Delaware
|
000-32341
|
84-1482082
|
(State
or Other Jurisdiction
|
(Commission
File
|
(I.R.S.
Employer
|
of
Incorporation)
|
Number)
|
Identification
Number)
|
Name
|
Location
|
Percentage
Revenues for the Year ended December 31, 2006
|
||
Quanta
Computer
|
Taiwan
based publicly traded company; original design manufacturer of
laptop
computers
|
39%
|
||
Hon
Hai
|
Taiwan
based publicly traded company;
manufacturing services provider to Computer, Communication and
Consumer-electronics leaders
|
21%
|
||
Universal
Scientific Industrial
|
US
based publicly traded company; Information and communications
products
|
10%
|
||
MiTac
|
Taiwan
based publicly traded company; Computer products design and
production
|
9%
|
Name
|
Patent
No
|
Country
|
Patent
Term
|
|||
Automatically
Labeling and Inspecting Apparatus and Method of Use
|
M277230
|
Taiwan
|
2005/10/1-20/15-1/30
|
|||
Automatically
Marking and Reading/Distinguishing Apparatus and Method of
Use
|
M277229
|
Taiwan
|
2005/10/1-20/15-1/30
|
Name
|
Number
|
Country
|
||
Automatically
Labeling and Inspecting Apparatus and Method of Use
|
200510052694.4
|
China
|
||
Automatically
Marking and Reading/Distinguishing Apparatus and Method of
Use
|
200510052693.X
|
China
|
||
Servo
Motor Conntrol Method and Apparatus Using the Same
|
2007-241297
|
Japan
|
||
Servo
Motor Conntrol Method and Apparatus Using the Same
|
096114150
|
Taiwan
|
||
Servo
Motor Conntrol Method and Apparatus Using the Same
|
200710107348.0
|
China
|
||
Automatically
Labeling and Inspecting Apparatus and Method of Use
|
11/248,218
|
U.S.A
|
||
Automatically
Marking and Reading/Distinguishing Apparatus and Method of
Use
|
11/248,212
|
U.S.A
|
Management
|
3
|
Technical
|
10
|
Administrative
|
4
|
Sales
|
3
|
1. |
Our
ability to attract and retain management, and to integrate and maintain
technical information and management
information
systems;
|
2. |
Our
ability to generate customer demand for our
services;
|
3. |
The
intensity of competition; and
|
4. |
General
economic conditions.
|
·
|
offer
buyers a sufficient supply of
merchandise;
|
·
|
develop
and implement effective sales and marketing
strategies;
|
·
|
comply
with regulatory or corporate seller requirements affecting marketing
and
disposition of certain categories of
merchandise;
|
·
|
efficiently
catalogue, handle, store, ship and track merchandise;
and
|
·
|
achieve
high levels of seller and buyer satisfaction with the trading
experience.
|
·
|
meet
our capital needs;
|
·
|
expand
our systems effectively or efficiently or in a timely manner;
|
·
|
allocate
our human resources optimally;
\
|
·
|
identify
and hire qualified employees or retain valued employees; or
|
·
|
incorporate
effectively the components of any business that we may acquire in
our
effort to achieve growth.
|
·
|
dilution
caused by our issuance of additional shares of common stock and other
forms of equity securities, which we expect to make in the Offering
and in
connection with future capital financings to fund our operations
and
growth, to attract and retain valuable personnel and in connection
with
future strategic partnerships with other
companies;
|
·
|
announcements
of new acquisitions, reserve discoveries or other business initiatives
by
our competitors;
|
·
|
our
ability to take advantage of new acquisitions, reserve discoveries
or
other business initiatives;
|
·
|
fluctuations
in revenue from our oil and gas business as new reserves come to
market;
|
·
|
changes
in the market for oil and natural gas commodities and/or in the capital
markets generally;
|
·
|
changes
in the demand for oil and natural gas, including changes resulting
from
the introduction or expansion of alternative fuels;
|
·
|
quarterly
variations in our revenues and operating
expenses;
|
·
|
changes
in the valuation of similarly situated companies, both in our industry
and
in other industries;
|
·
|
changes
in analysts’ estimates affecting our Company, our competitors and/or our
industry;
|
·
|
changes
in the accounting methods used in or otherwise affecting our
industry;
|
·
|
additions
and departures of key personnel;
|
·
|
announcements
of technological innovations or new products available to the oil
and gas
industry;
|
·
|
announcements
by relevant governments pertaining to incentives for alternative
energy
development programs;
|
·
|
fluctuations
in interest rates and the availability of capital in the capital
markets;
and
|
·
|
significant
sales of our common stock, including sales by the investors following
registration of the shares of common stock issued in this Offering
and/or
future investors in future offerings we expect to make to raise additional
capital.
|
Name
of Beneficial Owner
|
Common
Stock Beneficially Owned
|
Percentage
of
Common
Stock Beneficially Owned (1)
|
|||||
Sheng-Peir
Yang
|
55,347,485
|
61.3
|
%
|
||||
|
|||||||
Chi
Pi Yun
|
2,049,907
|
2.3
|
%
|
||||
|
|||||||
Li
Shen-Ren
|
4,099,814
|
4.5
|
%
|
||||
|
|||||||
All
officers and directors as a group (5 persons)
|
61,497,206
|
68.2
|
%
|
Name
|
Age
|
Position
|
||
Sheng-Peir
Yang
|
|
50
|
President
and Director
|
|
Chi
Pi Yun
|
36
|
Chief
Financial Officer
|
||
Li
Shen-Ren
|
44
|
Chief
Operating Officer
|
CONTENTS
|
||||
Page
|
||||
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-1
|
|||
FINANCIAL
STATEMENTS
|
||||
Combined
Balance Sheets
|
F-2
- F-3
|
|||
Combined
Statements of Income
|
F-4
|
|||
Combined
Statements of Changes in Shareholders' Equity and Comprehensive
Income
|
F-5
|
|||
Combined
Statements of Cash Flows
|
F-6
|
|||
Notes
to Combined Financial Statements
|
F-7
- F-17
|
CONTENTS
|
||||
Page
|
||||
Condensed
Combined Balance Sheets
|
F-18
-F-19
|
|||
Condensed
Combined Statements of Income
|
F-20
|
|||
Condensed
Combined Statements of Cash Flows
|
F-21
|
|||
Notes
to Combined Financial Statements
|
F-22-
F-26
|
|
2006
|
|
2005
|
||||
Assets
|
|||||||
Current
Assets
|
|||||||
Cash
and cash equivalents
|
$
|
9,124,178
|
$
|
8,102,156
|
|||
Accounts
receivable, net
|
1,795,676
|
5,733,419
|
|||||
Inventory,
net
|
941,986
|
1,381,460
|
|||||
Prepaid
and other current assets
|
93,213
|
141,079
|
|||||
Advances
to shareholders
|
-
|
62,798
|
|||||
Short-term
investments
|
80,487
|
77,735
|
|||||
Total
current assets
|
12,035,540
|
15,498,647
|
|||||
Leasehold
Improvements and Equipment, net
|
196,061
|
209,217
|
|||||
Intangible
assets, net
|
20,375
|
20,708
|
|||||
Deposits
|
11,601
|
11,506
|
|||||
Long-term
investments
|
1,902,166
|
1,344,465
|
|||||
Total
Assets
|
$
|
14,165,743
|
$
|
17,084,543
|
2006
|
|
2005
|
|||||
Liabilities
and Shareholders' Equity
|
|||||||
Current
Liabilities
|
|||||||
Accounts
payable
|
$
|
3,194,389
|
$
|
8,389,573
|
|||
Accrued
salaries and bonus
|
1,057,659
|
527,188
|
|||||
Accured
expenses
|
58,332
|
47,761
|
|||||
Customer
deposits
|
-
|
733
|
|||||
Advances
from shareholders
|
46,998
|
-
|
|||||
Total
current liabilities
|
4,357,378
|
8,965,255
|
|||||
Lont-term
notes payable
|
-
|
10,246
|
|||||
Commitments
and contingencies
|
|||||||
Shareholders'
Equity
|
|||||||
Capital
contribution
|
434,215
|
434,215
|
|||||
Subscription
receivable
|
(100,000
|
)
|
(100,000
|
)
|
|||
Other
comprehensive income
|
213,824
|
150,417
|
|||||
Retained
Earnings
|
9,260,326
|
7,624,410
|
|||||
Total
shareholders' equity
|
9,808,365
|
8,109,042
|
|||||
Total
Liabilities and Shareholders' Equity
|
$
|
14,165,743
|
$
|
17,084,543
|
2006
|
|
2005
|
|||||
Net
sales
|
$
|
13,782,980
|
$
|
17,309,701
|
|||
Cost
of sales
|
10,085,907
|
14,367,572
|
|||||
Gross
profit
|
3,697,073
|
2,942,129
|
|||||
Selling,
general and administrative expenses
|
2,378,892
|
1,848,955
|
|||||
Income
from operations
|
1,318,181
|
1,093,174
|
|||||
Other
income (expenses)
|
|||||||
Commission
income
|
24,175
|
181,025
|
|||||
Rental
income
|
332
|
337
|
|||||
Interest
expense
|
-
|
(3,512
|
)
|
||||
Interest
income
|
266,076
|
175,289
|
|||||
Loss
due to inventory value decline
|
(53,105
|
)
|
(194,463
|
)
|
|||
Gain
on foreign currency exchange
|
76,257
|
228,833
|
|||||
Gain
on investment
|
2,118
|
3,627
|
|||||
Miscellaneous
income (expenses)
|
1,881
|
(13,825
|
)
|
||||
Total
other income
|
317,736
|
377,310
|
|||||
Income
before provision for income taxes
|
1,635,916
|
1,470,485
|
|||||
Provision
for income taxes
|
-
|
-
|
|||||
Net
Income
|
$
|
1,635,916
|
$
|
1,470,485
|
Capital
|
|
Retained
|
|
Subscription
|
|
Comprehensive
|
|
|
|
|||||||
|
|
Contribution
|
|
Earning
|
|
Receivable
|
|
Income
(Loss)
|
|
Total
|
||||||
Balance
at January 1, 2005
|
$
|
384,215
|
$
|
6,153,925
|
$
|
(50,000
|
)
|
$
|
368,910
|
$
|
6,857,050
|
|||||
Capital
contribution
|
50,000
|
(50,000
|
)
|
-
|
||||||||||||
Translation
adjustment
|
(218,493
|
)
|
(218,493
|
)
|
||||||||||||
Net
income
|
-
|
1,470,485
|
-
|
1,470,485
|
||||||||||||
Balance
at December 31, 2005
|
434,215
|
7,624,410
|
(100,000
|
)
|
150,417
|
8,109,042
|
||||||||||
Translation
adjustment
|
63,407
|
63,407
|
||||||||||||||
Net
income
|
-
|
1,635,916
|
-
|
1,635,916
|
||||||||||||
Balance
at December 31, 2006
|
$
|
434,215
|
$
|
9,260,326
|
$
|
(100,000
|
)
|
$
|
213,824
|
$
|
9,808,365
|
2006
|
|
2005
|
|||||
Cash
flows from operating activities
|
|||||||
Net
income
|
$
|
1,635,916
|
$
|
1,470,485
|
|||
Adjustments
to reconcile net income to net cash provided by
|
|||||||
operating
activities:
|
|||||||
Amortization
and depreciation
|
15,407
|
31,245
|
|||||
Loss
due to inventory value decline
|
13,936
|
194,463
|
|||||
Foreign
currency exchange (gains)
|
(76,257
|
)
|
(228,833
|
)
|
|||
Changes
in assets and liabilities:
|
|||||||
(Increase)
Decrease in accounts receivable
|
3,992,622
|
(3,173,008
|
)
|
||||
(Increase)
Decrease in inventory
|
437,765
|
(310,293
|
)
|
||||
Decrease
in prepaid and other assets
|
49,121
|
130,726
|
|||||
Increase
(Decrease) in accounts payable
|
(5,274,379
|
)
|
4,972,462
|
||||
Increase
(Decrease) in accrued expenses
|
536,628
|
(436,829
|
)
|
||||
Increase
(Decrease) in other long-term liabilities
|
(10,350
|
)
|
10,492
|
||||
Net
cash provided by operating activities
|
1,320,409
|
2,660,910
|
|||||
Cash
flows from investing activities
|
|||||||
Acquisition
of equipment
|
-
|
(7,391
|
)
|
||||
Acquisition
of intangible assets
|
-
|
(21,332
|
)
|
||||
Purchases
of investments
|
(549,846
|
)
|
(41,271
|
)
|
|||
Net
cash (used in) investing activities
|
(549,846
|
)
|
(69,994
|
)
|
|||
Cash
flows from financing activities
|
|||||||
Loans
from (repayment to) related parties
|
110,528
|
(64,304
|
)
|
||||
Net
cash provided by (used in) financing activities
|
110,528
|
(64,304
|
)
|
||||
Effect
of exchange rate changes on cash and cash equivalents
|
140,931
|
15,066
|
|||||
Net
increase in cash and cash equivalents
|
1,022,022
|
2,541,677
|
|||||
Cash
and cash equivalents
|
|||||||
Beginning
|
8,102,156
|
5,560,479
|
|||||
Ending
|
$
|
9,124,178
|
$
|
8,102,156
|
|||
Supplemental
disclosure of cash flows
|
|||||||
Cash
paid during the year for:
|
|||||||
Interest
expense
|
$
|
-
|
$
|
3,512
|
|||
Income
tax
|
$
|
-
|
$
|
-
|
|||
Supplemental
disclosure of noncash financing activity
|
|||||||
Subscription
receivable from issuance of stocks
|
$
|
-
|
$
|
50,000
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
Automobile
|
5
years
|
Furniture
and fixtures
|
3
years
|
Machinery
and equipment
|
3
to 5 years
|
Leasehold
improvements
|
55
years
|
1.
|
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
1.
|
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2. |
PROPERTY
AND EQUIPMENT
|
2006
|
|
2005
|
|||||
Automobiles
|
$
|
29,156
|
$
|
28,918
|
|||
Building
and fixtures
|
147,890
|
146,685
|
|||||
Machinery
and equipment
|
49,709
|
49,304
|
|||||
Leashold
improvements
|
3,560
|
3,530
|
|||||
Land
|
78,506
|
77,867
|
|||||
308,821
|
306,304
|
||||||
Less:
accumulated depreciation
|
(112,760
|
)
|
(97,088
|
)
|
|||
Property
and equipment, net
|
$
|
196,061
|
$
|
209,217
|
3. |
OTHER
INTANGIBLE ASSETS
|
Gross
Carrying Value
|
|
Accumulated
Amortization
|
|||||
Patents
|
$
|
21,004
|
$ | 629 |
2007
|
$
|
504
|
||
2008
|
$
|
504
|
||
2009
|
$
|
504
|
||
2010
|
$
|
504
|
||
2011
|
$
|
504
|
4. |
INCOME
TAXES
|
|
|
2006
|
|
|
2005
|
|
Current
provision:
|
|
|
|
|
|
|
Computed
(provision for) income taxes
|
|
|
|
|
|
|
at statutory rates in BVI
|
$
|
-
|
|
$
|
-
|
|
Computed
(provision for) income taxes
|
|
|
|
|
||
at statutory rates in Taiwan
|
|
-
|
|
|
-
|
|
Total
current provision
|
|
-
|
|
|
-
|
|
Deferred
provision:
|
|
-
|
|
|
-
|
|
BVI
|
|
-
|
|
|
-
|
|
Taiwan
|
-
|
|
||||
Valuation
allowance
|
|
-
|
|
|
-
|
|
Total
deferred provision
|
|
-
|
|
|
-
|
|
Provision
for income taxes
|
$
|
-
|
|
$
|
-
|
|
5. |
RELATED-PARTY
TRANSACTIONS
|
2007
|
$
|
26,000
|
||
Total
|
$
|
26,000
|
6. |
COMPENSATED
ABSENCES
|
7. |
OTHER
COMPREHENSIVE INCOME
|
Foreign
Currency
|
|
Accumulated
Other
|
|
||||
|
|
Translation
Adjustment
|
|
Comprehensive
Income
|
|||
Balance
at January 1, 2005
|
$
|
368,910
|
$
|
368,910
|
|||
Change
for 2005
|
(218,493
|
)
|
$
|
(218,493
|
)
|
||
Balance
at December 31, 2005
|
150,417
|
150,417
|
|||||
Change
for 2006
|
63,407
|
63,407
|
|||||
Balance
at December 31, 2006
|
$
|
213,824
|
$
|
213,824
|
8. |
PENSION
PLAN
|
9. |
COMMITMENTS
|
September
30,
|
December
31,
|
||||||
Assets
|
2007
|
2006
|
|||||
Current
Assets
|
|||||||
Cash
and cash equivalents
|
$
|
5,673,891
|
$
|
9,124,178
|
|||
Accounts
receivable, net
|
3,234,455
|
1,795,676
|
|||||
Inventory,
net
|
644,055
|
941,986
|
|||||
Prepaid
and other current assets
|
130,676
|
93,213
|
|||||
Due
from shareholders
|
4,611,325
|
-
|
|||||
Short-term
investments
|
-
|
80,487
|
|||||
Total
current assets
|
14,294,402
|
12,035,540
|
|||||
Leasehold
Improvements and Equipment, net
|
13,543
|
196,061
|
|||||
Intangible
assets, net
|
23,177
|
20,375
|
|||||
Deposits
|
3,676
|
11,601
|
|||||
Long-term
investments
|
1,600,435
|
1,902,166
|
|||||
Total
Assets
|
$
|
15,935,233
|
$
|
14,165,743
|
September
30,
|
December
31,
|
||||||
Liabilities
and Shareholders' Equity
|
2007
|
2006
|
|||||
Current
Liabilities
|
|||||||
Accounts
payable
|
$
|
4,428,871
|
$
|
3,194,389
|
|||
Accrued
salaries and bonus
|
39,490
|
1,057,659
|
|||||
Accured
expenses
|
76,064
|
58,332
|
|||||
Advances
from shareholders
|
-
|
46,998
|
|||||
Total
current liabilities
|
4,544,425
|
4,357,378
|
|||||
Shareholders'
Equity
|
|||||||
Capital
contribution
|
100,000
|
434,215
|
|||||
Subscription
receivable
|
-
|
(100,000
|
)
|
||||
Other
comprehensive income
|
239,094
|
213,824
|
|||||
Retained
earnings
|
11,051,714
|
9,260,326
|
|||||
Total
shareholders' equity
|
11,390,808
|
9,808,365
|
|||||
Total
Liabilities and Shareholders' Equity
|
$
|
15,935,233
|
$
|
14,165,743
|
Nine
Months Ended
|
Three
Months Ended
|
||||||||||||
September
30, 2007
|
September
30, 2006
|
September
30, 2007
|
September
30, 2006
|
||||||||||
Net
sales
|
$
|
7,820,401
|
12,837,880
|
$
|
2,907,249
|
$
|
3,148,646
|
||||||
Cost
of sales
|
5,161,989
|
9,226,621
|
1,897,694
|
1,954,056
|
|||||||||
Gross
Profit
|
2,658,412
|
3,611,259
|
1,009,555
|
1,194,590
|
|||||||||
Selling,
general and
|
|||||||||||||
administrative
expenses
|
1,330,919
|
1,026,940
|
468,093
|
310,603
|
|||||||||
Income
from operations
|
1,327,493
|
2,584,319
|
541,462
|
883,987
|
|||||||||
Other
income
|
|||||||||||||
Interest
income
|
139,044
|
150,786
|
23,476
|
48,274
|
|||||||||
Gain
(loss) on foreign
|
|||||||||||||
currency
exchange
|
(111,706
|
)
|
191,183
|
(132,520
|
)
|
39,713
|
|||||||
Gain
on investment
|
57,179
|
33,384
|
18,756
|
14,811
|
|||||||||
Loss
on sale of property
|
-
|
-
|
2,527
|
-
|
|||||||||
Income
from lawsuit settlement
|
376,398
|
-
|
376,398
|
-
|
|||||||||
Miscellaneous
income
|
2,980
|
10,992
|
125
|
8,232
|
|||||||||
Total
other income
|
463,895
|
386,345
|
288,762
|
111,030
|
|||||||||
Income
before provision
|
|||||||||||||
for
income taxes
|
1,791,388
|
2,970,664
|
830,224
|
995,017
|
|||||||||
Provision
for income taxes
|
-
|
-
|
-
|
-
|
|||||||||
Net
Income
|
$
|
1,791,388
|
$
|
2,970,664
|
$
|
830,224
|
$
|
995,017
|
September
30, 2007
|
September
30, 2006
|
||||||
Cash
flows from operating activities
|
|||||||
Net
income
|
$
|
1,791,388
|
$
|
2,970,664
|
|||
Adjustments
to reconcile net income to net cash provided by
|
|||||||
operating
activities:
|
|||||||
Amortization
and depreciation
|
9,974
|
11,806
|
|||||
Loss
on sale of property
|
2,527
|
-
|
|||||
Foreign
currency exchange loss (gains)
|
111,706
|
(191,183
|
)
|
||||
Changes
in assets and liabilities:
|
|||||||
(Increase)
Decrease in accounts receivable
|
(1,427,222
|
)
|
284,538
|
||||
Decrease
in inventory
|
292,997
|
409,177
|
|||||
(Increase)
Decrease in prepaid and other assets
|
(29,432
|
)
|
50,565
|
||||
Increase
(Decrease) in accounts payable
|
1,227,765
|
(1,998,125
|
)
|
||||
(Decrease)
in accrued expenses
|
(987,826
|
)
|
(531,221
|
)
|
|||
Increase
in other long-term liabilities
|
-
|
3,722
|
|||||
Net
cash provided by operating activities
|
991,877
|
1,009,943
|
|||||
Cash
flows from investing activities
|
|||||||
Capital
contribution
|
96,598
|
(65,167
|
)
|
||||
Redemption
(purchase) of investments
|
374,390
|
-
|
|||||
Purchase
of equipment
|
(10,883
|
)
|
-
|
||||
Proceeds
received from disposition of equipment
|
115,026
|
-
|
|||||
Investments
in subsidiaries
|
(303,100
|
)
|
-
|
||||
Purchases
of investments
|
-
|
-
|
|||||
Net
cash provided by (used in) investing activities
|
272,031
|
(65,167
|
)
|
||||
Cash
flows from financing activities
|
|||||||
Loans
from (repayment to) related parties
|
(4,609,566
|
)
|
178,571
|
||||
Net
cash provided by (used in) financing activities
|
(4,609,566
|
)
|
178,571
|
||||
Effect
of exchange rate changes on cash and cash equivalents
|
(104,629
|
)
|
108,451
|
||||
Net
increase (decrease) in cash and cash equivalents
|
(3,450,287
|
)
|
1,231,798
|
||||
Cash
and cash equivalents
|
|||||||
Beginning
|
9,124,178
|
8,102,156
|
|||||
Ending
|
$
|
5,673,891
|
$
|
9,333,954
|
|||
Supplemental
disclosure of cash flows
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
expense
|
$
|
-
|
$
|
-
|
|||
Income
tax
|
$
|
-
|
$
|
-
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
1. |
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2. |
RELATED-PARTY
TRANSACTIONS
|
For
the twelve months ended
|
||||
September
30, 2008
|
$
|
6,600
|
||
Total
|
$
|
6,600
|
3. |
OTHER
COMPREHENSIVE INCOME
|
Foreign
Currency
|
Accumulated
Other
|
||||||
Translation
Adjustment
|
Comprehensive
Income
|
||||||
Balance
at January 1, 2006
|
$
|
150,417
|
$
|
150,417
|
|||
Change
for 2006
|
63,407
|
$
|
63,407
|
||||
Balance
at December 31, 2006
|
213,824
|
213,824
|
|||||
Change
for 2007
|
75,270
|
75,270
|
|||||
Balance
at September 30, 2007
|
$
|
289,094
|
$
|
289,094
|
4. |
SUBSEQUENT
EVENT
|
Exhibit
Number
|
|
Description
|
2.1
|
|
Share
Exchange Agreement dated February 5, 2008, between the Company and
the
parties set forth on the signature page
thereof.
|
Soyodo
Group Holdings, Inc.
|
||
|
|
|
By: | / s/ Sheng-Peir Yang | |
Chief Executive Officer |
(ii)
|
Complete
and correct copies of the Company’s certificate of incorporation and
by-laws are available for review on the EDGAR system maintained by
the
U.S. Securities and Exchange Commission (the
“Commission”).
|
(iii)
|
The
Company has full power and authority to carry out the transactions
provided for in this Agreement, and this Agreement constitutes the
legal,
valid and binding obligations of the Company, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency and other laws of general application affecting the enforcement
of creditor’s rights and except that any remedies in the nature of
equitable relief are in the discretion of the court. All necessary
action
required to be taken by the Company for the consummation of the
transactions contemplated by this Agreement has been
taken.
|
(iv)
|
The
execution and performance of this Agreement will not constitute a
breach
of any agreement, indenture, mortgage, license or other instrument
or
document to which the Company is a party or by which its assets and
properties are bound, and will not violate any judgment, decree,
order,
writ, rule, statute, or regulation applicable to the Company or its
properties. The execution and performance of this Agreement will
not
violate or conflict with any provision of the certificate of incorporation
or by-laws of the Company.
|
(v)
|
The
Shares, when issued pursuant to this Agreement, will be duly and
validly
authorized and issued, fully paid and non-assessable. The issuance
of the
Shares to Shareholders is exempt from the registration requirements
of the
Securities Act of 1933, as amended (the “Securities Act”), pursuant to an
exemption provided by Section 4(2) and Rule 506 promulgated thereunder
or
under Regulation S.
|
(vi)
|
The
authorized capital stock of the Company consists of 120,000,000 shares
of
Common Stock, of which 8,195,000 shares are presently outstanding.
Except
as provided in, contemplated by, or set forth in this Agreement or
the
Company SEC Documents (as defined below), the Company has no outstanding
or authorized warrants, options, other rights to purchase or otherwise
acquire capital stock or any other securities of the Company, preemptive
rights, rights of first refusal, registration rights or related
commitments of any nature. All issued and outstanding shares were
either
(i) registered under the Securities Act, or (ii) issued pursuant
to valid
exemptions from registration thereunder.
|
(vii)
|
No
consent, approval or agreement of any person, party, court, governmental
authority, or entity is required to be obtained by the Company in
connection with the execution and performance by the Company of this
Agreement or the execution and performance by the Company of any
agreements, instruments or other obligations entered into in connection
with this Agreement.
|
(i)
|
The
Company is registered pursuant to Section 12 of the Exchange Act
and it is
current with its reporting obligations under the Securities Exchange
Act
of 1934, as amended (the “Exchange Act”). None of the Company’s filings
made pursuant to the Exchange Act (collectively, the “Company SEC
Documents”) contains any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make
the statements therein, in light of the circumstances under which
they
were made, not misleading. The Company SEC Documents, as of their
respective dates, complied in all material respects with the requirements
of the Exchange Act, and the rules and regulations of the Commission
thereunder, and are available on the Commission’s EDGAR
system.
|
(ii)
|
The
Company SEC Documents include the Company’s
audited
consolidated financial statements for the fiscal years ended December
31,
2006 and 2005 (collectively, the “Audited Financial Statements”) and
unaudited financial statements for the nine months ended September
30,
2007 and 2006 (collectively, the “Interim Financial Statements,” and,
together with the Audited Financial Statements, the “Financial
Statements”), including, in each case, a balance sheet and the related
statements of income, stockholders’ equity and cash flows for the period
then ended, together with the related notes. The Audited Financial
Statements have been certified by Tom Jaspers, CPA (“Tom Jaspers”), and
the Interim Financial Statements have been reviewed by Jaspers+Hall,
PC
(“Jaspers”). The Financial Statements are in accordance with all books,
records and accounts of the Company, are true, correct and complete
and
have been prepared in accordance with GAAP, consistently applied.
Jaspers
is independent as to the Company under the rules of the Commission
pursuant to the Securities Act and is registered with the PCAOB.
The
Financial Statements present fairly the financial position of the
Company
at the respective balance sheet dates, and fairly present the results
of
the Company’s operations, changes in stockholders’ equity and cash flows
for the periods covered.
|
(iii)
|
At
the close of business on September 30, 2007, the Company did not
have any
material liabilities, absolute or contingent, of the type required
to be
reflected on balance sheets prepared in accordance with GAAP which
are not
fully reflected, reserved against or disclosed on the September 30,
2007
balance sheet. The Company has not guaranteed or assumed or incurred
any
obligation with respect to any debt or obligations of any Person,
except
endorsements made in the ordinary course of business in connection
with
the deposit of items for collection. The Company does not have any
debts,
contracts, guaranty, standby, indemnity or hold harmless commitments,
liabilities or obligations of any kind, character or description,
whether
accrued, absolute, contingent or otherwise, or due or to become due
except
to the extent set forth or noted in the Financial Statements, and
not
heretofore paid or discharged.
|
(i)
|
any
change in the consolidated assets, liabilities, or financial condition
of
the Company, except changes in the ordinary course of business which
do
not and will not have a material adverse effect on the
Company;
|
(ii)
|
any
damage, destruction, or loss, whether or not covered by insurance,
materially and adversely affecting the assets or financial condition of
the Company (as conducted and as proposed to be
conducted);
|
(iii)
|
any
change or amendment to a material contract, charter document or
arrangement not in the ordinary course of business to which the Company
is
a party other than contracts which are to be terminated at or prior
to the
Closing;
|
(iv)
|
any
loans made by the Company to any of affiliate of the Company or any
of the
Company’s employees, officers, directors, shareholders or any of its
affiliates;
|
(v)
|
any
declaration or payment of any dividend or other distribution or any
redemption of any capital stock of the
Company;
|
(vi)
|
any
sale, transfer, or lease of any of the Company’s assets other than in the
ordinary course of business;
|
(vii)
|
any
other event or condition of any character which might have a material
adverse effect on the Company;
|
(viii)
|
any
satisfaction or discharge of any lien, claim or encumbrance or payment
of
any obligation by Company except in the ordinary course of business
and
that is not material to the assets or financial condition of the
Company;
or
|
(ix)
|
any
agreement or commitment by the Company to do any of the things described
in this Section 2(c).
|
(i)
|
Omphalos
is a corporation duly organized, validly existing and in good standing
under the laws of the British Virgin Islands.
|
(ii)
|
Omphalos
has full power and authority to carry out the transactions provided
for in
this Agreement, and this Agreement constitutes the legal, valid and
binding obligations of Omphalos, enforceable in accordance with its
terms,
except as enforceability may be limited by bankruptcy, insolvency
and
other laws of general application affecting the enforcement of creditor’s
rights and except that any remedies in the nature of equitable relief
are
in the discretion of the court. All necessary action required to
be taken
by Omphalos for the consummation of the transactions contemplated
by this
Agreement has been taken.
|
(iii)
|
The
execution and performance of this Agreement will not constitute a
breach
of any agreement, indenture, mortgage, license or other instrument
or
document to which Omphalos is a party or by which its assets and
properties are bound, and will not violate any judgment, decree,
order,
writ, rule, statute, or regulation applicable to Omphalos or its
properties. The execution and performance of this Agreement will
not
violate or conflict with any provision of the certificate of incorporation
or by-laws of Omphalos.
|
(iv)
|
The
authorized and issued and outstanding capital stock of Omphalos are
as set
forth on Schedule 3(a)(iv) under the column "Omphalos Number of Shares."
Except as provided in, contemplated by, or set forth in this Agreement,
Omphalos has no outstanding or authorized warrants, options, other
rights
to purchase or otherwise acquire capital stock or any other Ompahalos
securities, preemptive rights, rights of first refusal, registration
rights or related commitments of any nature.
|
(v)
|
No
consent, approval or agreement of any person, party, court, governmental
authority, or entity is required to be obtained by Omphalos in connection
with the execution and performance by Omphalos of this Agreement
or the
execution and performance by Omphalos of any agreements, instruments
or
other obligations entered into in connection with this
Agreement.
|
(i)
|
any
change in the consolidated assets, liabilities, or financial condition
of
Omphalos, except changes in the ordinary course of business which
do not
and will not have a material adverse effect on
Omphalos;
|
(ii)
|
any
damage, destruction, or loss, whether or not covered by insurance,
materially and adversely affecting the assets or financial condition
of
Omphalos (as conducted and as proposed to be
conducted);
|
(iii)
|
any
change or amendment to a material contract, charter document or
arrangement not in the ordinary course of business to which Omphalos
is a
party other than contracts which are to be terminated at or prior
to the
Closing;
|
(iv)
|
any
loans made by Omphalos to any of affiliate of Omphalos or any of
Omphalos’s employees, officers, directors, shareholders or any of its
affiliates;
|
(v)
|
any
declaration or payment of any dividend or other distribution or any
redemption of any capital stock of
Omphalos;
|
(vi)
|
any
sale, transfer, or lease of any of Omphalos’s assets other than in the
ordinary course of business;
|
(vii)
|
any
other event or condition of any character which might have a material
adverse effect on Omphalos;
|
(viii)
|
any
satisfaction or discharge of any lien, claim or encumbrance or payment
of
any obligation by Omphalos except in the ordinary course of business
and
that is not material to the assets or financial condition of Omphalos;
or
|
(ix)
|
any
agreement or commitment by Omphalos to do any of the things described
in
this Section 3(b)).
|