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, 2008  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  ALCO, INC.(Exact name of registrant as specified in its charter)  Nevada11-3644700(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)  Suite 501, Bank of America Tower
12 Harcourt Road, Central
Hong Kong(Address of principal executive offices)  852-2521-0373(Registrants telephone number, including area code)  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 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
oAccelerated filer
oNon-accelerated filer
o
(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    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 October 31, 2008, there were 10,150,000 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, 2008 AND DECEMBER 31, 20074 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS SEPTEMBER 30, 2008 AND DECEMBER 31, 20076 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 20077 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS21 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK25 ITEM 4(T). CONTROLS AND PROCEDURES 25 PART II - OTHER INFORMATION 26 ITEM 1. LEGAL PROCEEDINGS 26 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 26 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 26 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 26 ITEM 5. OTHER INFORMATION 26 ITEM 6. EXHIBITS 27    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-KSB for the year ended December 31, 2007.   3   ALCO, INC  CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007 September 30, 2008December 31, 2007(unaudited)ASSETSCurrent Assets:Cash and cash equivalents (Note 3)$5,501,973$4,341,015Commissions receivable, net (Note 5)358,421277,130Enrolment fee receivable2,1632,754Total current assets5,862,5574,620,899Property, plant and equipment, net (Note 6)135,12971,237Other assets:Deposit and prepayments70,04184,637Restricted Cash (Note 4)696,538486,217Other receivable447,07324,675Total other assets1,213,652595,529Total Assets$7,211,338$5,287,665LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:Bank over draft  (Note 7)$-$-Trade accounts payable713,932278,222Claim payable104,59290,332Other payable83,654132,720Accrued expenses8,00046,882Due to directors (Note 9)15,49614,946Due to Minority shareholders (Note 8)(192)40,833Income tax payable289,69320,910Deferred revenue5,417-Current portion of obligation from Hire Purchase lease (Note 10)2,2782,085Total Current Liabilities1,222,870626,930Long term portion of obligation from hire purchases lease (Note 10)3,8935,626Minority interest52,58212,572Commitments and contingencies (Note 15)--Stockholders' 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;10,150,000 shares issued and outstanding as of September 30, 200810,15010,150(Note 14)Additional Paid-in capital60,36360,363Retained earnings5,861,4804,572,024  4    Stockholders' Equity5,931,9934,642,537Total Liabilities and Stockholders' Equity$7,211,338$5,287,665See Notes to Financial Statements   5   ALCO, INC  CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS SEPTEMBER 30, 2008 AND DECEMBER 31, 2007 (UNAUDITED) Three Months Ended
September 30,Nine Months Ended
September 30,2008200720082007RevenuesCommission income$1,091,367$1,187,027$3,410,066$3,321,766Consulting income65,44414,166126,360159,971Website advertising3,500-13,58310,917Enrollment fee income4,0141,6886,1812,153Total revenues1,164,3251,202,8813,556,1903,494,807Operating ExpensesSalaries342,564305,3011,042,016874,624Travel expenses84,81296,383237,389226,074Rents123,483116,615358,485341,643Bad debt expenses--12,507-Depreciation8,2554,99222,94913,282Exchange loss (gain)2,233(764)3,328(408)Other general and administrative99,481129,925359,644345,888Total Operating Expenses660,828652,4522,036,3181,801,103Income from Operations503,497550,4291,519,8721,693,704Other Income (Expense)Interest income12,86736,09651,60787,190Other Income8,15210,86027,28532,968Interest expense(156)(220)(515)(2,726)Total Other Income (Expenses)20,86346,73678,377117,432Income before provisionfor Income Taxes and Minority Interest524,360597,1651,598,2491,811,136Provision for Income Taxes (Note 12)79,158116,595268,783327,505Income before Minority Interest445,202480,5701,329,4661,483,631Minority Interest(14,042)(20,207)(40,010)(37,072)Net Income$431,160$460,363$1,289,456$1,446,559Basic and Fully Diluted Earnings per Share$0.04$0.05$0.13$0.14Weighted average shares outstanding10,150,00010,000,00010,150,00010,000,000See Notes to Financial Statements  6   ALCO, INC  CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED) Nine Months EndedSeptember 30,20082007Operating ActivitiesNet income$1,289,456$1,446,559Adjustments to reconcile net income tonet cash provided by operating activities:Depreciation22,94913,282Minority interest (income)40,01037,072Fixed asset written off64-Changes in operating assets and liabilities:(Increase)/Decrease in commission receivable (net)(81,291)(381,537)(Increase)/Decrease in restricted cash(210,321)480,346(Increase)/Decrease in enrolment fee receivable591-(Increase)/Decrease in deposit and prepayment14,596(13,865)(Increase)/Decrease in other receivable(422,398)(47,009)Increase/(Decrease) in accounts payable435,710221,129Increase/(Decrease) in claims payable14,260(926,530)Increase/(Decrease) in other payable(49,066)142,677Increase/(Decrease) in accrued expenses(38,882)(103,088)Increase/(Decrease) in deferred income5,417(1,917)Increase/(Decrease) in income tax payable268,783327,505Net cash (used) / provided by operating activities1,289,8781,194,624Investing ActivitiesPurchase of fixed assets(86,905)(8,528)Net cash (used) by investing activities(86,905)(8,528)Financing ActivitiesOverdraft from bank-(43,292)Repayment of obligations under finance leases(1,540)(1,346)Repayment of amount due to minority shareholder(41,025)(30,769)Loan of amount due to director550-Net cash provided / (used) by financing activities(42,015)(75,407)Increase in cash1,160,9581,110,689Cash at beginning of period4,341,0153,113,513Cash at end of period$5,501,973$4,224,202Supplemental Disclosures of Cash Flow Information:Cash paid (receive) during year for:Interest$515$2,726Income taxes$-$-See Notes to Financial Statements    7   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 1  ORGANIZATION AND OPERATIONS  Description of Business  ALCO, Inc. (ALCO, we, us, the Company) was incorporated under the laws of the State of Nevada on June 7, 1999 as Seahorse, Inc. and changed its name to Lotus Capital Corp. on September 20, 2004.  The Company changed its name to ALCO, Inc. on February 13, 2006.  The Company is principally engaged in the marine insurance brokerage business in the Asia Pacific region, through its wholly owned subsidiary, AL Marine Holdings (BVI), Ltd., a British Virgin Islands corporation ("AL Marine").  Under the terms of the Agreement for the Share Exchange, Lotus has agreed to acquire all of the issued and outstanding stock of AL Marine and $50,000 in a share exchange transaction, in return for the issuance of 9,766,480 shares of stock of Lotus.  Upon closing under the Agreement for Share Exchange, AL Marine would become a wholly-owned subsidiary of Lotus.  AL Marine is the 100% owner of Andrew Liu and Co., Ltd., a corporation principally engaged in the business of marine insurance brokerage in Asia.  AL Marine owns 60% of Chang An Consultants Ltd., a joint venture with China Changjiang National Shipping Corporation (CSC Group) that serves as a vehicle for the provision of marine insurance brokerage and other marine business services by AL Marine.  AL Marine owns 85% of EdushipAsia Ltd.  In 2005 and 2004, EdushipAsia Ltd was appointed as an exclusive agent by the Institute of Chartered Shipbrokers (UK) (ICS) to set up ICSs first distant learning centre in Shanghai, PRC.  As a result of the Agreement, the transaction was treated for accounting purposes as a capital transaction and reverse merger by the accounting acquirer (AL Marine) and as a reorganization of the accounting acquiree (Lotus).  Accordingly, the financial statements include the following:  n The balance sheet consists of the net assets of the acquirer at historical cost and the net assets of the acquiree at historical cost; and  n The statements of operations include the operations of the acquirer for the years presented and the operations of the acquiree from the date of the merger.  ALCO, Inc. and AL Marine are hereafter referred to as the Company.  8   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 1  ORGANIZATION AND OPERATIONS (continued)  Control by Principal Stockholders  The directors, executive officers, their affiliates and related parties own, beneficially and in the aggregate, the majority of the voting power of the outstanding share capital of the Company.  Accordingly, directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including approving significant expenses, increasing the authorized capital stock and the dissolution, merger or sale of the Company's assets.  Note 2  SIGNIFICANT ACCOUNTING POLICIES  Economic and Political Risks  The Company faces a number of risks and challenges since its assets are located in Hong Kong, a Special Administrative Region of the People's Republic of China ("PRC"), and its revenues are derived from its operations therein.  The PRC is a developing country with an early stage market economic system, overshadowed by the state.  Its political and economic systems are very different from the more developed countries and are in a state of change.  The PRC also faces many social, economic and political challenges that may produce major shocks and instabilities and even crises, in both its domestic arena and in its relationships with other countries, including the United States.  Such shocks, instabilities and crises may in turn significantly and negatively affect the Company's performance.  Basis of Presentation  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.  The accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").  This basis of accounting differs from that used in the statutory accounts of the Company, which are prepared in accordance with the "Hong Kong Accounting Standard" ("HKAS").  The consolidated financial statements have been prepared in accordance with US GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation SX.  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 (which include normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flows at September 30, 2008 and for all periods presented have been made.  Operating results for the nine months ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.  9   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 2  SIGNIFICANT ACCOUNTING POLICIES (continued)  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 is immaterial.  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.  Concentration of Credit Risk  Financial instruments which subject the Company to concentrations of credit risk consist principally of accounts receivable and cash.  Exposure to losses on receivables is dependent on each customer's financial condition.  The Company controls its exposure to credit risk through a process of credit approvals, credit limits and monitoring procedures, establishing allowances for anticipated losses.  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.   10   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 2  SIGNIFICANT ACCOUNTING POLICIES (continued)  Revenue Recognition  Commission revenue is recognized as of the effective date of the insurance policy or the date the customer is billed, whichever is later.  At that date, the earnings process has been completed and the Company can reliably estimate the impact of policy cancellations based upon historical cancellation experience adjusted by known circumstances.  The policy cancellation reserve is periodically evaluated and adjusted as necessary.  Subsequent commission adjustments are recognized upon notification from the insurance companies.  Commission revenues are reported net of commissions paid to sub-brokers.  Fee income is recognized as services are rendered.  Cash and Cash Equivalents  The Company invests idle cash primarily in money market accounts, certificates of deposit and short-term commercial paper.  Money market funds and all highly liquid debt instruments with an original maturity of three months or less are considered cash equivalents.  Commissions Receivable  Commissions receivable are recognized and carried at original invoice amount less an allowance for any uncollectible amounts.  An estimate for doubtful accounts is made when collection of the full amount becomes questionable.  We made allowance for doubtful accounts based on a review of all outstanding amounts on a monthly basis.  We analyze the aging of receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms.  Significant changes in customer concentration or payment terms, deterioration of customer credit-worthiness or weakening in economics trends could have a significant impact on the collectibility of receivables and the allowance.  If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances will be made.  Property, Plant and Equipment  Property, plant and equipment are carried at cost.  The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized.  When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the income statement in the year of disposition.     11   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 2  SIGNIFICANT ACCOUNTING POLICIES (continued)  Depreciation is calculated on a straight-line basis over the estimated useful life of the assets.  The annual percentages applied are:  Motor vehicles 20% Furniture and fixtures 15% Office equipment 15% Leasehold improvements 20%  Accounts Payable and Claims Payable  In its capacity as an insurance agent or broker, the Company collects premiums from customers and, after deducting its commissions, remits the premiums to the respective insurers; the Company also collects claims or refunds from insurers on behalf of customers.  Unremitted insurance premiums and claims are held in a fiduciary capacity.  The obligation to remit premiums is recorded as accounts payable and the obligation to remit claims and refunds is recorded as claims payable on the balance sheet.  Pension Costs  Mandatory contributions are made to the Hong Kong's Mandatory Provident Fund (MPF), based on a percentage of the employees' basic salaries.  The cost of these payments are charged to the profit and loss accounts as they become payable in accordance with the rule of the MPF Scheme.  The employer contributions vest fully with the employees when contributed into the MPF Scheme.  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 Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes, these deferred taxes are measured by applying currently enacted tax laws.  The effective tax rate was 17.5% in 2007 and 16.5% in 2008.  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 Financial Instruments  The carrying value of financial instruments, including cash and cash equivalents, receivables, accounts payable and accrued expenses, approximates their fair value at September 30, 2008, due to the relatively short-term nature of these instruments.  12   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 2  SIGNIFICANT ACCOUNTING POLICIES (continued)  Valuation of Long-Lived assets  The Company periodically analyzes its long-lived assets for potential impairment, assessing the appropriateness of lives and recoverability of unamortized balances through measurement of undiscounted operating cash flows on a basis consistent with US GAAP.  Related Party Transactions  The captions "Due from directors" and "Due from related companies" represent loans receivable that are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore are not considered current assets.  The related companies are owned by directors of the Company.  The captions "Due to director" and "Due to related company" represent loans payable that are unsecured, non-interest bearing and have no fixed terms of repayment, therefore, deemed payable on demand.  The related company is a development company owned by directors of the Company.  The Company rents office space in Hong Kong and quarter in Shanghai from a company owned by directors of the Company.  Foreign Currency and Other Comprehensive Income  The accompanying financial statements are presented in United States (US) dollars.  The functional currency is the Hong Kong dollar (HK$).  The financial statements are translated into US dollars from HK$ at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses.  Capital accounts are translated at their historical exchange rates when the capital transactions occurred.  13   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 2  SIGNIFICANT ACCOUNTING POLICIES (continued)  The Hong Kong Monetary Authority (HKMA), Hong Kong's central bank, maintains a Linked Exchange Rate System since 1983.  The HKMA operates Convertibility Undertakings on both the strong side and the weak side of the Linked Rate of US$1: HK$7.8.  In fact, the exchange rate for HK$ to US dollars has varied by only 100ths during 2008 and 2007.  Thus, the consistent exchange rate used has been 7.80 HK$ per each US dollar.  Since there have been no greater fluctuations in the exchange rate, there is no gain or loss from foreign currency translation and no resulting other comprehensive income or loss.  Foreign currency transactions are those that required settlement in a currency other than HK$.  Gain or loss from foreign currency transactions, or exchange loss, are recognized in income in the period they occur.  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.  Since the Companys common stock currently does not trade, the dilutive effect of any warrants or convertible notes outstanding cannot be determined.  Recently Adopted Accounting Principles  In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, "Fair Value Measurements".  SFAS No. 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements.  In February 2008, the FASB issued FASB Staff Position 157-1, "Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13" ("FSP 157-1") and FASB Staff Position 157-2, "Effective Date of FASB Statement No. 157" ("FSP 157-2").  FSP 157-1 amends SFAS No. 157 to remove certain leasing transactions from its scope.  FSP 157-2 delays the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008.  SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.  The Company adopted SFAS No. 157 effective January 1, 2008 for all financial assets and liabilities as required.  The adoption of SFAS No. 157 was not material to the Company's financial statements or results of operations.    14   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 2  SIGNIFICANT ACCOUNTING POLICIES (continued)  In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115, which is effective for fiscal years beginning after November 15, 2007.  SFAS No. 159 is an elective standard which permits an entity to choose to measure many financial instruments and certain other items at fair value at specified election dates.  Subsequent unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings.  The Company has not elected the fair value option for any assets or liabilities under SFAS No. 159.  Recent Accounting Pronouncements  On December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling interest in Consolidated Financial Statements.  SFAS No. 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements.  The statement establishes a single method of accounting for changes in a parents ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements.  SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years.  We have not yet determined the impact of the adoption of SFAS No. 160 on our consolidated financial statements and footnote disclosures.  On December 4, 2007, the FASB issued SFAS No.141R, Business Combinations.  SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination.  SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  We have not yet determined the impact of the adoption of SFAS No. 141R on our consolidated financial statements and footnote disclosures.  In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities.  The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial performance, and cash flows.  It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged.  The Company is currently evaluating the impact of adopting SFAS No. 161 on its consolidated financial statements.    15   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 2  SIGNIFICANT ACCOUNTING POLICIES (continued)  In April 2008, the FASB issued Staff Position FAS 142-3, Determination of the Useful Life of Intangible Assets (FSP FAS 142-3) which amends the factors an entity should consider in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS No. 142, Goodwill and Other Intangible Assets (FAS No. 142).  FSP FAS 142-3 applies to intangible assets that are acquired individually or with a group of assets and intangible assets acquired in both business combinations and asset acquisitions.  It removes a provision under FAS No. 142, requiring an entity to consider whether a contractual renewal or extension clause can be accomplished without substantial cost or material modifications of the existing terms and conditions associated with the asset.  Instead, FSP FAS 142-3 requires that an entity consider its own experience in renewing similar arrangements.  An entity would consider market participant assumptions regarding renewal if no such relevant experience exists.  FSP FAS 142-3 is effective for year ends beginning after December 15, 2008 with early adoption prohibited.  We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.  In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (FSP EITF 03-6-1).  FSP EITF 03-6-1 concludes that unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents are participating securities, and thus, should be included in the two-class method of computing earnings per share (EPS).  FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years.  Early application of EITF 03-6-1 is prohibited.  It also requires that all prior-period EPS data be adjusted retrospectively.  We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.   Note 3  CASH  Cash consists of the following:September 30,December 31,20082007Cash on hand$7,687$6,436Cash in Bank  Saving & Checking-
China Construction Bank (Asia) (formerly known as Bank of America (Asia))2,955,9461,816,445-
Bank of China5,2545,331-
United Overseas Bank7,5805,459-
Cash in bank  Fixed Deposit2,525,5062,507,344$5,501,973$4,341,015   16   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 3  CASH (continued)  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, they 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 4  RESTRICTED CASH  Restricted cash are 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 restricted cash.  Also, when the Company receives a claim on behalf of a policyholder, it debits restricted cash and credits claims payable and other payables, if necessary.  The restricted cash balance was $696,538 as of September 30, 2008.   Note 5  COMMISSIONS RECEIVABLE  Commissions receivable consist of the following:September 30,
2008December 31,
2007Commissions receivable$558,085$490,651Less: allowances for doubtful accounts(199,664)(213,521)$358,421$277,130   17   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 6  PROPERTY, PLANT AND EQUIPMENT  Property, Plant and Equipment consists of the following:September 30,
2008December 31,
2007Furniture and fixtures$164,250$157,836Office equipment151,644117,533Leasehold improvements97,59593,255Motor vehicle41,787-455,276368,624Less: Accumulated depreciation320,147297,387$135,129$71,237  Depreciation expense for the 9 months ended September 30, 2008 and 2007 was $22,949 and $13,282 respectively.   Note 7  BANK OVER DRAFT  The Company established a bank over draft of $46,154 credit line with United Overseas Bank.  The interest rate is subject to change from time to time based on changes in an index which is the rate announced from time to time by United Overseas Bank as its Prime Rate.  The bank over draft is pledged of GBP23,000 (approximately US$46,101) fixed deposit in the name of 3rd parties.  On September 30, 2008, the balance of bank over draft was $0.   Note 8  DUE TO MINORITY SHAREHOLDERS  Due to shareholders consist of the following:September 30,
2008December 31,
2007CSC Enterprises Development (HK) Co Ltd$0$41,025Chiang Wei Heng Henry(128)(128)Chin Tsu- Kuang(64)(64)$(192)$40,833  Note 9  DUE TO DIRECTORS  Due to directors consist of the following:September 30,December 31,20082007Andrew Liu Fu Kang$15,496$14,946   18   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 10  CAPITAL LEASE  On April 27, 2006, the Company entered into a lease agreement with Hitachi Credit (HK) Ltd.  The term of the lease is 60 months with $228 as its monthly payment.  The leased property was capitalized as office equipment in 2006 by the amount of the total principal, $10,739 and the related depreciation expense is $1,208 in the first nine months of 2008 and 2007.  The principal due within one year is the current portion of long term debt and classified as current liability.   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 consist of following for the nine months ended:  September 30,LocationLandlord20082007HK Office Room 501 and 502AFortune Ocean Ltd$107,308$107,308HK Office Room 502BFortune Ocean Ltd34,61534,615Shanghai Office and quarterFortune Ocean and Andrew Liu Fu Kang23,07746,371Director (Andrew) quarterFirst Pacific Development Ltd15,00015,000$180,000$203,294   Note 12  INCOME TAXES  The Company's effective tax rate for the nine month period ended September 30, 2008 and 2007 was 16.50% and 17.50%, respectively.  The provisions for income taxes for the nine month periods ended September 30, 2008 and 2007 are summarized as follows:  Hong Kong only:20082007Current$268,783$327,505Deferred--$268,783$327,505    19   ALCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2008 (UNAUDITED)  Note 13  COMMON STOCK  During the year ended December, 2007, the Company issued 150,000 shares of common stock in reliance upon exemptions from registration under the Securities Act of 1933.  The shares were issued to the Brean Murray, Carret & Co. on or about October 23, 2007, for total consideration of $50,000, or $0.33 per share.  The consideration was made for payment of services valued at $50,000 in conjunction with developing with the Company a program to introduce the Company to institutional investors, providing general financial advice and undertaking specific investment banking transactions and/or advisory assignment.  The shares were issued in reliance upon an exemption from registration provided by Section 4(2) under the Securities Act of 1933.   Note 14  COMMITMENTS AND CONTINGENCIES  The Company's business operations exist solely in the PRC and are subject to 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 environments and foreign currency limitations.  The Company's results may thus be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies, laws, regulations, anti-inflationary measures, currency conversion and remittance limitation, and rates and methods of taxation, among other things.      20   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  Our plan for 2008 is mainly the continuation of the plan for 2007.  The plan includes both expansion and improvement of our efficiency and cost competitiveness.  This includes the formation of branch offices in other cities in China.  These branches will rent office space in existing buildings.  We will determine how many offices to open based upon how much working capital we have at the time when we begin to open new offices.  Management will determine in which cities we will form branch offices.  We believe that this will greatly enhance the level of service that we provide to our customers in China and further expand our market share in the marine insurance business.  Both the extent to which we are able to implement this plan of operations and the timing of its implementation will depend, largely, on the availability of working capital, which we may not have or be able to raise.  Because there is no assurance that working capital will be available to us, there is also no assurance regarding the extent to which we will be able to implement our plan of operations within the foreseeable future.  We do not plan to hire additional employees in the next twelve months.   RESULTS OF OPERATIONS  NINE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2007 AND THREE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2007  Revenue  Revenues for the nine months ending September 30, 2008 were $3,556,190, as compared to  21   revenues of $3,494,807 for the nine month period ended September 30, 2007.  This increase of $61,383, or approximately 2%, was mainly due to increases in commission income from the existing clients, enrollment fees and website advertising income.  These increases were partially offset by a decrease in consulting income.  Commission income for the nine month period ended September 30, 2008 was $3,410,066 as compared to $3,321,766 for the same period of 2007.  The increase of commission income $88,300, or approximately 3%, was mainly due to an increase in insurance premium rates paid by customers to insurers.  Consulting income for the nine month period ended September 30, 2008 was $126,360 compared to $159,971 for the comparable period of 2007.  The decrease of consulting income of $33,611, or approximately 21%, was because demand for consulting services decreased.  Website advertising and enrollment fees for the nine month period ended September 30, 2008 were $13,583 and $6,181, respectively, as compared to $10,917 and $2,153 for the same period of 2007.  The increase of website advertising was mainly due to an increase in customers demand for such services.  The increase in enrollment fees was mainly due to the increase of enrollment during the period.  Revenue for the three months ended September 30, 2008 were $1,164,325, as compared to revenues of $1,202,881 for the three months period ended September 30, 2007.  This decrease of $38,556, or approximately 3%, was mainly due to a decrease of commission income which was partially offset by increases in consulting income, website advertising and enrollment fee income.  Causes for the changes for the three months ended September 30, 2008 and 2007 are same as the causes stated in the nine months ending as the paragraph above.  Net income before tax  Net income before tax and minority interest for the nine months ending September 30, 2008 was $1,598,249 compared to $1,811,136 for the nine month period ended September 30, 2007.  The decrease in pre-tax profit of $212,887, or approximately 12%, was mainly due to an increase in operating expenses and a decrease in interest income and other income during the nine months ended September 30, 2008.  Causes for the operating expense increase will be discussed in the section of operating expenses below.  For the interest income and other income, the decrease was mainly due to the recent interest rate cut in the market.  Net income before tax and minority interest for the three months ending September 30, 2008 was $524,360 compared to $597,165 for the three month period ended September 30, 2007.  The decrease in pre-tax profit of $72,805, or approximately 12%, was mainly due to an increase in operating expenses during the three months ended September 30, 2008.  Causes for the changes for the three months ended September 30, 2008 and 2007 are the same as the causes stated above in the discussion regarding the nine months ending September 30, 2008.  Operating expenses  Operating expenses for the nine months and three months ending September 30, 2008 were $2,036,318 and $660,828, respectively, as compared to $1,801,103 and $652,452 for the nine and three month periods ended September 30, 2007.  The increases of $235,215 (or approximately 13%) and $8,376 (or approximately 1%), respectively, were mainly due to  increases in salaries, travel, bad debt expenses, depreciation, and other general and administrative expenses during the nine months and three months ended September 30, 2008.  The reasons for the increases in the major items are as follows:  n Salaries  increased $167,392 or 19% from $874,624 for the nine months ended September 30, 2007 to $1,042,016 for the comparable period of 2008.  In addition, salaries increased  22   $37,263 or 12% from $305,301 for the three months ended September 30, 2007 to $342,564 for the same period of 2008.  The increase in salary expenses was mainly due to increases in headcounts and pay rates. n Travel  increased $11,315 or 5% from $226,074 for the nine months ended September 30, 2007 to $237,389 for the same period of 2008.  In addition, travel expenses decreased $11,571 or 12% from $96,383 for the three months ending September 30, 2007 to $84,812 for the same period of 2008.  The increase for the nine months end was due to revenue growth and general price inflation. n Bad debt expenses  increased to $12,507 during the nine month period ended September 30, 2008 from $0 during the same period of 2007.  The increase was due to an increase of doubtful debts during the first quarter of 2008.  No further bad debt was charged during the three months ending September 30, 2008. n Depreciation  increased $9,667 or 73% from $13,282 for the nine month period ended September 30, 2007 to $22,949 for the same period of 2008.  Furthermore, depreciation increased $3,263 or 65% from $4,992 for the three months ending September 30, 2007 to $8,255 for the three months ending September 30, 2008.  The increase was primarily due to the addition of fixed assets during the year of 2008. n Other general and administrative expenses  increased $13,756 or 4% from $345,888 for the nine month ended September 30, 2007 to $359,644 for the same period of 2008.  On the other hand, expenses decreased $30,444 or 23% from $129,925 for the three months ending September 30, 2007 to $99,481 for the three months ending September 30, 2008.  This increase for the nine months end was associated with building management, consumable store, medical, newspapers, periodicals and books, staff training, storage, subscriptions & membership fees, motor vehicle expenses, printing, post & stationery, repair & maintenance, telecommunication, and legal & professional.   LIQUIDITY AND CAPITAL RESOURCES  Cash flow  For the nine months ended September 30, 2008, cash provided by operating activities totaled $1,289,878.  This was primarily due to net income during the period plus an increase in commissions receivable, restricted cash, other receivables, accounts payable, claims payable, deferred income and income tax payable partially offset by a decrease in enrollment fees receivable, deposits and prepayments, other payables and accrued expenses.  For the nine months ended September 30, 2007, cash provided by operating activities totaled $1,194,624.  This was primarily due to net income during the period plus an increase in commission receivable, deposit and prepayment, other receivable, accounts payable, other payable and income tax payable partially offset by a decrease in restricted cash, claims payable, accrued expenses and deferred income.  Net cash provided by operating activities for the nine months ended September 30, 2008 increased by $95,254, or approximately 8%, as compared to the nine months ended September 30, 2007.  The increase of net cash flow was mainly due to the improvement of working capital (current assets minus current liabilities) in 2008.  As of September 30, 2008, working capital was $4,639,687, an increase of $1,435,624, or approximately 45%, as compared to working capital of $3,204,063 as of September 30, 2007.  For the nine months ended September 30, 2008, cash used in investing activities amounted to $86,905.  The use of funds was for the purchases of furniture and fittings, leasehold  23   improvement, motor vehicles and office equipment.  For the nine months ended September 30, 2007, cash used in investing activities amounted to $8,528.  The use of funds was for the purchases of office equipment, furniture and fittings and leasehold improvement.  For the nine months ended September 30, 2008, cash used in finance activities totaled $42,015 which was due to repayment of obligations under finance leases and repayment of amounts due to minority shareholder which were partially offset by the amount due to director.  For the nine months ended September 30, 2007, cash used by financing activities amounted to $75,407 which was due to repayment of bank overdraft, obligation under finance leases and loan amount due to minority shareholder.  Assets and liabilities  For the nine months ended September 30, 2008, the Groups balance sheet reflects current and total assets of $7,211,338, and total liabilities of $1,279,345.  These items increased $1,923,673 (36%) and $634,217 (98%), respectively, as compared to the year ended December 31, 2007.  The increase of current and total assets was mainly due to increases in cash and cash equivalents, commissions receivable, property, plant & equipment, restricted cash and other receivables.  In addition, the increase of total liabilities was due to increases of trade accounts payable, claims payable, amounts due to directors, income tax payable, deferred revenue and minority interest.  Because the rate of insurance premium paid by customers to insurers was raised, commissions receivable as well as the related balance sheet items such as restricted cash, other receivable, and trade accounts payable significantly increased during the nine month period September 30, 2008.  In addition, because certain claims were received from insurers on behalf of customers, the claims payable significantly increased as compared to the year end of 2007.  As of September 30, 2008, there was $5,417 deferred revenue included in the liabilities.  This item is in relation to the income received in advance for the website advertising.  The Group has bank deposits and cash equivalents of approximately $5,501,973 as of September 30, 2008.  The Company has sufficient funds to satisfy its financial commitments and working capital requirements for the next twelve months.  During the period end, the Company had no commitments for capital expenditures or off-balance sheet arrangements, and had lease commitments of $374,060.   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 1 of the Notes to Financial Statements in this Form 10-Q and Note 1 of the Notes to Consolidated Financial Statements in our 2007 Form 10-KSB.     24   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  We are exposed to market risk in relation to our cash and cash equivalents.  We invest our excess cash in short-term time deposit at banking institution with maturities of less than one month.  These investments are not held for trading or other speculative purposes.  Changes in interest rates affect the interest income we earn on our cash and cash equivalents.  Therefore, any changes of interest rate could impact our cash flows and results of operations.  Inflation is also a market risk to our operation.  The main inflationary factors affecting our operations are staff cost, rent, traveling expenses and other general and administrative expenses.  Substantial increases in these costs could impact our operating results.    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 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 of September 30, 2008 to provide reasonable assurance of the achievement of these objectives.   25   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 quarter ended September 30, 2008, 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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  None.    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    26   ITEM 6. EXHIBITS  The following exhibits are filed herewith:  3.1 Articles of Incorporation (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 6, 2005).  3.1(b) Amendment to Articles of Incorporation (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 6, 2005).  3.2 Bylaws (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 6, 2005).  10.1 Exclusive representative agreement between ALC and The Strike Club (herein incorporated by reference from the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on June 5, 2006).  10.2 Agreement between EduShipAsia Ltd. and the Institute of Chartered Shipbrokers appointing EduShipAsia Ltd. as ICSs exclusive agent in China (herein incorporated by reference from the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on June 5, 2006).  10.3 Employment Agreement between Andrew Liu & Company, Ltd. and Andrew Liu.  (Herein incorporated by reference from the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on September 14, 2006)  10.4 Employment Agreement between Andrew Liu & Company, Ltd. and John Liu.  (Herein incorporated by reference from the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on September 14, 2006).  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.      27    SIGNATURES  In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.   ALCO, INC.   By: /s/ Andrew Liu, CEO and Chairman  Date:  November 14, 2008   By: /s/ John Liu, Director  Date:  November 14, 2008   By: /s/ Colman Au, Chief Financial Officer  Date:  November 14, 2008     28