-PRC investors and derived from sources within the PRC may be increased to 20%. It is currently unclear in what circumstances a source will be considered as located within the PRC.

The new tax law provides only a framework of the enterprise tax provisions, leaving many details on the definitions of numerous terms as well as the interpretation and specific applications of various provisions unclear and unspecified.

Competition

In identifying, evaluating and selecting a target business for a business combination, we may encounter intense competition from other entities having a business objective similar to ours including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. While we believe there are numerous potential target businesses with which we could combine, our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore:

our obligation to seek shareholder approval of our initial business combination or obtain necessary financial information may delay the consummation of a transaction;

our obligation to redeem for cash ordinary shares held by our public shareholders who vote against the business combination and exercise their redemption rights may reduce the resources available to us for a business combination;

our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses; and

the requirement to acquire an operating business that has a fair market value equal to at least 80% of the balance of the trust account at the time of the acquisition (excluding deferred underwriting discounts and commissions of $1,187,004 and taxes payable) could require us to acquire the assets of several operating businesses at the same time, all of which sales would be contingent on the closings of the other sales, which could make it more difficult to consummate the business combination.

Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination.

Employees

We currently have three officers. These individuals are not obligated to devote any specific number of hours to our business and intend to devote only as much time as they deem necessary to our business. We intend to hire employees and/or consultants, possibly including certain full time employees and/or consultants, in order to assist us in the search, due diligence for and consummation of a business combination.

Enforcement of Civil Liabilities

We are registered under the laws of the Cayman Islands by way of continuation as an exempted company with limited liability. We are registered in the Cayman Islands because of certain benefits associated with being a Cayman Islands corporation, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides protections for investors to a significantly lesser extent. In addition, Cayman Islands companies do not have standing to sue before the federal courts of the United States.

Substantially all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals or residents of jurisdictions other than the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us, our officers and directors.

We have not appointed any agent to receive service of process with respect to any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

We believe that there is uncertainty as to whether the courts of the Cayman Islands or the PRC would, respectively, (1) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (2) entertain original actions brought in the Cayman Islands or the PRC against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to include this information in our transition report on Form 10-K.

ITEM 1B. UNRESOLVED STAFF COMMENTS

As a smaller reporting company, we are not required to include this information in our transition report on Form 10-K.

ITEM 2. PROPERTIES

We currently maintain our executive offices at 13/F Tower 2, New World Tower, 18 Queens Road Central, Hong Kong. The cost for this space is included in the $7,500 per-month fee paid to Hambrecht Eu Capital Management LLC, an affiliate of Robert Eu, for office space, administrative services and secretarial support. We believe, based on rents and fees for similar services in Hong Kong, that the fees that will be charged by Hambrecht Eu Capital Management LLC is at least as favorable as we could have obtained from unaffiliated persons.

ITEM 3. LEGAL PROCEEDINGS

There is no litigation currently pending or threatened against us or any of our directors in their capacity as such.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our shareholders during the quarter ended June 30, 2009.

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Price Information

The shares of our common stock, warrants and units are traded on the OTC Bulletin Board, or OTCBB, under the symbols “HMAQF,” “HMAWF” and “HMAUF,” respectively. Each unit consists of one ordinary share and one warrant. Each warrant entitles the holder to purchase one ordinary share at a price of $5.00 commencing on the later of our consummation of a business combination or one year from the date of the IPO prospectus, provided in each case that there is an effective registration statement covering the ordinary shares underlying the warrants in effect. The warrants will expire five years from the date of the IPO, unless earlier redeemed. Our common stock and warrants commenced to trade separately from April 9, 2008.

The following table sets forth, for the calendar quarters indicated, the quarterly high and low bid information prices for our common stock, warrants and units as reported on the OTCBB, such over the counter market quotation reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	Units				Ordinary Shares				Warrants
	High		Low		High		Low		High		Low
Third Quarter of 2009	$	7.65	$	7.52	$	7.98	$	7.58	$	0.16	$	0.11
Second Quarter of 2009	$	7.25	$	7.25	$	7.65	$	7.35	$	0.55	$	0.05
First Quarter of 2009	$	7.90	$	7.00	$	7.49	$	7.10	$	0.20	$	0.05
Fourth Quarter of 2008	$	7.15	$	6.50	$	7.00	$	6.21	$	0.42	$	0.13
Third Quarter of 2008	$	7.90	$	7.60	$	7.37	$	6.85	$	0.73	$	0.50
Second Quarter of 2008	$	7.90	$	7.60	$	7.16	$	6.95	$	0.85	$	0.60
First Quarter of 2008	$	8.15	$	7.85		-		-		-		-

Number of Holders of Common Stock.

The number of holders of record of our Common Stock on January 21, 2010 was 10, which does not include beneficial owners of our securities.

Dividends.

There were no cash dividends or other cash distributions made by us during the fiscal year ended June 30, 2009. Future dividend policy will be determined by our Board of Directors based on our earnings, financial condition, capital requirements and other then existing conditions. It is anticipated that cash dividends will not be paid to the holders of our common stock in the foreseeable future.

Recent Sales of Unregistered Securities.

On July 18, 2007, John Wang, Robert J. Eu and Stephen N. Cannon purchased an aggregate of 1,150,000 of our ordinary shares (which includs 90,174 ordinary shares that were subsequently redeemed because the underwriters did not fully exercise their over-allotment option) for an aggregate purchase price of $25,000. Mr. Cannon subsequently transferred all of the shares he purchased to the Cannon Family Irrevocable Trust, of which Mr. Cannon is the sole trustee. Such shares were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(2) of the Securities Act as they were sold in transactions not involving a public offering to a limited number of sophisticated, wealthy individuals. No underwriting commissions or offering discounts were paid with respect to such sales.

On February 21, 2008, John Wang, Robert Eu and the Cannon Family Irrevocable Trust transferred an aggregate of 463,334 shares to W.R. Hambrecht + Co., LLC, Shea Ventures LLC, Marbella Capital Partners Ltd., AEX Enterprises Limited and the Hambrecht 1980 Revocable Trust, each of which entities is an accredited investor for an aggregate purchase price of $10,193.35 or $0.022 per share. All such transfers were exempt from registration pursuant to Sections 4(1) and 4(2) of the Securities Act, due to the limited number of individuals involved, their status as accredited investors and transfer restrictions and legends on the share certificates.

On March 7, 2008, AEX Enterprises Limited, W.R. Hambrecht + Co., LLC and the Hambrecht 1980 Revocable Trust, companies controlled by Elizabeth B. Hambrecht, wife of Robert Eu, one of our founders and our Chairman, Chief Financial Officer and Secretary, and William R. Hambrecht, Mr. Eu’s father-in-law, Shea Ventures LLC, a company controlled by Edmund H. Shea Jr. and Marbella Capital Partners Ltd., a company controlled by John Wang, our Chief Executive Officer, agreed to invest an aggregate of $1,550,000 in us in the form of private placement warrants to purchase 1,550,000 ordinary shares at a price of $1.00 per warrant. Elizabeth B. Hambrecht owns approximately 25% and William R. Hambrecht controls (through a trust of which he is the trustee) approximately 38% of the voting shares of AEX Enterprises Limited. William Hambrecht is a controlling person of the voting shares of W.R. Hambrecht + Co., LLC and is the trustee of the Hambrecht 1980 Revocable Trust. The proceeds of the sale of the warrants were placed in the trust account established for our benefit in connection with our IPO.

On March 31, 2008, following the partial exercise of the over-allotment option by the underwriters of the IPO, we cancelled an aggregate of 90,174 ordinary shares held by Robert J. Eu, Cannon Family Irrevocable Trust and WR Hambrecht + Co., LLC.

On December 21, 2008, AEX Enterprises Limited transferred an aggregate of 441,666 warrants to AEX Capital, LLC, for no consideration. Such transfer was exempt from registration pursuant to Sections 4(1) and 4(2) of the Securities Act, due to the limited number of individuals involved, their status as accredited investors and transfer restrictions and legends on the share certificates.

In each of the foregoing sales of securities the purchasers were our officers and directors or affiliates of our officers and directors and therefore had access to all relevant information about us when choosing to invest in our securities. As of January 21, 2010, these securities were held by the persons or entities as set forth in the following table:

Name	Ordinary Shares		Warrants
John Wang		230,000		0
W.R. Hambrecht + Co., LLC(1)		178,275		25,000
Cannon Family Irrevocable Trust (2)		173,275		0
Robert J. Eu		173,275		0
AEX Enterprises Limited(3)		88,333		0
Hambrecht 1980 Revocable Trust(4)		88,333		441,667
Shea Ventures LLC(5)		88,333		441,667
Marbella Capital Partners Ltd.(6)		40,000		200,000
AEX Capital, LLC(7)		0		441,666
Total:		1,059,824		1,550,000

(1)	William R. Hambrecht is the controlling person of W.R. Hambrecht + Co., LLC.

(2)	Mr. Cannon is the sole Trustee of Cannon Family Irrevocable Trust.

(3)	Elizabeth B. Hambrecht, Robert Eu’s wife, and William R. Hambrecht control AEX Enterprises Limited.

(4)	William R. Hambrecht is the trustee of the Hambrecht 1980 Revocable Trust.

(5)	Edmund H. Shea Jr. is the controlling person of Shea Ventures LLC.

(6)	John Wang is the controlling person of Marbella Capital Partners Ltd.

(7)	Elizabeth B. Hambrecht, Robert Eu’s wife, and Robert J. Eu control AEX Capital, LLC.

Repurchases of Equity Securities.

None.

Use of Proceeds

On March 7, 2008, we completed a private placement of 1,550,000 warrants. On March 12, 2008, we consummated our initial public offering of 4,000,000 units. On March 31, 2008, the underwriters of our initial public offering exercised their over-allotment option for a total of an additional 239,300 units (over and above the 4,000,000 units sold in the initial public offering) for an aggregate offering of 4,239,300 units. Each unit consists of one share of common stock and one redeemable common stock purchase warrant. Each warrant entitles the holder to purchase from us one share of our common stock at an exercise price of $5.00. The units were sold at an offering price of $8.00 per unit and the warrants we sold at an offering price of $1.00 per warrant, generating total gross proceeds of $35,464,400. Broadband Capital Management LLC acted as lead underwriter. The securities sold in our initial public offering were registered under the Securities Act of 1933 on a registration statement on Form S-1 (No. 333-146147). The Securities and Exchange Commission declared the registration statement effective on March 7, 2008.

We incurred a total of $2,374,008 in underwriting discounts and commissions, of which $1,187,004 has been placed in the trust account. Such portion of the underwriter’s compensation will only be paid to the underwriters in the event that we consummate a business combination. The total expenses in connection with the sale of our warrants in the private placement and the initial public offering were $2,784,873.

After deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds to us from the private placement and the initial public offering were approximately $32,679,527. Approximately $33,527,396 (or approximately $7.91 per unit sold in our initial public offering) of the proceeds from the initial public offering and the private placement was placed in a Trust Account for our benefit and the remaining proceeds are available to be used to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. The Trust Account contains $1,187,004 of the underwriter’s compensation which will be paid to them only in the event of a business combination. The amounts held in the trust account may only be used by us upon the consummation of a business combination, except that we may use up to $700,000 (or $1,050,000 if approved by our shareholders) of the interest earned on the trust account to fund our working capital prior to a business combination. As of June 30, 2009, there was $ 33,838,155 held in the trust account, which includes deferred underwriting fees of $1,187,004. Through June 30, 2009, approximately $286,000 of interest earned on the trust account balance has been released to us for working capital purpose.

ITEM 6. SELECTED FINANCIAL DATA

As a smaller reporting company, we are not required to include this information in our transition report on Form 10-K.

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

The following discussion should be read in conjunction with the financial statements and related notes contained herein and the information included in our other filings with the SEC. This discussion includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this Transition Report on Form 10-K other than statements of historical fact are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those projected or assumed in such forward-looking statements. Among the factors that could cause actual results to differ materially are our being a development stage company with no operating history, our dependence on key personnel some of whom may join us following a business combination, our personnel allocating their time to other businesses and potentially having conflicts of interest with our business, our potentially being unable to obtain additional financing to complete a business combination and the ownership of our securities being concentrated. All forward-looking statements included in this document are made as of the date of this report, based on information available to us as of such date. We assume no obligation to update any forward-looking statement.

Overview

We are a blank check company formed under the laws of the Cayman Islands on July 18, 2007. We were formed to acquire one or more operating businesses through a merger, stock exchange, asset acquisition or similar business combination or control through contractual arrangements having its primary operations in the People’s Republic of China, or PRC. We will not seek to acquire a business with its primary operations outside of the PRC.

The company has entered into a letter of intent with a company for a business combination. The target is a company with its principal business operations in the People’s Republic of China. Pursuant to the Company’s Amended and Restated Memorandum and Articles of Association, the execution of the letter of intent affords the Company a six-month extension for completion of a business combination, until March 12, 2010 However if we anticipate that we will not be able to consummate a business combination by March 12, 2010, we may seek shareholder approval to extend the period of time to consummate a business combination until March 12, 2011. In order to extend the period of March 12, 2011, (i) public shareholders must approve the extension and (ii) public shareholders owning no more than one share less than 30% of the shares sold in this offering may have exercised their redemption rights.

Results of Operations for the Six Month Transition Period Ended June 30, 2009

We incurred a net loss of $87,677 for the six month period ended June 30, 2009 due to both a decrease in the interest earned on the Trust Account which did not exceed our expenses for the period, and an increase in expenses related to professional services. Until we enter into a business combination, we will not have any operating revenues.

Overall, for the six month period ended June 30, 2009, we incurred $25,002 of insurance expense from the amortization of our pre-paid D&O insurance policy, $45,000 of rent expense and other operating costs of $114,868.

For the six months ended June 30, 2009, our trust account earned interest of $97,193 and our funds outside of the trust account did not earn interest income.

Results of Operations for the Six Month Period Ended June 30, 2008

We had a net gain of $11,449 for the six month period ended June 30, 2008.

Overall for six month period ended June 30, 2008, we incurred $16,668 of insurance expense from the amortization of our pre-paid D&O insurance policy, $45,000 of rent expense and other operating costs of $95,015.

For the six months ended June 30, 2008, our trust account earned interest of $173,106.

Results of Operations for the Year Ended December 31, 2008

We reported net income of $236,505 for the year ended December 31, 2008 due to interest earned on the trust account. Until we enter into a business combination, we will not have any operating revenues.

For the year ended December 31, 2008, we incurred $37,503 of insurance expense from the amortization of our pre-paid D&O insurance policy, $97,500 of rent, administrative services and secretary support expense and other operating costs of $132,384.

For the year ended December 31, 2008, our trust account earned gross interest of $510,361. $239,110 of this interest was withdrawn from the trust account to fund working capital and $271,251 remained in the trust account.

Results of Operations for the Year Ended December 31, 2007

We reported a net loss of $21,736 for the year ended December 31, 2007 due to start-up expenses. Until we enter into a business combination, we will not have any operating revenues.

For the year ended December 31, 2007, we incurred $15,000 of rent as well as formation and administrative costs of $6,736.

For the year ended December 31, 2007, we did not earn any interest from our trust account.

Liquidity and Capital Resources

On March 7, 2008, we completed a private placement of 1,550,000 warrants to AEX Enterprises Limited, a company controlled by Elizabeth B. Hambrecht, wife of Robert Eu, one of our founders and our Chairman, Chief Financial Officer and Secretary, and William R. Hambrecht, Robert Eu’s father-in-law, W.R. Hambrecht + Co., LLC and the Hambrecht 1980 Revocable Trust, each an entity controlled by William Hambrecht, Shea Ventures LLC, a company controlled by Edmund H. Shea Jr., and Marbella Capital Partners Ltd., a company owned by John Wang, our Chief Executive Officer, and received net proceeds of $1,550,000. On March 12, 2008, we consummated our initial public offering of 4,000,000 units. On March 31, 2008, the underwriters of our initial public offering exercised a portion of their over-allotment option, for a total of an additional 239,300 units (over and above the 4,000,000 units sold in the initial public offering) for an aggregate offering of 4,239,300 units (collectively the “IPO”). Each unit in the public offering consisted of one share of common stock and one redeemable common stock purchase warrant. Each warrant entitles the holder to purchase from us one share of our common stock at an exercise price of $5.00. Our common stock and warrants started trading separately as of April 9, 2008.

The net proceeds from the sale of our warrants and units, after deducting certain offering expenses of approximately $2,784,873, including underwriting discounts of approximately $2,374,008, were approximately $32,679,527. Approximately $33,527,396 of the proceeds from the IPO and the private placement was placed in a trust account for our benefit, which includes $1,187,004 of the underwriter’s compensation which will be paid to them only in the event of a business combination. The remaining $339,135 was not held in the trust account. Except for up to $700,000 (plus up to and additional $350,000 if approved by our shareholders in connection with the extension of the period in which we must complete our initial business combination to March 12, 2011) in interest that is earned on the funds contained in the trust account that may be released to us to be used as working capital, we will not be able to access the amounts held in the trust until we consummate a business combination. The amounts held outside of the trust account are available to be used by us to provide for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. From July 18, 2007 (the date of our inception) through June 30, 2009, we had operating expenses of $473,993. From January 1, 2009 through June 30, 2009, we had operating expenses of $184,870. The net proceeds deposited into the trust fund remain on deposit in the trust account earning interest. Other than $700,000 (or $1,050,000 if approved by our shareholders) in interest which we may use to fund working capital, the amounts held in the trust account may only be used by us upon the consummation of a business combination. As of December 31, 2008, we had 33,798,651 held in the trust account and as of June 30, 2009 there was $33,838,155 held in the trust account, which includes deferred underwriting fees of $1,187,004. Additionally, as of June 30, 2009, we had $30,271 outside the trust account to fund our working capital requirements. Through June 30, 2009, approximately $286,000 of interest earned on the trust account balance has been released to us for working capital purpose.

We will use substantially all of the net proceeds of our IPO to acquire one or more target businesses, and will use a portion of the interest earned on the trust account together with the funds not held in trust to identify and evaluate prospective target businesses, to select one or more target businesses, and to structure, negotiate and consummate the business combination. We do not believe we will need to raise additional funds following our IPO in order to meet the expenditures required for operating our business. However, we may need to raise additional funds through a private offering of debt or equity securities if such funds were required to consummate a business combination. Such debt securities may include a working capital revolving debt facility or a longer term debt facility. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of a business combination.

Commencing on November 15, 2007, we began incurring a fee of approximately $7,500 per month for office space.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have never established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Contractual Obligations

We do not have any long term debt, capital lease obligations, operating lease obligations, purchase obligations or other long term liabilities, except for our agreement with Hambrecht Eu Capital Management LLC, an affiliate of Robert Eu, for office space, administrative services and secretarial support pursuant to which we pay a monthly fee of $7,500.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other market-driven rates or prices. We are not presently engaged in and, if a suitable business target is not identified by us prior to the prescribed liquidation date of the trust fund, we may not engage in, any substantive commercial business. Accordingly, we are not and, until such time as we consummate a business combination, we will not be, exposed to risks associated with foreign exchange rates, commodity prices, equity prices or other market-driven rates or prices. The net proceeds of our IPO held in the trust fund have been invested only in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940. Given our limited risk in our exposure to money market funds, we do not view the interest rate risk to be significant.

ITEM 8. FINANCIAL AND SUPPLEMENTAL DATA

Financial statements are attached hereto beginning with page F-1

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A(T). CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

An evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2009 was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

Disclosure Controls and Procedures are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. During the most recently completed fiscal quarter, there has been no significant change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Our internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our board of directors to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation under the criteria established in Internal Control – Integrated Framework, our management concluded that our internal control over financial reporting was effective as of June 30, 2009.

This Transition Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Transition Report.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors and Executive Officer

Our current directors and executive officers are as follows:

Name	Age	Position
John Wang	39	Chief Executive Officer, President and Director
Robert J. Eu	46	Chairman of the Board,
Hao Wu	35	Chief Financial Officer, Secretary and Director
Hong Xiang Liu	44	Director

John Wang has been our Chief Executive Officer, President and a director since our inception. Mr. Wang has over twelve years of investment banking and consulting experience. Since November 2004, Mr. Wang has been the Managing Director of Marbella Capital Partners Ltd., a financial advisory firm based in Shanghai which he founded. From January 2000 to November 2004, he helped develop and establish the U.S. operations of SBI USA as Executive Vice President of SBI E2-Capital (HK) Limited and was a Managing Director and Chief Operating Officer of SBI E2-Capital (USA) Ltd. Prior to SBI, from 1997 to 1999, he managed Accenture Consulting’s Greater China communications, media, and high tech strategy practice, where he acted as consultant to China Mobile’s IPO in 1997, among other high profile projects. From 1994 to 1997 he was also the lead telecom analyst covering Greater China and Southeast Asia for Pyramid Research, a Cambridge Massachusetts based emerging market telecom research firm that is part of the Economist Intelligence Unit. Last year, he advised on four late-stage deals that closed, of which one has already gone public in Hong Kong and another, Yingli Green Energy (NYSE: YGE), completed its IPO and listing on the New York Stock Exchange on June 8, 2007. Mr. Wang currently sits on the Board of Hong Kong Stock Exchange listed Wuyi International Pharmaceutical Company Limited (HKSE: 1889). Mr. Wang holds a Bachelor of Arts degree in international relations from Tufts University and is a graduate of the Washington International Studies Program at St. Catherine’s College at Oxford University. He has an M.A.L.D. in international law and business from The Fletcher School of Law and Diplomacy and is a graduate of the Private Equity course at Harvard Business School.

Robert J. Eu has been our Chairman of the Board, Secretary and director since our inception. He has been our Chief Financial Officer since February 21, 2008. Since 1998, Mr. Eu has served as a Managing Director for W.R. Hambrecht + Co., LLC (“WR Hambrecht + Co”) a San Francisco-based investment bank. Mr. Eu founded WR Hambrecht + Co’s investment banking practice in Asia in 2003. Prior to WR Hambrecht + Co, Mr. Eu was a Managing Director of H&Q Asia Pacific from 1992 until 1998, an affiliate of Hambrecht & Quist, where he co-founded its Hong Kong office and China investment practice. In 1996, Mr. Eu led the buy-out and de-listing of Eu Yang Sang (Hong Kong) Limited from the Hong Kong stock exchange and the company is now listed on the Singapore Stock Exchange (SGX:EYSI). Mr. Eu has been a director of Eu Yang Sang since 1997. In 1992, prior to working at H&Q Asia Pacific, Mr. Eu was the Business Development Manager for Eu Yang Sang (Hong Kong) Limited, a manufacturer and retailer of Traditional Chinese medicine. Mr. Eu has been a director and the Chairman of AEX Enterprises Limited (“AEX Enterprises”) since 2003. AEX Enterprises’ primary operating subsidiary is Boom Securities (H.K.) Limited (“Boom Securities”). Boom Securities is a licensed broker / dealer regulated by the Securities and Futures Commission (SFC) of Hong Kong and headquartered in Hong Kong. Mr. Eu worked for Citibank from 1987 until 1992 in the Private Banking Group in Hong Kong. Mr. Eu is a graduate of Northwestern University with a B.A. in History.

Hao Wu has been our Chief Financial Officer, Secretary and Director since September 4, 2009. He has been the Executive Vice President of Marbella Capital Partners, a boutique California/Shanghai based investment and advisory company that focuses on investing on Chinese deals in the growth and late stage, since January 2008. Prior to that, he was the finance director in B&Q Holding Co. Ltd., a leading home improvement retail company in China, from July 2006 until December 2007. Prior to B&Q, Mr. Wu worked for Fortune Tech group Co. Ltd. as the finance director from March 2004 until June 2006. He started his career in Unilever China as a management trainee. David holds a Bachelor of Science degree from the management school of Shanghai Jiao Tong University. Mr. Wu is employed by Marbella Capital Partners, which is controlled by John Wang, our Chief Executive Officer and a Director. Mr. Wu is not a party to any transactions listed in Item 404(a) of Regulation S

Hong Xiang Liu has been one of our directors since September 4, 2009. He has been the director of Jiangsu Performing Art & Culture Enterprises Inc. Ltd., a real estate developer in China, Jiangsu province, since July 2007. Prior to this, he was the Chief Executive Officer and Executive Director of Tongda Energy Limited, a piped gas provider & operator in 11 cities across China, from October 2002 until July 2007. From 1988 to September 2002, Mr. Liu held various positions in China Construction Bank. His last appointment was as Vice General manager of the Enterprise Banking Department, China Construction Bank, Beijing Branch. Mr. Liu received his Bachelor of Engineering (Infrastructure Management) from Tianjin University and was accredited as a senior economist by China Construction Bank in 1998. Mr. Liu is not a party to any transactions listed in Item 404(a) of Regulation S-K.

Board Committees

The board of directors is currently composed of four individuals and we do not have any committees, and, therefore, the entire board of directors performs the functions of the Audit Committee. It is intended that the board of directors will establish an Audit Committee upon the consummation of a business combination. The board of directors will take all reasonable actions to ensure that one of the members of the Audit Committee will be an “audit committee financial expert,” as such term is defined in the rules of the Securities and Exchange Commission. We are currently listed on the OTC Bulletin Board and are therefore not required to have a nominating committee or a compensation committee. We will evaluate establishing such committees in the future. There have been no changes to the procedures by which stockholders may recommend nominees to our board of directors.

Code of Ethics

We currently do not have a formal code of ethics. Upon consummation of a business combination, we intend to adopt a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our directors, executive officers and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership of our common stock with the Securities and Exchange Commission. Directors, executive officers and persons who own more than 10% of our common stock are required by Securities and Exchange Commission regulations to furnish to us copies of all Section 16(a) forms they file.

Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were complied with during 2009.

Legal Proceedings

John Wang, our Chief Executive Officer and President, who had been named a defendant in two lawsuits which were dismissed by the court in a summary judgement for the defendants. John Wang had been named as a defendant along with two other named individuals, SBI-USA, LLC, a U.S. investment firm, and several of SBI-USA’s subsidiaries. The lawsuits alleged several claims, including violation of federal civil RICO statutes, securities fraud, breach of escrow agreement and breach of fiduciary duty. The plaintiffs generally alleged that SBI-USA, through one of the other named defendants, breached the terms of an escrow agreement and distributed shares of common stock held for the benefit of a third party to the detriment of the plaintiffs. The complaints did not specify the damages sought but one suit claimed damages in excess of $1,600,000 and the other includes claims for damages in excess of $400,000. The first lawsuit was filed on June 8, 2007 and the second lawsuit was filed on December 7, 2007. Mr. Wang does not know if any additional lawsuits will be filed. Mr. Wang and the other defendants denied any wrongdoing in connection with the allegations in the complaints. On March 14, 2008, the lawsuits were dismissed by the court in a summary judgment for the defendants. The plaintiffs have filed a notice of their intent to appeal, and to date have requested and received extensions of time from the court to file a formal appeal brief, but have yet to do so.

ITEM 11. EXECUTIVE COMPENSATION

We agreed to pay Hambrecht Eu Capital Management LLC, an affiliate of Robert Eu, one of our founders and our Chairman, Chief Financial Officer and Secretary, and Elizabeth B. Hambrecht, Mr. Eu’s wife, a total of $7,500 per month for office space, administrative services and secretarial support for the period from November 15, 2007 until the earlier of our consummation of a business combination or our liquidation. This arrangement was agreed to by Hambrecht Eu Capital Management LLC for our benefit and is not intended to provide Mr. Eu compensation. We believe that such fees are at least as favorable as we could have obtained from an unaffiliated third party.

Other than the fees paid to Hambrecht Eu Capital Management LLC, we do not currently pay any cash fees to our officers and directors, nor do we pay their expenses in attending board meetings.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of our ordinary shares as of January 21, 2010 by:

each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;

each of our officers and directors; and

all our officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them.

	Number of Ordinary		Approx. Percentage
	Shares		of Outstanding
Name and Address of Beneficial Owner(1)	Beneficially Owned		Ordinary Shares
John Wang(2)		270,000		5.1	%
Robert J. Eu(3)		261,608		4.9	%
Stephen N. Cannon(4)		173,275		3.3	%
Hao Wu		—		—
Hong Xiang Liu		—		—
William R. Hambrecht(5)		354,941		6.7	%
W.R. Hambrecht + Co., LLC(6)		178,275		3.4	%
Shea Ventures LLC(7)		88,333		1.7	%
Marbella Capital Partners Ltd.(8)		40,000		*
AEX Enterprises Limited(9)		88,333		1.7	%
Hambrecht 1980 Revocable Trust(10)		88,333		1.7	%
Loeb Arbitrage Management, LLC(11)		483,872		9.13	%
HBK Investments L.P. (12)		423,900		8.0	%
Integrated Core Strategies (US) LLC (13)		520,500		9.8	%
Genesis Capital Advisors LLC. (14)		367,500		6.9	%

	Number of Ordinary		Approx. Percentage
	Shares		of Outstanding
Name and Address of Beneficial Owner(1)	Beneficially Owned		Ordinary Shares
Bulldog Investors (15)		300,000		5.7	%
Yarika Partners, L.P. (16)		284,225		5.4	%
All directors and executive officer as a group (4 individuals)		704,883	13.3		%

* Less than 1%

(1). Except as otherwise provided below, the address for each of our beneficial owners is 13/F Tower 2, New World Tower, 18 Queens Road Central, Hong Kong.

(2). The number of shares beneficially owned includes the ordinary shares held by Marbella Capital Partners.

(3). Includes ordinary shares held by AEX Enterprises Limited.

(4). The ordinary shares beneficially owned by Stephen N. Cannon are held by the Cannon Family Irrevocable Trust, of which Mr. Cannon is the sole trustee.

(5). Consists of ordinary shares held by W.R. Hambrecht + Co., LLC, AEX Enterprises Limited and the Hambrecht 1980 Revocable Trust.

(6). William R. Hambrecht is the controlling person of W.R. Hambrecht + Co., LLC. Its address is Pier 1, Bay 3, San Francisco, CA 94111.

(7). Edmund H. Shea Jr. is the controlling person of Shea Ventures LLC. Its address is P.O. Box 489, 655 Brea Canyon Rd. Walnut, CA 91788.

(8). John Wang is the controlling person of Marbella Capital Partners Ltd.

(9). Elizabeth B. Hambrecht, Robert Eu’s wife, and William R. Hambrecht control AEX Enterprises Limited. Its address is Suite 802, 8/F AIA Tower, 183 Electric Road, North Point, Hong Kong.

(10). William R. Hambrecht is the trustee of the Hambrecht 1980 Revocable Trust. Its address is Pier 1, Bay 3, San Francisco, CA 94111.

(11). Based on a 13G filed on November 10, 2009. The business address of Loeb Arbirtage Management, LLC is 61 Broadway, 24th Floor, New York, NY 10006. Loeb Arbirtage Management, LLC is a registered investment adviser. Loeb Arbirtage Management, LLC may invest on behalf of itself and clients for which it has investment discretion. Loeb Arbitrage Fund’s general partner is Loeb Arbitrage Management, LLC. Loeb Offshore Fund Ltd.’s registered investment advisor is Loeb Offshore Management, LLC.

(12). Based on a 13G/A filed on January 28, 2009. The business address of HBK Investments L.P. is 2101 Cedar Springs Road Suite 700, Dallas, TX 75201. HBK Investments L.P. has delegated discretion to vote and dispose of the Securities to HBK Services LLC. HBK Services may, from time to time, delegate discretion to vote and dispose of certain of the securities to HBK New York LLC, a Delaware limited liability company, HBK Virginia LLC, a Delaware limited liability company, and/or HBK Europe Management LLP, a limited liability partnership organized under the laws of the United Kingdom (collectively, the “Subadvisors”). Each of HBK Services and the Subadvisors is under common control with HBK Investments L.P. Jamiel A. Akhtar, Richard L. Booth, David C. Haley, Lawrence H. Lebowitz, and William E. Rose are each managing members of HBK Management LLC.

(13). Based on a 13G/A filed on January 29, 2009. The business address of Integrated Core Strategies (US) LLC is c/o Millennium Management, LLC 666 Fifth Avenue 8th Floor, New York, NY 10103. Millennium Management LLC, a Delaware limited liability company (“Millennium Management”), is the general partner of the managing member of Integrated Core Strategies and may be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies. Israel A. Englander is the managing member of Millennium Management. Consequently, Mr. Englander may also be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies.

(14). Based on a 13G/A filed on February 17, 2009. The business address of Genesis Capital Advisors LLC is 255 Huguenot Street, Suite 1103, New Rochelle, NY 10801. Jaime Hartman, Ethan Benovitz and Daniel Saks are the managing members of Genesis. As a result, Messrs. Hartman, Benovitz and Saks may be deemed to have shared voting control and investment discretion over securities deemed to be beneficially owned by Genesis.

(15). Based on a 13G filed on August 1, 2008. The business address of Bulldog Investors is Park 80 West, Plaza Two, Saddle Brook, NJ 07663. Phillip Goldstein and Andrew Dakos are principals of Bulldog Investors.

(16). Based on a 13G filed on October 21, 2009. The business address of Yakira Parterns, L.P. is 991 Post Road East Westport, CT 06880. Mr. Bruce M. Kallins is the managing member of Yakira Partners, L.P.

All 1,059,825 Founder Shares owned by our Founders have been placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent, pursuant to an escrow agreement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE

On July 18, 2007, John Wang, Robert J. Eu and Stephen N. Cannon purchased an aggregate of 1,150,000 of our ordinary shares (which includs 90,174 ordinary shares that we redeemed on March 31, 2008 because the IPO underwriters did not exercise their over-allotment option in full) for an aggregate purchase price of $25,000. Mr. Cannon subsequently transferred all of the shares he purchased to the Cannon Family Irrevocable Trust, of which Mr. Cannon is the sole trustee.

Name	Ordinary Shares		Warrants
John Wang		230,000		0
W.R. Hambrecht + Co., LLC(1)		178,275		25,000
Cannon Family Irrevocable Trust (2)		173,275		0
Robert J. Eu		173,275		0
AEX Enterprises Limited(3)		88,333		0
Hambrecht 1980 Revocable Trust(4)		88,333		441,667
Shea Ventures LLC(5)		88,333		441,667
Marbella Capital Partners Ltd.(6)		40,000		200,000
AEX Capital, LLC(7)		0		441,666
Total:		1,059,824		1,550,000

(1)	William R. Hambrecht is the controlling person of W.R. Hambrecht + Co., LLC.

(2)	Mr. Cannon is the sole Trustee of Cannon Family Irrevocable Trust.

(3)	Elizabeth B. Hambrecht, Robert Eu’s wife, and William R. Hambrecht control AEX Enterprises Limited.

(4)	William R. Hambrecht is the trustee of the Hambrecht 1980 Revocable Trust.

(5)	Edmund H. Shea Jr. is the controlling person of Shea Ventures LLC.

(6)	John Wang is the controlling person of Marbella Capital Partners Ltd.

(7)	Elizabeth B. Hambrecht, Robert Eu’s wife, and Robert J. Eu control AEX Capital, LLC.

Pursuant to a registration rights agreement between us and our pre-initial public offering shareholders and warrant holders such shareholders and warrant holders will be entitled to certain registration rights. Specifically, (i) the private placement warrants and the underlying ordinary shares will be entitled to certain registration rights immediately after the consummation of a business combination; and (ii) the ordinary shares will be entitled to certain registration rights one year from the consummation of a business combination. We are only required to use our best efforts to cause a registration statement relating to the resale of such securities to be declared effective and, once effective, only to use our best efforts to maintain the effectiveness of the registration statement. The holders of warrants do not have the rights or privileges of holders of our ordinary shares or any voting rights until such holders exercise their respective warrants and receive ordinary shares. Certain persons and entities that receive any of the above described securities from our founders will, under certain circumstances, be entitled to the registration rights described herein. We will bear the expenses incurred in connection with the filing of any such registration statements. In the event that we breach our obligations under the registration rights agreement, we could be obligated to purchase the securities owned by our pre-initial public offering shareholders for the then fair market value of the securities.

We agreed to pay Hambrecht Eu Capital Management LLC, an affiliate of Robert Eu, one of our founders and our Chairman, Chief Financial Officer and Secretary, and Elizabeth Hambrecht, Mr. Eu’s wife, a total of $7,500 per month for office space, administrative services and secretarial support for the period from November 15, 2007 until the earlier of our consummation of a business combination or our liquidation. This arrangement was agreed to by Hambrecht Eu Capital Management LLC for our benefit and is not intended to provide Mr. Eu compensation. We believe that such fees are at least as favorable as we could have obtained from an unaffiliated third party.

We will reimburse our officers and directors for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf such as identifying and investigating possible target businesses and business combinations. Subject to availability of proceeds not placed in the trust account and the interest income on the balance in the trust account to be released to us from time to time, there is no limit on the amount of out-of-pocket expenses that could be incurred. This formula was a result of a negotiation between us and the underwriters and was meant to help maximize the amount of money in the trust account that would be returned to the investors if we do not consummate a business combination within the permitted time. Our board of directors will review and approve all expense reimbursements made to our directors with the interested director or directors abstaining from such review and approval. To the extent such out-of-pocket expenses exceed the available proceeds not deposited in the trust account, such out-of-pocket expenses would not be reimbursed by us unless we consummate a business combination.

Other than the $7,500 per month administrative fee and reimbursable out-of-pocket expenses payable to Hambrecht Eu Capital Management LLC, an affiliate of Robert Eu, one of our founders and our Chairman, Chief Financial Officer and Secretary, and Elizabeth Hambrecht, Mr. Eu’s wife, no fees of any kind, including finders and consulting fees, will be paid to any of our directors who owned our ordinary shares prior to our IPO, or to any of their respective affiliates for services rendered to us prior to or with respect to the business combination.

After a business combination, any of our directors who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials furnished to our shareholders. It is unlikely that the amount of such compensation will be known at the time of a shareholder meeting held to consider a business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC.

All ongoing and future transactions between us and any of our directors or their respective affiliates, including loans by our directors, will be on terms believed by us at that time, based upon other similar arrangements known to us, to be no less favorable than are available from unaffiliated third parties. Such transactions or loans, including any forgiveness of loans, will require prior approval in each instance by a majority of our uninterested “independent” directors, to the extent we have independent directors, or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. It is our intention to obtain estimates from unaffiliated third parties for similar goods or services to ascertain whether such transactions with affiliates are on terms that are no less favorable to us than are otherwise available from such unaffiliated third parties. If a transaction with an affiliated third party were found to be on terms less favorable to us than with an unaffiliated third party, we would not engage in such transaction.

Director Independence

Our Board of Directors has not determined if any of our directors qualifies as independent. Our Board of Directors will make a determination about independence after the business combination is consummated. We do not have an audit committee, nominating committee or compensation committee and therefore the entire Board of Directors performs those functions for us.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Rothstein Kass & Company, P.C. audited our financial statements for the years ended June 30, 2009; December 31, 2008 and 2007:

Audit Fees

Fees for audit services provided by Rothstein Kass & Company, P.C. totaled approximately $55,000 in 2009, including fees associated with the audit of the annual financial statements for the fiscal year ended June 30, 2009 and the reviews of the Company’s quarterly reports on Form 10-Q.

Fees for audit services provided by Rothstein Kass & Company, P.C. totaled approximately $55,000 in 2008, including fees associated with the audit of the annual financial statements for the fiscal year ended December 31, 2008 and the reviews of the Company’s quarterly reports on Form 10-Q.

Fees for audit services provided by Rothstein Kass & Company, P.C. totaled approximately $80,000 in 2007, including fees associated with the audit of the annual financial statements for the fiscal year ended December 31, 2007, the audit of the financial statements as of August 31, 2007, the audit of the Company’s balance sheet at March 18, 2008 included in the Current Report on Form 8-K, and for services performed in connection with the Company’s registration statement on Form S-1 initially filed in 2007.

Audit-Related Fees

Rothstein Kass & Company, P.C. did not bill any fees for services rendered to us during fiscal years 2009, 2008 and 2007 for Audit-related services in connection with the audit or review of our financial statements.

Tax Fees

Rothstein Kass & Company, P.C. did not bill any fees for tax services, including tax compliance, tax advice, and tax planning, during fiscal years 2009, 2008 and 2007.

All Other Fees

There were no fees billed by Rothstein Kass & Company, P.C. for other professional services rendered during the fiscal years 2009, 2008 or 2007.

Pre-Approval of Services

We do not have an audit committee. As a result, our board of directors performs the duties of an audit committee. Our board of directors evaluates and approves in advance the scope and cost of the engagement of an auditor before the auditor renders the audit and non-audit services. We do not rely on pre-approval policies and procedures.

PART IV

ITEM 15. EXHIBITS

(a)

(1)

Financial Statements

Balance Sheets

Statement of Operations

Statement of Shareholders’ Equity

Statement of Cash Flows

(2)

Schedules

None.

(b)

Exhibits

The following Exhibits are filed as part of this report

Exhibit No.		Description
3.1		Memorandum of Association (1)
3.2		Amended and Restated Articles of Association (1)
4.1		Specimen Unit Certificate (1)
4.2		Specimen Common Share Certificate (1)
4.3		Specimen Public Warrant Certificate (1)
4.4		Specimen Private Warrant Certificate (1)
4.5		Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant (1)
4.6		Form of Unit Purchase Option (1)
10.1		Form of Letter Agreement by John Wang (1)
10.2		Form of Letter Agreement by Robert J. Eu (1)
10.3		Form of Letter Agreement by Stephen N. Cannon (1)
10.4		Form of Letter Agreement by Lee S. Ting (1)
10.5		Form of Letter Agreement by AEX Enterprises Limited (1)
10.6		Form of Letter Agreement by Feng Zhang (1)
10.7		Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant
10.8		Form of Securities Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company, the founding shareholders and the founders (1)
10.9		Form of Services Agreement between the Registrant and Hambrecht Eu Capital Management LLC (1)
10.10		Form of Registration Rights Agreement among the Registrant, the founding shareholders and the founders (1)
10.11		Revolving Credit Agreement between the Registrant and Robert Eu (1)
10.12		Promissory Note between Registrant and Robert Eu (1)
10.13		Form of Warrant Purchase Agreement between the Registrant and AEX Enterprises Limited (1)
10.14		Form of Right of First Refusal Agreement between the Registrant, Marbella Capital Partners and AEX Enterprises Limited (1)
31.1		Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended
31.2		Certification of the Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended
32.1		Certification of the Chief Executive Officers pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of the Chief Financial Officers pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-146147).

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant had duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

January 22, 2010		HAMBRECHT ASIA ACQUISITION CORP.

	By:	/s/ John Wang
		John Wang
		Chief Executive Officer, President and Director
		(Principal Executive Officer)

January 22, 2010	By:	/s/ Hao Wu
		Hao Wu
		Chief Financial Officer, Secretary and Director
		(Principal Financial and Accounting Officer)

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

January 22, 2010	By:	/s/ John Wang
		John Wang
		Chief Executive Officer, President and
		Director (Principal Executive Officer)

January 22, 2010	By:	/s/ Robert J. Eu
		Robert J. Eu
		Chairman of Board

January 22, 2010	By:	/s/ Hao Wu
		Hao Wu
		Chief Financial Officer, Secretary and Director
		(Principal Financial and Accounting Officer)

January 22, 2010	By:	/s/ Hong Xiang Liu
		Hong Xiang Liu
		Director

Hambrecht Asia Acquisition Corp.

(a corporation in the development stage)

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Financial Statements:
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Shareholders’ Equity	F-5
Statements of Cash Flows	F-6
Notes to Financial Statements	F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Hambrecht Asia Acquisition Corporation

We have audited the accompanying balance sheets of Hambrecht Asia Acquisition Corporation (a corporation in the development stage) (the “Company”) as of June 30, 2009 and December 31, 2008 and 2007, and the related statements of operations and cash flows for the six months ended June 30, 2009, the year ended December 31, 2008, the period from July 18, 2007 (date of inception) to December 31, 2007 and the periods from July 18, 2007 (date of inception) to June 30, 2009, and shareholders’ equity for the period from July 18, 2007 (date of inception) to June 30, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2009 and December 31, 2008, and the results of its operations and its cash flows for the six months ended June 30, 2009, the year ended December 31, 2008, the period from July 18, 2007 (date of inception) to December 31, 2007 and the periods from July 18, 2007 (date of inception) to June 30, 2009, and shareholders’ equity for the period from July 18, 2007 (date of inception) to June 30, 2009, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that Hambrecht Asia Acquisition Corporation will continue as a going concern. As discussed in Note 7 to the financial statements, Hambrecht Asia Acquisition Corporation will face a mandatory liquidation if a business combination is not consummated by March 12, 2010, which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Roseland, New Jersey

January 22, 2010

/s/ Rothstein Kass & Company, P.C.

F-2

Hambrecht Asia Acquisition Corp.

(a corporation in the development stage)

Balance Sheets

	June 30,2009		December 31, 2008		December 31, 2007
ASSETS
Current assets
Cash	$	30,271	$	100,312	$	101,671
Prepaid expenses		95,686		108,330		183,254

Total current assets		125,957		208,642		284,925
Other asset				—
Investments held in the trust account		33,838,155		33,798,651

Total assets	$	33,964,112	$	34,007,293	$	284,925

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses	$	76,275	$	31,780	$	—
Note payable, shareholder						281,661
				—

Total current liabilities		76,275		31,780		281,661

Long-term liabilities
Deferred underwriting fees, net of $356,101 subject to forfeiture in the event of possible redemption		830,903		830,903		—

Ordinary shares, subject to possible redemption, (1,271,788 shares at redemption value of $7.92 per share)		10,072,561		10,072,561		—

Shareholders’ equity
Ordinary shares, $.001 par value, 50,000,000 shares authorized; 5,299,125, 5,299,125 and 1,150,000 shares issued and outstanding as of June 30, 2009, December 31, 2008 and December 31, 2007 (which includes 1,271,788, 1,271,788 shares and 0 shares respectively subject to possible redemption)		5,299		5,299		1,150
Additional paid-in capital		22,851,981		22,851,981		23,850
Earnings (deficit) accumulated during the development stage		127,093		214,769		(21,736	)

Total shareholders’ equity		22,984,373		23,072,049		3,264

Total liabilities and shareholders’ equity	$	33,964,112	$	34,007,293	$	284,925

See accompanying notes to financial statements.

F-3

Hambrecht Asia Acquisition Corp.

(a corporation in the development stage)

Statements of Operations

	For the Period Ended June 30, 2009 (six months)			For the Period Ended June 30, 2008 (six months) (unaudited)			Period from July 18,2007 (inception) to June 30,2009			For the Year ended December 31,2008			Period from July 18, 2007 to December 31,2007
Revenues	$	—		$	—		$	—		$	—		$	—
Formation and administrative costs		184,870			156,683			473,993			267,387			21,736
Loss from operations		(184,870	)		(156,683	)		(473,993	)		(267,387	)		(21,736	)
Interest income, net		97,193			168,133			601,085			503,892			—
Net income (loss)		(87,677	)		11,449			127,093			236,505			(21,736	)
Weighted average number of ordinary shares subject to possible redemption, basic and diluted		1,271,788			808,223			793,378			1,037,742			—
Income (loss) per ordinary share subject to possible redemption, basic and diluted	$	(0.07	)	$	0.01		$	0.16		$	—		$	—
Weighted average number of ordinary shares outstanding (not subject to possible redemption) , basic		4,027,337			3,789,581			3,085,775			3,503,402			1,150,000
Income (loss) per ordinary share not subject to possible redemption, basic	$	(0.02	)	$	0.00		$	0.04		$	0.07		$	(0.02	)
Weighted average number of ordinary shares outstanding (not subject to possible redemption), diluted		4,027,337			5,164,193			4,267,656			5,213,337			1,150,000
Income (loss) per ordinary share not subject to possible redemption, diluted	$	(0.02	)	$	0.00		$	0.03		$	0.05		$	(0.02	)

See accompanying notes to financial statements.

F-4

Hambrecht Asia Acquisition Corp.

(a corporation in the development stage)

Statements of Shareholders’ Equity

For the Period July 18, 2007 (date of inception) to June 30, 2009

	Ordinary Shares									Earnings
	Shares			Amount			Additional Paid-in Capital			(Deficit) Accumulated During the Development Stage			Total Shareholders’ Equity
Balances at July 18, 2007		—		$	—		$	—		$	—		$	—

Sale of units issued to founders on July 18, 2007 at approximately $0.02 per share		1,150,000			1,150			23,850						25,000

Net loss											(21,736	)		(21,736	)

Balances at December 31, 2007		1,150,000		$	1,150		$	23,850		$	(21,736	)	$	3,264

Proceeds from sale of warrants in a private placement to initial shareholders								1,550,000						1,550,000
Sale of 4,000,000 units at $8.00 per unit in the public offering, net of underwriters’ discount and offering expenses (1,199,999 shares subject to possible redemption)		4,000,000			4,000			29,550,348						29,554,348
Sale of 239,300 units at $8.00 per unit in the public offering from partial exercise of underwriters’ overallotment option, net of underwriters’ discount and offering expenses (71,789 shares subject to possible redemption)		239,300			239			1,800,344						1,800,583
Forfeiture of founders shares from partial exercise of underwriters’ overallotment option		(90,175	)		(90	)								(90	)
Proceeds subject to possible redemption of 1,271,788 shares at a redemption value of $7.92 per share								(10,072,561	)					(10,072,561	)
Net income											236,505			236,505
Balances at December 31, 2008		5,299,125		$	5,299		$	22,851,981		$	214,769		$	23,072,049
Net loss											(87,677	)		(87,677	)
Balances at June 30, 2009		5,299,125		$	5,299		$	22,851,981		$	127,093		$	22,984,373

See accompanying notes to financial statements.

F-5

Hambrecht Asia Acquisition Corp.

(a corporation in the development stage)

Statements of Cash Flows

	For the Period Ended June 30, 2009 (six months)			For the Period Ended June 30, 2008 (six months) (unaudited)			Period from July 18,2007 (inception) to June 30,2009			For the Year ended December 31,2008			Period from July 18, 2007 to December 31,2007

Cash flows from operating activities:

Net income (loss)	$	(87,677	)	$	11,449		$	127,093		$	236,505		$	(21,736	)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Change in operating assets and liabilities:

Accrued expenses		44,494			94,063			76,275			31,780

Prepaid expenses and other current asset		12,644			49,922			(95,686	)		(108,330	)

Net cash provided by (used in) operating activities		(30,538	)		155,434			107,682			159,955			(21,736	)

Cash used in investing activities:

Proceeds from the public offering deposited in trust account		—			(33,527,400	)		(33,527,400	)		(33,527,400	)		—

Interest income re-invested in trust account		(85,836	)		(173,102	)		(510,361	)		(510,361	)		—

Redemption from the trust account		46,332			65,709			285,442			239,110			—

Net cash used in investing activities		(39,504	)		(33,634,793	)		(33,838,155	)		(33,798,651	)		—

Cash flows from financing activities:

Proceeds from sale of ordinary shares to founders		—			—			25,000			—			25,000

Proceeds from shareholder’s note payable	$	—		$	—		$	281,661		$	—		$	281,661

Proceeds from warrants purchased in private placement		—			1,550,000			1,550,000			1,550,000			—

Proceeds from initial public offering	$	—		$	32,000,000		$	32,000,000		$	32,000,000		$	—

Proceeds from exercise of underwriters overallotment option		—			1,914,400			1,914,400			1,914,400			—

Repayment of shareholder’s note payable		—			—			(281,661	)		(281,661	)		—

Payment of underwriters’ fee and offering cost of initial public offering		—			(1,728,656	)		(1,728,656	)		(1,545,402	)		(183,254	)

Net cash provided by financing activities		—			33,454,083			33,760,744			33,637,337			123,407

Net increase (decrease) in cash		(70,042	)		(25,276	)		30,271			(1,359	)		101,671

Cash at beginning of the period		100,312			101,671			—			101,671			—

Cash at end of the period	$	30,271		$	76,395		$	30,271		$	100,312		$	101,671

Supplemental schedule of non-cash financing activities:

Deferred underwriting fees, net	$	—		$	830,903		$	830,903		$	830,903		$	—

Ordinary shares subject to possible redemption	$	—		$	10,072,561		$	10,072,561		$	10,072,561		$	—

See accompanying notes to financial statements.

F-6

Hambrecht Asia Acquisition Corp.

(a corporation in the development stage)

Notes to Financial Statements

NOTE 1—ORGANIZATION AND BUSINESS OPERATIONS

Hambrecht Asia Acquisition Corp. (a corporation in the development stage) (the “Company”) was incorporated in the Cayman Islands on July 18, 2007 with an authorized share capital of 50,000,000 ordinary shares (par value $0.001 per share). The Company’s founders contributed $25,000 to the formation of the Company and were issued 1,150,000 ordinary shares. The Company was formed to acquire, through a stock exchange, asset acquisition or other similar business combination, one or more operating businesses having its primary operations located in the People’s Republic of China (“Business Combination”). The Company is considered to be in the development stage as defined in “Accounting and Reporting By Development Stage Enterprises”, and is subject to the risks associated with activities of development stage companies. The Company’s operations, if a Business Combination is consummated outside the United States, will be subject to local government regulations and to the uncertainties of the economic and political conditions of those areas.

On December 9, 2009 the Board of Directors of Hambrecht Asia Acquisition Corp. (the "Company") authorized a change in the Company's fiscal year end to June 30 from December 31. The Company reports its financial results for the six month transition period of December 31, 2008 through June 30, 2009 on a Transition Report on Form 10-K. After filing the Transition Report, the Company’s next fiscal year end will be June 30, 2010.

As of June 30, 2009, the Company had not commenced any operations or generated any revenues. All activity from the period July 18, 2007 (date of inception) through March 31, 2008 relates to the Company’s formation and its initial public offering as described below. Subsequent to that date to the present the Company has sought a target business to acquire. The Company will not generate any operating revenue until after the completion of the Business combination, at the earliest. The Company currently generates non-operating income from interest income earned on the investments held in a trust account (the “Trust Account”), from the proceeds derived from the public offering.

The registration statement for the Company’s initial public offering (the “Offering”) described in Note 3 was declared effective on March 7, 2008. The Company consummated the Offering on March 12, 2008 and immediately prior to such Offering, sold an aggregate of 1,550,000 warrants at $1.00 per warrant to certain officers and affiliates of the Company in a private placement (the “Private Placement”) described in Note 4. On March 31 2008, the underwriters of the Offering exercised their over-allotment option for a total of an additional 239,300 units. The net proceeds of the Offering and the Private Placement are intended to be generally applied toward consummating a business combination with one or more operating businesses having their primary operations in the People’s Republic of China (“Business Combination”). Net proceeds of $33,537,396 from the Offering, including the exercise of the underwriters’ over-allotment option, and the Private Placement are held in a Trust Account and will only be released to the Company upon the earlier of: (i) the consummation of a business combination; or (ii) the Company’s liquidation, except to satisfy shareholder conversion rights. The Trust Account includes the deferred underwriting discount from the Offering of up to $1,187,004 which will be paid to the underwriters upon consummation of a business combination, as described in Note 6. Additionally, up to an aggregate of $700,000, plus up to an additional $350,000 during the Extended Period (as described below) if approved by shareholders, of interest earned on the Trust Account balance (net of any taxes paid or payable) may be released to the Company to fund operating activities. Through June 30, 2009, approximately $286,000 of interest earned on the Trust Account balance has been released to the Company.

On September 4, 2009, the Company issued a press release announcing that it has entered into a letter of intent with a company for a business combination. The target is a company with its principal business operations in the People’s Republic of China. The Company, after signing a definitive agreement for the acquisition of a target business, is required to submit such transaction for shareholder approval. In the event that shareholders owning 30% or more of the shares sold in the Offering vote against the business combination and exercise their conversion rights described below, the business combination will not be consummated. All of the Company’s shareholders prior to the Offering, have agreed to vote their pre-initial public offering ordinary shares in accordance with the vote of the majority of the shares voted by all shareholders of the Company who purchased their shares in the Offering or the aftermarket (“Public Shareholders”) with respect to any business combination. After consummation of a business combination, these voting safeguards will no longer be applicable.

F-7

In the event that the Company does not complete a business combination by March 12, 2010, or March 12, 2011 if extension is approved by the shareholders, the Company will be dissolved and the proceeds held in the Trust Account, plus certain interest, less certain costs, will be distributed to the Company’s public shareholders. If the Company receives Public Shareholder approval for the Extended Period and holders of 30% or more of the shares held by Public Shareholders do not vote against the Extended Period and elect to convert their ordinary shares in connection with the vote for the Extended Period, the Company will then have an additional 12 months in which to complete the initial business combination. If the Extended Period is approved, the Company will still be required to seek Public Shareholder approval before completing a business combination. In the event there is no business combination within the 24-month deadline (assuming the Extended Period is not approved) described above, the Company will dissolve and distribute to its Public Shareholders, in proportion to their respective equity interests, the amount held in the Trust Account, and any remaining net assets, after the distribution of the Trust Account. The Company’s corporate existence will automatically cease at the end of the 36-month period if the Company has not received shareholder approval for an initial business combination. In the event of liquidation, the per share value of the residual assets remaining available for distribution (including Trust Account assets) may be less than the initial public offering price per share in the Offering.

With respect to a business combination which is approved and consummated or a vote on the Extended Period which is approved, any Public Shareholders who voted against the business combination or Extended Period may contemporaneously with or prior to such vote exercise their conversion right and their ordinary shares would be cancelled and returned to the status of authorized but unissued shares. The per share conversion price will equal the amount in the Trust Account (including interest therein), calculated as of two business days prior to the consummation of the proposed business combination or vote on Extended Period, divided by the number of common shares sold in the Offering and partial exercise of the over-allotment option.

A Public Shareholder’s election to convert ordinary shares in connection with the vote on the Extended Period will only be honored if the Extended Period is approved. Public Shareholders who vote their shares against the Extended Period and exercise their conversion rights, will not be able to vote these shares with respect to the initial business combination. All other Public Shareholders will be able to vote on the initial business combination.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the ‘SEC”). In the opinion of management, the accompanying financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial statements.

Investments held in the Trust Account:

The amounts held in the Trust Account as of June 30, 2009 represent substantially all of the proceeds of the Offering plus partial exercise of the underwriters’ over-allotment option, the private placement and interest earned on the trust to date, and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of a Business Combination. The funds held in the Trust Account are invested in a money market fund that invests in US and state government and government agency debt securities.

F-8

Fair value of financial instruments:

The Company does not enter into financial instruments for trading or speculative purposes. The carrying amounts of financial instruments classified as current assets and current liabilities as disclosed in the accompanying balance sheets, approximate their fair value due to their short maturities.

Use of estimates:

The preparation of financial statements in conformity with U.S. 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. Actual results could differ from those estimates.

Income taxes:

Under current Cayman Islands laws, the Company is not subject to income taxes or capital gains, and there is no Cayman Islands withholding tax imposed upon payments of dividends by the Company to its shareholders. In the future, the Company’s tax rate will be impacted by acquisitions of non-Cayman subsidiaries governed by the respective local income tax laws. Accordingly, no provision for income taxes has been made in the accompanying statements of operations.

Effective January 1, 2007, the Company adopted the provisions of “Accounting for Uncertainty in Income Taxes”. There were no unrecognized tax benefits as of June 30, 2009. The provision prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at June 30, 2009. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviation from its position.

Ordinary shares subject to possible redemption:

As discussed in Note 1, the Company will only proceed with a Business Combination if: (1) it is approved by a majority of the votes cast by the Company’s public shareholders; and (2) public shareholders holding less than 30% (1,271,788) of the ordinary shares sold in the Offering and partial exercise of the over-allotment option, choose to exercise their redemption rights thereby receiving their per share interest in the Trust Account. In accordance with FASB’s Emerging Issues Task Force (EITF) Topic No. D-98, “Classification and Measurement of Redeemable Securities”, the Company has classified 1,271,788 shares of its ordinary shares outside of permanent equity as “Ordinary shares subject to redemption,” at a redemption price of $7.92 per share as of June 30, 2009 . The Company will recognize changes in the conversion value as they occur and will adjust the carrying value of the ordinary shares subject to conversion to be equal to its conversion value at the end of each reporting period.

Income (loss) per ordinary share:

Basic income per common share is computed by dividing net income by the weighted average common shares outstanding for the period. Diluted income per common share reflects the potential dilution that could occur if warrants were to be exercised or converted or otherwise resulted in the issuance of ordinary shares that then shared in the earnings of the entity.

For the period ended (six months) June 30, 2009, and for the period from July 18, 2007 (inception) to June 30, 2009, the Company had potentially dilutive securities in the form of 7,129,125 warrants, and 5,299,125 warrants issued as part of the Units (as defined below) in the Offering. Of the total warrants outstanding for the periods then ended, approximately 2,328,422 and 1,181,881, respectively, represent incremental shares of ordinary share, based on their assumed redemption, to be included in the weighted average number of shares of ordinary share outstanding (not subject to possible redemption) for the calculation of diluted income per ordinary share. The Company uses the “treasury stock method” to calculate potential dilutive shares, as if they were redeemed for ordinary share at the beginning of the period.

F-9

The Company’s statements of operations includes a presentation of income per ordinary share subject to possible redemption in a manner similar to the two-class method of income per share. Basic and diluted income amount for the maximum number of shares subject to possible redemption is calculated by dividing the net interest attributable to common shares subject to redemption by the weighted average number of shares subject to possible redemption. Basic and diluted net income (loss) per share amount for the shares outstanding not subject to possible redemption is calculated by dividing the net income (loss) exclusive of the net interest income attributable to ordinary share subject to redemption by the weighted average number of shares not subject to possible redemption.

Newly Adopted Accounting Pronouncements:

In December 2007, the FASB issued “Business Combinations”, which requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors, and other users, all of the information they need to evaluate and understand the nature and financial effect of the business combination. “Business Combinations” will be effective for acquisitions with a date on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We will apply “Business Combinations” for any of our applicable acquisitions beginning January 1, 2009.

In December 2007, the FASB issued “Noncontrolling Interests in Consolidated Financial Statements”, which requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent’s equity; the inclusion of the amount of net income attributable to the noncontrolling interest in consolidated income on the face of the income statement; and a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. This guidance will be effective for the fiscal years beginning on or after December 15, 2008. We will apply to any applicable transactions beginning January 1, 2009.

In March 2008, the FASB issued “Disclosures about Derivative Instruments and Hedging Activities”, which is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on the Company’s results of operations or financial position; however, it could impact future transactions entered into by the Company.

On April 9, 2009, the FASB issued the guidance of “Interim Disclosures about Fair Value of Financial Instruments” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. The guidance also amends Accounting Principles Board Opinion-Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. The guidance shall be effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. An entity may early adopt this if certain requirements are met. This guidance does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this guidance requires comparative disclosures only for periods ending after initial adoption. The adoption of this guidance did not have a significant impact on the Company’s financial statements or related footnotes.

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On April 9, 2009, the FASB issued the guidance of “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”, to affirms that the objective of fair value when the market for an asset is not active is the price that would be received to sell the asset in an orderly transaction; clarifies and includes additional factors for determining whether there has been a significant decrease in market activity for an asset when the market for that asset is not active; eliminates the proposed presumption that all transactions are distressed (not orderly) unless proven otherwise. The guidance instead requires an entity to base its conclusion about whether a transaction was not orderly on the weight of the evidence. In addition, this guidance requires an entity to disclose a change in valuation technique (and the related inputs) resulting from the application of it and to quantify its effects, if practicable. This guidance is effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009 if certain requirements are met. It must be applied prospectively and retrospective application is not permitted. The adoption of this guidance did not have a significant impact on the Company’s financial statements or related footnotes.

On April 9, 2009, the FASB issued “Recognition and Presentation of Other-Than-Temporary Impairments”, to be intended to bring consistency to the timing of impairment recognition, and provide improved disclosures about the credit and noncredit components of impaired debt securities that are not expected to be sold. The measure of impairment in comprehensive income remains fair value. The guidance also requires increased and more timely disclosures regarding expected cash flows, credit losses, and an aging of securities with unrealized losses. This guidance shall be effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted. If an entity elects to adopt early either “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”, or “Interim Disclosures about Fair Value of Financial Instruments”, the entity also is required to adopt early this guidance. Additionally, if an entity elects to adopt early , it is required to adopt “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”. This guidance does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this guidance requires comparative disclosures only for periods ending after initial adoption. The adoption did not have a significant impact on the Company’s financial statement or footnotes.

On May 28, 2009, the FASB issued the guidance regarding subsequent events, which we adopted on a prospective basis beginning April 1, 2009. The guidance is intended to establish general standards of accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for selecting that date. The application of the pronouncement did not have an impact on our financial position, results of operations or cash flows. These financial statements were approved by management and were issued on January 22, 2010. Subsequent events have been evaluated through this date.

Recently Issued Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board issued the statement of “Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles This statement confirmed that the FASB Accounting Standards Codification (the “Codification”) will become the single official source of authoritative U.S. GAAP (other than guidance issued by the SEC), superseding existing FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force (“EITF”), and related literature. After that date, only one level of authoritative U.S. GAAP will exist. All other literature will be considered non-authoritative. The Codification does not change U.S. GAAP; instead, it introduces a new structure that is organized in an easily accessible, user-friendly online research system. The Codification, which changes the referencing of financial standards, becomes effective for interim and annual periods ending on or after September 15, 2009.. The Company has adopted this standard and did not have any substantive impact on our financial statements or related footnotes.

Management does not believe that any other recently issued, but no yet effective accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.

NOTE 3—PUBLIC OFFERING

On March 7, 2008, the Company sold 4,000,000 units in the Offering at a price of $8.00 per unit. On March 31, 2008, the Company consummated the closing of an additional 239,300 units which were subject to the over-allotment option. Each unit consists of one share of the Company’s ordinary shares, $0.001 par value, and one warrant. Each warrant will entitle the holder to purchase from the Company one of the Company’s ordinary shares at an exercise price of $5.00 per share commencing on the later of: (i) The consummation of the Business Combination, or (ii) March 7, 2009. The warrants will be exercisable only if the Company continues to provide for an effective registration statement covering the ordinary shares issueable upon exercise of the warrants. In no event will the holder of a warrant be entitled to receive a net cash settlement or other consideration in lieu of physical settlement in shares of the Company’s ordinary shares.

F-11

The warrants expire on March 7, 2013, unless earlier redeemed. The warrants included in the units sold in the Offering are redeemable, at the Company’s option, in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ notice after the warrants become exercisable, only in the event that the last sale price of the ordinary shares exceeds $11.50 per share for any 20 trading days within a 30-trading day period.

The purchased warrants are recognized in additional paid-in-capital within shareholders’ equity since, under the terms of the warrants, the Company cannot be required to settle or redeem them for cash.

NOTE 4—RELATED PARTY TRANSACTIONS

The Company has agreed to pay Hambrecht-Eu Capital, a company owned and managed by the Company’s Chairman of the Board, Chief Financial Officer and Secretary, $7,500 per month for office space and general and administrative services including secretarial support commencing on November 15, 2007 and continuing (i) until the consummation by the Company of a business combination (as described in Note 1), (ii) 18 months from commencement of the Offering if the Company does not effect a Business Combination, (iii) 24 months from the consummation of the Offering if a letter of intent, agreement in principle or definitive agreement, has been executed within 18 months of commencement of the Offering and the Company has not effected a business combination, or (iv) 36 months from the consummation of the Offering if an extension has been approved by the Company’s shareholders under certain circumstances.

AEX Enterprises Limited, W.R. Hambrecht + Co., LLC and the Hambrecht 1980 Revocable Trust, companies controlled by Elizabeth B. Hambrecht, wife of Robert Eu, one of the Company’s founders and the Company’s Chairman, Chief Financial Officer and Secretary and William R. Hambrecht, Robert Eu’s father-in-law, Shea Ventures LLC, a company controlled by Edmund H. Shea Jr. and Marbella Capital Partners Ltd., a company controlled by John Wang, our Chief Executive Officer, purchased an aggregate of 1,550,000 warrants at a price of $1.00 per warrant ($1,550,000 in the aggregate) in a private placement immediately prior to the initial public offering (“private placement warrants”). Elizabeth B. Hambrecht owns approximately 25% and William R. Hambrecht controls (through a trust of which he is trustee) approximately 38% of the voting shares of AEX Enterprises Limited. William Hambrecht is a controlling person of W.R. Hambrecht + Co., LLC and is the trustee of the Hambrecht 1980 Revocable Trust. The proceeds from the sale of the private placement warrants were added to the proceeds from the Offering and are held in the Trust Account pending the Company’s consummation of a Business Combination. If the Company does not complete a Business Combination that meets the criteria described in the Offering, then the $1,550,000 purchase price of the private placement warrants will become part of any liquidating distribution to the Company’s public shareholders following the Company’s liquidation and dissolution and the private placement warrants will expire worthless.

The private placement warrants will be non-redeemable so long as they are held by the original holders of the warrants, the pre-initial public offering shareholders and directors or their permitted transferees. In addition, pursuant to the registration rights agreement, the holders of the private placement warrants and the underlying ordinary shares will be entitled to certain registration rights immediately after the consummation of the initial business combination and the warrants may be exercised on a cashless basis if held by the original holder, the pre-initial public offering shareholder and director or their permitted transferees. With those exceptions, the private placement warrants have terms and provisions that are otherwise identical to those of the warrants sold as part of the units in the Offering.

The sale of private placement warrants did not result in the recognition of stock-based compensation expense because the private placement warrants were sold at or above fair market value.

AEX Enterprises Limited, W.R. Hambrecht + Co., LLC, the Hambrecht 1980 Revocable Trust, Shea Ventures LLC and Marbella Capital Partners Ltd. have agreed, subject to certain exceptions, not to transfer, assign or sell any of its private placement warrants until after the Company consummates a Business Combination. However, prior to the consummation of a business combination, the original holders of the warrants will be permitted to transfer their private placement warrants in certain limited circumstances, such as to the Company’s officers and directors, and other persons or entities associated with such persons, but the transferees receiving such private placement warrants will be subject to the same sale restrictions imposed on such entity.

F-12

Robert Eu, one of the Company’s founders, had provided to the Company advances totaling approximately $282,000 to pay a portion of the expenses of the Offering for the SEC registration fee, FINRA registration fee, and accounting and legal fees and expenses. The note was payable on demand with interest at 4% per annum. The note, plus interest of approximately $5,000, was repaid out of the proceeds of the Offering on March 12, 2008.

NOTE 5—FAIR VALUE MEASUREMENTS

The Company complies with Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The following tables present information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2009 and December 31, 2008, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability:

Fair Value of Financial Assets as of June 30, 2009

Description	June 30, 2009		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	30,271	$	30,271	$	—	$	—
Cash equivalents held in Trust Account		33,838,155		33,838,155		—		—

Total	$	33,868,426	$	33,868,426	$	—	$	—

Fair Value of Financial Assets as of December 31, 2008

Description	December 31, 2008		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	100,312	$	100,312	$	—	$	—
Cash equivalents held in Trust Account		33,798,651		33,798,651		—		—

Total	$	33,898,963	$	33,898,963	$	—	$	—

F-13

The fair values of the Company’s cash equivalents and cash and cash equivalents held on the Trust Account are determined through market, observable and corroborated sources.

NOTE 6— COMMITMENTS AND UNDERWRITERS’ COMPENSATION

The Company consummated the Offering on March 12, 2008 and paid to the underwriters a $1,120,000 underwriting fee, representing 3.5% of the gross proceeds, and is committed to pay up to an additional $1,120,000, currently held in the Trust Account, representing an additional deferred underwriting fee of 3.5%, payable upon the Company’s consummation of a Business Combination.

On March 31, 2008, the underwriters exercised their over-allotment option and purchased from the Company an additional 239,300 units. The Company paid to the underwriters a $67,004 underwriting discount, representing 3.5% of the over-allotment gross proceeds, and is committed to pay up to an additional $67,004, currently held in the Trust Account, representing an additional deferred underwriting discount of 3.5%, payable upon the Company’s consummation of a Business Combination.

The Company also issued and sold to the underwriters on the closing date an option, as an additional compensation to purchase up to an aggregate of 280,000 units for an aggregate purchase price of $100. The Option shall be exercisable, in whole or in part, commencing on the later of the consummation of a Business Combination or six months from March 7, 2008 and expiring on March 7, 2013 at an initial exercise price of $10.00 per Unit.

The Company has determined based upon a Black-Scholes- Merton option pricing model, that the estimated fair value of the option on the date of sale would be approximately $3.36 per unit or an aggregate of approximately $941,000, assuming an expected term of five years, estimated volatility of 51.51% and a risk-free interest rate of 3.38%. Given the parameters used in the computation of the value of the option change over time, the actual fair value of the option on the date of sale is expected to be different from the estimated fair value computed above.

The volatility calculation of 51.51% is based on the latest five year average prior to the Offering, volatility of 62 companies drawn from the Shanghai Stock Exchange Composite Index that had market capitalizations between $70 million and $150 million. Because the Company does not have a trading history, the Company estimated the potential volatility of its ordinary share price, which will depend on a number of factors which cannot be ascertained at this time. The Company used the annualized volatility of the historical volatilities for a period of time equal in length to the term of the option because the Company believes that the volatility of these companies is a reasonable benchmark to use in estimating the expected volatility for the Company’s ordinary share post-Business Combination. Although an expected life of five years was taken into account for purposes of assigning value to this option, if the Company does not consummate a Business Combination within the prescribed time period and liquidates, this option would become worthless.

Pursuant to Rule 2710(g)(1) of FINRA Conduct Rule, the option to purchase 280,000 units is deemed to be underwriting compensation and therefore upon exercise, the underlying ordinary shares and warrants are subject to a 180-day lock-up. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180-day period) following the date of the Offering.

NOTE 7 — GOING CONCERN

On September 4, 2009, the Company has issued a press release announcing that it has entered into a letter of intent with a company for a business combination. The target is a company with its principal business operations in the People’s Republic of China. Pursuant to the Company’s Amended and Restated Memorandum and Articles of Association, the execution of the letter of intent affords the Company a six-month extension for completion of a business combination, until March 12, 2010.

F-14

The consummation of the business combination is subject to, among other things, execution of a definitive agreement and required stockholder approval. There can be no assurance that a business combination will be consummated. However, if we anticipate that we will not be able to consummate a business combination by March 12, 2010, we may seek shareholder approval to extend the period of time to consummate a business combination until March 12, 2011. If we are unable to complete the business combination by March 12, 2010, or March 12, 2011 if extension period approved, our purposes and powers will be limited to dissolving, liquidating and winding up. Also contained in our articles of association is the requirement that our board of directors, to the fullest extent permitted by law, consider a resolution to dissolve our company at that time. Consistent with such obligations, our board of directors will seek shareholder approval for any such plan of distribution, and our pre-initial public offering shareholders and directors have agreed to vote in favor of such dissolution and liquidation. This provision will be amended only in connection with, and upon consummation of, its initial business combination by such date. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern and is required to liquidate.

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