UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q  xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2010  or  oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____  Commission File Number: 0-51105


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|ALCO, INC.                                            
|(Exact name of registrant as specified in its charter)




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|Nevada                                                         | 11-3644700                          
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)




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|Suite 501, Bank of America Tower
12 Harcourt Road, Central
Hong Kong
|(Address of principal executive offices)                            




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|852-2521-0373                                       
|(Registrants telephone number, including area code)




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|None                                                                              
|(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 o  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).                          Yeso   No o  N/A  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.


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|Large accelerated filer
o                                             | Accelerated filer
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|Non-accelerated filer
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(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 o  No x  1      APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o  No o  APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.  As of November 12, 2010, there were 10,342,000 shares of the registrants common stock, $0.001 par value, outstanding   TABLE OF CONTENTS PART 1 - FINANCIAL INFORMATION 3 ITEM 1.  FINANCIAL STATEMENTS 3 CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009 (UNAUDITED) 4 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)5 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)6 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE PERIOD ENDED SEPTEBER 30, 2010 AND YEAR ENDED DECEMBER 31, 2009 (UNAUDITED)7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS15 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 18 ITEM 4(T). CONTROLS AND PROCEDURES 18 PART II - OTHER INFORMATION 19 ITEM 1. LEGAL PROCEEDINGS 19 ITEM 1A. RISK FACTORS 19 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 19 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 20 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 20 ITEM 5. OTHER INFORMATION 20 ITEM 6. EXHIBITS 20   2      PART 1 - FINANCIAL INFORMATION     ITEM 1.  FINANCIAL STATEMENTS  The consolidated financial statements of ALCO, Inc. and subsidiaries (collectively, the "Company"), included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company as included in the Company's Form 10-K for the year ended December 31, 2009.   3     ALCO, INC   CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009 (UNAUDITED)  ASSETSSeptember 30, 2010December 31, 2009Current Assets:Cash and cash equivalents$5,916,024$6,587,876Commissions receivable, net349,239658,795Enrolment fee receivable1,6981,500Fiduciary asset2,915,627504,791Prepayment851,626-Total current assets10,034,2147,752,962Property, plant and equipment, net118,349117,815Other assets:Deposit163,627106,139Income tax refundable-12,253Investment in available for sale securities337,652369,360Loan receivable1,650,086-Other receivable532,716476,955Total other assets2,684,081964,707Total Assets$12,836,644$8,835,484LIABILITIESCurrent Liabilities:Trade accounts payable$2,855,624$625,385Claim payable48,52648,504Other payable196,244144,092Accrued expenses5,60977,481Income tax payable309,439-Due to directors15,25315,091Deferred revenue5,4171,917Current portion of obligation from Hire Purchase lease-2,599Total Current Liabilities3,436,112915,069Long term portion of obligation from hire purchases lease-685Total Liabilities$3,436,112$915,754COMMITMENTS AND CONTINGENCIESEQUITYALCO, Inc. shareholders' equity:Preferred stock, par value $0.01, 5,000,000 shares authorized;no shares issued and outstanding$-$-Common stock, par value $0.001, 50,000,000 shares authorized;10,342,000 and 10,150,000 shares issued and outstanding respectively10,34210,150Additional Paid-in capital93,66460,363Accumulated other comprehensive income80,075120,213Retained earnings9,107,1747,623,855Total ALCO, Inc. shareholders' equity9,291,2557,814,581Noncontrolling interest109,277105,149Total equity9,400,5327,919,730Total Liabilities and Equity$12,836,644$8,835,484See Notes to Consolidated Financial Statements   4     ALCO, INC   CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)


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|------------------------------------------------------------------- | -------- | ------------------ | -------- | ---------- | ----------------- | -------- | ---------- | -------- | ----------
|                                                                    |          | Three Months Ended |          |            | Nine Months Ended
|                                                                    |          | September 30,      |          |            | September 30,    
|                                                                    |          | 2010               |          | 2009       |                   |          | 2010       |          | 2009      
|Revenues                                                            |          |                    |          |            |                   |          |            |          |           
|Commission income                                                   | $        | 1,463,975          | $        | 1,320,181  |                   | $        | 4,360,602  | $        | 3,616,316 
|Consulting income                                                   |          | 12,000             |          | 21,500     |                   |          | 47,500     |          | 115,882   
|Website advertising                                                 |          | 3,500              |          | 3,500      |                   |          | 10,500     |          | 10,500    
|Enrolment fee income                                                |          | 1,108              |          | 1,641      |                   |          | 15,566     |          | 2,094     
|Other revenues                                                      |          | 8,640              |          | 14,035     |                   |          | 21,403     |          | 29,505    
|Total revenues                                                      |          | 1,489,223          |          | 1,360,857  |                   |          | 4,455,571  |          | 3,774,297 
|Operating Expenses                                                  |          |                    |          |            |                   |          |            |          |           
|Salaries                                                            |          | 485,611            |          | 401,558    |                   |          | 1,430,866  |          | 1,219,288 
|Travel expenses                                                     |          | 97,160             |          | 65,783     |                   |          | 262,624    |          | 180,923   
|Rents                                                               |          | 122,003            |          | 121,303    |                   |          | 363,828    |          | 366,522   
|Bad debt expenses                                                   |          | 173,527            |          | -          |                   |          | 188,587    |          | -         
|Depreciation                                                        |          | 9,962              |          | 8,641      |                   |          | 28,948     |          | 25,817    
|Exchange loss and (gain)                                            |          | (4,260)            |          | 4,832      |                   |          | 16,880     |          | 13,697    
|Other general and administrative                                    |          | 103,912            |          | 90,466     |                   |          | 375,955    |          | 340,913   
|Total Operating Expenses                                            |          | 987,915            |          | 692,583    |                   |          | 2,667,688  |          | 2,147,160 
|Income from Operations                                              |          | 501,308            |          | 668,274    |                   |          | 1,787,883  |          | 1,627,137 
|Other Income (Expense)                                              |          |                    |          |            |                   |          |            |          |           
|Interest income                                                     |          | 87,880             |          | 938        |                   |          | 89,726     |          | 4,256     
|Investment income                                                   |          | 2,627              |          | 2,543      |                   |          | 8,453      |          | 7,259     
|Interest expense                                                    |          | -                  |          | (92)       |                   |          | -          |          | (322)     
|Total Other Income                                                  |          | 90,507             |          | 3,389      |                   |          | 98,179     |          | 11,193    
|Income before provision for Income Taxes                            |          | 591,815            |          | 671,663    |                   |          | 1,886,062  |          | 1,638,330 
|Provision for Income Taxes                                          |          | 106,058            |          | 113,656    |                   |          | 321,692    |          | 274,677   
|Net Income                                                          |          | 485,757            |          | 558,007    |                   |          | 1,564,370  |          | 1,363,653 
|Less: Net income attributable to the noncontrolling interest        |          | (29,226)           |          | (24,411)   |                   |          | (81,051)   |          | (57,122)  
|Net Income attributable to ALCO, Inc.                               | $        | 456,531            | $        | 533,596    |                   | $        | 1,483,319  | $        | 1,306,531 
|                                                                    |          |                    |          |            |                   |          |            |          |           
|Comprehensive Income:                                               |          |                    |          |            |                   |          |            |          |           
|Net income                                                          |          | 485,757            |          | 558,007    |                   |          | 1,564,370  |          | 1,363,653 
|Other Comprehensive Income (loss) - marketable securities           |          | 29,961             |          | 99,353     |                   |          | (40,138)   |          | 128,045   
|Comprehensive Income                                                | $        | 515,718            | $        | 657,360    |                   | $        | 1,524,232  | $        | 1,491,698 
|Less: comprehensive income attributable to non-controlling interest | (29,226) |                    | (24,411) |            |                   | (81,051) |            | (57,122)
|Comprehensive Income attributable to ALCO. Inc.                     |          | 486,492            |          | 632,949    |                   |          | 1,443,181  |          | 1,434,576 
|                                                                    |          |                    |          |            |                   |          |            |          |           
|Basic and Fully Diluted Earnings per Share                          |          |                    |          |            |                   |          |            |          |           
|Net income attributable to ALCO, Inc                                |          |                    |          |            |                   |          |            |          |           
|common shareholders                                                 | $        | 0.04               | $        | 0.05       |                   | $        | 0.14       | $        | 0.13      
|Weighted average shares outstanding                                 |          | 10,344,087         |          | 10,150,000 |                   |          | 10,236,440 |          | 10,150,000
|                                                                    |          |                    |          |            |                   |          |            |          |           
|See Notes to Consolidated Financial Statements                     

5     ALCO, INC   CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)  Nine Months Ended September 30,Operating Activities20102009Net income$1,564,370$1,363,653Adjustments to reconcile net income to net cash provided by operating activities:Depreciation28,94825,817Bad debt188,587-Fixed asset written off1,809119Stock-based compensation33,493Changes in operating assets and liabilities:(Increase)/Decrease in commission receivable120,969(329,168)(Increase)/Decrease in fiduciary asset(2,410,836)1,108,494(Increase)/Decrease in enrolment fee receivable(198)(800)(Increase)/Decrease in deposits(57,944)1,107(Increase)/Decrease in other receivable(64,191)(37,041)Increase/(Decrease) in accounts payable4,080,153(831,224)Increase/(Decrease) in claims payable22(67,135)Increase/(Decrease) in other payable52,152(111,228)Increase/(Decrease) in accrued expenses(71,872)(52,947)Increase/(Decrease) in deferred income3,5003,500Increase/(Decrease) in income tax prepaid / payable321,692274,677Net cash provided by operating activities3,790,6541,347,824Investing ActivitiesLoan made to third parties(3,500,000)-Prepayment relating to acquisition(851,626)-Purchase of fixed assets(33,912)(4,138)Purchase of equity investment-(97,028)Net cash (used) by investing activities(4,385,538)(101,166)Financing ActivitiesRepayment of obligations under finance leases(207)(1,733)Dividend paid to minority shareholders(76,923)(41,025)Borrowings on related party debt19,129Principal payments on related party debt(18,967)(405)Net cash (used) by financing activities(76,968)(43,163)(Decrease) / increase in cash(671,852)1,203,495Cash at beginning of period6,587,8765,564,247Cash at end of period$5,916,024$6,767,742Supplemental Disclosures of Cash Flow Information:Cash paid / (receive) during year for:Interest$-$322Income taxes$-$-Non-Cash TransactionsOffset of loan receivable with accounts payable$1,849,914-Change in fair value for Available-for-sales securities$(40,138)$128,045Dividend received$8,430$5,756See Notes to Financial Statements  6





ALCO, INC   CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE PERIOD ENDED SEPTEBER 30, 2010 AND YEAR ENDED DECEMBER 31, 2009 (UNAUDITED)   ALCO, Inc ShareholdersAccumulated Other Comprehensive Income (loss)Common StockAdditional Paid-in CapitalRetained EarningsTotal Stockholders' EquityNon-controlling InterestTotal      EquitySharesPar ValueBalance, December 31, 200910,150,00010,15060,363120,2137,623,8557,814,581105,1497,919,730Restricted Shares issued to employee198,000198(198)--Stock forfeited(6,000)(6)6--Stock-based compensation33,49333,49333,493Unrealized loss on marketable securities(40,138)(40,138)(40,138)Net Income1,483,3191,483,31981,0511,564,370Dividend paid(76,923)(76,923)Balance, September 30, 201010,342,00010,34293,66480,0759,107,1749,291,255109,2779,400,532See Notes to Consolidated Financial Statements


7


ALCO, INC.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Note 1  ORGANIZATION AND OPERATIONS  Description of Business and Basis of Presentation  ALCO, Inc. (ALCO, we, us, the Company) was incorporated in Nevada on June 7, 1999 as Seahorse, Inc. and changed its name to Lotus Capital Corp. on September 20, 2004, and to ALCO, Inc. on February 13, 2006.  The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the SEC instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included.  Results for the nine-month period ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010. For further information, refer to the consolidated financial statements and footnotes thereto included in ALCOs Annual Report on Form 10-K for the fiscal year ended December 31, 2009.  The consolidated financial statements include the accounts of the Company and all its majority-owned subsidiaries which require consolidation.  Inter-company transactions have been eliminated in consolidation.  Certain accounting principles, which are stipulated by US GAAP, are not applicable in the HKAS.  The difference between HKAS accounts of the Company and its US GAAP financial statements are adjusted in the Company consolidated financial statements.  The Company maintains its books and accounting records in Hong Kong dollar ("HK$"), which is determined as the functional currency.  Assets and liabilities of the Company are translated at the prevailing exchange rate at each year end.  Contributed capital accounts are translated using the historical rate of exchange when capital is injected.  Income statement accounts are translated at the average rate of exchange during the year.  Translation adjustments arising from the use of different exchange rates from period to period are included in the cumulative translation adjustment account in shareholders' equity.  Gain and losses resulting from foreign currency transactions are included in operations.   Note 2  SIGNIFICANT ACCOUNTING POLICIES  For significant accounting policies, see notes to the consolidated financial statements included in the Companys annual report of Form 10-K for the year ended December 31, 2009 filed with the SEC.  Use of Estimates  The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.  Actual results, when ultimately realized could differ from those estimates.  Significant Estimates  Several areas require significant management estimates relating to uncertainties for which it is reasonably possible that there will be a material change in the near term.  The more significant areas requiring the use of management estimates relate to the valuation of accounts receivable and payable, equipment, accrued liabilities, and the useful lives for amortization and depreciation.   8       Income Taxes  Income tax expense is based on reported income before income taxes.  Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes.  In accordance with FASB Accounting Standards Codification TM (ASC) No. 740, "Income Taxes, these deferred taxes are measured by applying currently enacted tax laws.  The Company's effective tax rate for the periods ended September 30, 2010 and 2009 was 17.1% and 16.8%, respectively.  The Company did not provide any current or deferred income tax provision or benefit for any period presented to date because book income is substantially equal to taxable income, with only minor timing differences with regard to the depreciation of fixed assets.  Management has determined that any deferred tax asset or liability is inconsequential, and not material to the financial statements.   Fair Value of Measurements  The Company adopted Statement of ASC No. 820, Fair Value Measurements and Disclosures (ASC 820), effective January 1, 2008.  The provisions of ASC 820 are to be applied prospectively.  ASC 820 clarifies that fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date).  Under ASC 820, fair value measurements are not adjusted for transaction cost.  ASC 820 provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels:  Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities  Level 2: Input other than quoted market prices that are observable, either directly or indirectly, and reasonably available.  Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.  Level 3: Unobservable inputs.  Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.  An asset or liabilitys level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Availability of observable inputs can vary and is affected by a variety of factors.  The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities.  Related Party Transactions  The captions "Due to director" represent loans payable that are unsecured, non-interest bearing and have no fixed terms of repayment, therefore, deemed payable on demand.  The Company rents a quarter in Hong Kong from director of the company and a quarter in Shanghai from a company owned by directors of the Company.  Earnings (Loss) Per Share  Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period.  Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  Stock Based Compensation  The Company follows the provisions of ASC 718, Share-Based Payment which establishes the accounting treatment for transactions in which an entity exchanges its equity instruments for compensation to employees. Under the provisions of ASC  9     718, share-based payment compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period).  Recent Accounting Pronouncements   In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements (ASU 2010-06). This update provides amendments to Subtopic 820-10 and requires new disclosures for 1) significant transfers in and out of Level 1 and Level 2 and the reasons for such transfers and 2) activity in Level 3 fair value measurements to show separate information about purchases, sales, issuances and settlements. In addition, this update amends Subtopic 820-10 to clarify existing disclosures around the disaggregation level of fair value measurements and disclosures for the valuation techniques and inputs utilized (for Level 2 and Level 3 fair value measurements). The provisions in ASU 2010-06 are applicable to interim and annual reporting periods beginning subsequent to December 15, 2009, with the exception of Level 3 disclosures of purchases, sales, issuances and settlements, which will be required in reporting periods beginning after December 15, 2010. The adoption of ASU 2010-06 did not impact the Companys operating results, financial position or cash flows, but did impact the Companys disclosures on fair value measurements. See note 6, Fair value of available for sale marketable securities investments and investment income  In February 2010, FASB issued ASU No. 2010-09, Amendments to Certain Recognition and Disclosure Requirements (ASU 2010-09). This update amends Subtopic 855-10 and gives a definition to SEC filer, and requires SEC filers to assess for subsequent events through the issuance date of the financial statements. This amendment states that an SEC filer is not required to disclose the date through which subsequent events have been evaluated for a reporting period. ASU 2010-09 becomes effective upon issuance of the final update. The Company adopted the provisions of ASU 2010-09 for the period ended September 30, 2010.  In April 2010, the FASB issued ASU No. 2010-12, Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts (ASU 2010-12). This update clarifies questions surrounding the accounting implications of the different signing dates of the Health Care and Education Reconciliation Act (signed March 30, 2010) and the Patient Protection and Affordable Care Act (signed March 23, 2010). ASU 2010-12 states that the FASB and the Office of the Chief Accountant at the SEC would not be opposed to view the two Acts together for accounting purposes. The Company is currently assessing the impact, if any, the adoption of ASU 2010-12 will have on the Companys disclosures, operating results, financial position and cash flows.   Note 3  STOCK-BASED COMPENSATION  On June 1, 2010 the board of directors approved and the Company granted an award of 198,000 common shares to certain key employees and directors.  The award was made pursuant to the 2010 Restricted Share Stock Compensation Plans.  Under this plan, a maximum of 500,000 common shares may be delivered in satisfaction of awards under the plan.  Key employees and directors of the Company are eligible to participate.  Each grant of shares under the plan is subject to a three year restriction period during which: (1) the shares cannot be transferred by the employee; and (2) the shares will be forfeited if the employment is terminated by the holder or the Company. The restricted common stock does have full participation rights in both dividends and voting matters during the period of restriction.  The restricted stock was granted at a price that was equal to the fair value of the Companys stock on such date of grant. The aggregate value of this award was $301,440 which will be recognized ratably over the three-year restriction period. For the nine months ended September 30, 2010, the Company has recognized $33,493 of stock-based compensation expense in salaries and compensation expenses and has unrecognized compensation cost associated with this grant of $267,947. During August, 2010, one employee had forfeited the shares and therefore 6,000 shares were returned back to the company.   10     Note 4  CASH


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|                                                                          |   | September 30, |   | December 31,
|Cash consist of the following:                                            |   | 2010          |   | 2009        
|                                                                          |   |               |   |             
|Cash in hand                                                              | $ | 6,737         | $ | 8,153       
|Cash in bank - Saving & Checking                                          |   |               |   |             
|China Construction Bank (Asia) (formerly known as Bank of America (Asia)) |   | 5,897,296     |   | 4,035,514   
|United Overseas Bank                                                      |   | 7,696         |   | 5,580       
|Bank of China                                                             |   | 4,176         |   | 4,253       
|Sun Hung Kei Financial                                                    |   | 119           |   | 33          
|Cash in bank - Fixed Deposit                                              |   | 0             |   | 2,534,343   
|                                                                          | $ | 5,916,024     | $ | 6,587,876   

Cash balances are held principally at one financial institution and are not insured.  The Company believes it mitigates its risk by investing in or through major financial institutions.  Recoverability is dependent upon the performance of the institution.  Although the cash balances are not insured, however, starting in September 2006, cash balances (except accounts with overdraft facilities) are protected by the Deposit Protection Scheme which is maintaining by the Hong Kong Deposit Protection Board, an independent statutory body established under the Deposit Protection Scheme Ordinance (Cap. 581).  Under the scheme, compensation up to a limit of HK$100,000 (approximately US$12,821) will be paid from the scheme to depositor if the bank with which the depositor holds his/her eligible deposits fails.  In addition, on October 14, 2008, the Hong Kong Government announced that they would use the Exchange Fund to guarantee the repayment of all customer deposits held in authorized institutions in Hong Kong, following the principles of the Deposit Protection Scheme.  This action began on October 14, 2008 and will remain in force until the end of 2010.   Note 5  COMMISSIONS RECEIVABLE


|                                                 |   |               |   |             
|------------------------------------------------ | - | ------------- | - | ------------
|                                                 |   | September 30, |   | December 31,
|Commissions receivable consist of the following: |   | 2010          |   | 2009        
|                                                 |   |               |   |             
|Commissions receivable                           | $ | 967,122       | $ | 1,093,893   
|Less: allowances for doubtful accounts           |   | 617,883       |   | 435,098     
|                                                 | $ | 349,239       | $ | 658,795     

Note 6  FIDUCIARY ASSET  Fiduciary asset is cash balances held by a bank, mainly consisting of premiums collected from customers and payable to   insurers, and claims received from insurers and payable to policyholders. When the Company receives a premium from a     customer, it debits the lump sum amount into one bank account and establishes a schedule to keep track of the amount of premium payable to the insurer. At the monthly closing, the Company reclassifies the amount of premium payable to insurers as fiduciary asset. Also, when the Company receives a claim on behalf of a policyholder, it debits fiduciary asset and credits claims payable and other payables, if necessary. The fiduciary assets at September 30, 2010 and December 31, 2009 were $2,915,627 and $504,791, respectively.   Note 7  PREPAYMENT   Prepayment of $851,626 paid in September 2010 is in relation to an acquisition of an insurance broker in Asia.  The fund is kept by the attorney appointed by the company and will be used for settlement of the acquisition in future.  See Note 14Subsequent Event below.   11      Note 8  FAIR VALUE OF AVAILABLE FOR SALE MARKETABLE SECURITIES INVESTMENTS AND INVESTMENT INCOME  ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs.  The following tables set forth by level within the fair value hierarchy the Companys financial assets and liabilities that were accounted for at fair value as of September 30, 2010 and December 31, 2009. As required by ASC 820, a financial instruments level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There were no transfers between fair value hierarchy levels for the nine months ended September 30, 2010.


|       |   |                    |   |                      |  |         | 
|------ | - | ------------------ | - | -------------------- |  | ------- | 
|Assets |   | Fair value         |   | Fair value Hierarchy
|       |   | September 30, 2010 |   | December 31, 2009    |  |        
|       |   |                    |   |                      |  |        
|Stocks | $ | 337,652            | $ | 369,360              |  | Level 1
|       |   |                    |   |                      |  |        

Investment in available for sale securities listed above are carried at fair value. The Company is able to value its available for sale securities based on quoted fair values for identical instruments, which resulted in the Company reporting its securities as Level 1.  Unrealized loss of $40,138 and gain of $128,045 for the investments were recognized in the other comprehensive income for the nine months ended September 30, 2010 and 2009.All these gain and loss are related to the investments listed in the Hong Kong Stock Exchange.


|                                                    |   |               |   |              
|--------------------------------------------------- | - | ------------- | - | -------------
|                                                    |   | September 30, |   | September 30,
|Investment Income                                   |   | 2010          |   | 2009         
|                                                    |   |               |   |              
|Dividend from the publicly traded equity securities | $ | 8,453         | $ | 7,259        

Note 9  LOAN RECEIVABLE   On July 27, 2010, the companys subsidiary Andrew Liu & Company Limited (ALC) entered into a loan agreement and a mortgage with its client, HK Huajinyuan Shipping Co., Limited (HKHS).  Under the loan agreement and the mortgage, ALC made available to HKHS an on demand loan facility of up to US$3,500,000.  The loan bears interest rate of 2.5% and is secured by a vessel owned by HKHS.  The loan is payable in full at any time upon demand.  As of September 2010, interest earned is $87,500 and the outstanding balance of the loan is as follows:


|                                                      |  |  |   |           |  |              
|----------------------------------------------------- |  |  | - | --------- |  | -------------
|                                                      |  |  |   |           |  | September 30,
|                                                      |  |  |   |           |  | 2009         
|                                                      |  |  |   |           |  |              
|Loan amount                                           |  |  | $ | 3,500,000
|Less: Offset of loan receivable with accounts payable |  |  |   | 1,849,914
|Balance                                               |  |  | $ | 1,650,086

12     Note 10  DUE TO DIRECTORS


|                                           |   |               |   |             
|------------------------------------------ | - | ------------- | - | ------------
|                                           |   | September 30, |   | December 31,
|Due to directors consist of the following: |   | 2010          |   | 2009        
|                                           |   |               |   |             
|Andrew Liu Fu Kang                         |   | 15,091        |   | 15,091      
|John Liu Shou Kang                         |   | 162           |   | -           
|                                           | $ | 15,253        | $ | 15,091      

Note 11  RELATED PARTY TRANSACTION  The Company rents office space in Hong Kong and Shanghai from companies owned by directors of the Company.  The relevant rent expenses paid to related parties for the period ending September 30, 2010 and September 30, 2009 consist of following:


|                          |  |                                      |   |               |   |              
|------------------------- |  | ------------------------------------ | - | ------------- | - | -------------
|                          |  |                                      |   | September 30, |   | September 30,
|Location                  |  | Landlord                             |   | 2010          |   | 2009         
|                          |  |                                      |   |               |   |              
|HK Office Room 501 & 502A |  | Fortune Ocean Ltd                    | $ | 23,846        | $ | 107,308      
|HK Office Room 502B       |  | Fortune Ocean Ltd                    |   | 7,692         |   | 34,615       
|Shanghai Quarter          |  | Fortune Ocean and Andrew Liu Fu Kang |   | 23,077        |   | 23,077       
|Director (Andrew) Quarter |  | First Pacific Development Ltd        |   | 15,000        |   | 15,000       
|                          |  |                                      | $ | 69,615        | $ | 180,000      

In February 2010, Fortune Ocean Ltd sold the properties of Room 501, 502A and 502B of the Hong Kong Office to a third party.  In this connection, the company ceased to pay rent to Fortune Ocean Ltd starting in March 2010.  The amount disclosed as of September 30, 2010 for the Hong Kong office are payments made for January and February 2010 since this company was the landlord at this period. The company will continue recognize rent expense for the Hong Kong Office, but payment will be paid to the third parties.   Note 12  INCOME TAXES  The Company's effective tax rate for the nine months ended September 30, 2010 and 2009 was 17.1% and 16.8% respectively.  The provisions for income taxes for the periods ended September 30, 2010 and 2009 are summarized as follows:


|                |   |         |   |        
|--------------- | - | ------- | - | -------
|Hong Kong only: |   | 2010    |   | 2009   
|                |   |         |   |        
|Current         | $ | 321,692 | $ | 274,677
|Deferred        |   | -       |   | -      
|                | $ | 321,692 | $ | 274,677

A reconciliation between the income tax computed at the U.S. statutory rate and the Companys provision for income tax is as follows:


|                                          |  |        |  |       
|----------------------------------------- |  | ------ |  | ------
|                                          |  | 2010   |  | 2009  
|                                          |  |        |  |       
|U.S. statutory rate                       |  | 34.0%  |  | 34.0% 
|Foreign income not recognized in the U.S. |  | -34.0% |  | -34.0%
|Miscellaneous permanent differences       |  | 0.6%   |  | 0.3%  
|Hong Kong income tax rate                 |  | 16.5%  |  | 16.5% 
|Provision for income tax                  |  | 17.1%  |  | 16.8% 

There were no significant permanent or temporary differences.  13      Accounting for Uncertainty in Income Taxes  Based on the Companys evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements.  The Company may from time to time be assessed interest or penalties by major tax jurisdictions.  In the event it receives an assessment for interest and/or penalties, it will be classified in the consolidated financial statements as tax expense.   Note 13  NONCONTROLLING INTEREST  On February 1, 2010, the company subsidiary Chang An Consultants Ltd., declared dividends of $192,000. The company had made a payment of $76,923 to the noncontrolled shareholders.    Note 14  SUBSEQUENT EVENT   On October 28, 2010, the company agreed to acquire an insurance broker in Asia.  Consideration of the acquisition is around $851,626 in cash and the total assets of the insurance broker are about $692,000.  The acquisition is subject to approval of the local government and relevant application is in progress.  Once the approval is obtained, the acquisition will be completed and the consideration will be fully settled in cash.    14      ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS  Certain statements in this report, including statements in the following discussion, which are not statements of historical fact, are what are known as forward-looking statements, which are basically statements about the future.  For that reason, these statements involve risk and uncertainty since no one can accurately predict the future.  Words such as plans, intends, will, hopes, seeks, anticipates, expects, and the like, often identify such forward-looking statements, but are not the only indication that a statement is a forward-looking statement.  Such forward-looking statements include statements concerning our plans and objectives with respect to the present and future operations of the Company, and statements which express or imply that such present and future operations will or may produce revenues, income or profits.  Numerous factors and future events could cause the Company to change such plans and objectives, or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce revenues, income or profits.  Therefore, the reader is advised that the following discussion should be considered in light of the discussion of risks and other factors contained in this report on Form 10Q and in the Companys other filings with the Securities and Exchange Commission.  No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.   PLAN OF OPERATIONS  Since the worldwide financial turmoil began in 2008, the volume of international trade dramatically declined, leading to declining volumes in the shipping industry.  Although economic recovery began in late 2009, excess tonnage supply in the shipping market during the period of financial turmoil, led to a large volume of layup and some poorly funded owners and operators are still facing financial problems.  In order to deal with this financial and shipping turmoil, our plan for 2010 is mainly the continuation of the plan for 2009.  The plan consists of improvement of our cost competitiveness, and enhancement of credit control and marketing function.  In order to seek to improve our cost competitiveness, we are continuously reviewing our current operating processes and procedures to identify areas for improvement and to implement changes where necessary to ensure our efficiency and effectiveness.  In addition, beginning in early 2009, we implemented several measures intended to tighten reduce our general and administrative expenses.  The effect of these changes was noted in 2009 as our general and administrative expenses decreased 3% in 2009 as compared to 2008.  We will continue to implement these measures in 2010.  For enhancement of our credit control, we are closely monitoring the aging of client premium receivables and aiming to increase the receivable turnover.  In 2009, we established a marketing function, the main responsibilities of which are maintaining our existing client base and promoting the companys business to potential new clients.  Further resources will be allocated to this new function in 2010.  We do have a plan to hire additional employees in the next twelve months to enhance our operations including marketing, consultancy service and supporting functions.  However, this plan will depend on the market situation and internal resources and there is no assurance that we will able to implement this plan within the foreseeable future.  We do not have any material off-balance sheet arrangements.   RESULTS OF OPERATIONS  NINE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2009 AND THREE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2009   15     Revenue  Revenues for the nine months ending September 30, 2010 were $4,455,571, as compared to the revenues of $3,774,297 for the nine months period ended September 30, 2009.  This increase of $681,274 or approximately 18% was mainly due to an increase of commission income, and enrollment fee partially offset by a decrease of consulting income and other revenue.  Commission income, which is based on a percentage premium paid by the insured, for the nine months period ended September 30, 2010 was $4,360,602 as compared to $3,616,316 for the same period of 2009.  The increase of commission income $744,286 or approximately 21% was mainly due to the increase of client base as well as insurance call and premium rates in the market.  Consulting income for the nine months period ended September 30, 2010 was $47,500 compared to $115,882 for the comparable period of 2009.  The decrease of consulting income $68,382 or approximately 59% was mainly due to demand of the services decreased.  Enrollment fee for the nine months period ended September 30, 2010 was $15,566 as compared to $2,094 for the same period of 2009.  The increase of enrollment fee was mainly due to the increase of enrollment and the rates during the period.  Revenues for the three months ending September 30, 2010 were $1,489,223, as compared to revenues of $1,360,857 for the nine month ending September 30, 2009.  This increase of $128,366, or approximately 9%, was mainly due to increases in commission income partially offset by a decrease of consulting income, enrollment fee and other revenue.  Commission income for the three month period ended September 30, 2010 was $1,463,975 as compared to $1,320,181 for the same period of 2009.  The increase of commission income $143,794 or approximately 11%, was mainly due to the increase of client base as well as insurance call and premium rates in the market.  Consulting income for the three month period ended September 30, 2010 was $12,000 compared to $21,500 for the comparable period of 2009.  In addition, website advertising, enrollment fee and other revenue for the three month period ended September 30, 2010 were $3,500, $1,108 and $8,640 as compared to $3,500, $1,641 and $14,035 for the same period of 2009 respectively.  Causes for the changes for the three months ended September 30, 2010 and 2009 are same as the causes stated in the nine months ending as the paragraph above.  Net income before tax and noncontrolling interest  Net income before tax and noncontrolling interest for the nine months ending September 30, 2010 was $1,886,062 compared to $1,638,330 for the nine months period ended September 30, 2009.  The increase in pre-tax profit of $247,732, or approximately 15%, was mainly due to an increase in revenues and other income partially offset by an increase in operating expenses during the nine months ended September 30, 2010.  Causes for the revenue increase were discussed in the section of Revenue above while causes for the operating expense increase will be discussed in the section of Operating expenses below.  In addition, other income for the nine months period ended September 30, 2010 was $98,179 as compared to $11,193 for the same period of 2009.  The increase was mainly because of the interest income for the loan receivable.  Net income before tax and noncontrolling interest for the three months ending September 30, 2010 was $591,815 compared to $671,663 for the three month period ended September 30, 2009.  The decrease in pre-tax profit of $79,848 or approximately 12%, was mainly due to an increase in bad debt provision for 2010, even though there is an increase in revenue of $128,366 or 9% during the three months period.   Operating expenses  Operating expenses for the nine months ending September 30, 2010 was $2,667,688, as compared to $2,147,160 for the nine month period ended September 30, 2009.  The increase of $520,528 or approximately 24% was mainly due to increases in salary, travel expenses, bad debt expenses, depreciation, exchange loss and other general and administrative expenses, which were partially offset by a reduction in rents.  Operating expenses for the three months ending September 30, 2010 was $987,915, as compared to $692,583 for the three month period ended September 30, 2009.  The increase of $295,332 or approximately 43% was mainly due to increases in salary, travel expenses, bad debt expenses, depreciation and other general and administrative expenses, which were partially offset by a reduction in exchange loss.  The reasons for the increases and decreases in the major items are as follows:  16      n Salaries  increased $211,578 or 17% for the nine months ended and $84,053 or 21% for the three months ended September 30, 2010 as compared to last year.  The increase was mainly due to increases in pay rates and headcounts. n Travel Expenses  increased $81,701 or 45% for the nine months ended and $31,377 or 48% for three months ended September 30, 2010 as compared to last year.  The increase was due to the growth of client base and general price inflation. n Bad debt expenses  increased by $188,587 for the nine months ended and $173,527 for the three months ended September 30, 2010 as compared to the same period of 2009.  The increase was mainly due to an increase in the provision of doubtful debts in 2010. n Rent  decreased $2,694 or 1% for the nine months ended September 30, 2010.  The decrease was mainly due to a decrease in rental rate of the Hong Kong Office and the staff quarter. n Exchange loss  increased $3,183 or 23% for the nine months ended September 30, 2010 as compared to last year.  The increase was mainly because the exchange rate of US dollar against HK dollar in the market throughout 2010 was under HK$7.8 which is used by the company as standard rate in accounting purpose.  For the three months ended September 30, 2010 and 2009, exchange (gain) / loss was ($4,260) and $4,832 respectively.  The decrease of $9,092 or 188% was because the exchange rate of US dollar against HK dollar during 2009 was lower than 2010. n Other General and Administrative Expenses - increased $35,042 or 10% for the nine months ended and increase $13,446 or 15% for the three months ended September 30, 2010.  In general, the increase was due to the general price inflation, increment of headcount causing office administrative expense increased, and the growth of client base causing telecommunication and postage expenses increased.   LIQUIDITY AND CAPITAL RESOURCES  Cash flow  For the nine months ended September 30, 2010, net cash provided by operating activities totaled $3,790,654.  This was primarily due to the net income together with the decreases in commission receivable and increases in accounts payable, claims payable, other payable, deferred income and income tax prepaid / payable, which were partially offset by the increases in fiduciary asset, deposits and other receivable, and decrease in accrued expenses.  Net cash provided by operating activities for the nine months ended September 30, 2010 increased $2,442,830, or approximately 181%, as compared to the same period of 2009.  The increase of net cash inflow was mainly due to net income increased by 15% and change of operating assets and liabilities increased by 4825%.  For the nine months ended September 30, 2010, cash used in investing activities amounted to $4,385,538.  The use of funds for the nine months period was for making a loan to third parties, a prepayment relating to acquisition and the purchase of fixed assets.  For the same period of 2009, cash used in investing activities amounted to $101,166.  The use of funds was mainly for the purchases of fixed assets and equity investment for long term investment purpose.  For the nine months ended September 30, 2010, cash used in finance activities totaled $76,968.  The funds were used for the repayment of obligations under finance leases, dividend payment to minority shareholders and payments on related party debt which was partially offset by an increase of borrowings on related party.  For the same period of 2009, net cash used by financing activities amounted to $43,163.  The funds were used for the repayment of obligation under finance leases, dividend payment to minority shareholders, and payments on related party debt.  Assets and liabilities  For the nine months ended September 30, 2010, the Groups balance sheet reflects total assets of $12,836,644 and total liabilities of $3,436,112.  These items increased $4,001,160 or approximately 45% and $2,520,358 or approximately 275% respectively when compared to the year ended December 31, 2009.  The increase of total assets was mainly due to an increase of prepayment, deposits, fiduciary asset and other receivables which was partially offset by a decrease of cash and cash equivalents, commissions receivable, income tax refundable and investment in available for sale securities.  In addition, the increase of total liabilities was due to an increase of trade accounts payable, other payable, and income tax payable and deferred  17     revenue which was partially offset by a decrease of accrued expenses and the obligation from hire purchase lease.  As of September 30, 2010, commission receivable was $349,239 as compared to $658,795 for the same period in 2009, while trade accounts payable and other payable were $2,855,624 and $196,244 respectively, as compared to December 31, 2009 balances of $625,385 and $144,092.  Each of these changes was due to the timing of commissions received from customers and the timing of making payments to insurers and customers in relation to the period end.  In addition, because the rate of insurance premium paid by customers to insurers was raised, fiduciary asset and other receivable increased during the period ended September 30, 2010.  Accrued expenses of $5,609 as of September 30, 2010 significant reduced by $71,872 or approximately 93% from $77,481 as of December 31, 2009.  The reduction was mainly due to repayment of the accrued expenses which were provided for the year of 2009.  In addition, income tax payable as of September 30, 2010 was $309,439 was in relation to the provision of income tax for the nine months period of 2010.  Because the interest rate is maintained at a very low level in the recent years, the company purchased publicly traded equity securities with high dividend yield since 2008 for long term investment purpose.  The market value of the equity securities was $337,652 and $369,360 as of September 30, 2010 and December 31, 2009 respectively.  The decrease of $31,708 or approximately 9% was mainly due to the change of fair values between September 30, 2010 and December 31, 2009.  The Company has bank and cash equivalents of approximately $5,916,024 as at September 30, 2010.  The Company has sufficient funds to satisfy its financial commitments and working capital requirements for the next twelve months.  During the period end of September 30, 2010, the Company had $0 of commitments for capital expenditures and off-balance sheet arrangements as well as operating lease commitments of $591,094.   OFF BALANCE SHEET ARRANGEMENTS  We do not have any material off-balance sheet arrangements.   RECENT ACCOUNTING PRONOUNCEMENTS  For information about new accounting pronouncements and the potential impact on our Consolidated Financial Statements, see Note 2 of the Notes to Consolidated Financial Statements in this Form 10-Q and Note 2 of the Notes to Consolidated Financial Statements in our 2009 Form 10-K.     ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Not applicable.     ITEM 4(T). CONTROLS AND PROCEDURES  Evaluation of Disclosure Controls and Procedures  The Securities and Exchange Commission defines the term disclosure controls and procedures to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an  18     effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.  As of the end of the period covered by this report, The Company's management, with the participation of the chief executive officer and the chief financial officer, carried out an evaluation of the effectiveness of the design and operation of the Company's "disclosure, controls and procedures" (as defined in the Exchange Act Rules 13a-15(3) and 15-d-15(3) as of the end of the period covered by this annual report (the "Evaluation Date").  Based on that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, the Companys disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported with the time periods specified.  Our chief executive office and chief financial officer also concluded that our disclosure controls and procedures were effective as ofSeptember 30, 2010 to provide reasonable assurance of the achievement of these objectives.   Changes in Internal Controls Over Financial Reporting  There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) or any other factors during the nine months ended September 30, 2010, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.      PART II - OTHER INFORMATION     ITEM 1. LEGAL PROCEEDINGS  None.     ITEM 1A. RISK FACTORS  Not applicable.      ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  On or about June 1, 2010, we issued 198,000 shares of restricted stock to certain key employees and directors of the Company under the 2010 Restricted Share Stock Compensation Plan.  The plan was approved by the board of directors on May 31, 2010.  The restricted shares which were issued subject to certain terms and conditions such as that the shares may not be transferred during the applicable restriction period and that the shares will be forfeited if the employment is terminated by the holder or the Company. The shares were issued in reliance upon an exemption from registration provided by Regulation S under the Securities Act of 1933.  The shares were issued at a strike price of approximately $1.57, which was equal to the fair value of the Companys stock on June 1, 2010, the date of grant.  Therefore, the aggregate value of these shares as of the date of issuance was $301,440, of which $33,493 (6,000 shares with fair value of $9,420 was forfeited during the period) was recognized as stock-based compensation expense in salaries and compensation expenses during the nine months ended September 30, 2010.  The balance will be recognized as stock-based compensation expenses in the coming three years.      19      ITEM 3. DEFAULTS UPON SENIOR SECURITIES  Not applicable.     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable.     ITEM 5. OTHER INFORMATION  None.     ITEM 6. EXHIBITS  The following exhibits are filed herewith:  31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.      20      SIGNATURES  Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.  ALCO, INC. (Registrant)    By: /s/ Andrew Liu, CEO and Chairman  Date:  November 12, 2010   By: /s/ John Liu, Director  Date:  November 12, 2010   By: /s/ Colman Au, Chief Financial Officer  Date:  November 12, 2010   21