UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 2010 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to ____________

FORM 10-Q

(Mark One)

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

For the quarterly period ended: March 31, 2011

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

For the transition period from ____________to _____________

Commission File Number: 000-52251

8888 ACQUISITION CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

Nevada	59-2340247
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

Qingyanglianyu Industrial Area
Jinjiang City, Fujian Province 362200
People’s Republic of China
(Address of principal executive offices, Zip Code)

(86) 0595-82889862
(Registrant’s telephone number, including area code)

~~__________________________________________________________________~~ _____________________________________________________(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] (Do not check if a smaller reporting company) 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 [ ] No [ X ]

The number of shares outstanding of each of the issuer’s classes of common stock, as of ~~February~~May 1110, 2011 is as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.0001 par value	33,966,667

8888 ACQUISITION CORPORATION
Quarterly Report on Form 10-Q
Three and Six Months Ended December 31, 2010
Three and Nine Months Ended March 31, 2011
TABLE OF CONTENTS
PART I	FINANCIAL INFORMATION	1
FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS.	1
Item 1.	Financial Statements	1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	29
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
ITEM 4.	CONTROLS AND PROCEDURES.	40
Item 4.	Controls and Procedures	41
PART II	OTHER INFORMATION	41
PART II
ITEM 1.	LEGAL PROCEEDINGS.	41
OTHER INFORMATION
ITEM 1A.	RISK FACTORS.	41
Item 1.	Legal Proceedings	41
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	41
Item 1A.	Risk Factors	41
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
ITEM 4.	(REMOVED AND RESERVED).	41
Item 3.	Defaults Upon Senior Securities	42
ITEM 5.	OTHER INFORMATION.	41
Item 4.	(Removed and Reserved)	42
ITEM 6.	EXHIBITS.	41
Item 5.	Other Information	42
Item 6.	Exhibits	42

PART I FINANCIAL INFORMATION ~~ITEM 1. FINANCIAL STATEMENTS.~~

8888 Acquisition Corporation
Contents	Pages
Report of Independent Registered Public Accounting Firm	2
Consolidated Balance Sheets	3 – 4
Consolidated Statements of Income	5
Consolidated Statements of Cash Flows	6
Consolidated Statements of Stockholders’ Equity	7
Notes to Financial Statements	8 – 30

ITEM 1. FINANCIAL STATEMENTS.

18888 Acquisition Corporation Consolidated Financial statements March 31, 2011 and June 30, 2010

~~REPORT~~(Stated OFin ~~REGISTERED~~US ~~INDEPENDENT PUBLIC ACCOUNTING FIRM~~ Dollars)

~~To: The Board of Directors and Stockholders of 8888 Acquisition Corporation~~ii

We have reviewed the accompanying interim consolidated Balance Sheets of 8888 Acquisition Corporation (“the Company”) as of December 31, 2010 and June 30, 2010, and the related statements of income, stockholders’ equity, and cash flows for the three months and six months periods ended December 31, 2010 and 2009. These interim consolidated financial statements are the responsibility of the Company's management.

8888 Acquisition Corporation

Contents	Pages

Report of Independent Registered Public Accounting Firm	1
Consolidated Balance Sheets	2 – 3
Consolidated Statements of Income	4
Consolidated Statements of Cash Flows	5
Consolidated Statements of Stockholders’ Equity	6
Notes to Consolidated Financial Statements	7 – 28

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. iii

~~Based~~REPORT onOF ~~our~~REGISTERED ~~review,~~INDEPENDENT wePUBLIC ~~are~~ACCOUNTING not aware of any material modifications that should be made to the accompanying interim consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles. FIRM

San Mateo, California	Samuel H. Wong & Co., LLP
February 3, 2011	Certified Public Accountants

To:	The Board of Directors and Stockholders of
	8888 Acquisition Corporation

2We have reviewed the accompanying interim consolidated Balance Sheets of 8888 Acquisition Corporation (“the Company”) as of March 31, 2011 and June 30, 2010, and the related statements of income, stockholders’ equity, and cash flows for the three months and nine months periods ended March 31, 2011 and 2010. These interim consolidated financial statements are the responsibility of the Company's management.

~~8888~~We ~~Acquisition~~conducted ~~Corporation~~our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim ~~Unaudited~~financial ~~Consolidated~~information ~~Balance~~consists ~~Sheets~~principally of applying analytical procedures and Asmaking inquiries of ~~December~~persons ~~31,~~responsible ~~2010~~for financial and ~~June~~accounting 30matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, ~~2010~~the objective of which is the expression of an opinion regarding the financial statements taken ~~(Stated~~as ina USwhole. ~~Dollars)~~Accordingly, we do not express such an opinion.

	Note		December 31, 2010		June 30, 2010
Assets			[unaudited]		[audited]
Current assets
Cash and cash equivalents	2D	$	14,404,961	$	6,513,199
Restricted cash	3		476,421		517,728
Accounts receivable, net	2E, 4		17,351,744		11,656,785
Inventory	2F, 5		287,703		196,958
Prepaid expenses and taxes			32,064		1,762
Total current assets			32,552,893		18,886,432
Non-current assets
Plant and equipment, net	2G, 6		5,608,575		5,671,102
Intangible assets, net	2H, 7		3,192,624		3,246,985
Deposits			36,044		42,780
Total non-current assets			8,837,243		8,960,867
Total Assets		$	41,390,136	$	27,847,299
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities
Bank loans	8	$	2,931,123	$	2,787,651
Notes payable	9		476,421		1,725,759
Accounts payable and accruals	10		7,965,362		5,055,751
Taxes payable	11		1,459,725		1,333,397
Total current liabilities			12,832,631		10,902,558
Total Liabilities		$	12,832,631	$	10,902,558

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.

See Accompanying Notes to the Financial Statements.

San Mateo, California	Samuel H. Wong & Co., LLP
May 3, 2011	Certified Public Accountants

8888 Acquisition ~~Corporation Unaudited~~CorporationConsolidated ~~Consolidated~~ Balance Sheets As of ~~December~~March 31, ~~2010~~2011 and June 30, 2010 (Stated in US Dollars)

	Note		December 31, 2010		June 30, 2010
			March 31,		June 30,
Stockholders’ Equity
	Note		2011		2010
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 0 share issued and outstanding as of December 31, 2010 and June 30, 2010 respectively		$	-	$	-
Assets			[unaudited]		[audited]
Common stock, $0.0001 par value, 100,000,000 shares authorized; 33,966,667 and 31,419,167 shares issued and outstanding as of December 31, 2010 and June 30, 2009 respectively			3,397		3,142
Current assets
Additional paid-in capital	18		5,197,929		1,279,740
Cash and cash equivalents	2D	$	17,752,590	$	6,513,199
Statutory reserves	2P, 17		750,389		750,389
Restricted cash	3		-		517,728
Retained earnings			21,690,515		14,535,006
Accounts receivable, net	2E, 4		14,878,630		11,656,785
Accumulated other comprehensive income			915,275		376,464
Inventory	2F, 5		318,993		196,958
Total stockholders’ equity			28,557,505		16,944,741
Advance to Suppliers			443,448		-
Total Liabilities and Stockholders’ Equity		$	41,390,136	$	27,847,299
Prepaid expenses and taxes			7,308		1,762
Total current assets			33,400,969		18,886,432
Non-current assets
Plant and equipment, net	2G, 6		5,317,040		5,671,102
Intangible assets, net	2H, 7		3,169,260		3,246,985
Deposits			336,652		42,780
Total non-current assets			8,822,952		8,960,867
Total Assets		$	42,223,921	$	27,847,299
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities
Bank loans	8	$	3,713,794	$	2,787,651
Notes payable	9		-		1,725,759
Accounts payable and accruals	10		5,917,984		5,055,751
Taxes payable	11		1,332,509		1,333,397
Related party payable	12		119,989
Total current liabilities			11,084,276		10,902,558
Total Liabilities		$	11,084,276	$	10,902,558

See Accompanying Notes to the Consolidated Financial Statements. and Accountant’s Report

4 2

8888 Acquisition Corporation Unaudited Consolidated Statements of Income For the three months and six months ended December 31, 2010 and 2009 (Stated in US Dollars)

8888 Acquisition Corporation
Consolidated Balance Sheets
As of March 31, 2011 and June 30, 2010
(Stated in US Dollars)
			March 31,		June 30,
	Note		2011		2010
Stockholders’ Equity			[unaudited]		[audited]
Preferred stock, $0.0001 par value, 50,000,000
shares authorized; 0 share issued and
outstanding as of March 31, 2011 and June 30,
2010 respectively		$	-	$	-
Common stock, $0.0001 par value, 100,000,000
shares authorized; 33,966,667 and 31,419,167
shares issued and outstanding as of March 31,
2011 and June 30, 2010 respectively			3,397		3,142
Additional paid-in capital	19		5,197,929		1,279,740
Statutory reserves	2P, 16(C)		750,389		750,389
Retained earnings			24,129,876		14,535,006
Accumulated other comprehensive income			1,058,054		376,464
Total stockholders’ equity			31,139,645		16,944,741
Total Liabilities and Stockholders’ Equity		$	42,223,921	$	27,847,299

	Note		Three months ended December 31						Six months ended December 31
			2010			2009			2010			2009
Revenue	2R	$	12,421,991		$	5,868,661		$	26,232,749		$	12,698,010
Cost of revenue	2S		7,423,404			3,663,723			15,694,399			7,758,681
Gross profit			4,998,587			2,204,938			10,538,350			4,939,329
Selling expenses			168,242			33,440			220,182			75,867
General and administrative expenses			330,092			110,605			557,841			201,430
Total operating expenses			498,334			144,045			778,023			277,297
Operating income			4,500,253			2,060,893			9,760,327			4,662,032
Other income			-			982			-			982
Other expense			(77,850	)		-			(85,224	)		-
Interest income			9,261			1,714			15,473			-
Interest expense			(61,133	)		(61,542	)		(107,795	)		(113,476	)
Total other income/(expenses)			(129,722	)		(58,846	)		(177,546	)		(112,494	)
Pre-tax income			4,370,531			2,002,047			9,582,781			4,549,538
Provisions for income tax	2O, 12		1,116,252			500,517			2,427,272			1,137,390
Net income (loss)		$	3,254,279		$	1,501,530		$	7,155,509		$	3,412,148
Earnings per share	2T, 19
- Basic		$	0.10		$	0.05		$	0.22		$	0.11
- Diluted		$	0.10		$	0.05		$	0.22		$	0.11
Weighted average shares outstanding
- Basic			33,485,473			31,419,167			32,452,320			31,419,167
- Diluted			33,485,473			31,419,167			32,452,320			31,419,167

See Accompanying Notes to the Consolidated Financial Statements and Accountant’s Report

~~See Accompanying Notes to the Financial Statements.~~ 3

58888 Acquisition Corporation Consolidated Statements of Income For the three months and nine months ended March 31, 2011 and 2010 (Stated in US Dollars)

8888 Acquisition Corporation Unaudited Consolidated Statements of Cash Flows For the three months and six months ended December 31, 2010 and 2009 (Stated in US Dollars)

			Three Months Ended						Nine Months Ended
			March 31,			March 31,			March 31,			March 31,
	Note		2011			2010			2011			2010
Revenue	2R	$	10,432,547		$	4,170,644		$	36,665,296		$	16,728,146
Cost of revenue	2S		6,536,831			2,732,827			22,231,230			10,351,000
Gross profit			3,895,716			1,437,817			14,434,066			6,377,146
Selling expenses			65,828			26,891			286,010			102,758
General and administrative expenses			340,560			164,222			898,401			365,653
Total operating expenses			406,388			191,113			1,184,411			468,411
Operating income			3,489,328			1,246,704			13,249,655			5,908,735
Other income			-			7,853			-			8,835
Other expense			(159,979	)		-			(245,203	)		-
Interest income			16,660			-			32,133			-
Interest expense			(41,308	)		(37,421	)		(149,103	)		(150,898	)
Total other income/(expenses)			(184,627	)		(29,568	)		(362,173	)		(142,063	)
Pre-tax income			3,304,701			1,217,136			12,887,482			5,766,672
Provisions for income tax	2O, 13		865,340			302,450			3,292,612			1,439,840
Net income (loss)		$	2,439,361		$	914,686		$	9,594,870		$	4,326,832
Earnings per share	2T, 20
- Basic		$	0.07		$	0.03		$	0.29		$	0.14
- Diluted		$	0.07		$	0.03		$	0.29		$	0.14
Weighted average shares outstanding
- Basic			33,966,667			31,419,167			32,947,667			31,419,167
- Diluted			33,966,667			31,419,167			32,947,667			31,419,167

		Three months ended December 31						Six months ended December 31
		2010			2009			2010			2009
Net Income/(loss)	$	3,254,279		$	1,501,530		$	7,155,509		$	3,412,148
Adjustments to reconcile net income to net cash from operations:
Amortization		34,815			19,981			54,361			39,664
Depreciation		420,722			306,647			833,803			611,130
Loss on disposal of fixed asset		69,011			-			69,011			-
Provision for bad debt		28,618			-			28,618			-
Changes in operating assets and liabilities:
(Increase)/decrease in restricted cash		(227,843	)		(243,521	)		41,307			6,582
(Increase)/decrease in accounts and other receivables		850,175			2,217,767			(5,753,826	)		(795,986	)
(Increase)/decrease in inventories		(122,854	)		105,203			(90,745	)		607,552
(Increase)/decrease in prepaid expenses		5,351			5,265			(53	)		176
Increase/(decrease) in accounts payables and accruals		246,408			270,834			2,909,611			986,757
Increase/(decrease) in taxes payables		(281,302	)		(133,435	)		126,328			(99,120	)
Net cash provided by operating activities		4,277,380			4,050,271			5,373,924			4,768,903
Cash flows from investing activities
Proceeds from disposal of fixed assets		24,199			-			24,199			-
Decrease of deposits		3,489			-			6,736			-
Payments for land use rights		-			-			-			-
Payments for purchases of plant and equipment		(512,641	)		(77,905	)		(864,486	)		(109,973	)
Net cash used in investing activities		(484,953	)		(77,905	)		(833,551	)		(109,973	)
Cash flows from financing activities
Proceeds from Issuance of Common Stock		3,918,444			-			3,918,444			-
Proceeds from notes		1,343,665			506,065			4,195,220			3,299,443
Repayments of notes		(1,977,732	)		(505,860	)		(4,051,748	)		(3,299,443	)
Proceeds from bank loans		-			491,143			1,754,229			2,209,582
Repayments of bank loans		(352,172	)		(491,095	)		(3,003,567	)		(2,231,521	)
Repayment of loan to related party		-			(1,462,501	)		-			(2,998,303	)
Net cash provided by (used in) financing activities		2,932,205			(1,462,248	)		2,812,578			(3,020,242	)
Net Increase of cash and cash equivalents		6,724,632			2,510,118			7,352,951			1,638,688
Effect of foreign currency translation on cash		264,927			291			538,812			682
Cash and cash equivalents at beginning of year		7,415,402			2,089,117			6,513,198			2,960,156
Cash and cash equivalents at end of year	$	14,404,961		$	4,599,526		$	14,404,961		$	4,599,526
Supplementary cash flow information:
Interest received		9,261			-			15,473			-
Interest paid		(52,037	)		(59,828	)		(98,699	)		(113,476	)
Income tax paid		(1,319,459	)		(637,335	)		(2,179,292	)		(1,148,815	)

See Accompanying Notes to the Consolidated Financial Statements and Accountant’s Report

~~See Accompanying Notes to the Financial Statements.~~ 4

68888 Acquisition Corporation Consolidated Statements of Cash Flows For the three months and nine months ended March 31, 2011 and 2010 (Stated in US Dollars)

8888 Acquisition Corporation Unaudited Consolidated Statements of Stockholders’ Equity For the six months and twelve months ended December 31 and June 30, 2010 (Stated in US Dollars)

		Three Months Ended						Nine Months Ended
		March 31,			March 31,			March 31,			March 31,
		2011			2010			2011			2010
Net Income/(loss)	$	2,439,361		$	914,685		$	9,594,870		$	4,326,832
Adjustments to reconcile net income to net cash from operations:
Amortization		23,364			19,223			77,725			58,887
Depreciation		348,502			304,413			1,182,305			915,543
Loss on disposal of fixed asset		156,983			-			225,994			-
Provision for bad debt		-			-			16,190			-
Changes in operating assets and liabilities:
(Increase)/decrease in restricted cash		476,421			(307,232	)		517,728			(300,650	)
(Increase)/decrease in accounts and other receivables		2,059,915			2,275,626			(3,681,483	)		1,479,640
(Increase)/decrease in inventories		(31,290	)		382,172			(122,035	)		989,723
(Increase)/decrease in prepaid expenses		(5,491	)		(5,266	)		(5,544	)		(5,091	)
Increase/(decrease) in accounts payables and accruals		(1,927,391	)		(2,482,231	)		982,221			(1,495,474	)
Increase/(decrease) in taxes payables		(127,216	)		(235,261	)		(888	)		(334,381	)
Net cash provided by operating activities		3,413,158			866,129			8,787,083			5,635,029
Cash flows from investing activities
Proceeds from disposal of fixed assets		15,365			-			39,565			-
Payments for deposits		(300,608	)		(46,482	)		(293,872	)		(46,482	)
Payments for land use rights		-			-			-			-
Payments for purchases of plant and equipment		(229,315	)		(250,849	)		(1,093,802	)		(360,822	)
Net cash provided/(used) in investing activities		(514,558	)		(297,331	)		(1,348,109	)		(407,304	)
Cash flows from financing activities
Proceeds from Issuance of common stock		-			-			3,918,444			-
Proceeds from/(repayments of) notes		(476,421	)		1,024,106			(1,725,759	)		1,002,167
Proceeds from/(repayment of) bank loans		782,671			(748,398	)		926,143			(748,398	)
Repayment of loan to related party		-			-			-			(2,998,303	)
Net cash provided/(used) in financing activities		306,250			275,708			3,118,828			(2,744,534	)
Net Increase of cash and cash equivalents		3,204,850			844,505			10,557,802			2,483,191
Effect of foreign currency translation on cash		142,779			1,355			681,590			2,039
Cash and cash equivalents at beginning of year		14,404,961			4,599,526			6,513,198			2,960,156
Cash and cash equivalents at end of year	$	17,752,590		$	5,445,386		$	17,752,590		$	5,445,386
Supplementary cash flow information:
Interest received	$	16,660		$	-		$	32,133		$	-
Interest paid		(50,404	)		(37,421	)		(149,103	)		(150,898	)
Income tax paid		(1,125,779	)		(802,831	)		(3,305,071	)		(1,951,646	)

												Accumulated
	Number				Additional							other
	Of		Common		paid in		Statutory		Retained			comprehensive
	Shares		stock		capital		reserve		Earnings			income		Total
Balance at July 1, 2009	31,419,167	$	3,142	$	1,279,740	$	476,862	$	7,894,946		$	308,048	$	9,962,738
Net income	-		-		-		-		6,913,587			-		6,913,587
Appropriations of retained earnings	-		-		-		273,527		(273,527	)		-		-
Foreign currency translation adjustment	-		-		-		-		-			68,416		68,416
Balance at June 30, 2010	31,419,167	$	3,142	$	1,279,740	$	750,389	$	14,535,006		$	376,464	$	16,944,741
Balance at July 1, 2010	31,419,167	$	3,142	$	1,279,740	$	750,389	$	14,535,006		$	376,464	$	16,944,741
Issuance of common stock in connection with October financing transaction	2,547,500		255		3,918,189		-		-			-		3,918,444
Net income	-		-		-		-		7,155,509			-		7,155,509
Appropriations of retained earnings	-		-		-		-		-			-		-
Foreign currency translation adjustment	-		-		-		-		-			538,811		538,811
Balance at December 31, 2010	33,966,667	$	3,397	$	5,197,929	$	750,389	$	21,690,515		$	915,275	$	28,557,505

See Accompanying Notes to the Consolidated Financial Statements and Accountant’s Report

		Comprehensive Income
						Accumulated
		December 31, 2010		June 30, 2010		Total
Net income	$	7,155,509	$	6,913,587	$	14,069,096
Foreign currency translation adjustment		538,811		68,416		607,227
	$	7,694,320	$	6,982,003	$	14,676,323

See Accompanying Notes to the Financial Statements.

8888 Acquisition Corporation Consolidated Statements of Stockholders’ Equity For the nine months and twelve months ended March 31, 2011 and June 30, 2010 (Stated in US Dollars)

											Accumulated
	Number				Additional						other
	Of		Common		paid in		statutory		Retained		comprehensive
	Shares		stock		capital		reserve		Earnings		income		Total
Balance at July 1, 2009	31,419,167	$	3,142	$	1,279,740	$	476,862	$	7,894,946	$	308,048	$	9,962,738
Net income	-		-		-		-		6,913,587		-		6,913,587
Appropriations of retained earnings	-		-		-		273,527		(273,527		-		-
Foreign currency translation adjustment	-		-		-		-		-		68,416		68,416
Balance at June 30, 2010	31,419,167	$	3,142	$	1,279,740	$	750,389	$	14,535,006	$	376,464	$	16,944,741
Balance at July 1, 2010	31,419,167	$	3,142	$	1,279,740	$	750,389	$	14,535,006	$	376,464	$	16,944,741
Issuance of common stock in connection with
October financing transaction	2,547,500		255		3,918,189		-		-		-		3,918,444
Net income	-		-		-		-		9,594,870		-		9,594,870
Foreign currency translation adjustment	-		-		-		-		-		681,590		681,590
Balance at March 31, 2011	33,966,667	$	3,397	$	5,197,929	$	750,389	$	24,129,876	$	1,058,054	$	31,139,645

	Comprehensive Income
		March 31,		June 30,		Accumulated
		2011		2010		Total
Net income	$	9,594,870	$	6,913,587	$	16,508,457
Other comprehensive income
Foreign currency translation adjustment		681,590		68,416		750,006
	$	10,276,460	$	6,982,003	$	17,258,463

~~8888~~See ~~Acquisition~~Accompanying ~~Corporation~~ Notes to ~~Unaudited~~the Consolidated Financial Statements ~~As of December 31~~ and ~~June~~Accountant’s ~~30, 2010 And for the three months and six months ended December 31, 2010 and 2009 (Stated in US Dollars)~~ Report

1.	The Company and Principal Business Activities
	A.	Organization and Structure
		8888 Acquisition Corporation (“Company”) was originally incorporated on September 20, 1983 in accordance with the Laws of the State of Florida and, on July 18, 2006, changed its state of incorporation from Florida to Nevada by means of a merger with and into 8888 Acquisition Corporation, a Nevada corporation formed on June 26, 2006 solely for the purpose of effecting the reincorporation. The Certificate of Incorporation and Bylaws of the Nevada Corporation are the Certificate of Incorporation and Bylaws of the surviving corporation. Such Certificate of Incorporation kept the surviving entity’s name of 8888 Acquisition Corporation and modified the Company’s capital structure to allow for the issuance of up to 100,000,000 shares of $0.0001 par value common stock and up to 50,000,000 shares of $0.0001 par value preferred stock. On October 20, 2010, in order to more accurately reflect the Company’s business, the board of directors and majority stockholders of the Company approved an amendment and restatement of the Company’s Articles of Incorporation to, among other things, change the name of the Company from 8888 Acquisition Corporation to Sports Power, Inc. The Company is awaiting approval from the U.S. Securities and Exchange Commission to change its name.
		October 19, 2010, the Company entered into share exchange transaction with Cheng Chang Shoes Industry Company Limited (“Cheng Chang”) and its shareholders whereby the Company issued 31,059,267 shares of its common stock to such shareholders for all of the issued and outstanding stock of Cheng Chang. Accordingly, Cheng Chang became a wholly owned subsidiary of the Company.
		Cheng Chang was incorporated and domiciled under Chapter 32 of the Hong Kong Companies Ordinance Act on October 14, 1988 under the name Yesway Development Limited. On August 5, 1999, Cheng Chang changed its name to its current name, Cheng Chang Shoes Industry Company Limited. Cheng Chang was incorporated as an investment and general trading company. Cheng Chang conducts its operations through its wholly owned subsidiary, Jinjiang Chengchang Shoes Co., Ltd. (“Jinjiang Chengchang”).
		Jinjiang Chengchang was incorporated and domiciled in the People’s Republic of China (“PRC”) on January 2, 1997.
		The Company’s headquarters and production facilitates are located in Jinjiang City, Fujian, PRC.
		The share exchange transaction has been accounted for as a recapitalization of Cheng Chang where the Company (the legal acquirer) is considered the accounting acquiree and Cheng Chang (the legal acquiree) is considered the accounting acquirer. As a result of this transaction, the Company is deemed to be a continuation of the business of Cheng Chang. Accordingly, the financial data included in the accompanying consolidated financial statements for all periods prior to October 19, 2010 is that of the accounting acquirer, Cheng Chang. The historical stockholders’ equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the share exchange transaction occurred as of the beginning of the first period presented

8 8888 Acquisition Corporation Notes to Consolidated Financial Statements As of March 31, 2011 and June 30, 2010 And for the three months and nine months ended March 31, 2011 and 2010 (Stated in US Dollars)

8888 Acquisition Corporation Notes to Unaudited Consolidated Financial Statements As of December 31 and June 30, 2010 And for the three months and six months ended December 31, 2010 and 2009 (Stated in US Dollars)

1.	The Company and Principal Business Activities

	A.	Organization and Structure

		8888 Acquisition Corporation (“Company”) was originally incorporated on September 20, 1983 in accordance with the Laws of the State of Florida and, on July 18, 2006, changed its state of incorporation from Florida to Nevada by means of a merger with and into 8888 Acquisition Corporation, a Nevada corporation formed on June 26, 2006 solely for the purpose of effecting the reincorporation. The Certificate of Incorporation and Bylaws of the Nevada Corporation are the Certificate of Incorporation and Bylaws of the surviving corporation. Such Certificate of Incorporation kept the surviving entity’s name of 8888 Acquisition Corporation and modified the Company’s capital structure to allow for the issuance of up to 100,000,000 shares of $0.0001 par value common stock and up to 50,000,000 shares of $0.0001 par value preferred stock. On October 20, 2010, in order to more accurately reflect the Company’s business, the board of directors and majority stockholders of the Company approved an amendment and restatement of the Company’s Articles of Incorporation to, among other things, change the name of the Company from 8888 Acquisition Corporation to Sports Power, Inc. The Company is awaiting approval from the U.S. Securities and Exchange Commission to change its name.

		October 19, 2010, the Company entered into share exchange transaction with Cheng Chang Shoes Industry Company Limited (“Cheng Chang”) and its shareholders whereby the Company issued 31,059,267 shares of its common stock to such shareholders for all of the issued and outstanding stock of Cheng Chang. Accordingly, Cheng Chang became a wholly owned subsidiary of the Company.

		Cheng Chang was incorporated and domiciled under Chapter 32 of the Hong Kong Companies Ordinance on October 14, 1988 under the name Yesway Development Limited. On August 5, 1999, Cheng Chang changed its name to its current name, Cheng Chang Shoes Industry Company Limited. Cheng Chang was incorporated as an investment and general trading company. Cheng Chang conducts its operations through its wholly owned subsidiary, Jinjiang Chengchang Shoes Co., Ltd. (“Jinjiang Chengchang”).

		Jinjiang Chengchang was incorporated and domiciled in the People’s Republic of China (“PRC”) on January 2, 1997.

		The Company’s headquarters and production facilitates are located in Jinjiang City, Fujian, PRC.

		The share exchange transaction has been accounted for as a recapitalization of Cheng Chang where the Company (the legal acquirer) is considered the accounting acquiree and Cheng Chang (the legal acquiree) is considered the accounting acquirer. As a result of this transaction, the Company is deemed to be a continuation of the business of Cheng Chang. Accordingly, the financial data included in the accompanying consolidated financial statements for all periods prior to October 19, 2010 is that of the accounting acquirer, Cheng Chang. The historical stockholders’ equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the share exchange transaction occurred as of the beginning of the first period presented

	B.	Products and Operations
		Jinjiang Chengchang designs, produces, and sells high quality shoe soles and sole components used to manufacture athletic and leisure shoes.
		Jinjiang Chengchang’s current vertically integrated value chain has two links: (1) the production of EVO and (2) the production of shoe soles.
		EVO is a patent pending, proprietary, modified variant of the polymer Ethylene-vinyl acetate (“EVA”), which is widely used in the production of athletic shoe soles, stemming from EVA’s shock absorbent property. In comparison to EVA, EVO is both lighter and more wear-resistant. Jinjiang Chengchang is able to sell EVO directly to other shoe sole manufacturers in the industry, or use the EVO for its own shoe sole production.
		Jinjiang Chengchang’s shoe sole product line includes shoe soles that are made exclusively from EVO, EVA and rubber, or a combination of EVA and rubber. The Company considers the new EVO based products as superior to the older EVA and rubber based products.
2.	Significant Accounting Policies
	A.	Method of accounting
		The Company maintains its general ledger and journals with the accrual method of accounting in accordance to PRC generally accepted accounting principles (“GAAP”). For financial statement reporting purposes, the Company has converted its PRC GAAP financial statements to financial statements that are presented in accordance to generally accepted accounting principles in the United States of America. The conversion of the Company’s financial statements from presentation in accordance with PRC GAAP to US GAAP did not result in any reconciling items on the accompanying financial statements.
		The financial statements and accompanying notes are representations of management.
	B.	Principles of consolidation
		The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company balances such as due to/due from, investment in subsidiaries, and subsidiaries’ capitalization have been eliminated.
	C.	Use of estimates
		The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America 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 periods. Significant estimates and assumptions are used for, but not limited to: (1) allowance for trade receivables, (2) economic lives of property, plant and equipment, (3) asset impairments, and (4) contingency reserves. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates

98888 Acquisition Corporation Notes to Consolidated Financial Statements As of March 31, 2011 and June 30, 2010 And for the three months and nine months ended March 31, 2011 and 2010 (Stated in US Dollars)

	B.	Products and Operations

		Jinjiang Chengchang designs, produces, and sells high quality shoe soles and sole components used to manufacture athletic and leisure shoes.

		Jinjiang Chengchang’s current vertically integrated value chain has two links: (1) the production of EVO and (2) the production of shoe soles.

		EVO is a patent pending, proprietary, modified variant of the polymer Ethylene-vinyl acetate (“EVA”), which is widely used in the production of athletic shoe soles, stemming from EVA’s shock absorbent property. In comparison to EVA, EVO is both lighter and more wear-resistant. Jinjiang Chengchang is able to sell EVO directly to other shoe sole manufacturers in the industry, or use the EVO for its own shoe sole production.

		Jinjiang Chengchang’s shoe sole product line includes shoe soles that are made exclusively from EVO, EVA and rubber, or a combination of EVA and rubber. The Company considers the new EVO based products as superior to the older EVA and rubber based products.

D. Cash and cash equivalents The Company classifies the following instruments as cash and cash equivalents: cash on hand, unrestricted bank deposits, and all highly liquid investments purchased with original maturities of three months or less. E. Accounts receivable Accounts receivable are disclosed at gross invoice amounts less management’s estimate for doubtful accounts. Management regularly reviews outstanding accounts and provides an allowance for doubtful accounts. Management’s allowance for doubtful accounts was 0.5% of gross accounts receivables. We classify our customers into four tiers: (A) well-known companies in the international or domestic sportswear market, which also have had established business relationships with the Company for a long time; (B) median sized companies with good reputations; (C) small sized companies in the local market; and (D) occasional customers with limited transactions. We grant them credit terms of 120 days, 90 days, 60 days and 30 days, respectively. Currently, the Company seldom trades with tier (D) customers. We understand and expect our days sales outstanding to vary from period to period within a given range. Based on the credit terms we grant to our four tiers of customers respectively, we expect our days sales outstanding not to exceed 120 days by any large margin. In regard of allowance for doubtful accounts, we keep one general reserve, the amount of which equals 0.5% of gross account receivables. We have no specific reserve, as we believe adequate provisions for doubtful accounts have been provided through our general reserve. When estimating the allowance for doubtful accounts, we take into consideration: 1) our track record of payment collection, which shows zero experience of any material delinquent accounts that were uncollectible and that we have not written off material balance; 2) the enhanced measures we currently take to minimize failure of collection, which include having internal staff call for payment, filing legal pledge, collecting agent to collect the outstanding balance, etc. Since our collection period of receivables has never exceeded one year from past experience, we believe collection becomes improbable once beyond the threshold of one year. Thus we write off receivables after they have aged one year. F. Inventories Inventories consisting of finished goods, work in progress, and raw materials are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, and an appropriate proportion of overhead. Periodic evaluation is made by management to identity if inventories needed to be written down because of damage or spoilage. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition.

2.	Significant Accounting Policies

	A.	Method of accounting

		The Company maintains its general ledger and journals with the accrual method of accounting in accordance to PRC generally accepted accounting principles (“GAAP”). For financial statement reporting purposes, the Company has converted its PRC GAAP financial statements to financial statements that are presented in accordance to generally accepted accounting principles in the United States of America. The conversion of the Company’s financial statements from presentation in accordance with PRC GAAP to US GAAP did not result in any reconciling items on the accompanying financial statements.

		The financial statements and accompanying notes are representations of management.

	B.	Principles of consolidation

		The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company balances such as due to/due from, investment in subsidiaries, and subsidiaries’ capitalization have been eliminated.

	C.	Use of estimates

		The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America 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 periods. Significant estimates and assumptions are used for, but not limited to: (1) allowance for trade receivables, (2) economic lives of property, plant and equipment, (3) asset impairments, and (4) contingency reserves. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

10 8

8888 Acquisition Corporation Notes to ~~Unaudited~~ Consolidated Financial Statements As of ~~December~~ March 31, 2011 and June 30, 2010 And for the three months and ~~six~~nine months ended ~~December~~March 31, ~~2010~~ 2011 and ~~2009~~ 2010 (Stated in US Dollars)

GD. ~~Plant~~Cash and ~~equipment~~cash ~~Plant~~equivalents The Company classifies the following instruments as cash and ~~equipment~~cash equivalents: cash on hand, unrestricted bank deposits, and all highly liquid investments purchased with original maturities of three months or less. E. Accounts receivable Accounts receivable are ~~carried~~disclosed at ~~cost~~gross invoice amounts less ~~accumulated~~management’s ~~depreciation~~estimate for doubtful accounts. ~~Depreciation~~Management isregularly ~~provided~~reviews ~~over~~outstanding ~~their~~accounts ~~estimated~~and ~~useful~~provides ~~lives~~an allowance for doubtful accounts. Management’s allowance for doubtful accounts was 0.5% of gross accounts receivables. We classify our customers into four tiers: (A) well-known companies in the international or domestic sportswear market, ~~using~~which also have had established business relationships with the ~~straight-line~~Company ~~method~~for a long time; (B) median sized companies with good reputations; (C) small sized companies in the local market; and (D) occasional customers with limited transactions. ~~Estimated~~We ~~useful~~grant ~~lives~~them credit terms of 120 days, 90 days, 60 days and 30 days, respectively. Currently, the ~~plant~~Company seldom trades with tier (D) customers. We understand and ~~equipment~~expect ~~are~~our days sales outstanding to vary from period to period within a given range. Based on the credit terms we grant to our four tiers of customers respectively, we expect our days sales outstanding not to exceed 120 days by any large margin. In regards to the Company’s allowance for doubtful accounts, we keep one general reserve, the amount of which equals 0.5% of gross account receivables. We have no specific reserve, as ~~follows~~we believe adequate provisions for doubtful accounts have been provided through our general reserve. When estimating the allowance for doubtful accounts, we take into consideration:- 1) our track record of payment collection, which shows zero experience of any material delinquent accounts that were uncollectible and that we have not written off material balance; 2) the enhanced measures we currently take to minimize failure of collection, which include having internal staff call for payment, filing legal pledge, collecting agent to collect the outstanding balance, etc. Since our collection period of receivables has never exceeded one year, based on past experience, we believe collection becomes improbable once they exceed the threshold of one year. Thus we will write off receivables against allowance for doubtful accounts once they are older than one year. F. Inventories Inventories consisting of finished goods, work in progress, and raw materials are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, and an appropriate proportion of overhead. Periodic evaluation is made by management to identify if inventories needed to be written down because of damage or spoilage. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition.

Buildings	20 years
Machinery and equipment	5 - 10 years
Motor vehicles	5 years
Office equipment	5 years

~~The~~8888 ~~cost~~Acquisition ~~and~~Corporation ~~related~~ Notes accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to ~~income~~Consolidated as incurred, whereas significant renewals and betterments are capitalized. H. Intangible assets The Company individually tracks and accounts for each intangible asset. Each intangible asset is carried at its original acquisition cost less accumulated amortization. The Company provides amortization for each intangible asset using the straight line method over its estimated useful life. I. Accounting for impairment of long lived Assets The Company has adopted Statement of Financial ~~Accounting~~Statements ~~Standards~~ As ~~No. 144, “Accounting for the Impairment or Disposal~~ of ~~Long-Lived~~March Assets” (“SFAS 144”), ASC 360-10-35. The Company evaluates its long lived assets for impairment when indicators of impairment are present or annually, whichever occurs sooner. In the event that there are indications of impairment, the Company will record a loss to statements of income equal to the difference between the carrying value and the fair value of the long lived asset. The Company typically, but not exclusively uses the expected future discounted flows method to determine fair value of long lived asset subject to impairment. The fair value of long lived assets that held for disposition will include the cost of disposal. The Company’s long-lived assets are grouped by their presentation on the consolidated balance sheets, and further segregated by their operating and asset type. Long-lived assets subject to impairment include buildings, equipment, vehicles, software licenses, and land-use-rights. The Company makes its determinations based on various factors that impact those assets. At December 31, ~~2010~~2011 and June 30, 2010, ~~the~~ And ~~Company assessed its buildings, equipment, vehicles, software licenses, and land-use-rights~~ for ~~production and has concluded its long-lived assets have not experienced any impairment losses because~~ the ~~Company’s~~three ~~long lived assets have enabled the Company to experience significant profit growth during the six~~ months and ~~twelve~~nine months ended ~~December~~March 31, ~~2010~~2011 and ~~June 30,~~ 2010. (Stated M.in ~~Shipping~~US ~~and~~Dollars) handling All shipping and handling costs are charged to selling expenses as incurred. All the outward freight costs are paid by the Company, and inward freight charges are paid by the vendors and suppliers. Sales revenue does not include any shipping or handling fees.

11G. Plant and equipment Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:-

Buildings	20 years
Manufacturing equipment	5 - 10 years
Motor vehicles	5 years
Office equipment	5 years

N.The ~~Advertising~~cost ~~expenses~~and ~~The~~related ~~Company~~accumulated ~~expenses~~depreciation ~~advertising~~of ~~costs~~assets assold ~~incurred.~~or O.otherwise ~~Income~~retired ~~taxes~~are ~~The~~eliminated ~~Company~~from ~~uses~~ the ~~accrual~~accounts ~~method~~and ofany ~~accounting~~gain toor ~~determine~~loss ~~income~~is ~~taxes~~included ~~for~~in the ~~year~~statement of income. The ~~Company~~cost ~~has~~of ~~implemented~~maintenance ~~FASB~~and ~~ASC~~repairs ~~740~~is ~~Accounting~~charged ~~for~~to ~~Income~~income ~~Taxes.~~as ~~Income~~incurred, ~~tax~~whereas ~~liabilities~~significant ~~computed~~renewals ~~according~~and tobetterments ~~the~~are ~~United~~capitalized. ~~States,~~H. ~~People’s~~Intangible ~~Republic~~assets ofThe ~~China~~Company ~~(PRC),~~individually tracks and ~~Hong~~accounts ~~Kong~~for ~~tax~~each ~~laws~~intangible ~~provide~~asset. ~~for~~Each ~~the~~intangible ~~tax~~asset ~~effects~~is ofcarried ~~transactions~~at ~~reported~~its inoriginal ~~the~~acquisition ~~financial~~cost ~~statements~~less ~~and~~accumulated ~~consists~~amortization. ofThe ~~taxes~~Company ~~currently~~provides ~~due,~~amortization ~~plus~~for ~~deferred~~each ~~taxes,~~intangible ~~related~~asset ~~primarily~~using tothe ~~differences~~straight ~~arising~~line ~~from~~method ~~the~~over ~~recognition~~its ofestimated ~~expenses~~useful ~~related~~life. toI. ~~the~~Accounting ~~depreciation~~for impairment of ~~plant~~long ~~and~~lived ~~equipment,~~Assets ~~amortization~~The Company has adopted Statement of ~~intangible~~Financial ~~assets,~~Accounting ~~and~~Standards ~~provisions~~No. 144, “Accounting for ~~doubtful~~the ~~accounts~~Impairment ~~between~~or ~~financial~~Disposal ~~and~~of ~~tax~~Long-Lived ~~reporting~~Assets” (“SFAS 144”), ASC 360-10-35. The ~~deferred~~Company ~~tax~~evaluates its long lived assets ~~and~~for ~~liabilities~~impairment ~~represent~~when indicators of impairment are present or annually, whichever occurs sooner. In the ~~future~~event ~~tax~~that ~~return~~there ~~consequences~~are indications of ~~those differences~~impairment, ~~which~~the Company will berecord ~~either~~a ~~taxable~~loss orto ~~deductible~~statements ~~when~~of income equal to the ~~assets~~difference between the carrying value and ~~liabilities~~the ~~are~~fair ~~recovered~~value orof ~~settled~~the long lived asset. ~~Deferred~~The ~~taxes~~Company ~~also~~typically, ~~are~~but ~~recognized~~not ~~for~~exclusively ~~operating~~uses ~~losses~~the ~~that~~expected ~~are~~future ~~available~~discounted flows method to ~~offset~~determine ~~future~~fair ~~income~~value ~~taxes.~~of Along ~~valuation~~lived ~~allowance~~asset issubject ~~recognized~~to ~~for~~impairment. ~~deferred~~The ~~tax~~fair ~~assets~~value ifof itlong islived ~~more~~assets ~~likely~~that ~~than~~held ~~not,~~for ~~that~~disposition will include the ~~deferred~~cost ~~tax~~of ~~assets~~disposal. ~~will~~The ~~either~~Company’s ~~expire~~long-lived ~~before~~assets ~~the~~are ~~Company~~grouped isby ~~able~~their topresentation ~~realize~~on ~~that~~the ~~tax~~consolidated ~~benefit~~balance sheets, orand ~~that~~further ~~future~~segregated ~~realization~~by istheir ~~uncertain.~~operating Pand asset type. ~~Statutory~~Long-lived ~~reserves~~assets ~~Statutory~~subject ~~reserves~~to ~~are~~impairment ~~referring~~include tobuildings, ~~the~~equipment, ~~amount~~vehicles, ~~appropriated~~software ~~from~~licenses, ~~the~~and ~~net~~land-use-rights. ~~income~~The inCompany ~~accordance~~makes ~~with~~its ~~laws~~determinations orbased ~~regulations,~~on ~~which~~various ~~can~~factors bethat ~~used~~impact tothose ~~recover~~assets. ~~losses~~At March 31, 2011 and ~~increase~~June ~~capital~~30, as2010, ~~approved~~the Company assessed its buildings, ~~and~~equipment, ~~are~~vehicles, tosoftware belicenses, ~~used~~and toland-use-rights ~~expand~~for production orand ~~operations.~~has Q.concluded ~~Foreign~~its ~~currency~~long-lived ~~translation~~assets ~~The~~have ~~accompanying~~not ~~financial~~experienced ~~statements~~any ~~are~~impairment ~~presented~~losses inbecause ~~United~~the ~~States~~Company’s ~~dollars.~~long ~~The~~lived ~~functional~~assets ~~currency~~have ofenabled the Company isto ~~the~~experience ~~Renminbi~~significant ~~(RMB).~~profit ~~The~~growth ~~financial~~during ~~statements~~the ~~are~~nine ~~translated~~months ~~into~~and ~~United~~twelve ~~States~~months ~~dollars~~ended ~~from~~March ~~RMB~~31, at2011 ~~year-end~~and ~~exchange~~June ~~rates~~30, as2010. toM. ~~assets~~Shipping and ~~liabilities~~handling All shipping and ~~average~~handling ~~exchange~~costs ~~rates~~are ascharged to ~~revenues~~selling ~~and~~ expenses as incurred. ~~Capital~~All ~~accounts~~the outward freight costs are ~~translated~~paid atby ~~their~~the ~~historical~~Company, ~~exchange~~and ~~rates~~inward ~~when~~freight charges are paid by the ~~capital~~vendors ~~transactions~~and ~~occurred~~suppliers. Sales revenue does not include any shipping or handling fees.

Exchange Rates	12/31/2010	6/30/2010	12/31/2009
Year end RMB : US$ exchange rate	6.6118	6.8086	6.8372
Average yearly RMB : US$ exchange rate	6.7237	6.8347	6.8386

		The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollar at the rates used in translation.
	R.	Revenue recognition
		In accordance to FASB ASC 605-10, the Company recognizes revenue upon issuance of invoices to customers. The issuance of invoices is concurrent with the shipment of goods to customers, which generally coincides with the transfer of risks and rewards of ownership, and the title has passed.

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

12N. Advertising expenses The Company expenses advertising costs as incurred. O. Income taxes The Company uses the accrual method of accounting to determine income taxes for the year. The Company has implemented FASB ASC 740 Accounting for Income Taxes. Income tax liabilities computed according to the United States, People’s Republic of China (PRC), and Hong Kong tax laws provide for the tax effects of transactions reported in the financial statements and consists of taxes currently due, plus deferred taxes, related primarily to differences arising from the recognition of expenses related to the depreciation of plant and equipment, amortization of intangible assets, and provisions for doubtful accounts between financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is recognized for deferred tax assets if it is more likely than not, that the deferred tax assets will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain. P. Statutory reserves Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. Q. Foreign currency translation

~~8888~~The ~~Acquisition~~accompanying ~~Corporation~~financial statements ~~Notes~~are topresented ~~Unaudited~~in ~~Consolidated~~United ~~Financial~~States ~~Statements~~dollars. AsThe functional currency of ~~December~~the 31Company is ~~and~~the ~~June~~Renminbi ~~30,~~(RMB). ~~2010~~The financial statements are translated into United ~~And~~States ~~for~~dollars ~~the~~from ~~three~~RMB ~~months~~at year-end exchange rates as to assets and ~~six~~liabilities and ~~months~~average ~~ended~~exchange ~~December~~rates ~~31,~~as ~~2010~~to revenues and ~~2009~~expenses. Capital accounts are ~~(Stated~~translated inat UStheir ~~Dollars)~~historical exchange rates when the capital transactions occurred.

The Company typically has written contracts with both new customers and existing customers. Contracts between the Company and its customers indicate a fixed price, delivery date, and the type of goods. The products are fully functional upon shipment and the Company is not obliged to provide any further services to be entitled to payment by its customers. The Company allows two-week period for post- delivery refund if quality problem condition exists. Upon such, the Company will reduce the sale revenue. However, the Company has not experienced any significant return of products and, as such, has not prepared an allowance for returns. Inventory credit, rebates, discounts and volume incentive policies are not applicable to the Company’s sales transactions. Collectability is reasonably assured upon issuance of invoices. The invoice value includes sales value and output value added taxes, which are immediately payable to the PRC government upon issuance. Customer payments received prior to completion of the above criteria are carried as unearned revenue. S. Cost of revenue The Company’s cost of revenue is comprised of raw materials, factory workers’ salaries and related benefits, maintenance supplies, and allocated overhead such as depreciation and utilities. T. Earnings per share The Company computes earnings per share (“EPS”) in accordance with FASB ASC 260 “Earnings per share”. SFAS No. 128 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., contingent shares, convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. U. Comprehensive income Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. The Company presents components of comprehensive income with equal prominence to other financial statements. The Company’s current component of other comprehensive income is the foreign currency translation adjustment. V. Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

*Exchange Rates*	3/31/2011	6/30/2010	12/31/2009
Year end RMB : US$ exchange rate	6.5701	6.8086	6.8372
Average yearly RMB : US$ exchange rate	6.6796	6.8347	6.8386

		The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollar at the rates used in translation.

	R.	Revenue recognition

		In accordance to FASB ASC 605-10, the Company recognizes revenue upon issuance of invoices to customers. The issuance of invoices is concurrent with the shipment of goods to customers, which generally coincides with the transfer of risks and rewards of ownership, and the title has passed.

	W.	Subsequent events
		The Company evaluates subsequent events that have occurred after the consolidated balance sheet date but before the consolidated financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has evaluated subsequent events, and based on this evaluation, the Company identified a non-recognized subsequent event that would require disclosure to the consolidated financial statements.
	X.	Recent accounting pronouncements
		In June 2009, FASB issued FASB Statement No. 166, Accounting for Transfers for Financial Assets (FASB ASC 860 Transfers and Servicing) and FASB Statement No. 167 (FASB ASC 810 Consolidation), a revision to FASB Interpretation No. 46 (Revised December 2003), Consolidation of Variable Interest Entities (FASB ASC 810 Consolidation). The Company has adopted the new accounting policies and has determined that there is no material impact to the financial statements presented herein.
		On June 30, 2009, FASB issued FASB Statement No. 168, Accounting Standards Codification™ (FASB ASC 105 Generally Accepted Accounting Principles) a replacement of FASB Statement No. 162 the Hierarchy of Generally Accepted Accounting Principles. On the effective date of this standard, FASB Accounting Standards Codification™ (ASC) became the source of authoritative U.S. accounting and reporting standards for nongovernmental entities, in addition to guidance issued by the Securities and Exchange Commission (SEC). This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. If an accounting change results from the application of this guidance, an entity should disclose the nature and reason for the change in accounting principle in their financial statements. This new standard flattens the GAAP hierarchy to two levels: one that is authoritative (in FASB ASC) and one that is non-authoritative (not in FASB ASC). Exceptions include all rules and interpretive releases of the SEC under the authority of federal securities laws, which are sources of authoritative GAAP for SEC registrants, and certain grandfathered guidance having an effective date before March 15, 1992. Statement No. 168 is the final standard that will be issued by FASB in that form. There will no longer be, for example, accounting standards in the form of statements, staff positions, Emerging Issues Task Force (EITF) abstracts, or AICPA Accounting Statements of Position. The Company has adopted and implemented the new accounting policy.
		In October 2009, the FASB issued ASU No. 2009-13 “Revenue Recognition (Topic 605): Multiple Deliverable Revenue Arrangements - A Consensus of the FASB Emerging Issues Task Force”. This update provides application guidance on whether multiple deliverables exist, how the deliverables should be separated and how the consideration should be allocated to one or more units of accounting. This update establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence, if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor- specific or third-party evidence is available. The Company will be required to apply this guidance prospectively for revenue arrangements entered into or materially modified after January 1, 2011; however, earlier application is permitted. The management is in the process of evaluating the impact of adopting this ASU on the Company’s financial statements.

14 The Company typically has written contracts with both new customers and existing customers. Contracts between the Company and its customers indicate a fixed price, delivery date, and the type of goods. The products are fully functional upon shipment and the Company is not obliged to provide any further services to be entitled to payment by its customers. The Company allows two-week period for post-delivery refund if quality problem condition exists. Upon such, the Company will reduce the sale revenue. However, the Company has not experienced any significant return of products and, as such, has not prepared an allowance for returns. Inventory credit, rebates, discounts and volume incentive policies are not applicable to the Company’s sales transactions. Collectability is reasonably assured upon issuance of invoices. The invoice value includes sales value and output value added taxes (“VAT”), which are immediately payable to the PRC government upon issuance.

~~8888 Acquisition Corporation~~ ~~Notes~~Customer topayments ~~Unaudited~~received ~~Consolidated~~prior ~~Financial~~to ~~Statements~~completion As of ~~December~~ ~~31 and June 30, 2010 And for~~ the ~~three~~above ~~months~~criteria ~~and~~are ~~six~~carried ~~months~~as ~~ended~~unearned ~~December~~revenue. ~~31, 2010 and 2009 (Stated in US Dollars)~~

S. Cost of revenue The ~~FASB~~Company’s ~~issued~~cost ~~ASU-2010-09~~of ~~(Topic~~revenue ~~855~~is comprised of raw materials, factory workers’ salaries and related benefits, maintenance supplies, and allocated overhead such as depreciation and utilities. T. Earnings per share The Company computes earnings per share (“EPS”) in accordance with FASB ASC 260 “Earnings per share”. SFAS No. 128 requires companies with complex capital structures to ~~amend~~present ~~guidance~~basic onand ~~subsequent~~diluted ~~events~~EPS. Basic EPS is measured as the income or loss available to ~~remove~~common shareholders divided by the ~~requirement~~weighted average common shares outstanding for ~~SEC~~the ~~filers~~period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (ase.g., ~~defined~~contingent inshares, ~~ASU~~convertible ~~2010-09~~securities, options, and warrants) toas ~~disclose~~if they had been converted at the beginning of the periods presented, or issuance date, ~~through~~if ~~which~~later. anPotential ~~entity~~common ~~has~~shares ~~evaluated~~that ~~subsequent~~have ~~events~~an anti-dilutive effect (i.e., ~~This~~those ~~change~~that ~~alleviates~~increase ~~potential~~income ~~conflicts~~per ~~with~~share ~~current~~or ~~SEC~~decrease ~~guidance~~loss per share) are excluded from the calculation of diluted EPS. AnU. ~~SEC~~Comprehensive ~~filer~~income Comprehensive income is ~~still~~defined ~~required~~to include all changes in equity except those resulting from investments by owners and distributions to ~~evaluate~~owners. ~~subsequent~~The ~~events~~Company ~~through~~presents ~~the~~components ~~date~~of comprehensive income with equal prominence to other financial statements. ~~are~~The ~~issued,~~Company’s ~~but~~current ~~disclosure~~component of ~~that~~other ~~date~~comprehensive income is nothe ~~longer~~foreign ~~required~~currency translation adjustment. ~~The~~V. ~~amendments~~Commitments inand ~~ASU~~contingencies ~~2010-09~~Liabilities ~~became~~for ~~effective~~loss ~~upon~~contingencies ~~issuance~~arising offrom ~~the~~claims, ~~guidance.~~assessments, ~~Management~~litigation, ~~adopted~~fines ~~this~~and ~~pronouncement~~penalties asand other sources are recorded when it is probable that a liability has been incurred and the amount of ~~July~~the 1,assessment ~~2010~~can be reasonably estimated.

3.	Restricted Cash
	Restricted cash represents interest bearing deposits placed with banks to secure and settle notes payable upon maturity.
4.	Accounts Receivable
	Accounts receivable at December 31, 2010 and June 30, 2010 consisted of the following: -

		December 31,			June 30,
		2010			2010
Accounts Receivable	$	17,438,939		$	11,715,362
Less: Allowance for Doubtful Accounts		(87,195	)		(58,577	)
Net Accounts Receivable	$	17,351,744		$	11,656,785
		December 31,			June 30,
		2010			2010
Accounts Receivable for Sales Revenue	$	14,905,063		$	10,013,130
Accounts Receivable for Value Added Taxes		2,533,876			1,702,232
Accounts Receivable	$	17,438,939		$	11,715,362
		December 31,			June 30,
		2010			2010
Allowance for Doubtful Accounts
Beginning Balance	$	58,577		$	32,856
Allowance Provided		28,618			25,721
Charged Against Allowance		-			-
Reversals		-			-
Ending Balance	$	87,195		$	58,577

Accounts receivable aging analysis:-

	W.	Subsequent events

		The Company evaluates subsequent events that have occurred after the consolidated balance sheet date but before the consolidated financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has evaluated subsequent events, and based on this evaluation, the Company identified a non-recognized subsequent event that would require disclosure to the consolidated financial statements.

	X.	Recent accounting pronouncements

		No New Pronouncement issued since FASB issued in October 2009 ASU No. 2009-13 “Revenue Recognition (Topic 605) that management adopted on January 1, 2011.

At December 31, 2010
		Total		Sales Revenue		Value Added Taxes
1-30 Days	$	4,112,792	$	3,515,204	$	597,588
30-60 Days		4,871,419		4,163,602		707,817
61-90 Days		5,448,890		4,657,167		791,723
91-120 Days		3,005,838		2,569,090		436,748
121-365 Days		-		-		-
Over 365 Days		-		-		-
Total	$	17,438,939	$	14,905,063	$	2,533,876


3.	Restricted Cash

	Restricted cash represents interest bearing deposits placed with banks to secure and settle notes payable upon maturity.

154. Accounts Receivable Accounts receivable at March 31, 2011 and June 30, 2010 consisted of the following: -


		March 31,			June 30,
		2011			2010
Accounts receivable	$	14,953,397		$	11,715,362
Less: Allowance for doubtful accounts		(74,767	)		(58,577	)
Accounts receivable, net	$	14,878,630		$	11,656,785

		March 31,			June 30,
		2011			2010
Accounts receivable for sales	$	12,780,681		$	10,013,130
Accounts receivable for VAT		2,172,716			1,702,232
Accounts receivable, net	$	14,953,397		$	11,715,362

		March 31,			June 30,
		2011			2010
Beginning balance	$	58,577		$	32,856
Allowance provided		16,190			25,721
Charged against allowance		-			-
Reversals		-			-
Ending balance	$	74,767		$	58,577

At June 30, 2010
		Total		Sales Revenue		Value Added Taxes
1-30 Days	$	5,320,029	$	4,547,033	$	772,996
30-60 Days		3,979,962		3,401,677		578,285
61-90 Days		1,278,530		1,092,761		185,769
91-120 Days		1,136,841		971,659		165,182
121-365 Days		-		-		-
Over 365 Days		-		-		-
Total	$	11,715,362	$	10,013,130	$	1,702,232

~~The~~8888 ~~Company~~Acquisition ~~believes~~Corporation it Notes ~~has~~to ~~provided~~Consolidated ~~adequate~~Financial ~~provisions~~Statements ~~for~~ ~~doubtful~~As ~~accounts.~~of ~~Doubtful~~March ~~allowance accounts at December~~ 31, 2011 and June 30, 2010 ~~was~~ ~~0.5% of gross account receivables. In the situation, the Company uses all~~ ~~its~~And ~~efforts, such as having internal staff call~~ for ~~payment, filing legal pledges, or even hiring collecting agents to collect~~ the ~~outstanding~~three ~~balance.~~months ~~If the~~and ~~collection~~nine ismonths noended ~~longer~~March ~~probable~~31, ~~the~~2011 ~~Company~~and ~~will write off the balance~~2010 ~~against~~ (Stated ~~the~~in ~~allowance~~US ~~for~~Dollars) ~~doubtful accounts. In the event that previously written off receivables are collected, they are recorded as other income.~~

The Company has not experienced any material delinquent accounts that were uncollectible, and has not written off material balance against the allowance for doubtful accounts. In addition, there were zero amounts recorded in other income that represent collections of receivables previously written off for the periods ended December 31, 2010 and 2009.

Accounts receivable aging analysis:-
At

March 31, 2011:-		Sales		VAT		Total
1-30 Days	$	4,854,926	$	825,338	$	5,680,264
30-60 Days		1,949,092		331,346		2,280,438
61-90 Days		3,626,274		616,466		4,242,740
91-120 Days		2,350,389		399,566		2,749,955
121-365 Days		-		-		-
Over 365 Days		-		-		-
Total	$	12,780,681	$	2,172,716	$	14,953,397

At
June 30, 2010:-		Sales		VAT		Total
1-30 Days	$	4,547,033	$	772,996	$	5,320,029
30-60 Days		3,401,677		578,285		3,979,962
61-90 Days		1,092,761		185,769		1,278,530
91-120 Days		971,659		165,182		1,136,841
121-365 Days		-		-		-
Over 365 Days		-		-		-
Total	$	10,013,130	$	1,702,232	$	11,715,362

The Company believes it has provided adequate provisions for doubtful accounts. Doubtful allowance accounts at March 31, 2011 and June 30, 2010 were 0.5% of gross account receivables. ~~Inventories~~In a situation, the Company uses all its efforts, such as having internal staff call for payment, filing legal pledges, or even hiring collecting agents to collect the outstanding balance, but the collection is no longer probable. The Company will write off the balance against the allowance for doubtful accounts. In the event that previously written off receivables are collected, the Company will re-establish the allowance of bad debt.

		December 31,		June 30,
		2010		2010
Raw Materials	$	208,419	$	28,149
Work in Progress		78,632		105,057
Finished Goods		652		63,752
	$	287,703	$	196,958

From the inception of business, the Company has not experienced any material delinquent accounts that were uncollectible, and has not written off material balance against the allowance for doubtful accounts.

65. ~~Plant and Equipment Plant and equipment consisted of the following at December 31, 2010 and June 30, 2010:-~~Inventories

At				Accumulated
					March 31,			June 30,
December 31, 2010:		Cost		Depreciation			Net
					2011			2010
Buildings	$	2,414,297	$	(522,923	)	$	1,891,374
	Raw materials			$	239,184		$	28,149
Manufacturing Equipment		8,382,429		(4,800,670	)		3,581,759
	Work in progress				79,687			105,057
Office Equipment		68,663		(40,452	)		28,211
	Finished goods				122			63,752
Vehicles		140,829		(33,598	)		107,231
				$	318,993		$	196,958
		11,006,218	$	(5,397,643	)		5,608,575

1614

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

6.	Plant and Equipment

	Plant and equipment consisted of the following at March 31, 2011 and June 30, 2010:-

	At				Accumulated
	March 31, 2011:-		Cost		Depreciation			Net
	Buildings	$	2,429,621	$	(553,575	)	$	1,876,046
	Manufacturing equipment		7,847,463		(4,564,039	)		3,283,424
	Office equipment		69,860		(41,498	)		28,362
	Vehicles		167,293		(38,085	)		129,208
		$	10,514,237	$	(5,197,197	)	$	5,317,040

	At				Accumulated
	June 30, 2010:-		Cost		Depreciation			Net
	Buildings	$	2,344,513	$	(455,057	)	$	1,889,456
	Manufacturing equipment		8,108,363		(4,413,073	)		3,695,290
	Office equipment		66,267		(36,856	)		29,411
	Vehicles		83,885		(26,940	)		56,945
		$	10,603,028	$	(4,931,926	)	$	5,671,102

	Depreciation expenses were $1,182,305 and $1,252,308 for the nine months and twelve months ended March 31, 2011 and June 30, 2010 respectively.


7.	Intangible Assets

	At				Accumulated
	March 31, 2011:-		Cost		Amortization			Net
	Land use rights	$	3,732,933	$	(563,757	)	$	3,169,176
	Software licenses		1,248		(1,164	)		84
		$	3,734,181	$	(564,921	)	$	3,169,260

	At				Accumulated
	June 30, 2010:-		Cost		Amortization			Net
	Land use rights	$	3,732,933	$	(486,322	)	$	3,246,611
	Software licenses		1,248		(874	)		374
		$	3,734,181	$	(487,196	)	$	3,246,985

At				Accumulated
June 30, 2010:		Cost		Depreciation			Net
Buildings	$	2,344,513	$	(455,057	)	$	1,889,456
Manufacturing Equipment		8,108,363		(4,413,073	)		3,695,290
Office Equipment		66,267		(36,856	)		29,411
Vehicles		83,885		(26,940	)		56,945
	$	10,603,028	$	(4,931,926	)	$	5,671,102

Land-use-rights represent the right to use and develop land in accordance to zoning laws granted by the local PRC government less accumulated amortization. Under PRC law, the company is permitted to sell, transfer, or mortgage its land-use-rights. Amortization expenses were $77,725 and $79,998 for the nine months and twelve months ended March 31, 2011 and June 30, 2010 respectively.

~~Depreciation expenses were $833,803 and $1,252,308 for the six months and twelve months ended December 31 and June 30, 2010 respectively. 7. Intangible Assets~~15

At				Accumulated
December 31, 2010:		Cost		Amortization			Net
Land Use Rights	$	3,732,933	$	(540,437	)	$	3,192,496
Software Licenses		1,248		(1,120	)		128
	$	3,734,181	$	(541,557	)	$	3,192,624
At				Accumulated
June 30, 2010:		Cost		Amortization			Net
Land Use Rights	$	3,732,933	$	(486,322	)	$	3,246,611
Software Licenses		1,248		(874	)		374
	$	3,734,181	$	(487,196	)	$	3,246,985

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

Land-use-rights represent the right to use and develop land in accordance to zoning laws granted by the local PRC government less accumulated amortization. Under PRC law, the company is permitted to sell, transfer, or mortgage its land-use-rights. Amortization expenses were $54,361 and $79,998 for the six months and twelve months ended December 31 and June 30, 2010 respectively. 8. Bank Loans

Short-term bank loans at December 31, 2010:-

Creditor

Note

Interest Rate

Maturity

Amount

March 31, 2011:-

Note

Interest Rate

Maturity

Amount

Industrial & Commercial Bank of China – JinJiang Branch

5.841%

02/08/2011

299,465

Industrial & Commercial Bank of China - Jinjiang Branch

5.810%

12/17/2011

761,024

China Construction Bank - JinJiang Branch

5.310%

06/17/2011

302,489

Industrial & Commercial Bank of China - Jinjiang Branch

6.060%

01/30/2012

304,409

China Construction Bank - JinJiang Branch

5.310%

06/17/2011

226,867

China Construction Bank - Jinjiang Branch

5.310%

06/17/2011

228,307

Industrial & Commercial Bank of China – JinJiang Branch

5.310%

08/05/2011

741,100

China Construction Bank - Jinjiang Branch

5.310%

06/17/2011

304,409

China Construction Bank - JinJiang Branch

5.310%

10/08/2011

151,245

Industrial & Commercial Bank of China - Jinjiang Branch

5.310%

08/05/2011

745,803

Industrial & Commercial Bank of China – JinJiang Branch

5.560%

10/28/2011

453,734

China Construction Bank - Jinjiang Branch

5.310%

10/08/2011

152,205

China Construction Bank - JinJiang Branch

6.116%

11/02/2011

650,352

Industrial & Commercial Bank of China - Jinjiang Branch

5.560%

10/28/2011

456,614

China Construction Bank - JinJiang Branch

5.560%

11/10/2011

105,871

China Construction Bank - Jinjiang Branch

6.116%

11/02/2011

654,480

2,931,123

China Construction Bank - Jinjiang Branch

5.560%

11/10/2011

106,543

3,713,794

June 30, 2010:-

Note

Interest Rate

Maturity

Amount

China Construction Bank - Jinjiang Branch

6.372%

01/13/2011

73,437

China Construction Bank - Jinjiang Branch

6.372%

01/20/2011

102,811

China Construction Bank - Jinjiang Branch

5.310%

06/17/2011

293,746

China Construction Bank - Jinjiang Branch

6.372%

01/11/2011

631,554

China Construction Bank - Jinjiang Branch

5.310%

06/17/2011

220,310

Industrial & Commercial Bank of China - Jinjiang Branch

5.841%

01/03/2011

734,365

Industrial & Commercial Bank of China - Jinjiang Branch

5.841%

02/08/2011

290,809

Industrial & Commercial Bank of China - Jinjiang Branch

5.841%

11/08/2010

440,619

2,787,651

The loans detailed above are securitized as follows:-

17A. Guaranteed by the former shareholders of Jinjiang Chengchang, Mr. Zhuang Guoqing and Ms. Ding Quanying, and Jinjiang Chendai Ailibao Shoe and Apparel Co., Ltd. B. Guaranteed by the former shareholders of Jinjiang Chengchang, Mr. Zhuang Guoqing and Ms. Ding Quanying. The bank also securitizes the loans with the Company’s land use rights. C. Guaranteed by the former shareholders of Jinjiang Chengchang, Mr. Zhuang Guoqing and Ms. Ding Quanying, and Fujian Yifeng Shoe and Apparel Co., Ltd. D. The bank securitizes the loans with the Company’s land used rights. E. Guaranteed by Fujian Yifeng Shoe and Apparel Co., Ltd. There were no restrictive covenants such as minimum bank balance, net income target, or level of working capital requirement applied on the company’s bank loan.

Short-term bank loans at June 30, 2010:-

China Construction Bank – JinJiang Branch

6.372%

01/13/2011

$ 73,437

China Construction Bank – JinJiang Branch

6.372%

01/20/2011

102,811

China Construction Bank – JinJiang Branch

5.310%

06/17/2011

293,746

China Construction Bank – JinJiang Branch

6.372%

01/11/2011

631,554

China Construction Bank – JinJiang Branch

5.310%

06/17/2011

220,310

Industrial & Commercial Bank of China – JinJiang Branch

5.841%

01/03/2011

734,365

Industrial & Commercial Bank of China – JinJiang Branch

5.841%

02/08/2011

290,809

Industrial & Commercial Bank of China – JinJiang Branch

~~The~~9. ~~loans~~Notes ~~detailed above are securitized as follows:-~~ Payable

A.As ~~Guaranteed~~detailed bybelow, ~~the~~at ~~former~~March ~~shareholders~~31, of2011 ~~Jinjiang~~and ~~Chengchang~~June 30, ~~Mr.~~2010, ~~Zhuang~~there were ~~Guoqing~~$0 and ~~Ms.~~$ ~~Ding~~1,725,759 ~~Quanying~~of notes issued by financial institutions, ~~and~~on ~~Jinjiang~~behalf ~~Chendai~~of the ~~Ailibao~~Company, ~~Shoe~~to the Company’s vendors as payment for products delivered and services ~~Apparel~~rendered ~~Co.,~~to ~~Ltd.~~the BCompany. ~~Guaranteed~~These bynotes ~~the~~are ~~former~~short ~~shareholders~~term financial instruments with maturities of ~~Jinjiang~~less ~~Chengchang,~~than Mrone year. ~~Zhuang~~They ~~Guoqing~~do ~~and~~not ~~Ms.~~have ~~Ding~~any ~~Quanying~~stated interest rate. The ~~bank~~Company ~~also~~does ~~securitizes~~not ~~the~~calculate ~~loans~~imputed ~~with~~interest rate on the ~~Company’s~~notes because ~~land~~of ~~use~~the ~~rights~~short ofterm ~~appraisal~~nature ~~value~~of ~~$4,769,204.~~these Cinstruments. ~~Guaranteed~~The byCompany is obligated to settle the ~~former~~amounts ~~shareholders~~owed ofwith ~~Jinjiang~~the ~~Chengchang,~~issuing Mrfinancial institution when they mature. ~~Zhuang~~These ~~Guoqing~~notes ~~and~~are ~~Ms.~~collateralized ~~Ding~~by ~~Quanying~~the Company’s restricted cash, ~~and~~which represents ~~Fujian~~compensating ~~Yifeng~~balances ~~Shoe~~held ~~and~~at ~~Apparel~~banks ~~Co.,~~to ~~Ltd.~~partially Dsecure banking facilities in the form of notes payable. The ~~bank~~imposed ~~securitizes~~restrictions dictate that the ~~loans~~restricted ~~with~~cash cannot be withdrawn when there are outstanding notes payable, and the ~~Company’s~~restricted ~~land~~cash is only allowed to be used ~~rights.~~to Esettle bank indebtedness. ~~Guaranteed~~Restricted bycash ~~Fujian~~deposited ~~Yifeng~~as ~~Shoe~~compensating ~~and~~balance ~~Apparel~~is Cointerest bearing., ~~Ltd.~~

	There were no restrictive covenants such as minimum bank balance, net income target, or level of working capital requirement applied on the company’s bank loan.
9.	Notes Payable
	As detailed below, at December 31, 2010 and June 30, 2010, there were $ 476,421 and $ 1,725,759 of notes issued by financial institutions, on behalf of the Company, to the Company’s vendors as payment for products delivered and services rendered to the Company. These notes are short term financial instruments with maturities of less than one year. They do not have any stated interest rate. The Company does not calculate imputed interest rate on the notes because of the short term nature of these instruments. The Company is obligated to settle the amounts owed with the issuing financial institution when they mature. These notes are collateralized by the Company’s restricted cash, which represents compensating balances held at banks to partially secure banking facilities in the form of notes payable. The imposed restrictions dictate that the restricted cash cannot be withdrawn when there are outstanding notes payable, and the restricted cash is only allowed to be used to settle bank indebtedness. Restricted cash deposited as compensating balance is interest bearing.
	There were no restrictive covenants such as minimum bank balance, net income target, or level of working capital requirement applied on the company’s notes payable.

There were no restrictive covenants such as minimum bank balance, net income target, or level of working capital requirement applied on the company’s notes payable.

At
June 30, 2010:-			Restricted Cash
Financial Institution	Maturity		Collateralized		Amount
The Industrial & Commercial Bank of China - Jinjiang Branch	08/06/2010	$	66,093	$	220,310
China Construction Bank - Jinjiang Branch	12/07/2010		83,718		279,059
The Industrial & Commercial Bank of China - Jinjiang Branch	08/06/2010		4,406		14,687
The Industrial & Commercial Bank of China - Jinjiang Branch	08/06/2010		154,216		514,056
China Construction Bank - Jinjiang Branch	09/24/2010		72,702		242,341
China Construction Bank - Jinjiang Branch	09/26/2010		30,843		102,811
China Construction Bank - Jinjiang Branch	12/07/2010		13,219		44,062
China Construction Bank - Jinjiang Branch	12/25/2010		8,813		29,375
The Industrial & Commercial Bank of China - Jinjiang Branch	08/06/2010		35,249		117,498
China Construction Bank - Jinjiang Branch	12/07/2010		26,437		88,124
China Construction Bank - Jinjiang Branch	12/25/2010		13,219		44,062
China Construction Bank - Jinjiang Branch	12/25/2010		8,813		29,374
		$	517,728	$	1,725,759

10.	Accounts Payable and Accruals

	Description		March 31,		June 30,
			2011		2010
	Payables related to purchases of production	$	5,418,079	$	4,586,251
	Wage payable		323,302		312,358
	Miscellaneous payables and accrued expenses		176,603		157,142
		$	5,917,984	$	5,055,751

~~Notes payable at December 31, 2010:~~ 17

	Restricted Cash
Financial Institution	Maturity		Collateralized		Amount
China Construction Bank – JinJiang Branch	01/01/2011	$	30,249	$	30,249
China Construction Bank – JinJiang Branch	01/01/2011		30,249		30,249
China Construction Bank – JinJiang Branch	01/01/2011		30,249		30,249
China Construction Bank – JinJiang Branch	01/01/2011		30,249		30,249
China Construction Bank – JinJiang Branch	03/29/2011		60,498		60,498
China Construction Bank – JinJiang Branch	03/29/2011		60,498		60,498
China Construction Bank – JinJiang Branch	03/29/2011		45,373		45,373
China Construction Bank – JinJiang Branch	03/29/2011		37,811		37,811
China Construction Bank – JinJiang Branch	03/29/2011		30,249		30,249
China Construction Bank – JinJiang Branch	03/29/2011		30,249		30,249
China Construction Bank – JinJiang Branch	03/29/2011		30,249		30,249
China Construction Bank – JinJiang Branch	03/29/2011		30,249		30,249
China Construction Bank – JinJiang Branch	03/29/2011		30,249		30,249
		$	476,421	$	476,421

~~Notes~~11. ~~payable~~Taxes ~~at June 30, 2010:~~ payable

		Restricted Cash
	Description		March 31,			June 30,
Financial Institution		Maturity			Collateralized			Amount
			2010			2010
The Industrial & Commercial Bank of China – Jinjiang Branch		08/06/2010		$	66,093		$	220,310
	Income tax payable	$	863,467		$	875,926
China Construction Bank – Jinjiang Branch		12/07/2010			83,718			279,059
	VAT payable		420,213			430,236
The Industrial & Commercial Bank of China – Jinjiang Branch		08/06/2010			4,406			14,687
	Personal income tax withholding		16,939			24,916
The Industrial & Commercial Bank of China – Jinjiang Branch		08/06/2010			154,216			514,056
	Other taxes payable		31,890			2,319
China Construction Bank – Jinjiang Branch		09/24/2010			72,702			242,341
		$	1,332,509		$	1,333,397
China Construction Bank – Jinjiang Branch		09/26/2010			30,843			102,811
China Construction Bank – Jinjiang Branch		12/07/2010			13,219			44,062
China Construction Bank – Jinjiang Branch		12/25/2010			8,813			29,375
The Industrial & Commercial Bank of China – Jinjiang Branch		08/06/2010			35,249			117,498
China Construction Bank – Jinjiang Branch		12/07/2010			26,437			88,124
China Construction Bank – Jinjiang Branch		12/25/2010			13,219			44,062
China Construction Bank – Jinjiang Branch		12/25/2010			8,813			29,374
				$	517,728		$	1,725,759

10Our revenue does not include output VAT. ~~Accounts~~For ~~Payable~~the purchase of raw materials, we are bearing 17% input VAT, which is exclusive from the cost. For the sale of products, we are liable to pay 17% output VAT. However, the input VAT can be used to off-set the output VAT. The VAT liabilities were $420,213 and ~~Accruals~~$430,236 as of March 31, 2011 and June 30, 2010 respectably. The following tabulation represents the calculation of VAT liabilities for the nine months and twelve months ended March 31, 2011 and June 30, 2010:-

Description			December 31,		June 30,
					March 31,			June 30,
			2010		2010
					2011			2010
Payables related to purchases of production materials		$	7,250,604	$	4,586,251
	VAT liabilities at beginning of periods		(1)	$	430,236		$	262,356
Wage payable			420,346		312,358
	Current periods output VAT:-
Miscellaneous payables and accrued expenses			294,412		157,142
	Sales revenue				36,665,296			26,324,824
		$	7,965,362	$	5,055,751
	Output VAT percentage				17%			17%
			(2)		6,233,100			4,475,220
	Current periods input VAT:-
	For purchase of raw materials				(2,947,305	)		(1,393,433	)
	For purchase of plant and equipment				(103,938	)		(73,149	)
	For water and electricity payments				(178,292	)		(150,695	)
	For other miscellaneous items				(27,066	)		(225,706	)
			(3)		(3,256,601	)		(1,842,983	)
	VAT paid during the periods		(4)		(3,087,686	)		(2,482,645	)
	Impact of foreign currency translation		(5)		101,164			18,288
	VAT liabilities at ending of periods		(1) +(2)+(3)+(4)+(5)	$	420,213		$	430,236

1912. Related party payable

~~8888~~Due ~~Acquisition~~to ~~Corporation~~Chinese regulations which restrict currency exchange, ~~Notes~~Mr. toZhuang ~~Unaudited~~paid ~~Consolidated~~professional ~~Financial~~service ~~Statements~~fee Asin aboard on behalf of ~~December~~ 31the ~~and~~Company. ~~June~~The payment 30$119,989 ~~2010~~owed ~~And~~to ~~for~~Mr. ~~the~~Zhuang ~~three~~was ~~months~~recorded ~~and~~as ~~six~~related ~~months~~party ~~ended~~payable ~~December~~as of March 31, ~~2010 and~~2011. ~~2009~~This payable was interest free. The Company expected to remit ~~(Stated~~Mr. inZhuang USduring ~~Dollars)~~the last quarter of 2011.

~~11. Taxes payable~~18

Description		December 31,		June 30,
		2010		2010
Income tax payable	$	1,123,906	$	875,926
Value added tax payable		293,024		430,236
Personal Income tax withholding		41,002		24,916
Other taxes payable		1,793		2,319
	$	1,459,725	$	1,333,397

~~Our revenue does not include output value added tax (“VAT”). For the purchase of raw materials, we are bearing~~ 13~~% input VAT, which is exclusive from the cost~~. ~~For~~Income the sale of products, we are liable to pay 17% output VAT. However, the input VAT can be used to off-set the output VAT. The output VAT liabilities were $4,459,567 and $4,475,220 as of December 31 and June 30, 2010 respectably. The following tabulation represents the calculation of VAT liabilities for the six months and twelve months ended December 31 and June 30, 2010:- Taxes

			December 31,			June 30,
			2010			2010
VAT liabilities at beginning of periods	(1 )	$	430,236		$	262,356
Current periods output VAT:
Sales revenue			26,232,749			26,324,824
Output VAT percentage			17%			17%
	(2 )		4,459,567			4,475,220
Current periods input VAT:
For purchase of raw materials			(1,695,869	)		(1,393,433	)
For purchase of property, plant and equipment			(79,218	)		(73,149	)
For water and electricity			(124,509	)		(150,695	)
For other miscellaneous items			(381,767	)		(225,706	)
	(3 )		(2,281,363	)		(1,842,983	)
VAT paid during the periods	(4 )		(2,311,327	)		(2,482,645	)
Impact of Foreign Currency Translation	(5 )		(4,089	)		18,288
Ending VAT payable	(1)+(2)+(3)+(4)+(5)	$	293,024		$	430,236

In respect of the Company and its subsidiaries domiciled and operated in United States, Hong Kong and the People’s Republic of China, the taxation of these entities are summarized below:

Entities	Countries of Domicile	Income Tax Rate
8888 Acquisition Corporation	United States	34.00%
Cheng Chang HK	Hong Kong	16.50%
Jinjiang Chengchang	PRC	25%

~~8888~~Since ~~Acquisition~~the ~~Corporation Notes~~Company tois ~~Unaudited~~primarily ~~Consolidated~~a ~~Financial~~holding ~~Statements~~company Aswithout ofany ~~December~~business 31activities ~~and~~in ~~June~~United 30States, ~~2010~~the ~~And~~Company ~~for~~did ~~the~~not ~~three~~incur ~~months~~any ~~and~~tax ~~six~~for the nine months ended ~~December~~March 31, ~~2010~~ 2011 and ~~2009~~2010. ~~(Stated in US Dollars)~~

~~12.~~The ~~Income~~following ~~Taxes~~tabulation Inpresents ~~respect of~~ the ~~Company~~income ~~and~~tax ~~its subsidiaries domiciled~~ and ~~operated~~deferred tax ~~in United States, Hong Kong and the People’s Republic~~ of ~~China,~~ the ~~taxation~~Company ofand ~~these~~its ~~entities~~individual ~~are summarized below~~subsidiaries:-

Entities			Countries of Domicile			Income Tax Rate
			Nine months ended			Nine months ended
8888 Acquisition Corporation			United States			34.00%
			March 31,			March 31,
Cheng Chang HK			Hong Kong			16.50%
	Description		2011			2010
Jinjiang Chengchang			PRC			25%
	Income (loss) before taxes:-
	US Federal	$	(3,813	)	$	-
	State		-			-
	HK		(186,408	)		(127	)
	PRC		13,077,703			5,766,799
	Total income before taxes		12,887,482			5,766,672
	Provision for taxes:-
	Current:
	U.S. Federal		-			-
	State		-			-
	HK		-			-
	PRC		3,292,612			1,439,840
			3,292,612			1,439,840
	Deferred:
	U.S. Federal		-			-
	State		-			-
	HK		-			-
	PRC		-			-
	Valuation allowance		-			-
	Total provision for taxes	$	3,292,612		$	1,439,840
	Effective tax rate		25.55%			24.97%

~~Since~~The ~~the~~differences ~~Company~~between isthe ~~primarily~~U.S. afederal ~~holding~~statutory ~~company~~income ~~without any~~tax ~~business~~rates ~~activities~~and ~~in United States,~~ the Company’s ~~did~~effective ~~not incur any~~ tax rate for the ~~six~~ nine months ended ~~December~~March 31, 2011 and 2010 ~~and~~are ~~2009.~~shown in the following table:-

~~The following tabulation presents the income tax and deferred tax of the Company and its individual subsidiaries:-~~ 19

		Six months ended			Six months ended
Description		December 31, 2010			December 31, 2009
Income (loss) before taxes:
US Federal	$	-		$	-
HK		(76,938	)		(23	)
PRC		9,659,719			4,549,561
Total income before taxes		9,582,781			4,549,538
Provision for taxes:
Current:
U.S. Federal		-			-
State		-			-
HK		-			-
PRC		2,427,272			1,137,390
		2,427,272			1,137,390
Deferred:
U.S. Federal		-			-
State		-			-
HK		-			-
PRC		-			-
Valuation Allowance		-			-
Deferred tax:		-			-
		-			-
Total provision for taxes	$	2,427,272		$	1,137,390
Effective tax rate		25.33%			25.00%

	Nine months ended	Nine months ended
	March 31,	March 31,
	2011	2010
U.S. federal statutory income tax rate	34.00%	34.00%
Lower rates in PRC, net	(9.00%)	(9.00%)
Accruals in foreign jurisdictions	0.55%	(0.03%)
Effective tax rate	25.55%	24.97%

14.	Risks

	A.	Credit risk

		Since the Company’s inception, the age of account receivables have been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers.

	B.	Interest risk

		The company subject to the interest rate risk when their short term loans become due and require refinancing.

	C.	Concentration of demand risk

		The Company’s top ten customers accounted for 79.04% and 74.59% of its revenue for the nine months ended March 31, 2011 and 2010, respectively. During those same periods, 2 and 2 individual customers each accounted for greater than 10% of the Company’s revenues, respectively.

	D.	Concentration of supply risk

		The Company’s top ten vendors accounted for 66.12% and 72.56% of its cost for the nine months ended March 31, 2011 and 2010, respectively. During those same periods, 1 and 3 individual vendor each accounted for greater than 10% of the Company’s cost, respectively.

	E.	Economic and political risks

		The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.

		The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

~~The differences between the U.S. federal statutory income tax rates and the Company’s effective tax rate for the six months ended December 31, 2010 and 2009 are shown in the following table:-~~ 20

	2010		2009
U.S. federal statutory income tax rate	34.00%		34.00%
Lower rates in PRC, net	(9.00%	)	(9.00%	)
Accruals in foreign jurisdictions	0.33%		0.00%
Effective tax rate	25.33%		25.00%

13.	Risks
	A.	Credit risk
		Since the Company’s inception, the age of account receivables have been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers.
	B.	Interest risk
		The company subject to the interest rate risk when their short term loans become due and require refinancing.
	C.	Concentration of demand risk
		The Company’s top ten customers accounted for 71% and 83% of its revenue for the six months ended December 31, 2010 and 2009, respectively. During those same periods, one and one individual customers each accounted for greater than 10% of the Company’s revenues, respectively.
	D.	Concentration of supply risk
		The Company’s top ten vendors accounted for 68% and 79% of its cost for the six months ended December 31, 2010 and 2009, respectively. During those same periods, one and three individual vendor each accounted for greater than 10% of the Company’s cost, respectively.
	E.	Economic and political risks
		The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.
		The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

	F.	Environmental risks

		The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential damage to employees, equipment, and local environment.

	G.	Inflation Risk

		Management monitors changes in prices levels. Historically inflation has not materially impacted the company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed on the Company’s customers could adversely impact the Company’s results of operations.

2215. Financial Instruments

~~8888~~The ~~Acquisition~~Company ~~Corporation Notes~~adopted toASC ~~Unaudited~~820-10, ~~Consolidated~~Fair ~~Financial~~Value ~~Statements~~Measurements Asand ofDisclosures, ~~December~~which 31defines ~~and~~fair ~~June 30~~value, ~~2010~~establishes ~~And~~a framework for ~~the~~using ~~three~~fair ~~months~~value ~~and~~to ~~six~~measure ~~months~~assets ~~ended~~and ~~December 31~~liabilities, ~~2010~~ and ~~2009~~expands ~~(Stated~~disclosures inabout USfair ~~Dollars)~~value measurements.

F. ASC ~~Environmental~~820-10 ~~risks~~includes ~~The~~a ~~Company~~fair ~~has~~value ~~procured~~hierarchy ~~environmental~~that ~~licenses~~is ~~required~~intended byto increase the ~~PRC~~consistency ~~government.~~and ~~The~~comparability ~~Company~~in ~~has~~fair ~~both~~value ameasurements ~~water~~and ~~treatment~~related ~~facility~~disclosures. ~~for~~The ~~water~~fair ~~used~~value inhierarchy ~~its~~is ~~production~~based ~~process~~on ~~and~~inputs ~~secure transportation~~ to ~~remove~~valuation ~~waste~~techniques ~~off~~that ~~site.~~are Inused ~~the~~to measure ~~event~~fair ofvalue anthat ~~accident,~~are ~~the~~either ~~Company~~observable ~~has~~or ~~purchased~~unobservable. ~~insurance~~Observable toinputs ~~cover~~reflect ~~potential~~assumptions ~~damage~~market toparticipants ~~employees,~~would ~~equipment,~~use ~~and~~in ~~local~~pricing ~~environment.~~an G.asset ~~Inflation~~or ~~Risk~~liability ~~Management~~based ~~monitors~~on ~~changes~~market indata ~~prices~~obtained ~~levels.~~from ~~Historically~~independent ~~inflation~~sources ~~has~~while ~~not~~unobservable ~~materially~~inputs reflect ~~impacted~~a ~~the~~reporting ~~company~~entity’s ~~financial~~pricing ~~statements;~~an ~~however,~~asset ~~significant~~or ~~increases~~liability inbased ~~the~~upon ~~price~~their ofown ~~raw~~market ~~materials~~assumptions. ~~and~~The ~~labor~~fair ~~that~~value ~~cannot~~hierarchy beconsists ~~passed~~of on the ~~Company’s~~following ~~customers~~three ~~could~~levels: ~~adversely impact the Company’s results of operations.~~

14.	Financial Instruments
	The Company adopted ASC 820-10, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements.
	ASC 820-10 includes a fair value hierarchy that is intended to increase the consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing an asset or liability based upon their own market assumptions. The fair value hierarchy consists of the following three levels:
	Level 1–inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
	Level 2–observable inputs other than level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
	Level 3–instrument valuations are obtained without observable market values and require a high-level of judgment to determine the fair value.
	The Company’s financial instruments consist mainly of cash, restricted cash, and debt obligations. Based on the borrowing rates currently available to the Company for loans and similar terms and average maturities, the fair value of debt obligations also approximates its carrying value due to the short-term nature of the instruments. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Level 1–inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

23 Level 2–observable inputs other than level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

~~8888 Acquisition Corporation~~ ~~Notes~~Level to3–instrument ~~Unaudited~~valuations ~~Consolidated~~are ~~Financial~~obtained ~~Statements~~without Asobservable ~~of December~~market 31values and ~~June~~require ~~30,~~a ~~2010~~high-level ~~And~~of ~~for~~judgment ~~the~~to ~~three~~determine ~~months~~the ~~and~~fair ~~six~~value. ~~months ended December 31, 2010 and 2009 (Stated in US Dollars)~~

The ~~following~~Company’s ~~tables~~financial ~~present~~instruments consist mainly of cash, restricted cash, and debt obligations. Based on the borrowing rates currently available to the Company’s ~~financial~~for ~~assets~~loans and ~~liabilities~~ atsimilar terms and average maturities, the fair value inof ~~accordance~~debt obligations also approximates its carrying value due to ~~ASC~~the ~~820~~short-~~10:~~term nature of the instruments. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

At December 31, 2010		Quoted in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
		Assets		Inputs		Inputs
		(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Cash	$	14,404,961	$	-	$	-	$	14,404,961
Restricted cash		476,421		-		-		476,421
Total financial assets		14,881,382		-		-		14,881,382
Financial liabilities:
Notes payable		476,421		-		-		476,421
Total financial liabilities	$	476,421	$	-	$	-	$	476,421
At June 30, 2010		Quoted in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
		Assets		Inputs		Inputs
		(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Cash	$	6,513,199	$	-	$	-	$	6,513,199
Restricted cash		517,728		-		-		517,728
Total financial assets		7,030,927		-		-		7,030,927
Financial liabilities:
Notes payable		1,725,759		-		-		1,725,759
Total financial liabilities	$	1,725,759	$	-	$	-	$	1,725,759

In8888 ~~January~~Acquisition ~~2008,~~Corporation ~~the Company adopted SFAS 159, the Fair~~ ~~Value~~Notes ~~Option~~to ~~for~~Consolidated Financial ~~Assets~~Statements ~~and Financial Liabilities, now known as~~ ~~the~~As ~~provisions~~ of ~~Accounting~~March ~~Standards Codification subtopic 825-10 (formerly SFAS 159)~~31, ~~Fair~~2011 ~~Value Option for Financial Assets~~ and ~~Financial Liabilities,~~June and have elected not to measure any of our current eligible financial assets or liabilities at fair value. SFAS 159 was issued to allow entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable30, ~~unless~~2010 ~~a new~~ ~~election~~And ~~date occurs. If the fair value option is elected~~ for an instrument, SFAS 159 specifies that unrealized gains and losses for that instrument shall be reported in earnings at each subsequent reporting date. SFAS 159 is effective January 1, 2008. We did not elect the ~~fair~~three ~~value~~months ~~option for our financial assets~~ and ~~liabilities~~nine ~~existing~~months onended ~~January~~March 131, ~~2008,~~2011 and ~~did not elect the fair value~~2010 ~~option~~ (Stated ~~for~~in ~~any~~US ~~financial~~Dollars) ~~assets or liabilities transacted during the six months ended December 31, 2010.~~

24The following tables present the Company’s financial assets and liabilities at fair value in accordance to ASC 820-10:

		Quoted in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
At		Assets		Inputs		Inputs
March 31, 2011:-		(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Cash	$	17,752,591	$	-	$	-	$	17,752,591
Restricted cash		-		-		-		-
Total financial assets		17,752,591		-		-		17,752,591
Financial liabilities:
Notes payable 6		-		-		-		-
Total financial liabilities	$	-	$	-	$	-	$	-

		Quoted in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
At		Assets		Inputs		Inputs
June 30, 2010:-		(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Cash	$	6,513,199	$	-	$	-	$	6,513,199
Restricted cash		517,728		-		-		517,728
Total financial assets		7,030,927		-		-		7,030,927
Financial liabilities:
Notes payable		1,725,759		-		-		1,725,759
Total financial liabilities	$	1,725,759	$	-	$	-	$	1,725,759

15.	Operating Lease Commitments from Related Party
	The Company leases a facility from the Company’s Chief Executive Officer and shareholder, Mr. Guoqing Zhuang as a dormitory for its employees. The impact to the Company’s results of operations, in the form of rent expense, for the six months ended December 31, 2010 and 2009, were $12,493 and $12,266, respectively. The Company’s lease contract with the related party calls for an operating lease commitment as follow:
	For the twelve months ending June 30:-

In January 2008, the Company adopted SFAS 159, the Fair Value Option for Financial Assets and Financial Liabilities, now known as the provisions of Accounting Standards Codification subtopic 825-10 (formerly SFAS 159), Fair Value Option for Financial Assets and Financial Liabilities, and have elected not to measure any of our current eligible financial assets or liabilities at fair value. SFAS 159 was issued to allow entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, SFAS 159 specifies that unrealized gains and losses for that instrument shall be reported in earnings at each subsequent reporting date. SFAS 159 is effective January 1, 2008. We did not elect the fair value option for our financial assets and liabilities existing on January 1, 2008, and did not elect the fair value option for any financial assets or liabilities transacted during the nine months ended March 31, 2011.

Fiscal Years		Commitments
2011	$	5,310
2012		21,238
2013		21,238
2014		21,238
2015		21,238
2016		21,238
2017		21,238
2018		21,238
2019		21,238
	$	175,214

~~16.~~8888 ~~Statutory~~Acquisition ~~Reserve~~Corporation ~~Commitment~~ Notes Into ~~compliance~~Consolidated ~~with~~Financial ~~PRC~~Statements ~~laws,~~ As ~~the~~of ~~Company~~March is31, ~~required~~2011 toand ~~appropriate~~June a30, ~~portion~~2010 of And ~~its~~for ~~statutory~~the ~~reserve~~three upmonths toand anine ~~maximum~~months ofended ~~50%~~March of31, an2011 ~~enterprise’s~~and ~~capital~~2010 (Stated in ~~the~~US ~~PRC.~~Dollars) ~~The Company had future unfunded commitments, as provided below.~~

		12/31/2010			6/30/2010
16.	Commitments
PRC Subsidiaries Registered Capital Jin Jiang Cheng Chang	$	4,063,667		$	1,480,828
	A.	Operating lease commitment from related party
Statutory Reserve Ceiling based on 50% of PRC Registered Capital		2,031,834			740,414
		The Company leases a facility from the Company’s Chief Executive Officer and shareholder, Mr. Guoqing Zhuang as a dormitory for its employees. The impact to the Company’s results of operations, in the form of rent expense, for the nine months ended March 31, 2011 and 2010, were $19,582 and $15,795 respectively. The Company’s lease contract with the related party calls for an operating lease commitment as follow:
Less: Retained Earnings appropriated to Statutory Reserve		(750,389	)		(750,389	)
		For the twelve months ending June 30:-
Impact of Foreign Currency Translation		-			9,975
Reserve Commitment Outstanding	$	1,281,445		$	-

Fiscal Years		Commitments
2011	$	1,656
2012		21,238
2013		21,238
2014		21,238
2015		21,238
2016		21,238
2017		21,238
2018		21,238
2019		21,238
	$	171,560

	B.	Operating lease commitment from external party

		Starting from April 1, 2011, the Company leases a plant from Jinjiang Huahong Textile Co., Ltd. (“Huahong Textile”) to expand its production capacity. The lease contract with Huahong Texitle will expire on March 31, 2016, and calls for a non-cancellable operating lease commitment as follow:

		For the twelve months ended June 30:-

17.	Operating Segments
	Fiscal Years		Commitments
	The Company has contracted with customers in two revenue segments. Altogether, one is for the development and production of shoe sole products: a EVA sole, b EVO sole and c RB sole used for athletic and leisure shoes, and another one is for the production of EVO compound pellets, where semi-processed raw materials are used to develop shoe sole.
	2011	$	292,598
	The Company individually tracks the performance of its operating segments. Each segment is engaged in the development and production of its corresponding athletic shoe part products.
	2012		1,170,393
	The Company’s operations are located in the PRC. All revenue is from customers in the PRC. All of the Company’s assets are located in the PRC. Sales of soles and pellets are carried out in the PRC. Accordingly, no analysis of the Company’s sales and assets by geographical market is presented. No other measures of segment profit or loss and assets have been provided or reviewed by the company’s chief operating decision maker.
	2013		1,170,393
	Below is a presentation of the Company’s financial position and results of operations for its operating segments as of December 31 and June 30, 2010, and for the six month ended December 31, 2010 and 2009:
	2014		1,170,393
	2015		1,170,393
	2016		877,795
		$	5,851,965

~~Results of Operations For the Six Months Ended December 31, 2010~~ 23

											EVO
		EVA			RB			EVO			Compound
		Sole			Sole			Sole			Pellet			Others			Total
Sales	$	7,221,190		$	1,798,009		$	13,089,674		$	3,985,022		$	138,854		$	26,232,749
Cost of Sales		(4,346,333	)		(1,121,341	)		(7,768,011	)		(2,370,129	)		(88,585	)		(15,694,399	)
Gross Profit		2,874,857			676,668			5,321,663			1,614,893			50,269			10,538,350
Operating Expense		(210,317	)		(52,367	)		(381,236	)		(116,063	)		(18,040	)		(778,023	)
Operating (Loss)/Profit		2,664,540			624,301			4,940,427			1,498,830			32,229			9,760,327
Other Income (Expense)		(46,412	)		(11,556	)		(84,129	)		(25,612	)		(9,837	)		(177,546	)
Earnings before Tax		2,618,128			612,745			4,856,298			1,473,218			22,392			9,582,781
(Income Tax Expense)		(667,339	)		(166,161	)		(1,209,669	)		(368,272	)		(15,831	)		(2,427,272	)
Net Income	$	1,950,789		$	446,584		$	3,646,629		$	1,104,946		$	6,561		$	7,155,509

26C. Statutory reserve commitment

~~8888~~In ~~Acquisition~~accordance ~~Corporation~~with PRC laws, statutory reserve refers to the ~~Notes~~appropriation from net income, to ~~Unaudited~~the ~~Consolidated~~account ~~Financial~~statutory ~~Statements~~reserve, to be used for Asfuture company development, recovery of ~~December~~ 31losses, and ~~June~~increase 30of capital, ~~2010~~as approved, to expand production or operations. Under the applicable PRC laws, a ~~And~~PRC ~~for~~enterprise operating at a profit must appropriate, on an annual basis, an amount equal to 10% of its profit until the ~~three~~reserve ~~months~~reaches ~~and~~50% ~~six~~of ~~months~~its registered ~~ended~~capital. ~~December~~On 31October 22, 2010, the Company increased Jinjiang Cheng ~~and~~Chang’s ~~2009~~registered capital from $1,480,828 to $4,063,667 by remitting the private placement proceeds (~~Stated~~refer into USNote ~~Dollars~~18). For each year ended June 30, Jin Jiang Cheng Chang will continue to appropriate 10% of its operation net income to fund the statutory reserve account until it reaches the 50% cap. The Company’s future fund commitment requirements were provided below:-

Results of Operations For the Six Months Ended December 31, 2009

		3/31/2011			6/30/2010
PRC subsidiaries registered capital
- Jinjiang Cheng Chang	$	4,063,667		$	1,480,828
Statutory reserve ceiling based on 50% of PRC registered capital		2,031,834			740,414
Less: Retained earnings appropriated to statutory reserve		(750,389	)		(750,389	)
Impact of foreign currency translation		-			9,975
Reserve commitment outstanding	$	1,281,445		$	-

										EVO
		EVA			RB			EVO		Compound
		Sole			Sole			Sole		Pellet		Others			Total
Sales	$	8,536,616		$	3,911,298		$	-	$	-	$	250,096		$	12,698,010
Cost of Sales		(5,126,826	)		(2,476,874	)		-		-		(154,981	)		(7,758,681	)
Gross Profit		3,409,790			1,434,424			-		-		95,115			4,939,329
Operating Expense		(186,421	)		(85,414	)		-		-		(5,462	)		(277,297	)
Operating (Loss)/Profit		3,223,369			1,349,010			-		-		89,653			4,662,032
Other Income (Expense)		(75,627	)		(34,651	)		-		-		(2,216	)		(112,494	)
Earnings before Tax		3,147,742			1,314,359			-		-		87,437			4,549,538
(Income Tax Expense)		(764,644	)		(350,344	)		-		-		(22,402	)		(1,137,390	)
Net Income	$	2,383,098		$	964,015		$	-	$	-	$	65,035		$	3,412,148

17.	Operating Segments

~~Financial~~The ~~Position~~Company Asreports its primary segment information based on its principal operating activities. For management purposes, the Company is currently organized into four major operating divisions and reporting segments based on product line: (1) Ethylene-vinyl acetate (“EVA”) soles, (ii) EVO soles, or ethylene vinyl acetate outsoles, an outgrowth of ~~December~~our 31EVA product line, ~~2010~~(3) Rubber (“RB”) soles, and (4) EVO compound pellets. All our products are mainly used for athletic and leisure shoes.

								EVO
		EVA		RB		EVO		Compound
		Sole		Sole		Sole		Pellet		Others		Total
Current Assets	$	8,960,962	$	2,231,196	$	16,243,313	$	4,945,116	$	172,306	$	32,552,893
Non-Current Assets	$	2,432,662	$	605,710	$	4,409,627	$	1,342,467	$	46,777		8,837,243
Total Assets		11,393,624		2,836,906		20,652,940		6,287,583		219,083		41,390,136
Current Liabilities	$	3,532,489	$	879,557	$	6,403,255	$	1,949,408	$	67,922		12,832,631
Total Liabilities		3,532,489		879,557		6,403,255		1,949,408		67,922		12,832,631
Net Assets		7,861,135		1,957,349		14,249,685		4,338,175		151,161		28,557,505
Total Liabilities & Net Assets	$	11,393,624	$	2,836,906	$	20,652,940	$	6,287,583	$	219,083	$	41,390,136

Prior to May 2010, the Company’s revenue was generated from two products: (1) the EVA soles and (2) RB soles. As a result, we had two reporting segments in fiscal year 2009: (1) EVA soles and (2) RB soles. In May 2010, the Company launched two new products EVO soles and EVO compound pellets which contributed approximately 9% and 4% of the Company’s total revenue for the fiscal year ended June 30, 2010, respectively. As management believes EVO soles and EVO compound pellets will be its main products in the future, the Company added EVO soles and EVO compound pellets as two new reporting segments starting from the fiscal year ended June 30, 2010.

27The Company’s operations are located in the PRC. All revenue is from customers in the PRC. All of the Company’s assets are located in the PRC. Sales of soles and pellets are carried out in the PRC. Accordingly, no analysis of the Company’s sales and assets by geographical market is presented. No other measures of segment profit or loss and assets have been provided or reviewed by the company’s chief operating decision maker.

~~8888~~Below ~~Acquisition~~is ~~Corporation Notes~~a topresentation ~~Unaudited~~of ~~Consolidated~~the ~~Financial~~Company’s ~~Statements~~financial position and Asresults of ~~December~~ operations for its operating segments as of March 31, 2011 and June 30, 2010, ~~And~~and for the ~~three~~nine months ~~and six months~~ ended ~~December~~March 31, 2011 and 2010 . EVO soles and EVO ~~2009~~compound pellet reporting columns have been added into 2010 financial ~~(Stated~~statements infor UScomparable ~~Dollars)~~purpose:-

~~Financial Position As of June 30, 2010~~ 24

											EVO
	8888 Acquisition Corporation
		EVA			RB			EVO			Compound			Others			Total
	Notes to Consolidated Financial Statements
		Sole			Sole			Sole			Pellet
	As of March 31, 2011 and June 30, 2010
Current Assets	$	15,101,651		$	3,731,308		$	-		$	-		$	53,473		$	18,886,432
	And for the three months and nine months ended March 31, 2011 and 2010
Non-Current Assets		7,165,138			1,770,358			-			-			25,371			8,960,867
	(Stated in US Dollars)
Total Assets		22,266,789			5,501,666			-			-			78,844			27,847,299
	Results of Operations
Current Liabilities		8,717,720			2,153,970			-			-			30,868			10,902,558
	For the Nine Months Ended
Total Liabilities		8,717,720			2,153,970			-			-			30,868			10,902,558
	March 31, 2011
Net Assets		13,549,069			3,347,696			-			-			47,976			16,944,741
												EVO
Total Liabilities & Net Assets	$	22,266,789		$	5,501,667		$	-		$	-		$	78,843		$	27,847,299
			EVA			RB			EVO			Compound
			Sole			Sole			Sole			Pellet			Others			Total
	Sales	$	9,347,825		$	2,494,865		$	18,424,125		$	6,240,735		$	157,746		$	36,665,296
	Cost of Sales		5,678,462			1,552,151			11,041,504			3,739,949			219,164			22,231,230
	Gross Profit		3,669,363			942,714			7,382,621			2,500,786			(61,418	)		14,434,066
	Operating Expense		301,096			77,356			605,793			205,206			(5,040	)		1,184,411
	Operating (Loss)/Profit		3,368,267			865,358			6,776,828			2,295,580			(56,378	)		13,249,655
	Other Income (Expense)		(92,070	)		(23,654	)		(185,241	)		(62,749	)		1,541			(362,173	)
	Earnings before Tax		3,276,197			841,704			6,591,587			2,232,831			(54,837	)		12,887,482
	(Income Tax Expense)		837,033			215,046			1,684,079			570,464			(14,010	)		3,292,612
	Net Income	$	2,439,164		$	626,658		$	4,907,508		$	1,662,367		$	(40,827	)	$	9,594,870
	Results of Operations
	For the Nine Months Ended
	March 31, 2010
												EVO
			EVA			RB			EVO			Compound			Others			Total
			Sole			Sole			Sole			Pellet
	Sales	$	10,790,980		$	5,636,072		$	-		$	-		$	301,094		$	16,728,146
	Cost of Sales		6,579,208			3,574,008			-			-			197,784			10,351,000
	Gross Profit		4,211,772			2,062,064			-			-			103,310			6,377,146
	Operating Expense		309,361			151,462			-			-			7,588			468,411
	Operating (Loss)/Profit		3,902,411			1,910,602			-			-			95,722			5,908,735
	Other Income (Expense)		(93,825	)		(45,936	)		-			-			(2,302	)		(142,063	)
	Earnings before Tax		3,808,586			1,864,666			-			-			93,420			5,766,672
	(Income Tax Expense)		950,940			465,575			-			-			23,325			1,439,840
	Net Income	$	2,857,646		$	1,399,091		$	-		$	-		$	70,095		$	4,326,832

18.	Financing Transaction
	On October 19, 2010, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company issued to the investor 2,547,500 shares of its common stock for gross proceeds of $4,504,505, or $1.768 per share. Among the $4,504,505 gross proceeds, $400,000 was used to purchase 8888 Acquisition Corporation (legal acquirer, accounting acquiree), and $186,061 was paid to legal firms for professional services. The Company received $3,918,444 net proceeds.
	Under the Securities Purchase Agreement, the Company agreed to file a registration statement to register the shares of the Company’s common stock issued to the investor within 45 days after the closing of the Securities Purchase Agreement. If any shares pledged by Mr. Zhuang are transferred to the investor pursuant to the make good escrow agreement discussed below, the Company also agreed to register those shares within 45 days after such shares are issuable to the investor. In addition, the Company granted the investor a piggyback registration right within one year after the closing. The Securities Purchase Agreement contains customary representations and warranties about the Company’s business operations, capital structure and financial condition, among other things, and obligates the Company to fulfill certain covenants, such as the aforementioned share registration obligation.
	At December 29, 2010, the Company has passed the deadline of 45 days to file the registration statement of S-1 with the SEC. In accordance with FASB Staff Position No. EITF 00-19-2, Accounting for Registration Payment Arrangements (FASB ASC 815-15), liquidated damages should be accounted for as a reduction of the proceeds. However, the Company did not account for any liabilities as of December 31, 2010 because the Company had entered waiver agreement with the sole investor to extend the deadline until the Company clears the comments raised by the SEC staff’s on the Company’s 8-K filing.

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

Financial Position
As of March 31, 2011
								EVO
		EVA		RB		EVO		Compound
		Sole		Sole		Sole		Pellet		Others			Total
Current Assets	$	8,491,044	$	2,181,476	$	17,083,662	$	5,786,913	$	(142,126	)	$	33,400,969
Non-Current Assets		2,242,931		576,242		4,512,693		1,528,628		(37,542	)		8,822,952
Total Assets		10,733,975		2,757,718		21,596,355		7,315,541		(179,668	)		42,223,921
Current Liabilities		2,817,794		723,933		5,669,297		1,920,415		(47,163	)		11,084,276
Total Liabilities		2,817,794		723,933		5,669,297		1,920,415		(47,163	)		11,084,276
Net Assets		7,916,181		2,033,785		15,927,058		5,395,126		(132,505	)		31,139,645
Total Liabilities
& Net Assets	$	10,733,975	$	2,757,718	$	21,596,355	$	7,315,541	$	(179,668	)	$	42,223,921

Financial Position
As of June 30, 2010
								EVO
		EVA		RB		EVO		Compound		Others			Total
		Sole		Sole		Sole		Pellet
Current Assets	$	15,101,651	$	3,731,308	$	-	$	-	$	53,473		$	18,886,432
Non-current Assets		7,165,138		1,770,358		-		-		25,371			8,960,867
Total Assets		22,266,789		5,501,666		-		-		78,844			27,847,299
Current Liabilities		8,717,720		2,153,970		-		-		30,868			10,902,558
Total Liabilities		8,717,720		2,153,970		-		-		30,868			10,902,558
Net Assets		13,549,069		3,347,696		-		-		47,976			16,944,741
Total Liabilities
& Net Assets	$	22,266,789	$	5,501,667	$	-	$	-	$	78,843		$	27,847,299

In8888 ~~connection~~Acquisition ~~with~~Corporation ~~the Securities Purchase Agreement, the~~ ~~Company’s~~Notes ~~Chairman and CEO Mr. Zhuang entered into a Make Good Escrow Agreement, whereby Mr. Zhuang pledged~~ to ~~several~~Consolidated ~~other~~Financial ~~parties,~~Statements ~~including the investor,~~ ~~7,492,154~~As ~~shares~~ of ~~common~~March ~~stock~~31, ~~owned~~2011 byand ~~him~~June in30, ~~support~~2010 ~~of the Company’s~~ ~~obligation~~And tofor ~~satisfy a pre-established after tax net income level at $6.9 million. All or a portion of~~ the ~~shares~~three ~~pledged~~months ~~pursuant~~and tonine ~~the~~months ~~Make~~ended ~~Good~~March ~~Escrow Agreement~~31, ~~will~~2011 beand ~~transferred to the beneficiaries of the make good arrangement~~2010 if (Stated ~~the~~in ~~Company~~US ~~does~~Dollars) ~~not satisfy the after tax net income threshold. The shares will be returned to Mr. Zhuang if the threshold is met.~~

~~The~~19. ~~following~~Financing ~~total capitalization table depicts an analysis of total capitalization for the issuance of preferred stock, common stock, and the related additional paid in capital at December 31, 2010:~~Transaction

	Preferred Stock		Common Stock
	Number of Shares		Number of Shares				Additional Paid	% of Equity
Name of Shareholders	outstanding	Capital	outstanding		Capital		in Capital	Holdings
Management/Insider	-	-	26,489,754	$	2,649	$	1,279,740	77.99%
Minority Investor	-	-	4,929,413		493		-	14.51%
Private Placement	-	-	2,547,500		255		3,918,189	7.50%
	-	-	33,966,667	$	3,397	$	5,197,929	100.00%

On October 19, 2010, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company issued to the investor 2,547,500 shares of its common stock for gross proceeds of $4,504,505, or $1.768 per share. Among the $4,504,505 gross proceeds, $400,000 was used to purchase 8888 Acquisition Corporation (legal acquirer, accounting acquiree), and $186,061 was paid to legal firms for professional services. The Company received $3,918,444 net proceeds.

29Under the Securities Purchase Agreement, 8888 Acquisition agreed to file a registration statement to register the shares of its common stock issued to the investor within 45 days after the closing of the agreement. The Securities Purchase Agreement does not call for liquidated damages in the event of tardiness in filing or effectiveness of the S-1. On March 22, 2011, 8888 Acquisition entered into a waiver and extension letter with the investor pursuant to which the filing deadline for the registration statement has been extended until twenty days after 8888 Acquisition has been informed by the SEC that the SEC has completed its review of the Form 8K and has no further comments. In accordance with FASB ASC 825-20-50-1, Disclosure for Registration Payment Arrangements, the Company must disclose how it accounts for liquidated damages, and any related settlement alternatives. As indicated above, the agreement does not call for liquidated damages to be paid by 8888 Acquisition, therefore, the Company has not accrued any liabilities of liquidated damages in the Company’s financial statements as of March 31, 2011.

~~8888~~In ~~Acquisition~~connection ~~Corporation~~with the Securities Purchase Agreement, the ~~Notes~~Company’s toChairman ~~Unaudited~~and ~~Consolidated~~CEO ~~Financial~~Mr. ~~Statements~~Zhuang Asentered ofinto a Make Good Escrow Agreement, ~~December~~whereby 31Mr. ~~and~~Zhuang ~~June~~pledged 30to several other parties, ~~2010~~including the investor, ~~And~~7,492,154 ~~for~~shares of common stock owned by him in support of the ~~three~~Company’s obligation ~~months~~to ~~and~~satisfy a pre-established after tax net income level at $6.9 million for the six months ended December 31, 2010. All or a portion of the ~~and~~shares ~~2009~~pledged pursuant to the Make Good Escrow Agreement will be transferred to ~~(Stated~~the inbeneficiaries USof ~~Dollars)~~the make good arrangement if the Company does not satisfy the after tax net income threshold. The shares will be returned to Mr. Zhuang if the threshold is met.

19If any shares pledged by Mr. ~~Earnings~~Zhuang ~~Per~~are ~~Share~~transferred to the investor pursuant to the make good escrow agreement, 8888 Acquisition also agreed to register those shares within 45 days after such shares are issuable to the investor. In addition, 8888 Acquisition granted the investor a piggyback registration right within one year after the closing. The Securities Purchase Agreement contains customary representations and warranties about 8888 Acquisition’s business operations, capital structure and financial condition, among other things, and obligates 8888 Acquisition to fulfill certain covenants, such as the aforementioned share registration obligation. The Company believes it has satisfied the after tax net income $6.9 million criteria. The investors will release 7,492,154 shares held in the escrow back to Mr. Zhuang.

		Three months ended				Six months ended
		2010		2009		2010		2009
Net Income	$	3,254,279	$	1,501,530	$	7,155,509	$	3,412,148
Income available to Common Stockholders	$	3,254,279	$	1,501,530	$	7,155,509	$	3,412,148
Original Shares of Common Stock		31,419,167		31,419,167		31,419,167		31,419,167
New Issuance of Common Stock		2,066,306		-		1,033,153		-
Basic Weighted Average Shares Outstanding		33,485,473		31,419,167		32,452,320		31,419,167
Addition to Common Stock from conversion of
Preferred Stock		-		-		-		-
Addition to Common Stock from exercise of
Warrant		-		-		-		-
Diluted Weighted Average Shares Outstanding		33,485,473		31,419,167		32,452,320		31,419,167
Earnings Per Share
- Basic	$	0.10	$	0.05	$	0.22	$	0.11
- Diluted	$	0.10	$	0.05	$	0.22	$	0.11
Weighted Average Shares Outstanding
- Basic		33,485,473		31,419,167		32,452,320		31,419,167
- Diluted		33,485,473		31,419,167		32,452,320		31,419,167

The following total capitalization table depicts an analysis of total capitalization for the issuance of preferred stock, common stock, and the related additional paid in capital at March 31, 2011:-

	Preferred Stock		Common Stock
	Number of Shares		Number of Shares				Additional Paid	% of Equity
Name of Shareholders	outstanding	Capital	outstanding		Capital		in Capital	Holdings
Management/Insider	-	-	26,489,754		$ 2,649		$ 1,279,740	77.99%
Minority Investor	-	-	4,929,413		493		-	14.51%
Private Placement	-	-	2,547,500		255		3,918,189	7.50%
	-	-	33,966,667	$	3,397	$	5,197,929	100.00%

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~27

Special Note Regarding Forward Looking Statements

8888 Acquisition Corporation Notes to Consolidated Financial Statements As of March 31, 2011 and June 30, 2010 And for the three months and nine months ended March 31, 2011 and 2010 (Stated in US Dollars)
20. Earnings per Share
		Three Months Ended				Nine Months Ended
		March 31,		March 31,		March 31,		March 31,
		2011		2010		2011		2010
Net Income	$	2,439,361	$	914,685	$	9,594,870		4,326,832
Income available to Common Stockholders		2,439,361		914,685		9,594,870		4,326,832
Original Shares of Common Stock		31,419,167		31,419,167		31,419,167		31,419,167
New Issuance of Common Stock		2,547,500		-		1,528,500		-
Basic Weighted Average Shares Outstanding		33,966,667		31,419,167		32,947,667		31,419,167
Addition to Common Stock from conversion of
Preferred Stock		-		-		-		-
Addition to Common Stock from exercise of
Warrant		-		-		-		-
Diluted Weighted Average Shares Outstanding		33,966,667		31,419,167		32,947,667		31,419,167
Earnings Per Share
- Basic	$	0.07	$	0.03		0.29	$	0.14
- Diluted	$	0.07	$	0.03		0.29	$	0.14
Weighted Average Shares Outstanding
- Basic		33,966,667		31,419,167		32,947,667		31,419,167
- Diluted		33,966,667		31,419,167		32,947,667		31,419,167

In addition to historical information, this report contains 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. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in the section captioned “Risk Factors” in our Current Report on Form 8-K filed October 25, 2010, and the amendments thereto, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.28

~~Readers~~ITEM ~~are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC~~2. ~~These~~MANAGEMENT’S ~~reports~~DISCUSSION ~~attempt~~AND toANALYSIS ~~advise~~OF ~~interested~~FINANCIAL ~~parties~~CONDITION ofAND ~~the~~RESULTS ~~risks~~OF ~~and factors that may affect our business, financial condition and results of operations and prospects~~OPERATIONS. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

~~Use~~Special ofNote ~~Terms~~Regarding Forward Looking Statements

In addition to historical information, this report contains ~~Except~~forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as ~~otherwise~~amended, ~~indicated~~and bySection 21E of the ~~context~~Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and ~~for~~industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, ~~purposes~~strategies and objectives of ~~this~~management ~~report~~for ~~only~~future operations; any statements regarding future economic conditions or performance; as well as all assumptions, ~~references~~expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in ~~this~~the ~~report~~section captioned “Risk Factors” in our Current Report on Form 8-K filed October 25, 2010, as amended, and the subsequent filings with the SEC, as well as assumptions, which, if they were to: ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.

~~“we,”~~Readers “are urged to carefully review and consider the various disclosures made by us,” “in this report and our,” orother “filings with the ~~Company”~~SEC. ~~are~~These reports attempt to ~~combined~~advise ~~business~~interested parties of ~~8888~~the ~~Acquisition~~risks ~~Corporation,~~and afactors ~~Nevada~~that ~~corporation~~may affect our business, financial condition and ~~its~~results ~~consolidated~~of ~~subsidiaries,~~operations ~~Chengchang~~and prospects. HKThe forward-looking statements made in this report speak only as of the date hereof and ~~Jinjiang~~we ~~Chengchang;~~disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

~~“Chengchang~~Use ~~HK”~~of ~~are to Cheng Chang Shoes Industry Company Limited, a Hong Kong limited company;~~Terms

~~“Jinjiang~~Except ~~Chengchang”~~as ~~are~~otherwise toindicated ~~Jinjiang~~by ~~Chengchang~~the ~~Shoes~~context ~~Co.,~~and ~~Ltd.,~~for athe purposes ~~PRC~~of ~~limited~~this ~~company~~report ~~and~~only, ~~the~~references ~~wholly-~~in ~~owned~~this ~~subsidiary~~report ~~of Chengchang HK;~~to:

“~~Hong~~we,” ~~Kong~~“us,” ~~are~~“our,” toor “the ~~Hong~~Company” ~~Kong~~are ~~Special~~to ~~Administrative~~combined ~~Region~~business of ~~the~~8888 Acquisition ~~People’s~~Corporation, ~~Republic~~a ofNevada ~~China~~corporation, and its consolidated subsidiaries, Chengchang HK and Jinjiang Chengchang;
“~~PRC,”~~Chengchang ~~“China,~~HK” ~~and~~are ~~“Chinese~~to Cheng Chang Shoes Industry Company Limited,” ~~are~~a toHong Kong ~~the~~limited ~~People’s~~company ~~Republic~~and ofour ~~China~~direct, wholly-owned subsidiary;
“~~SEC~~Jinjiang Chengchang” are to ~~the~~Jinjiang ~~Securities~~Chengchang Shoes Co., Ltd., a PRC limited company and ~~Exchange~~the ~~Commission~~wholly- owned subsidiary of Chengchang HK;
“~~Securities~~Hong ~~Act~~Kong” are to the ~~Securities~~Hong ~~Act~~Kong Special Administrative Region of ~~1933,~~the People’s asRepublic ~~amended~~of China;
“~~Exchange~~PRC,” ~~Act~~“China,” and “Chinese,” are to the ~~Securities~~People’s ~~Exchange~~Republic ~~Act~~ of ~~1934, as amended~~China;
“~~Renminbi~~SEC” ~~and “RMB”~~ are to the ~~legal~~Securities ~~currency~~and ofExchange ~~China~~Commission; ~~and~~
“~~U.S.~~Securities ~~dollars,~~Act” ~~“dollars” and “$”~~ are to the ~~legal~~Securities ~~currency~~Act of ~~the~~1933, ~~United~~as ~~States.~~amended;
~~Overview~~“Exchange Act” are to the Securities Exchange Act of ~~our~~1934, ~~Business~~as amended;
We“Renminbi” ~~are a holding company whose indirect, Chinese operating subsidiary, Jinjiang Chengchang, designs, produces~~ and ~~sells~~“RMB” ~~high~~are ~~quality~~to ~~shoe~~the ~~soles~~legal ~~and~~currency ~~sole~~of ~~components~~China; ~~used to manufacture athletic~~ and ~~leisure shoes.~~
~~Since~~“U.S. ~~1996~~dollars,” we“dollars” ~~have been a vertically integrated manufacturer of athletic~~ and ~~leisure~~“$” ~~shoes.~~are ~~In recent years, we shifted our strategic focus~~ to ~~concentrate~~the onlegal ~~developing~~currency ~~and~~of ~~producing~~the ~~specialized soles~~United States.

InOverview our manufacturing operations, we process basic chemicals and other raw materials to make our sole products. Currently, we categorize our sole products into three primary product lines: (i) EVA, or ethylene vinyl acetate, sole products which are made from a viscous and elastic foam material containing tiny bubbles for shock absorption and cushioning abilities; (ii) RB, or synthetic rubber, sole products processed mainly from polybutadiene rubber, which is highly resistant to wear and abrasion and used mostly commonly in the production of ~~outsoles; and (iii) EVO, or ethylene vinyl acetate outsole, products which are an outgrowth of~~ our EVA product line that is designed to be more abrasive resistance and lighter and softer than our EVA product line. In 2010, we also started to sell EVO compound pellets to local sole producers which lack the technical and manufacturing capability to manufacture high quality, high performance soles on their own. Business

31Through our indirect Chinese subsidiary, Jinjiang Chengchang, we design, produce and sell high quality shoe soles and sole components used to manufacture athletic and leisure shoes.

WeSince ~~sell~~1996, ~~our~~we ~~products~~have tobeen ~~footwear~~a ~~manufacturers~~vertically ~~that~~integrated ~~are~~manufacturer of ~~based primarily in China. Our customers use our sole products as components in the~~ athletic and leisure shoes ~~that they sell to end consumers, athletic wear companies and global shoe distributors~~. As ofIn ~~December~~recent 31years, ~~2010,~~ we ~~had~~shifted ~~approximately~~our 45strategic ~~customers which include a number of well-known companies in China’s athletic wear market, such as 361º, Exceed, Erke, Xtep and Qiaodan, as well as Taiwan Ching Lu Footwear,~~focus ~~which is an OEM footwear company that is a supplier~~ to ~~Adidas~~concentrate inon ~~Asia.~~developing ~~An “OEM” is an “original equipment manufacturer” which typically purchases customized products or product components which are then re-branded~~ and ~~resold under~~producing ~~its~~specialized ~~own~~shoe ~~brand~~soles.

~~Our~~In our manufacturing ~~facilities~~operations, inwe ~~China~~process ~~are~~basic ~~located~~chemicals inand other ~~Jinjiang~~raw materials to make our sole products. Currently, ~~Fujian~~we ~~Province~~categorize our sole products into three primary product lines: (i) EVA, or ethylene vinyl acetate, sole products which ~~has~~are made from a ~~high~~viscous ~~concentration~~and ofelastic ~~footwear~~foam ~~industry~~material ~~participants.~~containing ~~Most~~tiny ofbubbles ~~our~~for ~~customers~~shock ~~are~~absorption ~~also~~and ~~either~~cushioning ~~headquartered~~abilities; (ii) RB, or ~~have~~synthetic ~~significant~~rubber, ~~operations~~sole products processed mainly from polybutadiene rubber, which is highly resistant to wear and abrasion and used mostly commonly in the ~~greater Jinjiang~~production ~~area~~of outsoles; and (iii) EVO, or ethylene vinyl acetate outsole, products which ~~reduces~~are an outgrowth of our ~~logistic~~EVA ~~costs~~product ~~and~~line ~~provides~~that usis ~~with~~designed anto ~~excellent~~be ~~marketing~~more ~~channel~~abrasive resistance and ~~better~~lighter inand ~~person~~softer ~~communication~~than our ~~with~~EVA product line. In 2010, we also started to supply our ~~customers~~EVO compound pellets to local sole producers which lack the technical and manufacturing capability to manufacture high quality, high performance soles on their own.

~~Second Quarter Financial Performance Highlights~~ 29

~~The~~We ~~following~~sell our products to footwear manufacturers that are ~~some~~based ~~financial~~primarily ~~highlights~~in ~~for~~China. Our customers use our ~~second~~sole ~~fiscal~~products ~~quarter:~~as components in the athletic and leisure shoes that they sell to end consumers, athletic wear companies and global shoe distributors. As of March 31, 2011, we had approximately 32 customers which include a number of well-known companies in China’s athletic wear market, such as 361º, Erke, Xtep and Qiaodan, as well as Taiwan Ching Lu Footwear, which is an OEM footwear company and a supplier to Adidas in Asia. An “OEM” is an “original equipment manufacturer” which typically purchases customized products or product components which are then re-branded and resold under its own brand.

~~Revenue:~~Our ~~Revenue~~manufacturing ~~increased~~facilities ~~$6.5~~in ~~million~~China are located in Jinjiang, orFujian ~~112%~~Province, towhich ~~$12~~has a high concentration of footwear industry participants.4 ~~million~~Most ~~for~~of ~~the~~our ~~three~~customers ~~months~~are ~~ended~~also ~~December~~either ~~31,~~headquartered ~~2010,~~or ~~from~~have ~~$5.9~~significant ~~million~~operations ~~for~~in the ~~same~~greater Jinjiang ~~period~~area, which reduces our logistic costs and provides us with an excellent marketing channel and better in ~~2009~~person communication with our customers.

~~Gross~~Third ~~Profit~~Fiscal ~~and~~Quarter ~~Gross~~Financial ~~Margin:~~Performance ~~Gross profit increased $2.8 million, or 127%, to $5.0 million for the three months ended December 31, 2010, from $2.2 million for the same period in 2009. Gross margin was 40.2% for the three~~Highlights ~~months ended December 31, 2010 as compared to 37.6% for the same period last year.~~

~~Net~~The ~~income:~~following ~~Net~~are ~~income~~some ~~increased~~financial ~~$1.8~~highlights ~~million, or 117%, to $3.3 million~~ for ~~the~~our ~~three~~third ~~months~~fiscal ~~ended December 31, 2010, from $1.5 million for the same period in 2009.~~quarter:

~~Fully diluted net income per share~~Revenue: ~~Fully~~Revenue ~~diluted~~increased ~~net~~$6.3 ~~income~~million, ~~per~~or ~~share~~150.1%, ~~was~~to $0.10.4 million for the three months ended ~~December~~March 31, ~~2010~~2011, asfrom ~~compared to~~ $04.051 million for the same period in ~~2009~~2010.
~~Business~~Gross ~~Segment~~Profit ~~Information~~and Gross Margin: Gross profit increased $2.5 million, or 170.9%, to $3.9 million for the three months ended March 31, 2011, from $1.4 million for the same period in 2010. Gross margin was 37.3% for the three months ended March 31, 2011 as compared to 34.5% for the same period last year.
~~Our~~Net ~~business~~income: ~~operations~~Net ~~can~~income beincreased ~~categorized~~$1.5 ~~into~~million, ~~four~~or ~~segments~~166.7%, ~~based~~to on$2.4 ~~the~~million ~~type~~for ofthe ~~products~~three wemonths ~~manufacture~~ended ~~and~~March ~~sell~~31, ~~specifically (i) EVA soles~~2011, ~~(ii)~~from ~~RB soles~~$914,686 ~~(iii)~~for ~~EVO~~the ~~soles,~~same ~~and~~period ~~(iv)~~in ~~EVO compound pellets~~2010.
~~For~~Fully ~~the~~diluted ~~six~~net ~~months~~income ~~ended~~per ~~December~~share: ~~30,~~Fully ~~2010,~~diluted ~~our~~net ~~sales~~income ~~from~~per ~~EVA~~share ~~soles~~ was $70.207 ~~million,~~for ~~our~~the ~~sales~~three ~~from~~months RBended ~~soles~~March ~~was~~31, ~~$1.8 million~~2011, ~~our~~as ~~sales~~compared ~~from~~to ~~EVO soles was~~ $130.103 ~~million,~~for ~~and~~the ~~our~~same ~~sales~~period ~~from~~in ~~EVO~~2010, ~~compound~~despite ~~pellets~~an ~~was~~increase $4of approximately 2.05 million shares outstanding.

WeBusiness ~~manufacture~~Segment and sell our products using largely the same facilities, personnel and other resources in Jinjiang Chengchang. Additional information regarding our operating segments can be found at Note 17 in our unaudited consolidated financialInformation ~~statements included elsewhere in this report.~~

32 Our business operations can be categorized into four segments based on the type of products we manufacture and sell, specifically (i) EVA soles, (ii) RB soles, (iii) EVO soles, and (iv) EVO compound pellets.

~~Results~~ For ofthe ~~Operations~~nine months ended March 31, 2011, our sales from EVA soles was $9.3 million, our sales from RB soles was $2.5 million, our sales from EVO soles was $18.4 million, and our sales from EVO compound pellets was $6.2 million.

~~Comparison~~ We ofmanufacture ~~Three~~and ~~Months~~sell ~~Ended~~our ~~December~~products 31using largely the same facilities, ~~2010~~personnel and other resources in Jinjiang Chengchang. Additional information regarding our operating segments can be found at Note 17 to our unaudited consolidated financial ~~December~~statements ~~31,~~included ~~2009~~elsewhere in this report.

~~The following table sets forth key components of our results of~~ ~~operations~~Results ~~during the three months ended December 31, 2010 and 2009, both in dollars and as a percentage~~ of ~~our net revenue.~~Operations

		Three Months Ended					Three Months Ended
(Unaudited)		December 31, 2010					December 31, 2009
				Percent of					Percent of
		Amount		Revenue			Amount		Revenue
Revenue	$	12,421,991		100.00%		$	5,868,661		100.00%
Cost of revenue		7,423,404		59.76%			3,663,723		62.43%
Gross profit		4,998,587		40.24%			2,204,938		37.57%
Selling expenses		168,242		1.35%			33,440		0.57%
General and administrative expenses		330,092		2.66%			110,605		1.88%
Total operating expenses		498,334		4.01%			144,045		2.45%
Operating income		4,500,253		36.23%			2,060,893		35.12%
Other income/(expense)		(77,850	)	(0.63%	)		982		0.02%
Interest income		9,261		0.07%			1,714		0.03%
Interest expense		(61,133	)	(0.49%	)		(61,542	)	(1.05%	)
Total other income/(expenses)		(129,722	)	(1.04%	)		(58,846	)	(1.00%	)
Pre-tax income		4,370,531		35.18%			2,002,047		34.11%
Provisions for income tax		1,116,252		8.99%			500,517		8.53%
Net income	$	3,254,279		26.20%		$	1,501,530		25.59%

Comparison of Three Months Ended March 31, 2011 and March 31, 2010

~~Revenue.~~ The ~~Our~~following ~~revenue~~table issets ~~generated~~forth ~~from~~key ~~the sale~~components of our ~~athletic~~results ~~and~~of ~~leisure~~operations ~~shoe~~during ~~sole products. Our revenue rose to $12.4 million for~~ the three months ended ~~December~~March 31, ~~2010~~2011 ~~from $5.9 million for the same period last year, representing an increase of $6.5 million, or 112%. This significant increase is largely attributable to increased sales volume of our EVO sole~~ and ~~EVO compound pellet products. We launched our new EVO sole products in May~~ 2010 ~~which we believe were well received by the market and generated approximately $7.9 million in revenue in the three months ended December 31~~, ~~2010.~~both ~~In addition, we also commenced supplying EVO compound pellets to other local sole makers~~ in ~~2010.~~dollars ~~This~~and ~~new~~as ~~line~~a percentage of ~~business accounted~~our ~~for~~net ~~approximately $1.9 million in~~ revenue ~~in the three months ended December 31, 2010~~.

~~Cost of revenue. Our cost of revenue includes the~~ direct costs of raw materials, labor and overhead. Our cost of revenue increased approximately $3.8 million, or 103%, to $7.4 million for the three months ended December 31, 2010 as compared to approximately $3.6 million for the same period last year. As a percentage of revenue, cost of revenue declined slightly to 60% for the three months ended December 31, 2010 as compared to 62% for the same period in 2009. The dollar increase in cost of revenue resulted primarily from the increased production costs associated with the overall increase in the volume of products sold.30

Gross profit and gross margin. Our gross profit was approximately $5.0 million for the three months ended December 31, 2010, as compared to approximately $2.2 million for the same period last year, representing an increase of approximately $2.8 million, or 127%. Gross profit increased due to higher sales volumes and relatively stable costs of revenue. Gross profit as a percentage of net revenue, or gross margin, increased to 40% for the three months ended December 31, 2010 as compared to 38% in the same quarter last year. The increase in gross margin was mainly because our newly launched EVO sole and EVO compound pellet products had higher gross margin than other products.

		Three Months Ended					Three Months Ended
(Unaudited)		March 31, 2011					March 31, 2010
				Percent of					Percent of
		Amount		Revenue			Amount		Revenue
Revenue	$	10,432,547		100.0%		$	4,170,644		100.0%
Cost of revenue		6,536,831		62.7%			2,732,827		65.5%
Gross profit		3,895,716		37.3%			1,437,817		34.5%
Selling expenses		65,828		0.6%			26,891		0.6%
General and administrative expenses		340,560		3.3%			164,222		3.9%
Total operating expenses		406,388		3.9%			191,113		4.6%
Operating income		3,489,328		33.5%			1,246,704		29.9%
Other income/(expense)		(159,979	)	(1.5%	)		7,853		0.2%
Interest income		16,660		0.2%			-		-
Interest expense		(41,308	)	(0.4%	)		(37,421	)	(0.9%	)
Total other income/(expenses)		(184,627	)	(1.8%	)		(29,568	)	(0.7%	)
Pre-tax income		3,304,701		31.7%			1,217,136		29.2%
Provisions for income tax		865,340		8.3%			302,450		7.3%
Net income	$	2,439,361		23.4%		$	914,686		21.9%

~~Selling expenses~~Revenue. Our ~~selling~~revenue ~~expenses~~is ~~consist~~generated from the ~~primarily~~sale of ~~compensation and benefits to~~ our ~~sales~~athletic and ~~marketing~~leisure ~~staff,~~shoe ~~sales commissions,~~sole ~~advertising costs, business travel and transportation costs and other sales related costs~~products. Our ~~selling~~revenue ~~expenses~~increased ~~were~~ to $~~168,242~~10.4 million for the three months ended ~~December~~March 31, ~~2010~~2011 asfrom ~~compared to~~ $~~33,440~~4.2 ~~for~~million for the same period last year, representing an increase of $~~134~~6.2 million,~~802,~~ or ~~403~~150.1%, ~~mostly as a result of~~. ~~higher~~This ~~sales~~significant ~~volume~~increase ~~and~~is ~~increased~~largely ~~bonus~~attributable ~~payments~~ to ~~sales~~revenue ~~personnel.~~generated Asfrom sales aof ~~percentage~~our ofEVO ~~revenue, selling~~sole ~~expenses~~and ~~increased~~EVO tocompound 1pellet products.~~35%~~ ~~for~~We ~~three~~launched ~~months~~our ~~ended~~new ~~December~~EVO sole ~~31,~~products ~~2010 from~~in ~~0.57%~~May ~~for~~2010 ~~the~~which ~~three~~we ~~months~~believe ~~ended~~were ~~December~~well ~~31,~~received ~~2009.~~by ~~The~~the ~~percentage~~market ~~increase~~and ~~resulted~~contributed ~~primarily~~approximately ~~from~~$5.3 amillion ~~change~~in revenue in the ~~way~~three wemonths ~~compensate~~ended March ~~our~~31, ~~sales staff~~2011. ~~Instead~~ ofIn ~~paying~~addition, ~~performance~~we ~~bonuses~~also oncommenced asupplying ~~quarterly~~EVO ~~basis~~compound aspellets ~~we did last year,~~to ~~bonuses~~other ~~which~~local ~~were~~sole ~~earned throughout~~makers ~~the~~in ~~year~~2010. ~~were~~This ~~paid~~new atline ~~year~~of ~~end,~~business ~~which~~contributed approximately we$2.3 ~~believe~~million ~~will provide~~in ~~better~~revenue ~~long~~in ~~term~~the ~~incentive~~three ~~and~~months ~~more~~ended ~~objective~~March ~~measures of~~31, ~~performance~~2011.

The following tables show the different segments comprising our total revenue:
		Three Months Ended
(Unaudited)		March 31,			Change
		2011		2010	(%)
EVA soles	$	2,126,635	$	2,254,364	(5.7%	)
RB soles		696,856		1,724,774	(59.6%	)
EVO soles		5,334,451		-	-
EVO compound pellets		2,255,713		-	-
Other		18,892		191,506	(90.1%	)
Total revenue	$	10,432,547	$	4,170,644	150.1%

~~General~~Total ~~and~~revenue ~~administrative~~from ~~expenses.~~our ~~Our~~EVA ~~general and~~segment ~~administrative~~decreased ~~expenses~~to ~~consist~~$2.1 ofmillion for the ~~cost~~three ofmonths ~~compensation~~ended ~~and~~March ~~benefits~~31, ~~for general~~2011 ~~management~~from ~~and~~$2.3 ~~administrative~~million ~~staff,~~for ~~social~~the ~~welfare~~same ~~benefits,~~period ~~amortization~~last ~~and depreciation~~year, ~~rental~~representing ~~costs,~~a ~~research~~decrease ~~and~~of ~~development costs~~$127,729, ~~and other~~or ~~miscellaneous administrative costs~~5.7%, ~~Our~~mainly ~~general~~because ~~and~~we ~~administrative~~made ~~expenses~~a ~~increased~~strategic bydecision ~~$219,487,~~to orfocus ~~198%,~~on toour ~~$330,092~~newly ~~for~~launched ~~the~~EVO ~~three~~products ~~months~~and ~~ended~~have ~~December~~accordingly ~~31,~~reduced ~~2010~~our ~~from~~production ~~$110,605~~capacity inon the ~~same~~traditional ~~period~~EVA ~~in 2009~~product segment. AsTotal ~~a percentage of~~ revenue, ~~general~~from ~~and~~the ~~administrative~~RB ~~expenses~~segment ~~increased~~declined toby 259.666% ~~for~~to ~~three months ended December 31~~$696,856 ~~2010 from 1.88%~~ for the three months ended ~~December~~March 31, ~~2009. The~~2011 ~~amount~~as ~~and~~compared ~~percentage increases are primarily attributable~~ to ~~costs~~$1.7 ~~incurred in~~million ~~this period associated with our going public transaction and higher employment disability and welfare payments made~~ for the ~~benefit~~same period oflast ~~employees~~year as a result of adecreased ~~PRC~~demands ~~governmental~~from ~~policy~~our ~~change~~RB ~~in 2010, as well as depreciation~~product ~~costs associated with the shutdown of Polyurethane production lines and Thermoplastic Urethane lines in February 2010 which were used to produce products we no longer sell~~customers.

~~Interest~~Cost ~~income~~of revenue. ~~Interest~~Our ~~income~~cost of revenue includes the direct costs of raw materials, labor and overhead. Our cost of revenue increased approximately $73.8 million,~~547,~~ or ~~440~~139.2%, to $~~9,261~~6.5 million for the three months ended ~~December~~March 31, ~~2010~~2011 as compared to approximately $~~1,714~~2.7 million for the same period last year. asAs a ~~result~~percentage of ~~higher~~revenue, ~~cash balances~~cost inof ~~interest~~revenue ~~bearing~~declined ~~deposit~~to ~~accounts~~62.7% for ~~during~~ the three months ended ~~December~~ March 31, 2011 as compared to 65.5% for the same period in 2010 mainly due to increased sales of our EVO products, which offered higher gross margins than the traditional EVA and RB products. The dollar increase in cost of revenue resulted primarily from the increased production costs associated with the overall increase in the volume of products sold.

~~Interest expense. Interest expense was $61,133 for the three months ended December~~ 31, 2010 as compared to $61,542 for the same period last year, representing a decrease of $409 or 1%. The decrease was largely because we had less short-term borrowings during the three months ended December 31, 2010 as compared to the same period in 2009. In addition, the interest rates of our bank loans were lower in 2010 as compared to 2009.

Pre-tax income. Our pre-tax income increased by approximately $2.4 million, or 118%, to $4.4 million for the three months ended December 31, 2010 from $2.0 million for the same period in 2009, due to the factors described above.

The following tables show the different segments comprising our total cost of revenue:

(Unaudited)		Three Months Ended
		March 31,
		2011		2010
EVA soles	$	1,332,129	$	1,452,382
RB soles		430,810		1,097,134
EVO soles		3,273,493		-
EVO compound pellets		1,369,820		-
Other		130,579		183,311
Total cost of revenue	$	6,536,831	$	2,732,827

~~Provision~~Total ~~for~~costs ~~income~~of ~~taxes.~~revenue ~~Our~~for ~~provision~~our ~~for income~~EVA ~~taxes~~segment ~~was~~decreased ~~approximately~~by 8.3% from $1.15 million ~~for~~during the three months ended ~~December~~ March 31, 2010, to $1.3 million for the same period in 2011 as ~~compared~~a result of lower sales volume in this segment in this quarter. Total costs of revenue for the RB products were down by 60.7% to $430,810 ~~approximately~~from $01.51 million for the same period last year. ~~The~~due ~~increase~~to ~~was~~lower ~~due~~production costs toassociated anwith ~~increase~~the overall reduction in ~~our~~the ~~taxable~~volume ~~income.~~of RB products sold.

~~Net~~Gross ~~income~~profit and gross margin. Our ~~net~~gross ~~income~~profit was ~~increased~~approximately $3.9 million for the three months ended March 31, 2011, as compared to approximately $1.84 million for the same period last year, representing an increase of approximately $2.5 million, or ~~118~~170.9% . Gross profit as a percentage of net revenue, or gross margin, increased to $337.3% ~~million~~ for the three months ended ~~December~~ March 31, ~~2010,~~2011 ~~from~~as ~~approximately~~compared $1to 34.5% ~~million~~in ~~for~~ the same ~~period~~quarter last year,. ~~due~~The increase in gross margin was mainly attributed to ~~the~~our ~~factors~~newly ~~described~~launched EVO ~~above.~~sole and EVO compound pellet products, which had higher gross margins than our EVA and RB products.

~~Comparison~~Gross ofmargins ~~Six~~for ~~Months~~the ~~Ended~~EVA ~~December~~and RB segments were approximately 37.4% and 38.2% for the three months ended March 31, ~~2010~~2011 as compared to 35.6% and 36.4% for the same period last year, respectively, primarily due to lower ~~December~~overhead costs allocated to such segments benefiting from the economics of scale generated by the increase in overall production volume. Gross margins for our new EVO soles and EVO compound pellets were approximately 38.6% and 39.3% for the three months ended March 31, ~~2009~~2011, respectively.

~~The~~Selling ~~following~~expenses. ~~table~~Our ~~sets~~selling ~~forth~~expenses ~~key~~consist primarily ~~components~~ of compensation and benefits to our ~~results~~sales ofand marketing staff, sales ~~operations~~commissions, ~~during~~advertising ~~the~~costs, ~~six~~business travel and transportation costs and other sales related costs. Our selling expenses were $65,828 for the three months ended ~~December~~March 31, ~~2010~~2011 ~~and~~as ~~2009~~compared to $26,891 ~~both~~for inthe same period last ~~dollars~~year, ~~and~~representing an increase of $38,937, or 144.8%, mostly as a ~~percentage~~result of higher ~~our~~sales ~~net~~volume and increased bonus payments. As a percentage of revenue, selling expenses remained stable at 0.6% for three months ended March 31, 2011 over the same period last year.

		Six Months Ended					Six Months Ended
(Unaudited)		December 31, 2010					December 31, 2009
				Percent of					Percent of
		Amount		Revenue			Amount		Revenue
Revenue	$	26,232,749		100.00%		$	12,698,010		100.00%
Cost of revenue		15,694,399		59.83%			7,758,681		61.10%
Gross profit		10,538,350		40.17%			4,939,329		38.90%
Selling expenses		220,182		0.84%			75,867		0.60%
General and administrative expenses		557,841		2.13%			201,430		1.59%
Total operating expenses		778,023		2.97%			277,297		2.18%
Operating income		9,760,327		37.21%			4,662,032		36.71%
Other income/(expense)		(85,224	)	(0.32%	)		982		0.01%
Interest income		15,473		0.06%			3,428		0.03%
Interest expense		(107,795	)	(0.41%	)		(116,904	)	(0.92%	)
Total other income/(expenses)		(177,546	)	(0.68%	)		(112,494	)	(0.89%	)
Pre-tax income		9,582,781		36.53%			4,549,538		35.83%
Provisions for income tax		2,424,272		9.25%			1,137,390		8.96%
Net income	$	7,155,509		27.28%		$	3,412,148		26.87%

General and administrative expenses. Our general and administrative expenses consist of the cost of compensation and benefits for general management and administrative staff, social welfare benefits, amortization and depreciation, rental costs, research and development costs, and other miscellaneous administrative costs. Our general and administrative expenses increased by $176,338, or 107.4%, to $340,560 for the three months ended March 31, 2011 from $164,222 in the same period in 2010, primarily due to higher costs incurred associated with being a public company. However, as a percentage of revenue, general and administrative expenses decreased to 3.3% for three months ended March 31, 2011 from 3.9% for the three months ended March 31, 2010, as revenue growth outpaced the increase of general and administrative costs.

34Interest income. Interest income was $16,660 for the three months ended March 31, 2011 as compared to a negligible amount for the same period last year, due to higher cash balances in interest bearing deposit accounts during the three months ended March 31, 2011.

~~Revenue~~Interest expense. ~~Our~~Interest ~~revenue~~expense ~~increased to~~was $~~26.2 million~~ 41,308 for the ~~six~~three months ended ~~December~~March 31, ~~2010~~2011 ~~from $12.7~~as ~~million~~compared to $37,421 for the same period last year, representing ana slight increase of $~~13.5 million~~3,887 or ~~107~~10.4% . ~~This significant~~ The increase iswas largely ~~attributable~~because ~~to increased sales volume of our EVO sole and EVO compound pellet products. We launched our new EVO sole products in May 2010 which~~ we ~~believe~~had ~~were~~more ~~well~~short-term ~~received~~borrowings byduring the ~~market~~ ~~and the EVO sole product line generated approximately $13.1 million in revenue in the six months~~three months ended ~~December~~March 31, ~~2010.~~2011 Inas ~~addition,~~compared ~~we also commenced supplying EVO compound pellets~~ to ~~other~~the ~~local~~same ~~sole~~period ~~makers~~ in 2010. ~~This new line of business contributed approximately $4.0 million in revenue in the six months ended December 31, 2010.~~

The following tables show the different segments comprising our total sales:
(Unaudited)		Six Months Ended December 31,			Change
		2010		2009	(%)
EVA soles	$	7,221,190	$	8,536,616	(15.41%	)
RB soles		1,798,009		3,911,298	(54.03%	)
EVO soles		13,089,674		-	-
EVO compound pellets		3,985,022		-	-
Other		138,854		250,096	(44.48%	)
Total sales	$	26,232,749	$	12,698,010	106.59%

Pre-tax income. Our pre-tax income increased by approximately $2.1 million, or 171.5%, to $3.3 million for the three months ended March 31, 2011 from $1.2 million for the same period in 2010, due to the factors described above.

Cost of revenue. Our cost of revenue increased approximately $7.9 million, or 102%, to $15.7 million for the six months ended December 31, 2010 as compared to approximately $7.8 million for the same period last year. As a percentage of revenue, cost of revenue was 60% for the six months ended December 31, 2010 as compared to 61% for the same period in 2009. The dollar increase in cost of revenue resulted primarily from the increased production costs associated with the overall increase in the volume of products sold.32

~~Gross~~Provision ~~profit~~for ~~and~~income ~~gross margin~~taxes. Our ~~gross~~provision ~~profit~~for income taxes was approximately $~~10.5~~865,340 ~~million~~ for the ~~six~~three months ended ~~December~~March 31, ~~2010~~ 2011, as compared to approximately $~~4.9~~302,450 ~~million~~ for the same period last year~~, representing an increase of approximately $5~~.6 ~~million, or 113%. Gross profit as~~The aincrease ~~percentage of net revenue, or gross margin,~~ was ~~40%~~mainly ~~for~~due ~~the six months ended December 31, 2010 as compared~~ to ~~39%~~an increase in ~~the same quarter last year. Gross margins for~~ our ~~newly~~taxable ~~launched EVO sole and EVO compound pellet products were approximately 41% for the six months ended December 31, 2010, slightly higher than those of our EVA sole and RB sole products~~income. ~~Gross margins for our EVA sole and RB sole were approximately 40% and 38% for the six months ended December 31, 2010 as compared to 40% and 37% for the same period last year.~~

~~Selling~~Net ~~expenses~~income. Our ~~selling~~net ~~expenses~~income ~~were~~increased ~~$220,182~~approximately ~~for the six months ended December 31, 2010 as compared to~~ $~~75,867~~1.5 ~~for the same period last year~~million, ~~representing an increase of $144,315,~~ or ~~190~~166.7%, ~~mostly as a result of higher sales volume. As a percentage of revenue, selling expenses increased~~ to 0$2.~~84%~~4 ~~for~~million ~~six months ended December 31, 2010 from 0.60%~~ for the ~~six months~~three months ended ~~December~~March 31, ~~2009.~~2011, ~~The slight percentage decrease resulted~~ from ~~a change~~approximately in$914,686 for the ~~way~~same weperiod ~~compensate our sales staff. Instead of paying performance bonuses on a quarterly basis as we did~~ last year, ~~we paid bonuses which were~~ ~~earned~~as ~~throughout~~a ~~the~~result ~~year at~~of the ~~year~~cumulative ~~end,~~effect ~~which~~of weall ~~believe~~factors ~~will~~described ~~provide better long term incentive and more objective measures of performance~~above.

~~General~~Comparison ~~and~~of ~~administrative~~Nine ~~expenses.~~Months ~~Our~~Ended ~~general and~~March ~~administrative expenses increased by $356,409, or 177%, to $557,841 for the six months ended December~~ 31, ~~2010~~2011 ~~from $201,431 in the same period in 2009. As a percentage of revenue, general~~ and ~~administrative expenses increased to 2.13%~~March ~~for six months ended December~~ 31, 2010 from 1.59% for the six months ended December 31, 2009. This amount and percentage increase are primarily attributable to costs incurred in this period associated with our going public transaction and higher employment disability and welfare payments made for the benefit of employees as a result of a PRC governmental policy change in 2010, as well as depreciation costs associated with the shutdown of production lines for discontinued products in February, 2010.

35The following table sets forth key components of our results of operations during the nine months ended March 31, 2011 and 2010, both in dollars and as a percentage of our net revenue.

Interest income. Interest income increased $12,045, or 351%, to $15,473 for the six months ended December 31, 2010 as compared to $3,428 for the same period last year as a result of higher cash balances in interest bearing deposit accounts during the six months ended December 31, 2010.

		Nine Months Ended					Nine Months Ended
(Unaudited)		March 31, 2011					March 31, 2010
				Percent of					Percent of
		Amount		Revenue			Amount		Revenue
Revenue	$	36,665,296		100.0%		$	16,728,146		100.0%
Cost of revenue		22,231,230		60.6%			10,351,000		61.9%
Gross profit		14,434,066		39.4%			6,377,146		38.1%
Selling expenses		286,010		0.8%			102,758		0.6%
General and administrative expenses		898,401		2.5%			365,653		2.2%
Total operating expenses		1,184,411		3.2%			468,411		2.8%
Operating income		13,249,655		36.1%			5,908,735		35.3%
Other income/(expense)		(245,203	)	(0.7%	)		8,835		0.1%
Interest income		32,133		0.1%			-		-
Interest expense		(149,103	)	(0.4%	)		(150,898	)	(0.9%	)
Total other income/(expenses)		(362,173	)	(1.0%	)		(142,063	)	(0.9%	)
Pre-tax income		12,887,482		35.2%			5,766,672		34.5%
Provisions for income tax		3,292,612		9.0%			1,439,840		8.6%
Net income	$	9,594,870		26.2%		$	4,326,832		25.9%

~~Interest expense~~Revenue. ~~Interest~~Our ~~expense~~revenue ~~was~~increased significantly to $~~107,795~~36.7 million for the ~~six~~nine months ended ~~December~~March 31, ~~2010~~2011 ~~as compared to~~ from $~~116,904~~16.7 million for the same period last year, representing aan ~~decrease~~increase of $920.0 million,~~109,~~ or 8119.2% . ~~The~~This ~~slight~~significant ~~decrease~~increase was ~~because~~largely weattributed to revenue ~~had~~generated ~~less~~from ~~short-term~~sales ~~borrowings~~of ~~during~~our EVO sole and EVO compound pellet products. We launched our EVO sole products in May 2010 which we believe were well received by the ~~six~~market and contributed approximately $18.4 million in revenue in the nine months ended ~~December~~March 31, ~~2010~~2011. asIn ~~compared~~addition, we also commenced supplying EVO compound pellets to ~~the~~other ~~same~~local ~~period~~sole makers in ~~2009~~2010. ~~and~~This ~~the~~new ~~interest~~line ~~rates~~of ~~were~~business contributed ~~lower~~approximately $6.2 million in ~~2010~~revenue asin ~~compared~~the tonine ~~2009~~months ended March 31, 2011.

Pre-tax income. Our pre-tax income increased by approximately $5.1 million, or 111%, to $9.6 million for the six months ended December 31, 2010 from $4.5 million for the same period in 2009, due to the factors described above.

The following tables show the different segments comprising our total revenue:
		Nine Months Ended
(Unaudited)		March 31,			Change
		2011		2010	(%)
EVA soles	$	9,347,825	$	10,790,980	(13.4%	)
RB soles		2,494,865		5,636,072	(55.7%	)
EVO soles		18,424,125		-	-
EVO compound pellets		6,240,735		-	-
Other		157,746		301,094	(47.6%	)
Total revenue	$	36,665,296	$	16,728,146	119.2%

~~Provision~~Total ~~for~~revenue ~~income~~from ~~taxes~~our EVA segment decreased to $9.4 ~~Our~~million for ~~provision~~the nine months ended March 31, 2011 from $10.8 million for ~~income~~the ~~taxes~~same ~~was~~period last ~~approximately~~year, representing a decrease of $21.4 million, or 13.4% mainly because we made a strategic decision to focus on our newly launched EVO products and have accordingly reduced our production capacity on the traditional EVA product segment. Total revenue from the RB segment decreased by 55.7% to $2.5 million for the ~~six~~nine months ended ~~December~~March 31, ~~2010,~~2011 as compared to ~~approximately~~ $15.16 million for the same period last year. ~~The~~as ~~increase~~a ~~was~~result ~~due~~of tolower ~~an increase~~demands infrom our ~~taxable~~RB ~~income~~product customers.

Net income. Our net income increased approximately 3.8 million, or 110%, to $7.2 million for the six months ended December 31, 2010, from approximately $3.4 million for the same period last year, due to the factors described above. 33

Cost of revenue. Our cost of revenue increased ~~Liquidity~~approximately ~~and~~$11.9 ~~Capital~~million, ~~Resources~~or 114.8%, to $22.2 million for the nine months ended March 31, 2011 as compared to approximately $10.3 million for the same period last year. As a percentage of revenue, cost of revenue was 60.6% for the nine months ended March 31, 2011 as compared to 61.9% for the same period in 2010. The dollar increase in cost of revenue resulted primarily from the increased production costs associated with the overall increase in the volume of products sold.

To date, we have financed our operations primarily through cash flows from operations, augmented by short-term bank borrowings and equity contributions by our stockholders. Cash flow from operation and short-term bank loans are likely to continue to be our key sources of financing for the foreseeable future, although in the future we may raise additional capital by issuing shares of our capital stock in an equity financing. We expect to renew our short term loans when they become due.

The following tables show the different segments comprising our total cost of revenue:
(Unaudited)		Nine Months Ended
		March 31,
		2011		2010
EVA soles	$	5,678,462	$	6,579,208
RB soles		1,552,151		3,574,008
EVO soles		11,041,504		-
EVO compound pellets		3,739,949		-
Other		219,164		197,784
Total cost of revenue	$	22,231,230	$	10,351,000

~~Our~~Total ~~liquidity~~costs ~~and~~of ~~working~~revenue ~~capital~~for ~~may~~our beEVA ~~affected~~segment decreased by a13.7% from ~~material~~$6.6 ~~decrease~~million induring ~~cash flow due to factors such as~~ the ~~continued~~nine ~~use~~months ofended ~~cash~~March in31, ~~operating~~2010 ~~activities resulting from a decrease in sales due~~ to ~~the~~$5.7 ~~current global economic~~million ~~challenges,~~for ~~increased competition, decreases in~~ the ~~availability,~~same orperiod ~~increases~~ in ~~the~~2011 ~~cost~~as ofa ~~raw~~result ~~materials,~~of ~~unexpected~~lower ~~equipment~~sales ~~failures,~~in orthis ~~regulatory changes~~segment. WeTotal costs ~~are~~of ~~also~~revenue ~~exposed~~for tothe aRB ~~variety~~products ofdeclined ~~risks~~by ~~associated~~56.6% ~~with~~to ~~short-term~~$1.6 ~~borrowings~~million ~~including~~from ~~adverse~~$3.6 ~~fluctuations~~million ~~in fixed interest rates~~ for ~~short-term~~the ~~borrowings~~same ~~and~~period ~~unfavorable~~last ~~increases~~year indue ~~variable interest rates, potential inability~~ to ~~service~~lower ~~our~~production ~~short~~costs ~~term~~associated with ~~indebtedness~~the ~~through~~overall ~~cash~~decrease ~~flow~~in ~~from operations and~~ the ~~overall~~volume ~~reduction~~ of ~~credit~~RB ~~in the~~products ~~current economic environment~~sold.

Gross profit and gross margin. Our gross profit Aswas ofapproximately ~~December~~$14.4 million for the nine months ended March 31, ~~2010~~2011, weas compared ~~had~~to ~~cash~~approximately ~~and~~$6.4 ~~cash~~million ~~equivalents~~for the same period last year, representing an increase of approximately $148.40 million, ~~primarily~~or ~~consisting~~126.3% . Gross profit as a percentage of ~~cash~~net onrevenue, ~~hand~~or gross margin, was 39.4% for the nine months ended March 31, 2011 as compared to 38.1% in the same period last year. Gross margins for our newly launched EVO sole and ~~demand~~EVO ~~deposits~~compound pellet products were both approximately 40.1% ~~The~~for ~~following~~the ~~table~~nine ~~sets~~months ~~forth~~ended aMarch ~~summary~~31, of2011. Gross margins for our ~~cash~~EVA ~~flows~~sole and RB sole were approximately 39.3% and 37.8% for the ~~periods~~nine months ~~indicated:~~ended March 31, 2011 as compared to 39.0% and 36.6% for the same period last year, primarily due to lower overhead costs allocated to such segments benefiting from the economics of scale generated by the increase in overall production volume.

Selling expenses. Our selling expenses were ~~Cash~~$286,010 ~~Flow~~for the nine months ended March 31, 2011 as compared to $102,758 for ~~(all~~the ~~amounts~~same inperiod Ulast year, representing an increase of $183,252, or 178.S3%, mostly as a result of higher sales volume. ~~dollars)~~As a percentage of revenue, selling expenses increased slightly to 0.8% for nine months ended March 31, 2011 from 0.6% for the nine months ended March 31, 2010.

	Six Months Ended December 31,
		2010		2009
Net cash provided by operating activities	$	5,373,924	$	4,768,903

General and administrative expenses. Our general and administrative expenses increased by $532,748, or 145.7%, to $898,401 for the nine months ended March 31, 2011 from $365,653 in the same period in 2010. As a percentage of revenue, general and administrative expenses increased to 2.5% for nine months ended March 31, 2011 from 2.2% for the nine months ended March 31, 2010. This amount and percentage increase are primarily attributable to costs incurred in this period associated with our going public transaction and higher employment disability and welfare payments made for the benefit of employees as a result of a PRC governmental policy change in 2010.

~~Net~~Interest income. Interest income was $32,133 for the nine months ended March 31, 2011 as compared to a negligible amount for the same period last year as a result of higher cash ~~(used~~balances in) ~~investing~~interest ~~activities~~bearing deposit ~~(833,551~~accounts )during ~~(109~~the nine months ended March 31,~~973~~ )2011.

~~Net~~Interest ~~cash~~expense. ~~provided~~Interest ~~by/(used~~expense ~~in)~~was ~~financing~~$149,103 for ~~activities~~the 2nine months ended March 31,~~812~~ 2011 as compared to $150,~~578~~898 (3for the same period last year,~~020~~ representing a decrease of $1,~~242~~795, )or 1.2% . The slight decrease was attributed to less short-term borrowings during the nine months ended March 31, 2011 as compared to the same period in 2010.

Net increase in cash and cash equivalents		7,352,951		1,638,688
Effect of foreign currency translation on cash		538,812		682
Cash and cash equivalent at beginning of the year		6,513,198		2,960,156
Cash and cash equivalent at end of the year	$	14,404,961	$	4,599,526

Pre-tax income. Our pre-tax income increased by approximately $7.1 million, or 123.5%, to $12.9 million for the nine months ended March 31, 2011 from $5.8 million for the same period in 2010, due to the factors described above.

3634

Provision for income taxes. Our provision for ~~Operating~~income ~~Activities~~taxes was approximately $3.3 million for the nine months ended March 31, 2011, as compared to approximately $1.4 million for the same period last year. The increase was due to an increase in our taxable income.

Net ~~cash~~income. ~~provided~~Our bynet ~~operating~~income ~~activities was~~ increased approximately $5.43 million, or 121.8%, to $9.6 million for the ~~six~~nine months ended March ~~December~~ 31, ~~2010~~2011, asfrom ~~compared to~~ approximately $4.83 million infor the same period ~~2009.~~last ~~The increase was mainly due to the increase in operating~~year, ~~income~~ as a result of ~~increased~~the ~~sales~~cumulative ~~and~~effect ~~business~~of ~~expansion,~~factors as described above.

~~Investing~~Liquidity ~~Activities~~ and Capital Resources

~~Net~~To ~~cash~~date, ~~used~~we inhave ~~investing~~financed ~~activities~~our ~~for~~operations ~~the~~primarily ~~six~~through ~~months~~cash flows ~~ended~~from ~~December 31~~operations, ~~2010~~augmented ~~was~~by ~~$833,551,~~short-term asbank ~~compared~~borrowings toand ~~$109,973~~equity contributions inby ~~the~~our ~~same~~stockholders. ~~period~~Cash inflow ~~2009.~~from ~~During~~operation ~~the~~and ~~2010~~short-term ~~period,~~bank loans weare ~~spent~~likely ~~$248,593~~to ~~for~~continue ~~the~~to ~~purchases~~be ofour ~~one~~key ~~automatic~~sources ~~EVA~~of ~~ejection~~financing for the ~~machine~~foreseeable future, ~~one~~although ~~rubbing~~in ~~mixing~~the ~~mill~~future ~~and~~we ~~two~~may ~~vehicles.~~raise ~~The~~additional ~~remaining~~capital ~~cash~~by issuing ~~was~~shares ~~predominantly~~of ~~used~~our tocapital ~~purchase~~stock ~~molds~~in toan ~~meet~~equity ~~new~~financing. ~~design~~We ~~needs,~~expect asto ~~well~~renew our asshort toterm ~~replace~~loans ~~worn-out~~when ~~molds~~they become due.

Our liquidity and working capital may be affected by a material ~~Financing~~decrease ~~Activities~~in cash flow due to factors such as the continued use of cash in operating activities resulting from a decrease in sales due to the current global economic crisis, increased competition, decreases in the availability, or increases in the cost of raw materials, unexpected equipment failures, or regulatory changes. We are also exposed to a variety of risks associated with short-term borrowings including adverse fluctuations in fixed interest rates for short-term borrowings and unfavorable increases in variable interest rates, potential inability to service our short term indebtedness through cash flow from operations and the overall reduction of credit in the current economic environment.

~~Net~~As ~~cash~~of ~~provided~~March by31, ~~financing~~2011, ~~activities~~we ~~was~~had ~~approximately~~cash ~~$2.8~~and ~~million~~cash ~~for~~equivalents ~~the six months ended December 31, 2010 as compared to~~ of approximately $317.08 million, ~~used~~primarily inconsisting ~~financing~~of ~~activities~~cash inon ~~the~~hand ~~same~~and ~~period in 2009~~demand deposits. ~~Such~~The ~~increase~~following intable ~~net~~sets ~~cash provided~~forth bya ~~financing~~summary ~~activities~~of ~~was mainly due to~~ our ~~private~~cash ~~placement~~flows ~~transaction~~for ~~described~~the periods ~~below.~~indicated:

On October 19, 2010, we completed a private placement transaction with an accredited investor, pursuant to which we issued to the investor 2,547,500 shares of our common stock for a purchase price of $4.5 million, or $1.768 per share. As a result of this private placement, we raised approximately $4.5 million in gross proceeds, which left us with approximately $3.9 million in net proceeds after the deduction of offering expenses in the amount of approximately $0.6 million.

Cash Flow
(all amounts in U.S. dollars)
		Nine Months Ended
		December 31,
		2011			2010
Net cash provided by operating activities	$	8,787,083		$	5,635,029
Net cash (used in) investing activities		(1,348,109	)		(407,304	)
Net cash provided by/(used in) financing activities		3,118,828			(2,744,534	)
Net increase in cash and cash equivalents		10,557,802			2,483,191
Effect of foreign currency translation on cash		681,590			2,039
Cash and cash equivalent at beginning of the year		6,513,198			2,960,156
Cash and cash equivalent at end of the year	$	17,752,590		$	5,445,386

~~Capital~~Operating ~~Expenditures~~ Activities

~~Our~~Net ~~capital~~cash ~~expenditures~~provided ~~are~~by ~~mainly~~operating ~~related~~activities towas ~~the~~approximately $8.8 ~~purchase~~million offor ~~sole~~the ~~molds~~nine ~~and~~months ~~other~~ended ~~manufacturing~~March ~~equipment.~~31, ~~Our~~2011, ~~capital~~as ~~expenditures~~compared ~~were~~ to approximately $0.5.6 million ~~for~~in the ~~six~~same ~~months~~period ~~ended~~of ~~December~~2010. 31The increase was mainly due to the increase in operating income as a result of increased sales and expansion in product lines, ~~2010~~as described above.

AsInvesting part of our growth strategy, we intend to acquire land use rights for approximately 40,000 square meters of additional land located in Jinjiang from the local PRC government and expect to begin construction of a new plant in the first half of 2011. We have commenced negotiations with the local government for the acquisition of land use rights for this property. We intend to use commercially reasonable efforts to secure such land rights on favorable terms, but cannot assure that we will be able to acquire the land use rights on commercially favorable terms, if at all. If we acquire the land use rights, we estimate that the purchase price for the land use rights will be approximately RMB 30 million (approximately $4.5 million) and we estimate that we may incur an additional RMB 30 million (approximately $4.5 million) in construction costs to upgrade the infrastructure of the facility. Our expectation is that the transaction and related costs associated with the acquisition of land use rights will be satisfied and paid for with cash on hand, cash flow from operations and bank loans. In light of uncertainty concerning the above-mentioned purchase, we have also commenced negotiations on leasing an alternative plant. Activities

WeNet ~~expect to renew our short term loans when they become due. We believe that our~~ cash onused ~~hand,~~in ~~cash~~investing ~~flow~~activities ~~from operations and anticipated bank loans will meet our expected capital expenditure and working capital~~ for the ~~next~~nine 12 months. ~~We may,~~ended ~~however,~~March ~~in the future~~31, ~~require~~2011 ~~additional~~was ~~cash~~$1.3 ~~resources due to changed business conditions~~million, ~~implementation~~as ofcompared ~~our strategy~~ to ~~expand~~$407,304 ~~our~~in ~~production~~the ~~capacity~~same orperiod ~~other investments or acquisitions we may decide to pursue~~in 2010. IfDuring ~~our~~the ~~own~~nine ~~financial resources~~months ~~are~~ended ~~insufficient~~March to31, ~~satisfy our capital requirements~~2011, we ~~may~~spent ~~seek~~approximately ~~to sell additional equity or debt securities or obtain additional credit facilities~~$0.3 million ~~The~~for ~~sale~~the purchases of ~~additional~~one ~~equity~~automatic ~~securities~~EVA ~~could~~ejection ~~result~~machine, inone ~~dilution to our stockholders.~~rubbing ~~The~~mixing ~~incurrence~~mill ~~of indebtedness would result in increased debt service obligations~~ and ~~could~~two ~~require us to agree to operating and financial covenants that would restrict our operations~~vehicles. ~~Financing~~The ~~may~~remaining ~~not~~cash bewas ~~available~~predominantly inused ~~amounts or on terms acceptable~~ to purchase ~~us,~~molds ~~if at all. Any failure by us~~ to ~~raise~~meet ~~additional~~new ~~funds~~design ~~on terms favorable to us~~needs, oras atwell ~~all,~~as ~~could limit our ability~~ to ~~expand~~replace ~~our business operations and could harm our overall business prospects~~worn-out molds.

~~Loan Commitments~~ 35

~~Our~~Financing ~~borrowings are mostly short term loans from commercial banks located in China. As of December 31, 2010, the amount, maturity date and term of each of our bank loans are as follows:~~ Activities

37 Net cash provided by financing activities was approximately $3.1 million for the nine months ended March 31, 2011 as compared to approximately $2.7 million used in financing activities in the same period in 2010. Such increase in net cash provided by financing activities was mainly due to our private placement transaction described below.

Bank		Amount*	Maturity Date	Interest Rate	Duration
China Construction Bank, Jinjiang Branch	$	302,489	June 17, 2011	5.310%	1 year
China Construction Bank, Jinjiang Branch	$	226,867	June 17, 2011	5.310%	1 year
China Construction Bank, Jinjiang Branch	$	151,245	October 8, 2011	5.310%	1 year
China Construction Bank, Jinjiang Branch	$	650,352	November 2, 2011	6.116%	1 year
China Construction Bank, Jinjiang Branch 1	$	105,871	November 10, 2011	5.560%	1 year
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$	299,465	February 8, 2011	5.841%	1 year
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$	741,100	August 5, 2011	5.310%	1 year
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$	453,734	October 28, 2011	5.560%	1 year
TOTAL	$	2,931,123
* Calculated based on the exchange rate of $1 = RMB6.6118

~~Obligations~~ Foreign ~~Under~~Currency ~~Material Contracts~~ Translation

We Our ~~lease~~operating asubsidiary ~~facility~~is ~~from~~located Mrin China. ~~Guoqing~~Our ~~Zhuang,~~operating ~~our~~subsidiary ~~CEO,~~purchases ~~director~~ substantially all raw materials and ~~major~~sells ~~shareholder~~all products in China, and ~~several~~receives ~~other~~payments ~~parties,~~from customers in China using RMB as athe ~~dormitory~~functional ~~for~~currency. ~~our~~Hence, the change ~~employees~~in exchange rate between the U.S. ~~The~~Dollar and Renminbi has not had a material impact toon our ~~results~~business of operations. However, since our financial statements are reported in ~~the~~U.S. ~~form~~dollar and due to significant appreciation of ~~rent~~the ~~expense,~~Renminbi to the U.S. ~~for~~dollar over the past few years, ~~ended~~we had a foreign currency translation reserve of $68,416 and $681,590 as of June 30, 2010 and ~~2009~~March 31, ~~were $12~~2011,~~493~~ respectively. The value of the Renminbi against the U.S. dollar and ~~$12~~other currencies is affected by changes in China’s political and economic conditions and China’s foreign exchange policies. The Chinese government changed its currency policy of pegging the value of the Renminbi to the U.S. dollar in July 2005. As a result,~~266,~~ the Renminbi ~~respectively~~appreciated over 20% against the U.S. ~~Our~~dollar ~~lease~~during ~~contract~~the ~~with~~following three years. Nevertheless, the ~~related~~People’s ~~party~~Bank ~~calls~~of China regularly intervenes in the currency market to limit fluctuations in Renminbi exchange rates. The Renminbi has therefore traded within a narrow range against the U.S. dollar since 2008. International pressure exists for anthe ~~operating~~Chinese government to adopt a more flexible currency policy, there could be further appreciation of the Renminbi against the U.S. dollar and a ~~lease~~further ~~commitment~~increase asof ~~follow:~~our foreign currency translation reserve.

~~For~~ Capital ~~the~~Expenditures ~~12 months ending June 30:~~

Fiscal Years		Commitments
2011	$	5,310
2012		21,238
2013		21,238
2014		21,238
2015		21,238
2016		21,238
2017		21,238
2018		21,238
2019		21,238
	$	175,214

Our capital expenditures are mainly related to the purchase of sole molds and other manufacturing equipment. Our capital expenditures were approximately $1.1 million for the nine months ended March 31, 2011.

As part of our growth strategy, we intend to acquire land use rights for approximately 40,000 square meters of additional land located in Jinjiang from the local PRC government and expect to begin construction of a new plant in the first half of 2011. We have nocommenced ~~other~~negotiations ~~long~~with ~~term~~the ~~debt~~local government for the acquisition of land use rights for this property. We intend to use commercially reasonable efforts to secure such land rights on favorable terms, ~~capital~~but orcannot ~~operating~~assure ~~lease~~that orwe will ~~fixed~~be able to acquire the land use rights on commercially favorable terms, if at all. If we acquire the land use rights, we estimate that the purchase ~~obligations~~price for the land use rights will be approximately RMB 30 million (approximately $4.5 million) and we estimate that we may incur an additional RMB 30 million (approximately $4.5 million) in construction costs to upgrade the infrastructure of the facility. Our expectation is that the transaction and related costs associated with the acquisition of land use rights will be satisfied and paid for with cash on hand, cash flow from operations and bank loans. In light of uncertainty concerning the above-mentioned purchase, we have leased an alternative facility, which is expected to begin operation in June 2011.

~~Inflation~~ We expect to renew our short term loans when they become due. We believe that our cash on hand, cash flow from operations and anticipated bank loans will meet our expected capital expenditure and working capital for the next 12 months. We may, however, in the future, require additional cash resources due to changed business conditions, implementation of our strategy to expand our production capacity or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor the price change in travel industry and continually maintain effective cost control in operations.36

~~Off~~Loan ~~Balance Sheet Arrangements~~Commitments

WeOur doborrowings ~~not have any off balance sheet arrangements that have or~~ are ~~reasonably~~mostly ~~likely~~short toterm ~~have~~loans afrom ~~current or future effect on our financial~~commercial ~~condition,~~banks ~~changes~~located in ~~financial~~China. ~~condition,~~As ~~revenues~~of orMarch ~~expenses~~31, ~~results of operations~~2011, ~~liquidity~~the oramount, ~~capital~~maturity ~~expenditures~~date orand ~~capital~~term of ~~resources~~each ~~that~~of ~~is material~~our tobank anloans ~~investor~~are inas ~~our~~follows: ~~securities.~~

Seasonality

Bank	Amount *	Maturity Date	Interest Rate
China Construction Bank, Jinjiang Branch	$304,409	June 17, 2011	5.310%
China Construction Bank, Jinjiang Branch	$228,307	June 17, 2011	5.310%
China Construction Bank, Jinjiang Branch	$152,205	October 8, 2011	5.310%
China Construction Bank, Jinjiang Branch	$654,480	November 2, 2011	6.116%
China Construction Bank, Jinjiang Branch	$106,543	November 10, 2011	5.560%
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$745,803	August 5, 2011	5.310%
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$761,024	December 17, 2011	5.810%
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$456,614	October 28, 2011	5.560%
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$304,409	January 30, 2012	6.060%

~~Our~~* ~~operating~~Calculated ~~results~~based ~~and~~on ~~operating cash flows historically have been subject to moderate seasonal variations. Our revenues are usually higher in~~ the ~~first and second fiscal quarter than in the other quarters. The~~ ~~third~~ exchange ~~fiscal~~rate ~~quarter is usually the slowest quarter because~~ of ~~the~~$1 ~~Chinese~~= ~~New Year holiday which results in a slowdown in business activity beginning in the second half of January and until March~~RMB6.5701

38Obligations Under Material Contracts Below is a table setting forth our material contractual obligations as of March 31, 2011:

In(All ~~addition,~~amounts ~~manufactures of athletic shoes tend to experience increased sales just~~ in ~~advance~~millions of ~~the summer months when there is an increase in outdoor activities by consumers so we typically experience a increase in production activities and sales~~ ~~orders during the first and second fiscal quarters in order to allow athletic shoe manufacturers to meet demand their peak sales seasons~~ U.S. dollars)

Critical Accounting Policies

	Payments due by period
				Less than						More than
		Total		1 year		1-3 years		3-5 years		5 years
Operating Lease Obligations	$	6,023,525	$	294,254	$	3,574,893	$	2,090,664	$	63,714
Total	$	6,023,525	$	294,254	$	3,574,893	$	2,090,664		63,714

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements. Inflation

Inflation and changing prices have not had a material effect on ~~Revenue~~our ~~recognition~~business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor the price change in travel industry and continually maintain effective cost control in operations.

InOff ~~accordance~~Balance toSheet FASB ASC 605-10, the Company recognizes revenue upon issuance of invoices to customers. The issuance of invoices is concurrent with the shipment of goods to customers, which generally coincides with the transfer of risks and rewards of ownership, and the title has passed. Arrangements

~~The~~We ~~Company~~do ~~typically~~not ~~has~~have ~~written~~any ~~contracts~~off ~~with~~balance ~~both~~sheet ~~new~~arrangements ~~customers~~that ~~and~~have ~~existing~~or are ~~customers. Contracts~~reasonably ~~between~~likely ~~the~~to ~~Company~~have ~~and its customers indicate~~ a ~~fixed~~current ~~price,~~or ~~delivery~~future ~~date,~~effect ~~and~~on ~~the~~our ~~type of goods. The products are fully functional upon~~financial ~~shipment~~condition, ~~and~~changes ~~the~~in ~~Company~~financial ~~is not obliged to provide any further services to be entitled to payment by its customers. The Company allows two-week period for post-delivery refund if quality problem~~ condition ~~exists. Upon such~~, ~~the~~revenues ~~Company~~or ~~will reduce the sale revenue. However~~expenses, ~~the~~results ~~Company has not experienced any significant return~~ of ~~products and~~ operations, asliquidity ~~such,~~or ~~has~~capital ~~not~~expenditures ~~prepared~~or ancapital ~~allowance~~resources ~~for~~that ~~returns. Inventory credit, rebates, discounts and volume incentive policies are not applicable to the~~is ~~Company’s~~material ~~sales transactions. Collectability is reasonably assured upon issuance of invoices. The invoice value includes sales value and output value added taxes, which are immediately payable~~ to ~~the~~an ~~PRC~~investor ~~government~~in ~~upon~~our ~~issuance~~securities.

~~Customer payments received prior to completion of the above criteria are carried as unearned revenue.~~ Seasonality

Our operating results and operating cash flows historically ~~Accounts~~have ~~receivable~~been subject to moderate seasonal variations. Our revenues are usually higher in the first and second fiscal quarter than in the other quarters. The third fiscal quarter is usually the slowest quarter because of the Chinese New Year holiday which results in a slowdown in business activity beginning in the second half of January and until March.

In addition, manufactures of athletic shoes tend to experience ~~Accounts~~increased ~~receivable~~sales ~~are~~just ~~disclosed~~in atadvance ~~gross~~of ~~invoice~~the ~~amounts~~summer ~~less~~months ~~management’s~~when ~~estimate~~there ~~for~~is ~~doubtful~~an ~~accounts..~~increase in ~~Management~~outdoor ~~regularly~~activities ~~reviews~~by ~~outstanding~~consumers ~~accounts~~so ~~and~~we ~~provides~~typically anexperience ~~allowance~~a ~~for~~increase ~~doubtful~~in production ~~accounts.~~activities ~~Management’s~~and ~~allowance~~sales ~~for~~orders during the first and second fiscal ~~doubtful~~quarters ~~accounts~~in ~~was~~order ~~0.5%~~to ofallow ~~gross~~athletic ~~accounts~~shoe ~~receivables~~manufacturers to meet demand their peak sales seasons.

We classify our customers into four tiers: (A) well-known companies in the international or domestic sportswear market, which also have had established business relationships with the Company for a long time; (B) median sized companies with good reputations; (C) small sized companies in the local market; and (D) occasional customers with limited transactions. We grant them credit terms of 120 days, 90 days, 60 days and 30 days, respectively. Currently, the Company seldom trades with tier (D) customers. We understand and expect our days sales outstanding to vary from period to period within a given range. Based on the credit terms we grant to our four tiers of customers respectively, we expect our days sales outstanding not to exceed 120 days by any large margin. 37

InCritical ~~regard~~Accounting of allowance for doubtful accounts, we keep one general reserve, the amount of which equals 0.5% of gross account receivables. We have no specific reserve, as we believe adequate provisions for doubtful accounts have been provided throughPolicies our general reserve. When estimating the allowance for doubtful accounts, we take into consideration: 1) our track record of payment collection, which shows zero experience of any material delinquent accounts that were uncollectible and that we have not written off material balance; 2) the enhanced measures we currently take to minimize failure of collection, which include having internal staff call for payment, filing legal pledge, collecting agent to collect the outstanding balance, etc. Since our collection period of receivables has never exceeded one year from past experience, we believe collection becomes improbable once beyond the threshold of one year. Thus we write off receivables after they have aged one year.

39 The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.

~~Inventories~~ Revenue recognition

~~Inventories~~ In ~~consisting~~accordance ofto ~~finished~~FASB ~~goods,~~ASC ~~work in progress~~605-10, ~~and raw~~the ~~materials~~Company ~~are~~recognizes ~~stated~~revenue atupon ~~the~~issuance ~~lower~~ of ~~cost~~invoices orto ~~market value~~customers. ~~Finished~~The ~~goods are~~issuance ~~comprised~~ of ~~direct~~invoices ~~materials,~~is ~~direct~~concurrent ~~labor,~~with ~~and~~the anshipment ~~appropriate proportion~~ of ~~overhead.~~goods ~~Periodic evaluation is made by management~~ to ~~identity~~customers, ~~if inventories~~which ~~needed~~generally tocoincides bewith ~~written~~the ~~down~~transfer ~~because~~ of ~~damage~~risks ~~or spoilage. Cost is determined on a weighted average basis~~ and ~~includes all expenditures incurred in~~rewards ~~bringing the goods to the point~~ of ~~sale~~ownership, and ~~putting~~the ~~them~~title inhas ~~a saleable condition~~passed.

~~Plant~~ The Company typically has written contracts with both new customers and ~~equipment~~existing customers. Contracts between the Company and its customers indicate a fixed price, delivery date, and the type of goods. The products are fully functional upon shipment and the Company is not obliged to provide any further services to be entitled to payment by its customers. The Company allows two-week period for post-delivery refund if quality problem condition exists. Upon such, the Company will reduce the sale revenue. However, the Company has not experienced any significant return of products and, as such, has not prepared an allowance for returns. Inventory credit, rebates, discounts and volume incentive policies are not applicable to the Company’s sales transactions. Collectability is reasonably assured upon issuance of invoices. The invoice value includes sales value and output value added taxes, which are immediately payable to the PRC government upon issuance.

~~Plant and equipment are carried at cost less accumulated~~ ~~depreciation.~~Customer ~~Depreciation~~payments isreceived ~~provided~~prior ~~over~~to ~~their~~completion ~~estimated useful lives, using the straight-line method. Estimated useful lives~~ of the ~~plant~~above ~~and~~criteria ~~equipment~~ are carried as ~~follows:~~unearned revenue.

Buildings	20 years
Machinery and equipment	5 - 10 years
Motor vehicles	5 years
Office equipment	5 years

Accounts receivable

~~The~~ Accounts ~~cost~~receivable ~~and~~are ~~related~~disclosed ~~accumulated~~at ~~depreciation~~gross ofinvoice ~~assets~~amounts ~~sold~~less ~~or otherwise~~management’s ~~retired~~estimate ~~are~~for ~~eliminated~~doubtful ~~from the~~ accounts.. ~~and~~Management ~~any~~regularly ~~gain~~reviews oroutstanding ~~loss~~accounts ~~is included~~and inprovides ~~the~~an ~~statement~~allowance offor ~~income~~doubtful accounts. ~~The~~Management’s ~~cost~~allowance ~~of maintenance and repairs is~~for ~~charged~~doubtful toaccounts ~~income~~was as0.5% ~~incurred,~~of ~~whereas~~gross ~~significant~~accounts ~~renewals and betterments are capitalized~~receivables.

~~Accounting~~ We classify our customers into four tiers: (A) well-known companies in the international or domestic sportswear market, which also have had established business relationships with the Company for ~~impairment~~a long time; (B) median sized companies with good reputations; (C) small sized companies in the local market; and (D) occasional customers with limited transactions. We grant them credit terms of ~~long~~120 ~~lived~~days, 90 days, 60 days and 30 days, respectively. Currently, the Company seldom trades with tier ~~Assets~~(D) customers. We understand and expect our days sales outstanding to vary from period to period within a given range. Based on the credit terms we grant to our four tiers of customers respectively, we expect our days sales outstanding not to exceed 120 days by any large margin.

~~The~~ In ~~Company~~regard ~~has~~of ~~adopted~~allowance ~~Statement~~for ofdoubtful ~~Financial~~accounts, ~~Accounting Standards~~we ~~No.~~keep ~~144,~~one ~~“Accounting~~general ~~for~~reserve, the ~~Impairment~~amount orof ~~Disposal~~which ofequals ~~Long-Lived Assets”~~0.5% ~~(“SFAS~~of ~~144”),~~gross ~~ASC~~account ~~360-10-35~~receivables. ~~The~~We ~~Company~~have ~~evaluates~~no ~~its~~specific ~~long~~reserve, ~~lived~~as ~~assets for~~we ~~impairment~~believe ~~when~~adequate ~~indicators~~provisions offor ~~impairment~~doubtful ~~are~~accounts ~~present~~have orbeen ~~annually,~~provided ~~whichever~~through ~~occurs~~our ~~sooner~~general reserve. InWhen estimating the ~~event~~allowance ~~that~~for ~~there~~doubtful ~~are~~accounts, ~~indications~~we oftake ~~impairment,~~into ~~the Company~~consideration: ~~will~~1) our track record aof ~~loss~~payment tocollection, ~~statements~~which ofshows ~~income~~zero ~~equal~~experience toof ~~the~~any ~~difference between~~material ~~the~~delinquent ~~carrying~~accounts ~~value~~that were uncollectible and ~~the~~that ~~fair~~we ~~value~~have not ofwritten off material balance; 2) the ~~long~~enhanced ~~lived~~measures ~~asset.~~we ~~The Company~~currently ~~typically,~~take ~~but~~to ~~not~~minimize ~~exclusively~~failure ~~uses~~of ~~the~~collection, ~~expected~~which ~~future~~include ~~discounted~~having ~~flows method~~internal tostaff ~~determine~~call ~~fair~~for ~~value~~payment, offiling ~~long~~legal ~~lived~~pledge, ~~asset~~collecting ~~subject~~agent to ~~impairment.~~collect ~~The~~the outstanding balance, etc. ~~fair~~Since ~~value~~our collection period of ~~long~~receivables ~~lived~~has ~~assets~~never ~~that~~exceeded ~~held~~one ~~for~~year ~~disposition~~from ~~will~~past ~~include~~experience, we believe collection becomes improbable once beyond the ~~cost~~ threshold of ~~disposal~~one year. Thus we write off receivables after they have aged one year.

The Company’s long-lived assets are grouped by their presentation on the consolidated balance sheets, and further segregated by their operating and asset type. Long-lived assets subject to impairment include buildings, equipment, vehicles, software licenses, and land-use-rights. The Company makes its determinations based on various factors that impact those assets. 38

At December 31, 2010 and June 30, 2010, the Company assessed its buildings, equipment, vehicles, software licenses, and land-use-rights for production and has concluded its long-lived assets have not experienced any impairment losses because the Company’s long lived assets have enabled the Company to experience significant profit growth during the six months and twelve months ended December 31, 2010 and June 30, 2010. Inventories

~~Foreign~~Inventories ~~currency~~consisting ~~translation~~of finished goods, work in progress, and raw materials are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, and an appropriate proportion of overhead. Periodic evaluation is made by management to identity if inventories needed to be written down because of damage or spoilage. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition.

~~The~~Plant accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and ~~liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.~~ equipment

Exchange Rates	12/31/2010	9/30/2010	6/30/2010	12/31/2009	6/30/2009
Year end RMB : US$ exchange rate	6.6118	6.6981	6.8086	6.8372	6.8448
Average yearly RMB : US$ exchange rate	6.7237	6.7803	6.8347	6.8386	6.8481

Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:

40 Buildings 20 years Machinery and equipment 5 - 10 years Motor vehicles 5 years Office equipment 5 years

The ~~RMB~~cost isand ~~not~~related ~~freely~~accumulated ~~convertible~~depreciation ~~into~~of ~~foreign~~assets ~~currency~~sold ~~and~~or otherwise ~~all~~retired ~~foreign~~are ~~exchange~~eliminated ~~transactions~~from ~~must~~the ~~take~~accounts ~~place~~and ~~through~~any ~~authorized~~gain ~~institutions.~~or Noloss ~~representation~~ is included ~~made~~in ~~that~~ the ~~RMB~~statement ~~amounts~~of ~~could~~income. ~~have~~The ~~been,~~cost orof ~~could~~maintenance ~~be,~~and ~~converted~~repairs ~~into~~is charged USto ~~Dollar~~income ~~at the~~as ~~rates~~incurred, ~~used~~whereas insignificant ~~translation.~~renewals and betterments are capitalized.

~~Commitments~~Accounting ~~and~~for ~~contingencies~~impairment of long lived Assets

The Company has adopted Statement of Financial Accounting ~~Liabilities~~Standards No. 144, “Accounting for ~~loss~~the ~~contingencies~~Impairment ~~arising~~or ~~from~~Disposal ~~claims,~~of ~~assessments,~~Long-Lived Assets” ~~litigation~~(“SFAS 144”), ~~fines~~ASC ~~and~~360-10-35. ~~penalties~~The ~~and~~Company ~~other~~evaluates ~~sources~~its ~~are~~long ~~recorded~~lived assets for impairment when itindicators isof ~~probable~~impairment are present or annually, whichever occurs sooner. In the event that there are indications of impairment, the Company will record a ~~liability~~loss ~~has~~to ~~been~~statements ~~incurred~~of income equal to the difference between the carrying value and the ~~amount~~fair value of the ~~assessment~~long ~~can~~lived beasset. ~~reasonably~~The Company ~~estimated~~typically, but not exclusively uses the expected future discounted flows method to determine fair value of long lived asset subject to impairment. The fair value of long lived assets that held for disposition will include the cost of disposal.

The Company’s long-lived assets are grouped by their ~~Recent~~presentation ~~Accounting~~on ~~Pronouncements~~the consolidated balance sheets, and further segregated by their operating and asset type. Long-lived assets subject to impairment include buildings, equipment, vehicles, software licenses, and land-use-rights. The Company makes its determinations based on various factors that impact those assets.

At March 31, 2011 and June 30, 2010, the Company assessed its ~~See~~buildings, ~~Note~~equipment, ~~2.X~~vehicles, ~~(Recent~~software ~~accounting~~licenses, ~~pronouncements)~~and land-use-rights for production and has concluded its long-lived assets have not experienced any impairment losses because the Company’s long lived assets have enabled the Company to ~~our~~experience ~~unaudited~~significant ~~consolidated~~profit ~~financial~~growth ~~statements~~during ~~included~~the ~~elsewhere~~nine inmonths ~~this~~and twelve ~~report~~months ended March 31, 2011 and June 30, 2010.

Foreign currency translation

The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

*Exchange Rates*	3/31/2011	12/31/2010	6/30/2010	12/31/2009	6/30/2009
Year end RMB : US$ exchange rate	6.5701	6.6118	6.8086	6.8372	6.8448
Average yearly RMB : US$ exchange rate	6.6796	6.7237	6.8347	6.8386	6.8481

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollar at the rates used in translation.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Recent Accounting Pronouncements

See Note 2.X (Recent accounting pronouncements) to our unaudited consolidated financial statements included elsewhere in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable. ~~ITEM 4. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures~~

WeITEM ~~maintain~~4. ~~disclosure~~CONTROLS ~~controls~~AND and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosurePROCEDURES.

AsEvaluation ~~required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness~~ of ~~the~~Disclosure ~~design~~Controls and ~~operation of our disclosure controls and procedures as of December~~Procedures 31, 2010. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2010, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were effective.

~~Changes~~We maintain disclosure controls and procedures (as defined in ~~Internal~~Rule ~~Control~~13a-15(e) ~~Over~~under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial ~~Reporting~~Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~There~~As ~~have~~required ~~been~~by noRule ~~changes~~13a-15 inunder the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2011. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that because of the material weakness in internal control over financial reporting ~~during~~described ~~the~~below, ~~three~~our ~~months~~disclosure ~~ended~~controls ~~December~~and procedures were not effective as of March 31, ~~2010~~2011. ~~that~~The ~~have~~term ~~materially~~“material ~~affected,~~weakness” oris ~~are~~defined ~~reasonably~~as ~~likely~~a todeficiency, ~~materially~~or ~~affect~~a combination of deficiencies, ~~our~~in internal control, ~~over~~such that there is a reasonable possibility that a material misstatement of the financial ~~reporting~~statements will not be prevented, or detected and corrected on a timely basis.

~~PART~~Changes IIin ~~OTHER~~Internal ~~INFORMATION~~Control Over Financial Reporting

~~ITEM~~ We 1believe that we have material weaknesses in our internal controls over financial reporting due to our accounting staff’s relative lack of experience and knowledge of U.S. ~~LEGAL~~GAAP. ~~PROCEEDINGS~~Our accounting staffs have limited experience in preparing financial statements in accordance with U.S. GAAP and will require additional training and assistance in U.S. GAAP. Management is committed to improving the Company’s internal control over financial reporting and plan to implement changes designed to enhance the effectiveness of our internal control, including (i) hiring additional staff with U.S. GAAP experience, (ii) implementing expanded policies and procedures over financial reporting, and (iii) instituting expanded training of management and staff responsible for financial transactions and records. Our management is not aware that the material weakness in our internal control over financial reporting causes them to believe that any material inaccuracies or errors existed in our financial statements as of March 31, 2011.

~~From~~Other ~~time~~than todescribed ~~time~~above, wethere ~~may~~have ~~become~~been ~~involved~~no changes in ~~various~~our ~~lawsuits~~internal ~~and~~control ~~legal~~over ~~proceedings,~~financial ~~which~~reporting ~~arise,~~during in the ~~ordinary~~three ~~course~~months ofended ~~business.~~March ~~However~~31, ~~litigation~~2011 isthat ~~subject~~have tomaterially ~~inherent uncertainties~~affected, ~~and an adverse result in these,~~ or ~~other~~are ~~matters,~~reasonably ~~may arise~~likely ~~from time~~ to ~~time~~materially ~~that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse~~ affect, on our ~~business,~~internal control over financial ~~condition or operating results~~reporting.

~~ITEM 1A. RISK FACTORS.~~40

~~Not~~PART ~~applicable.~~II OTHER INFORMATION

ITEM 21. ~~UNREGISTERED~~LEGAL ~~SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~PROCEEDINGS.

~~None~~ From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

41ITEM 1A. RISK FACTORS.

~~ITEM~~ Not 3applicable. ~~DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. (REMOVED AND RESERVED). ITEM 5. OTHER INFORMATION.~~

We have no information to disclose that was required to be in a report on Form 8-K during the period covered by this report, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.	(REMOVED AND RESERVED).

ITEM 5.	OTHER INFORMATION.

~~ITEM~~ We 6have no information to disclose that was required to be in a report on Form 8-K during the period covered by this report, but was not reported. ~~EXHIBITS~~There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

~~The~~ITEM ~~following~~6. ~~exhibits are filed as part of this report or incorporated by reference:~~EXHIBITS.

Exhibit No.	Description
31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The following exhibits are filed as part of this report or incorporated by reference:

Exhibit No.	Description

31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

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

~~SIGNATURES~~ 41

~~In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~ SIGNATURES

~~Date:~~In ~~February~~accordance 14with Section 13 or 15(d) of the Exchange Act, ~~2011~~ the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~8888~~Date: ~~ACQUISITION~~May ~~CORPORATION~~12, 2011

~~By:~~8888 ~~/s/~~ACQUISITION ~~Guoqing Zhuang~~ CORPORATION

By: /s/ Guoqing Zhuang Guoqing Zhuang, Chief Executive Officer (Principal Executive Officer)

By: /s/ Xuanzhi Luo Xuanzhi Luo, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

~~Xuanzhi Luo, Chief Financial Officer~~42 ~~(Principal Financial Officer and Principal Accounting Officer)~~

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