**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**










**FORM
      10-Q**


**(Mark
      One)**





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


**For
      the quarterly period ended March 31, 2008**




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


**For
      the transition period from ______________ to
      _______________**





Commission
      File Number 000-30292





**ASIAMART,
      INC.**


(Exact
      name of registrant as specified in its charter)




**Delaware**
            **88-0405437**(State
                of Incorporation)
            (I.R.S.
                Employer Identification No.)





**Room
                1508 Peninsula Square**
              **18
                Sung On Street**
              **Hunghom,
                Kowloon, Hong Kong**
            **N/A**(Address
                of principal executive offices)
            (Zip
                Code)




**(852)
      3580-8808**


(Registrant’s
      telephone number, including area code)




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. (Check one):


Large
      Accelerated filer o Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company x





Indicate
      by check mark whether the registrant is a shell company (as determined in Rule
      12b-2 of the Exchange Act). Yes  ̈ 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:




As
      of
      March 31, 2008, the Registrant had 24,744,177 shares of Common Stock
      outstanding.







**ASIAMART,
      INC.**





**INDEX**





Page Number**PART
                I. Financial Statements**Item
                1.
            Financial
                Information
            F-1Consolidated
                Balance Sheets as of March 31, 2008 (Unaudited) and December 31,
                2007
            F-1Consolidated
                Statements of Operations for the Three Months Ended March 31, 2008
                and
                March 31, 2007 (Unaudited)
            F-2Consolidated
                Statements of Stockholders' Equity
            F-3Consolidated
                Statements of Cash Flows for the Three Months Ended March 31, 2008
                and
                March 31, 2007 (Unaudited)
            F-4Notes
                to Consolidated Financial Statements - March 31, 2008
                (Unaudited)
            F-5Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            1Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            6Item
                4.
            Controls
                and Procedures
            6**PART
                II. Other Information**Item
                1.
            Legal
                Proceedings
            7Item
                1A.
            Risk
                Factors
            7Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            15Item
                3.
            Defaults
                Upon Senior Securities
            15Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            15Item
                5.
            Other
                Information
            15Item
                6.
            Exhibits
            15Signatures
            
            16







**PART
      I. FINANCIAL INFORMATION**





**ITEM
      1.**  **FINANCIAL
      STATEMENTS**




**ASIAMART,
      INC. AND SUBSIDIARIES**





**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**Page**Condensed
                Consolidated Balance Sheets
            F-1Condensed
                Consolidated Statements of Operations and other comprehensive (loss)/
                income
            F-2Condensed
                Consolidated Statements of Changes in Stockholders’ Equity
            F-3Condensed
                Consolidated Statements of Cash Flows
            F-4Notes
                to Condensed Consolidated Financial Statements
            F-5











**ASIAMART,
      INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**Currency
      expressed in United States Dollars (“US$”), except for number of
      shares**





March 31,
              2008
            
            December 31,
              2007(Unaudited)
            
            (Note 2)**ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            1,251,954
            
            $
            1,817,148Accounts
                receivable, net
            
            
            2,129,292
            
            
            1,883,609Inventories
            
            
            3,563,872
            
            
            3,817,215Deposits
                and prepaid expenses
            
            
            1,702,042
            
            
            1,500,599Other
                receivables
            
            
            462,622
            
            
            475,513Total
                current assets
            
            
            9,109,782
            
            
            9,494,084Plant
                and equipment, net
            
            
            784,010
            
            
            848,978Other
                assets:Long-term
                loan, net
            
            
            1,196,569
            
            
            1,211,580Long-term
                rental and utilities deposits
            
            
            158,385
            
            
            157,922Debt
                issuance costs
            
            
            158,136
            
            
            184,492Tax
                recoverable
            
            
            9,053
            
            
            54,829Total
                other assets
            
            
            1,522,143
            
            
            1,608,823**TOTAL
                ASSETS**
            
            $
            11,415,935
            
            $
            11,951,885**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilities:Accounts
                payable
            
            $
            1,754,673
            
            $
            2,482,382Accrued
                liabilities
            
            
            958,186
            
            
            1,026,210Customer
                deposits
            
            
            1,887
            
            
            95,292Due
                to stockholders
            
            
            286,891
            
            
            286,585Other
                payable
            
            
            169,417
            
            
            110,771Current
                maturities of long-term debt
            
            
            365,884
            
            
            523,435Total
                current liabilities
            
            
            3,536,938
            
            
            4,524,675Long-term
                liabilitiesDeferred
                tax liabilities
            
            
            15,471
            
            
            15,455Long-term
                debt
            
            
            66,530
            
            
            115,916Debentures
                payable, net of discount
            
            
            1,520,231
            
            
            1,264,406Total
                long-term liabilities
            
            
            1,602,232
            
            
            1,395,777**TOTAL
                LIABILITIES**
            
            $
            5,139,170
            
            $
            5,920,452Stockholders’
                equity:Common
                stock
            
            
            2,474
            
            
            2,474Additional
                paid-in capital
            
            
            3,455,421
            
            
            3,455,421Retained
                earnings
            
            
            2,745,919
            
            
            2,507,417Accumulated
                other comprehensive income
            
            
            72,951
            
            
            66,121Total
                stockholders’ equity
            
            
            6,276,765
            
            
            6,031,433**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY**
            
            $
            11,415,935
            
            $
            11,951,885





See
      accompanying notes to condensed consolidated financial statements.





F-1





**ASIAMART,
      INC AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**AND
      COMPREHENSIVE (LOSS) INCOME**


**Currency
      expressed in United States Dollars (“US$”), except for number of
      shares**


**(Unaudited)**





Three months ended March 31,2008
            
            2007**REVENUE**Sales
            
            $
            10,810,979
            
            $
            16,428,383Referral
                income
            
            
            -
            
            
            426,609Related
                party
            
            
            290,130
            
            
            -Total
                revenue
            
            
            11,101,109
            
            
            16,854,992**COST
                OF SALES**
            
            
            5,813,486
            
            
            10,190,187**GROSS
                PROFIT**
            
            
            5,287,623
            
            
            6,664,805**OPERATING
                EXPENSES**Selling,
                general and administrative expenses
            
            
            5,055,427
            
            
            5,512,364**INCOME
                FROM OPERATIONS**
            
            
            232,196
            
            
            1,152,441**OTHER
                INCOME, NET**
            
            
            52,141
            
            
            154,644**INCOME
                BEFORE PROVISION FOR INCOME TAXES**
            
            
            284,337
            
            
            1,307,085Provision
                for Income Tax
            
            
            45,835
            
            
            296,580**NET
                INCOME**
            
            
            238,502
            
            
            1,010,505**OTHER
                COMPREHENSIVE INCOME (LOSS):**Foreign
                currency translation adjustment
            
            
            6,830
            
            
            (30,831
            )**COMPREHENSIVE
                INCOME**
            
            $
            245,332
            
            $
            979,674**BASIC
                (LOSS)EARNINGS PER SHARE**
            
            $
            0.01
            
            $
            0.04**DILUTED
                (LOSS)EARNINGS PER SHARE**
            
            $
            0.01
            
            $
            0.04**BASIC
                WEIGHTED AVERAGE SHARES OUTSTANDING**
            
            
            24,744,177
            
            
            24,570,477**DILUTED
                WEIGHTED AVERAGE SHARES OUTSTANDING**
            
            
            24,744,177
            
            
            27,768,284





See
      accompanying notes to condensed consolidated financial statements.





F-2




**ASIAMART,
        INC AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY**
 **FOR
        THE THREE MONTHS ENDED MARCH 31, 2008**
 **Currency
        expressed in United States Dollars (“US$”), except for number of
        shares**
 **(Unaudited)**
 
 Common stock
              
              Additional
              
              Retained
              
              Accumulated other
                comprehensiveShares
              
              Par value
              
              paid-in capital
              
              Earnings
              
              income
              
              TotalsBalance
                  as of December 31, 2007
              
              
              24,744,177
              
              $
              2,474
              
              $
              3,455,421
              
              $
              2,507,417
              
              $
              66,121
              
              $
              6,031,433Net
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              238,502
              
              
              -
              
              
              238,502Foreign
                  currency translation adjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              6,830
              
              
              6,830Balance
                  as of March 31, 2008
              
              
              24,744,177
              
              $
              2,474
              
              $
              3,455,421
              
              $
              2,745,919
              
              $
              72,951
              
              $
              6,276,765
  See
          accompanying notes to condensed
          consolidated financial statements.


F-3




**ASIAMART,
        INC AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **Currency
        expressed in United States Dollars (“US$”)**
 **(Unaudited)**
 
 Three months ended March 31,2008
              
              2007**Cash
                  flow from operating activities:**Net
                  cash (used in) provided by operating activities
              
              $
              (380,098
              )
              $
              1,002,576**Cash
                  flows from investing activities:**Long-term
                  loans to travel agencies
              
              
              15,011
              
              
              (105,041
              )Purchase
                  of plant and equipment
              
              
              -
              
              
              (88,140
              )Net
                  cash provided by (used in) investing activities
              
              
              15,011
              
              
              (193,181
              )**Cash
                  flows from financing activities:**Repayments
                  of amounts due to shareholders
              
              
              -
              
              
              (17,731
              )Proceeds
                  from installment loan
              
              
              -
              
              
              256,180Repayment
                  of installment loan
              
              
              (136,975
              )
              
              (171,088
              )Repayment
                  of capital lease obligations
              
              
              (69,962
              )
              
              (117,355
              )Net
                  cash used in financing activities
              
              
              (206,937
              )
              
              (49,994
              )**EFFECT
                  OF EXCHANGE RATE ON CASH**
              
              
              6,830
              
              
              (51,890
              )**CHANGE
                  IN CASH**
              
              
              (565,194
              )
              
              707,511**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              1,817,148
              
              
              2,560,304**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              1,251,954
              
              $
              3,267,815**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION**Interest
                  paid
              
              $
              6,750
              
              $
              13,620Income
                  taxes paid
              
              $
              0
              
              $
              243,900
 
 See
        accompanying notes to condensed
        consolidated financial statements




F-4




**ASIAMART,
      INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**Currency
      expressed in United States Dollars (“US$”)**


**(Unaudited)**





**NOTE
      1 – DESCRIPTION OF BUSINESS AND ORGANIZATION**





Asiamart,
      Inc., formerly known as WT Holdings Corporation (the “Company”) is a Delaware
      corporation which was incorporated under the laws of the State of Delaware
      on
      August 25, 1997. The Company was originally involved in developing gaming
      and entertainment products, and as of December 31, 2001, the Company
      discontinued these operations. The Company began a new development stage
      commencing January 2002, when it began searching for a new business
      combination.





Effective
      August 13, 2004, the Company acquired the outstanding equity interest in
      two related companies, Diabetes Education Sources, LLC (“DES”) and Freedom
      Medical Sources, LLC (“FMS”), pursuant to a Membership Interest Purchase
      Agreement among the Company, DES and FMS. Pursuant to the agreement, the Company
      issued an aggregate of 10,000,000 shares of restricted stock (500,000 shares
      after giving effect to the Reverse Stock Split) to the members of DES and FMS
      in
      exchange for 100% of the outstanding membership interest in each
      entity.





On
      November 21, 2005, the Company entered into a Securities Purchase Agreement
      with Central Class Group Limited. In addition, prior to the date of the
      Securities Purchase Agreement, Central Class Group Limited acquired
      approximately 17,271,422 shares of common stock (863,571 shares after giving
      effect to the Reverse Stock Split) from existing stockholders of the Company
      in
      a series of private stock purchase transactions. In connection with these
      transactions, the Company was reorganized. Under the Securities Purchase
      Agreement, WB Capital Group and Central Class Group Limited provided a certain
      amount of capital to the Company in exchange for a promissory note and common
      stock. The Company used the proceeds from the transaction to pay its creditors
      and settle its debts.





Effective
      April 4, 2006, the Company effected a one-for-twenty (1:20) reverse
      stock split of its common stock. Effective November 30, 2006, the Company
      effected a one-for-four (1:4) reverse stock split of its common
      stock.





On
      June 22, 2006, the Company executed an Agreement and Plan of Share Exchange
      (“Exchange Agreement”) by and among the Company on the one hand, and Horizon
      Corporation Limited, a Hong Kong corporation (“Horizon”), Mr. Ricky Kee
      Kwong Tsoi and Mr. Alex Chun Shan Yue as the shareholders (the “PDD
      Shareholders”) of Profits Dreams Development Ltd. (“PDD”), and the shareholders
      (the “FRHL Shareholders”) of Forever Rise Holdings Limited (“FRHL”) on the other
      hand. Prior to the Exchange Agreement, FRHL was the parent company of Horizon,
      which in turn was the parent company of PDD, which in turn owns five operating
      subsidiaries. The business and operations of the Horizon Group are more fully
      described below.





The
      Exchange Agreement provided for (i) the acquisition by the Company of all
      of the issued and outstanding shares of capital stock of PDD, consisting of
      a
      total of 1,000 ordinary shares (collectively, the “PDD Shares”), such that PDD
      became a wholly owned subsidiary of the Company; and in exchange therefore
      (ii) the issuance by the Company at the closing of an aggregate of
      68,699,565 shares of restricted common stock of the Company to the PDD
      Shareholders, or their assigns, which shall constitute 70% of the issued and
      outstanding common stock of the Company immediately after closing of the
      transaction.





F-5




**ASIAMART,
      INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**Currency
      expressed in United States Dollars (“US$”)**


**(Unaudited)**


In
      accordance with the Accounting and Financial Reporting Interpretations and
      Guidance prepared by the staff of the U.S. Securities and Exchange Commission,
      the Company (the legal acquirer) is considered the accounting acquiree and
      PDD
      (the legal acquiree) is considered the accounting acquirer. The consolidated
      financial statements of the combined entity will in substance be those of PDD,
      with the assets and liabilities, and revenues and expenses, of the Company
      being
      included effective from the date of consummation of the Exchange Transaction.
      The Company is deemed to be a continuation of the business of PDD. The
      outstanding stock of the Company prior to the Exchange Transaction will be
      accounted for at their net book value and no goodwill will be
      recognized.





As
      a
      result of the Exchange Agreement with the Horizon Group, the Company acquired
      100% of the capital stock of PDD. From and after the Closing Date of the
      Exchange Agreement, the Company’s primary operations consist of the retail and
      trading operations of the Horizon Group, which are conducted through the five
      operating subsidiaries in Hong Kong.





The
      Company through its subsidiaries engages in two operating segments, trading
      and
      retailing. Trading consists of selling products wholesale to other retail
      operators and retail consists of selling products primarily to tourist through
      two discount shopping centers in Hong Kong.




**Company name**
            
            **Trade Name**
            
            **Place of**
              **incorporation**
            
            **Date of incorporation**
            
            **Principal business**1
            
            Raffle Limited
            
            N/A
            
            Hong Kong
            
            August 7, 1998
            
            Trading of
                general merchandise2
            
            Sure
                Profits Trading Limited
            
            N/A
            
            Hong Kong
            
            August 3, 2001
            
            Trading
                of general merchandise3
            
            Manigood
                International Industrial Limited
            
            Hong
                Kong (Duty Free) Center
            
            Hong Kong
            
            December 15, 2003
            
            Operating
                a discount shopping center in Hong Kong4
            
            Allied
                Fine Development Limited
            
            Super
                Star Department Store
            
            Hong Kong
            
            September 19, 2003
            
            Operating
                a discount shopping center in Hong Kong5
            
            Max
                Surplus International Development Limited
            
            Golden
                Bauhinia Duty Free
            
            Hong Kong
            
            July 26, 2004
            
            Operating
                a discount shopping center in Hong Kong, closed on Nov,
                2006





The
      Company’s outlets and discount shopping centers cater to tourists visiting Hong
      Kong from other parts of China (“mainland China”) who are transported directly
      to the Company’s shopping centers by a large network of travel companies and
      tour operators. The Company’s outlets and shopping centers offer the tourists
      discount prices on a limited selection of international branded and selected
      private label products in a wide range of merchandise categories such as
      consumer electronics, cosmetics, watches, dietary supplements, health care
      products and optical instruments. A number of travel companies and tour
      operators have agreements, partnerships or affiliation arrangements with the
      Company to transport tourists from mainland China to the Company’s outlets and
      shopping centers for shopping.





F-6




**ASIAMART,
      INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**Currency
      expressed in United States Dollars (“US$”)**


**(Unaudited)**


All
      current operations and assets of the Company are located in Hong
      Kong.





**NOTE
      2 –** **BASIS
      OF PRESENTATION**





The
      accompanying condensed consolidated balance sheet as of December 31, 2007 has
      been
      derived from audited financial statements and the
      accompanying unaudited condensed consolidated financial statements as of March
      31, 2008 and for the three months ended March 31, 2008 and 2007 have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America (“GAAP”) for interim financial information and the
      interim reporting requirements of Regulation S-X. They do not include all of
      the
      information and footnotes for complete consolidated financial statements as
      required by GAAP. In management's opinion, all adjustments (consisting only
      of
      normal recurring adjustments) considered necessary for a fair presentation
      have
      been included. The results of operations for the periods ended March 31, 2008
      and 2007 presented are not necessarily indicative of the results to be expected
      for the year. These financial statements should be read in conjunction with
      the
      annual financial statements included in the Company’s Form 10-K filed with the
      U.S. Securities and Exchange Commission on April 15, 2008.





There
      is
      no provision for dividends for the quarter to which this quarterly report
      relates .





**NOTE
      3 –** **RECENT
      ACCOUNTING PRONOUNCEMENTS**





The
      Company has reviewed all recently issued, but not yet effective, accounting
      pronouncements and do not believe the future adoption of any such pronouncements
      may be expected to cause a material impact on its financial condition or the
      results of its operations.





In
      February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
      Financial Assets and Financial Liabilities" ("SFAS No. 159"). SFAS No. 159
      permits entities to choose to measure, on an item-by-item basis, specified
      financial instruments and certain other items at fair value. Unrealized gains
      and losses on items for which the fair value option has been elected are
      required to be reported in earnings at each reporting date. SFAS No. 159 is
      effective for fiscal years beginning after November 15, 2007, the provisions
      of
      which are required to be applied prospectively. The Company believes that SFAS
      159 should not have a material impact on the consolidated financial position
      or
      results of operations.




In
      December 2007, the FASB issued SFAS No. 141 (Revised 2007), "Business
      Combinations" ("SFAS No. 141R"). SFAS No. 141R will change the accounting for
      business combinations. Under SFAS No. 141R, an acquiring entity will be required
      to recognize all the assets acquired and liabilities assumed in a transaction
      at
      the acquisition-date fair value with limited exceptions. SFAS No. 141R will
      change the accounting treatment and disclosure for certain specific items in
      a
      business combination. SFAS No. 141R applies prospectively to 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.
      Accordingly, any business combinations the Company engages in will be recorded
      and disclosed following existing GAAP until January 1, 2009. The Company expects
      SFAS No. 141R will have an impact on accounting for business combinations once
      adopted but the effect is dependent upon acquisitions at that time. The Company
      is still assessing the impact of this pronouncement.





F-7




**ASIAMART,
      INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**Currency
      expressed in United States Dollars (“US$”)**


**(Unaudited)**


In
      December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
      Consolidated Financial Statements--An Amendment of ARB No. 51, or SFAS No.
      160"
      ("SFAS No. 160"). SFAS No. 160 establishes new accounting and reporting
      standards for the noncontrolling interest in a subsidiary and for the
      deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years
      beginning on or after December 15, 2008. The Company believes that SFAS 160
      should not have a material impact on the consolidated financial position or
      results of operations.




In
      March
      2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
      and Hedging Activities" ("SFAS No. 161"). SFAS 161 requires companies with
      derivative instruments to disclose information that should enable
      financial-statement users to understand how and why a company uses derivative
      instruments, how derivative instruments and related hedged items are accounted
      for under FASB Statement No. 133 "Accounting for Derivative Instruments and
      Hedging Activities" and how derivative instruments and related hedged items
      affect a company's financial position, financial performance and cash flows.
      SFAS 161 is effective for financial statements issued for fiscal years and
      interim periods beginning after November 15, 2008. The adoption of this
      statement is not expected to have a material effect on the Company's future
      financial position or results of operations.





**NOTE
      4 – INVENTORIES**





Inventory
      consisted of the following:





March 31, 2008
            
            December 31, 2007(Unaudited)
            
            (Audited)Inventories
            
            $
            4,039,167
            
            $
            4,292,510Less:
                valuation allowance
            
            
            (475,295
            )
            
            (475,295
            )Total
            
            $
            3,563,872
            
            $
            3,817,215





**NOTE
      5 – INCOME TAXES**





The
      Company, being registered in the State of Delaware and which conducts all of
      its
      business through its subsidiaries incorporated in Hong Kong, is not subject
      to
      any income tax. Pursuant to Hong Kong tax law, the Company’s Hong Kong
      subsidiaries are subjected to profits tax imposed at the rate of
      17.5%.





F-8




**ASIAMART,
      INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**Currency
      expressed in United States Dollars (“US$”)**


**(Unaudited)**


**NOTE
      6 – RELATED PARTY TRANSACTIONS**





Trade
      receivable and sales – related party





For
      the
      three months ended March 31, 2008 and 2007, the Company earned sales
      revenue from Prince Digital in the amounts of $290,130 and $0, respectively,
      a
      related company, which is controlled by Mr. Tsoi Kee Kwong Ricky, a
      beneficial shareholder of the Company.





**NOTE
      7 – OTHER INCOME**





Other
      income consisted of the following:





Three months ended March 312008
            
            2007(Unaudited)
            
            (Unaudited)Income
                from concessionaire sales
            
            $
            176,283
            
            $
            159,873Rental
                income
            
            
            -
            
            
            3,843Transaction
                gain
            
            
            201,462
            
            
            257,459Interest
                income
            
            
            -
            
            
            6,613Finance
                costs
            
            
            (322,934
            )
            
            (329,804
            )Others
            
            
            (2,670
            )
            
            56,660Total
            
            $
            52,141
            
            $
            154,644





**NOTE
      8 – SEGMENT INFORMATION**





The
      Company’s operating businesses are structured and managed separately, according
      to the nature of their operations and the products and services they provide.
      The Company identifies its reportable segments based on management
      responsibility: (i) the trading segment, and (ii) the retailing
      segment.




Three months ended March 31,2008
            
            2007(Unaudited)
            
            (Unaudited)Revenue:Trading
            
            $
            1,517,556
            
            $
            1,124,004Retailing
            
            
            9,583,553
            
            
            15,730,988$
            11,101,109
            
            $
            16,854,992





F-9


**ASIAMART,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **Currency
        expressed in United States Dollars (“US$”)**
 **(Unaudited)**


Three months ended March 31,2008
            
            2007(Unaudited)
            
            (Unaudited)Income
                / (loss) before provision for income tax:Trading
            
            $
            339,072
            
            $
            180,573Retailing
            
            
            (54,735
            )
            
            1,126,512$
            284,337
            
            $
            1,307,085





March 31, 2008
            
            December 31, 2007(Unaudited)
            
            (Audited)Total
                assets:Trading
            
            $
            2,404,408
            
            $
            6,446,113Retailing
            
            
            9,011,527
            
            
            5,505,772$
            11,415,935
            
            $
            11,951,885





All
      of
      the Company’s revenue and assets are located in Hong Kong.





**NOTE
      9 – LEGAL PROCEEDINGS**




Everest
      Special Situations Fund, LP v. Asiamart, Inc. (Index No. 603666/07). On or
      about
      November 5, 2007, Everest Special Situations Fund, LP filed a Complaint in
      the
      Supreme Court for the State of New York, County of New York (the “Court”),
      alleging claims for fraud and breach of contract related to a Securities
      Purchase Agreement entered into with the Company on October 6, 2006. The Company
      filed a Motion to Dismiss the Complaint, which was submitted on March 26, 2008.
      The Court granted the Motion and dismissed the action pursuant to an Order
      entered on April 8, 2008.




Other
      than the above described legal proceeding, the Company is not aware of any
      legal
      proceedings in which purchasers, any director, officer, or any owner of record
      or beneficial owner of more than five percent of any class of voting securities
      of the Company, or any affiliate of purchaser, or of any such director, officer,
      affiliate of the Company, or security holder, is a party adverse to the Company
      or has a material interest adverse to the Company. No provision has been made
      in
      the consolidated financial statements for the above
      contingencies.





F-10


**ITEM
      2.**  **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS**





**Note
      Regarding Forward-Looking Statements**





*This
      quarterly report on Form 10-Q and other reports filed by Registrant from time
      to
      time with the Securities and Exchange Commission (collectively the “Filings”)
      contain or may contain forward-looking statements and information that are
      based
      upon beliefs of, and information currently available to, Registrant’s management
      as well as estimates and assumptions made by Registrant’s management. Readers
      are cautioned not to place undue reliance on these forward-looking statements,
      which are only predictions and speak only as of the date hereof. When used
      in
      the filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”,
“intend”, “plan”, or the negative of these terms and similar expressions as they
      relate to Registrant or Registrant’s management identify forward-looking
      statements. Such statements reflect the current view of Registrant with respect
      to future events and are subject to risks, uncertainties, assumptions, and
      other
      factors (including the risks contained in the section of this report entitled
      “Risk Factors”) relating to Registrant’s industry, Registrant’s operations and
      results of operations, and any businesses that Registrant may acquire. Should
      one or more of these risks or uncertainties materialize, or should the
      underlying assumptions prove incorrect, actual results may differ significantly
      from those anticipated, believed, estimated, expected, intended, or
      planned.*





*Although
      Registrant believes that the expectations reflected in the forward-looking
      statements are reasonable, Registrant cannot guarantee future results, levels
      of
      activity, performance, or achievements. Except as required by applicable law,
      including the securities laws of the United States, the Registrant does not
      intend to update any of the forward-looking statements to conform these
      statements to actual results. Readers are urged to carefully review and consider
      the various disclosures made throughout the entirety of this quarterly report,
      which attempt to advise interested parties of the risks and factors that may
      affect our business, financial condition, results of operations, and
      prospects.*





*In
      this Form 10-Q, references to “we”, “our”, “us”, “our company”, “Asiamart” or
      the “Registrant” refer to Asiamart, Inc., a Delaware
      corporation.*




**Overview**




We
      operate outlet and discount shopping centers catering principally to tourists
      visiting Hong Kong from other parts of mainland China who are brought directly
      to our shopping centers through a large network of travel companies and tour
      operators. We offer this captive group of tourists discount prices on selected
      international brands in a wide range of merchandise categories such as consumer
      electronics, cosmetics, watches, dietary supplements, health care products
      and
      optical instruments, producing high sales volume and rapid inventory turnover.
      The high sales volume and rapid inventory turnover provide us with volume
      purchasing power, and combined with the relatively low overhead of our shopping
      centers strategically located in low to moderate rent districts, we have been
      able to quickly achieve profitability since our inception, and continue to
      grow
      our profits over the past several years.





Virtually
      all of our customers are brought to our shopping centers by various mainland
      Chinese travel companies and travel tour operators. Through our relationships
      with over 100 Chinese travel companies and tour operators, our shopping centers
      received an average of over 1,800 visitors per day in 2006, and received an
      average of approximately 1,300 visitors per day in 2007, principally from
      mainland China.





In
      2007,
      we diversified our marketing strategy to focus on high quality customers.
      Accordingly, the number of visitors to our shopping centers dropped
      significantly from over 2,000 visitors per day in the first two quarters to
      1,000 in the fourth quarter. Although the total number of visitors decreased,
      the average spending per visitor increased from $70 in the first quarter of
      2007
      to $78 in the same period in 2008. Management believes this is a direct result
      of a shift in our focus on quality customers and effective customer management.




By
      concentrating on selected valued customers, we also diversified our income
      sources and derived referral income from introducing our customers to other
      retail stores that specialize in products not currently offered in our stores.
      Commencing from July 2006, we began an arrangement with travel agents under
      which the tourists brought in by these travel agents would also visit the shops
      designated by us. Results from this arrangement proved satisfactory in the
      third
      quarter of 2006. We increased our efforts to enter into these arrangements
      with
      travel agents in the fourth quarter of 2006, and as a result, our referral
      income increased substantially. Accordingly, we paid higher commissions to
      travel agents and received referral income from the shops we introduced.
      Management believes these arrangements allows us to strengthen our relationships
      with other retailers that do not directly compete with us, and to enhance our
      relationships with travel agents who source tourist traffic, without having
      to
      expand our product variety. We generally collect referral income from retailers
      within 60 to 90 days from the date of a tourist’s purchase that generates the
      referral income. On the other hand, we generally pay referral fees to travel
      agents within 30 days of a tourist’s completion of travel. This arrangement
      exposes us to a certain amount of credit risk, however, we have taken steps
      to
      mitigate this risk by shortening our collection period from retailers, and
      negotiating extended grace periods for payments by us to travel agents. We
      no
      longer earn referral income since the second quarter of 2007.




1




For
      our
      retail operation, we source products from over 100 vendors. Our strong sales
      volume, rapid inventory turnover and strong relationships with vendors allow
      us
      to take advantage of volume discounts and favorable trade credit terms.





Our
      shopping centers are each 20,000 square feet and the floor plans resemble a
      typical department store. We seek shopping center locations in areas with
      reasonable rents and with readily available parking space for large tour buses.
      Because such locations tend to be in the non-commercial areas of Hong Kong,
      the
      tourists that are transported to our shopping centers generally have little
      opportunity to shop elsewhere other than at our shopping centers. By selecting
      sites with very reasonable rents located in non-commercial areas, we are able
      to
      reduce our overhead expenses and face virtually no competition from other
      retailers near our shopping centers.





Our
      merchandising strategy is to provide our customers with a broad range of well
      known, branded products that are the most popular in their respective
      categories, at prices consistently lower than could be obtained by our shoppers
      in mainland China. We seek to limit specific items in each product line to
      fast
      selling models, sizes and colors, focusing on selling popular products at high
      volume. As such, our product line is relatively streamlined and each shopping
      center only carries approximately 1,000 active stock keeping units (“SKUs”).





We
      own
      and operate two trading subsidiaries - Raffle Limited and Sure Profits Trading
      Limited, which engage in the import and local distribution of consumer
      electronic products. We believe we have established a reputation of reliable,
      quality service among our business and retail customers. We source our product
      from suppliers worldwide in order to provide our customers with an extensive
      variety of products at competitive prices. We have also established a
      comprehensive quality assurance and service protocol. Our customers are entitled
      to a full refund within 180 days of their purchase of a product if the product
      does not meet their satisfaction. In cases where there is a manufacturer’s
      warranty, during the warranty period our customers can bring their products
      directly to manufacturers in China, including Hong Kong and Macau, for repair.
      We mark receipts for our products with a special symbol to denote our guarantee
      that the product authentic and sourced directly from the manufacturer or an
      authorized dealer.





We
      have
      aggressively and strategically pursued development of our retail business with
      a
      focus on international tourists in Hong Kong. Over the past several years,
      we
      have become the largest retail enterprise in this market, and operated three
      shopping centers with a combined total area of 53,000 square feet in 2006.
      However, due to changing the marketing strategy of in focusing high quality
      customers, in 2007 we decided to consolidate our three stores into two,
      beginning in the first quarter of 2007.





Tourists
      from mainland China account for over 90% of our customers. Because of our
      extensive product selection and high quality service, we believe we have become
      the tourist shopping mall of first choice for mainland China tour groups and
      other tour groups visiting Hong Kong.




**Quarterly
      Results May Fluctuate**




Our
      business is subject to some seasonality, with decreases in sales during the
      winter months due to decreases in travel and tourist activity, and increases
      in
      sales during the summer months due to increases in such activity. Due to the
      seasonality of our sales, our quarterly results will fluctuate, perhaps
      significantly. Our operating results can also be impacted by the supply of
      products from suppliers caused by manufacturing delays or delivery issues.
      Additionally, the offering of new products or utilization of new sales channels
      can cause our quarterly operating results to fluctuate. For a discussion of
      these and other risks related to the seasonality of our business, see *“* Risk
      Factors *”* in Part
      II below.




**Critical
      Accounting Policies and Estimates**




Management’s
      discussion and analysis of our financial condition or plan of operations are
      based on our consolidated financial statements, which have been prepared in
      accordance with accounting principles generally accepted in the United States.
      The preparation of these financial statements requires us to make estimates
      and
      assumptions that affect the reported amounts of assets and liabilities and
      the
      disclosure of contingent assets and liabilities at the date of the financial
      statements as well as the reported net sales and expenses during the reporting
      periods. On an ongoing basis, we evaluate our estimates and assumptions. We
      base
      our estimates on historical experience and on various other factors that we
      believe are reasonable under the circumstances, the results of which form the
      basis for making judgments about the carrying value of assets and liabilities
      that are not readily apparent from other sources. Actual results may differ
      from
      these estimates under different assumptions or conditions.




2





While
      our
      significant accounting policies are described in Note 2 to our consolidated
      financial statements, we believe that the following accounting policies are
      the
      most critical to aid you in fully understanding and evaluating our reported
      financial results.




*Revenue
      recognition.* Revenue
      of the Company includes sales and referral income. Referral income is derived
      from referring our customers to other non-directly competitive shops. Sales
      and
      referral income are recognized when the following four revenue criteria are
      met:
      persuasive evidence of an arrangement exists, delivery has occurred, the selling
      price is fixed or determinable, and collectibility is reasonably assured. Sales
      revenue is recognized net of sales discount and actual returns at the time
      when
      the merchandise is sold to the customer. Based on historical experience,
      management estimates that sales returns are immaterial and has not made
      allowance for estimated sales returns. Referral income is the income derived
      from referring customers to other non-directly competitive duty-free shops.
      The
      Company recognized referral income according to the number of visitors referred
      during the financial period.




*Accounts
      receivable* .
      Accounts receivable consist primarily of trade receivables and amounts due
      from
      banks for customer credit card transactions. Accounts receivable are recognized
      and carried at original invoiced amount less an allowance for any uncollectible
      accounts. Management reviews and adjusts this allowance periodically based
      on
      historical experience, current economic climate as well as its evaluation of
      the
      collectibility of outstanding accounts. We evaluate the credit risks of our
      customers utilizing historical data and estimates of future performance.





*Inventories* .
      We
      value inventory at the lower of cost or market, using the first-in, first-out
      or
      weighted average basis method, and regularly reviews the book value of
      discontinued product lines and stock keeping units to determine if these items
      are properly valued. If the market value of the product is less than cost,
      management will write down the related inventory to the estimated net realizable
      value. The management regularly evaluates the composition of its inventory
      to
      identify slow-moving and obsolete inventories to determine if additional
      write-downs are required. This valuation requires significant judgment from
      management as to the salability of its inventory based on forecasted sales.
      It
      is particularly difficult to judge the potential sales of new products. Should
      the forecasted sales not materialize, it would have a significant impact on
      the
      company’s results of operations and the valuation of its inventory, resulting in
      a charge to income in the period such determination is made.





*Property
      and equipment* .
      Property and equipment are recorded at cost less accumulated depreciation and
      amortization and impairment losses. Gains or losses on disposals are reflected
      as gain or loss in the year of disposal. The cost of improvements that extend
      the life of plant, property and equipment are capitalized. These capitalized
      costs may include structural improvements, equipment and fixtures. All ordinary
      repair and maintenance costs are expensed as incurred. Property and equipment
      held-for-sale are measured at the lower of their carrying amount or fair value
      less cost to sell. Depreciation or amortization for financial reporting purposes
      is provided using the straight-line method over the estimated useful lives
      of
      the assets.




*Impairment
      of long-lived assets* .
      We
      account for impairment of property, plant and equipment and amortizable
      intangible assets in accordance with SFAS No. 144, *Accounting for the Impairment or Disposal of Long-Lived Assets* ,
      which
      requires us to evaluate a long-lived asset for recoverability when there is
      an
      event or circumstance that indicates the carrying value of the asset may not
      be
      recoverable. An impairment loss is recognized when the carrying amount of a
      long-lived asset or asset group is not recoverable (when carrying amount exceeds
      the gross, undiscounted cash flows from use and disposition) and is measured
      as
      the excess of the carrying amount over the asset’s (or asset group’s) fair
      value.





**Results
      of Operations**





***Comparison
      of Three Months Ended March 31, 2008 and March 31,
      2007.***





*Revenues* .
      For the
      three months ended March 31, 2008, total revenue decreased 34% from $16.9
      million to $11.1 million relative to the three months ended March 31, 2007.
      For
      the first quarter of 2008, watch sales totaled $0.3 million as compared to
      $6.3
      for the same period in 2007. Of the remaining $10.8 million in sales for 2008,
      $9.3 million was generated by our retail segment (excluding watches), and $1.5
      million was generated from our trading segment as compared to $9.4 million
      and
      $1.1 million, respectively, for 2007. The average spending per capita increased
      from $70 for the three months ended March 31, 2007 to $78 for the same period
      in
      2008, an increase of 11% mainly due to an increase in the number of tourists
      from cities with higher average household income. Retail sales (excluding
      watches) fell due to decreased patronage from 109,695 for the three months
      ended
      March 31, 2007 to 87,527 for the three months ended March 31, 2008, a decrease
      of 20% for the corresponding periods.




3





*Cost
      of Sales.* Cost
      of
      sales decreased from $10.2 million for the three months ended March 31, 2007
      to
      $5.8 million for the three months ended March 31, 2008, a decrease of 43.1%
      in
      cost of sales. Our gross profit margin, however, increased from 40% for the
      three months ended March 31, 2007 to 48% for the same period this year. The
      increase of margin was mainly due to the higher margins of our retail products
      other than luxury watches.




*Selling,
      General and Administrative Expenses.* Selling,
      general and administrative expenses decreased from $5.5 million for the three
      months ended March 31, 2007 to $5.1 million for the same period in 2008. Our
      selling expense increased from $3.1 million for the first quarter in 2007 to
      $3.2 million for the same period of in 2008. As a percentage of retail sales,
      our selling expenses increased to 53% for the three months ended March 31,
      2008
      from 37% for the same period in 2007. Our selling expenses percentage increased
      due to our reduction in the turnover in our luxury watch sales. Salaries and
      other administrative expenses decreased from $2.4 million in the first quarter
      of 2007 to $1.8 million for the same period of 2008 as a result of our
      cost-cutting efforts.





*Other
      Income* .
      Other
      income primarily represents the gain on exchange from converting RMB received
      from customers to Hong Kong Dollars and amortization expenses on the debt
      discount. Total other income decreased from $0.15 million for the three months
      ended 2007 to $0.05 million for the same period in 2008.




**Business
      Segments**





Our
      operating businesses are structured and managed separately, according to the
      nature of their operations and the products and services they provide. We
      identify our reportable segments based on management responsibility, and these
      reportable segments are (i) the trading segment (“Trading Segment”) and
      (ii) the retail segment (“Retail Segment”). Information on segments and
      reconciliations to income before income taxes are described in Note 8 to our
      consolidated financial statements and is incorporated herein by reference.





*Trading
      Segment*





Segment
      sales and profit for our Trading Segment were as follows:




Sales
      revenues from external customers in the Trading Segment during the first quarter
      of 2008 increased 36%, from $1.1 million for the three month period ended March
      31, 2007 to $1.5 million for the same period in 2008.





Total
      segment profit as a percentage of sales for the Trading Segment was 22% for
      the
      three month period ended March 31, 2008, as compared to 16% for the same period
      in 2007.





*Retail
      Segment*





Segment
      revenue and profit for the Retail Segment, were as follows:





Sales
      revenues from external customers in the Retail Segment during the first quarter
      of 2008 decreased 39%, from $15.7 million for three month period ended March
      31,
      2007 to $9.6 million for the same period in 2008. The decrease in revenues
      is
      attributed to the decrease in turnover in luxury watches from sales of $6.3
      million in the first quarter of 2007 compared to $0.3 million in the same period
      of 2008. Sales in relation all other sales were relatively stable at $9.3
      million.





Total
      segment profit (loss) as a percentage of sales for the Retail Segment was
      0.6% in loss and 7.2% in profit for the three month period ended March
      31, 2008 and 2007, respectively.





**Liquidity
      and Capital Resources**





*Cash
      Flows.* For the three month period ended March 31, 2008, net cash flow from
      operating activities was $380,098, which was due to pre-payment to vendors
      for
      new models of their products. We had negative cash flows from operations
      during the first quarter of 2008 while having positive net income in the same
      period due to a major outflow from operating activity of $727,709 as we used
      cash to pay accounts payable during the three months ended March 31, 2008.




4





Net
      cash
      flow provided by investing activities in the first quarter of 2008 was
      $15,011,  which
      was
      primarily due to repayment of a loan to a travel agency.




Net
      cash
      flow used in financing activities was $206,937 mainly due to our repayments
      of
      capital lease arrangements and payments for installment loans.




We
      believe that our existing cash balances and anticipated cash flows from
      operations will be sufficient to meet our operating, acquisition and capital
      requirements for at least the next twelve months. There is no assurance,
      however, that we will not need to raise additional equity or debt financing
      within this period. We also may require additional capital for other purposes
      not presently contemplated. If we are unable to obtain sufficient capital,
      we
      could be required to curtail our expenditures, including capital expenditures
      for property and equipment, which could harm our business.





**Contractual
      Obligations**





We
      have
      certain fixed contractual obligations and commitments that include future
      estimated payments. Changes in our business needs, cancellation provisions,
      changing interest rates, and other factors may result in actual payments
      differing from the estimates. We cannot provide certainty regarding the timing
      and amounts of payments. We present below a summary of the most significant
      assumptions used in our determination of amounts presented in the tables in
      order to assist in the review of this information within the context of our
      consolidated financial position, results of operations, and cash flows.





The
      following tables summarize our contractual obligations as of March 31, 2008,
      and
      the effect that these obligations are expected to have on our liquidity and
      cash
      flows in future periods.




**Payments Due by Period****Total**
            
            **Less than 1**
              **year**
            
            **1-3 Years**
            
            **4-5 Years**
            
            **5 Years +****(in thousands of dollars)***Contractual
                Obligations*:Total
                Indebtedness
            
            $
            247
            
            $
            225
            
            $
            22
            
            
            —
            
            $
            —Capital
                Lease Obligations
            
            
            185
            
            
            141
            
            
            44
            
            
            —
            
            
            —Operating
                Leases
            
            
            684
            
            
            362
            
            
            322
            
            
            —
            
            
            —Total
                Contractual Obligations:
            
            $
            1,116
            
            $
            728
            
            $
            388
            
            $
            —
            
            $
            —




Total
      indebtedness consists of an installment loan from a financial institution in
      Hong Kong.





Capital
      lease amounts primarily consist of vehicles and equipment to support our
      wholesale operations. See “Note 7— *Property
      and Equipment* ”
in
      the
      notes to the consolidated financial statements, included elsewhere in this
      report.





Operating
      lease amounts include minimum lease payments under our non-cancelable operating
      leases for office facilities, as well as limited computer and office equipment
      that we utilize under lease arrangements. The amounts presented are consistent
      with contractual terms and are not expected to differ significantly, unless
      a
      substantial change in our headcount needs requires us to exit an office facility
      early or expand our occupied space.




Other
      purchase obligation amounts include minimum purchase commitments for advertising
      and other goods and services that were entered into through our ordinary course
      of business.




5





**Off-Balance
      Sheet Arrangements**





We
      have
      not entered into any off-balance sheet arrangements that have or are reasonably
      likely to have a current or future effect on our financial condition, changes
      in
      financial condition, revenues or expenses, results of operations, liquidity,
      capital expenditures, or capital resources that would be considered material
      to
      investors.





**Effects
      of Inflation**





We
      are
      subject to price risks arising from price fluctuations in the market prices
      of
      the products that we sell. Price risks are managed by each business segment
      through productivity improvements and cost-containment measures. Management
      does
      not believe that inflation risk is material to our business or our consolidated
      financial position, results of operations, or cash flows.





**ITEM
      3.**  **QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**





We
      do not
      use derivative financial instruments in our investment portfolio and have no
      foreign exchange contracts. Our financial instruments consist of cash and cash
      equivalents, trade accounts receivable, accounts payable, and long-term
      obligations. We consider investments in highly-liquid instruments purchased
      with
      a remaining maturity of 90 days or less at the date of purchase to be cash
      equivalents.





*Interest
      Rates* .
      Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      short-term investments and short-term obligations; thus, fluctuations in
      interest rates do not have a material impact on the fair value of these
      securities. At March 31, 2008, we had approximately $1.2 million in cash and
      cash equivalents. A hypothetical 5% increase or decrease in either short-term
      or
      long-term interest rates would not have a material impact on our earnings or
      loss, or the fair market value or cash flows of these instruments.





*Foreign
      Exchange Rates* .
      We
      generally transact business in Hong Kong Dollars, and we do not have significant
      exposure to exchange rates between and among the U.S. Dollar or Chinese Renminbi
      (RMB). Since 1983, the Hong Kong Dollar has been pegged to the U.S. Dollar
      and
      currently has an exchange rate of 7.79 Hong Kong Dollars for each U.S. Dollar.
      Our stores typically hold insignificant amounts of U.S. Dollars and RMB, i.e.,
      100,000 to 150,000 RMB, and $2,000 to $3,000 in U.S. Dollars. However, see
      the
      risk factor in Part II below entitled “Fluctuation in the value of RMB and the
      Hong Kong Dollar relative to other currencies may have a material adverse effect
      on our business and/or an investment in our shares.”





**ITEM
      4.**  **CONTROLS
      AND PROCEDURES**





Based
      on
      an evaluation of the effectiveness of our disclosure controls and procedures
      (as
      defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act
      of
      1934 (the “Exchange Act”)) as of March 31, 2008, our Chief Executive Officer and
      Chief Financial Officer believe that our disclosure controls and procedures
      (as
      defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act) are effective to
      ensure that information required to be disclosed by us in this report is
      accumulated and communicated to our management, including our principal
      executive officer and principal financial officer, as appropriate, to allow
      timely decisions regarding required disclosure. There were no changes in our
      internal control over financial reporting (as defined in Rules 13a-15(f) and
      15d-15(f) under the Securities Exchange Act of 1934, as amended) during the
      quarter ended March 31, 2008 that have materially affected, or are reasonably
      likely to materially affect, our internal control over financial reporting.




6


**PART
      II. OTHER INFORMATION**





**ITEM 1.****LEGAL
      PROCEEDINGS**********





Other
      than the proceeding described below, we are not currently involved in any
      material legal proceedings, nor have we been involved in any such proceeding
      that has had, or may have, a significant effect on us. We are not aware of
      any
      material legal proceedings pending against us.





Everest
      Special Situations Fund, LP v. Asiamart, Inc. (Index No.
      603666/07).  On or about November 5, 2007, Everest Special
      Situations Fund, LP filed a Complaint in the Supreme Court for the State of
      New
      York, County of New York (the “Court”), alleging claims for fraud and breach of
      contract related to a Securities Purchase Agreement entered into with the
      Company on October 6, 2006.  The Company filed a Motion to Dismiss the
      Complaint, which was submitted on March 26, 2008.  The Court granted the
      Motion and dismissed the action pursuant to an Order entered on April
      8, 2008.





**ITEM 1A.****RISK
      FACTORS**





*You
      should carefully consider the risks described below together with all of the
      other information included in this report before making an investment decision
      with regard to our securities. The statements contained in or incorporated
      into
      this report that are not historic facts are forward-looking statements that
      are
      subject to risks and uncertainties that could cause actual results to differ
      materially from those set forth in or implied by forward-looking statements.
      If
      any of the following risks actually occurs, our business, financial condition
      or
      results of operations could be harmed. In that case, the trading price of our
      common stock could decline, and you may lose all or part of your
      investment.*





**Risks
      Relating to Our Business**





**We
      face intense competition and operate in an industry with limited barriers to
      entry, and some of our competitors may be better positioned to capitalize on
      the
      rapidly growing retail sector in our geographic area.**





The
      retail sector, in our geographic area, is rapidly evolving and intensely
      competitive. Many of our current and potential competitors have longer operating
      histories, larger customer bases, greater brand recognition and significantly
      greater financial, marketing, technical, management and other resources than
      we
      do. In addition, some of our competitors have used, and may continue to use,
      aggressive pricing or carry a larger inventory than we do. We expect that
      competition will further intensify in the future. Because barriers to entry
      are
      limited, current and new competitors may open retail locations that will compete
      with ours.





We
      believe that the primary competitive factors in the retail sector include brand
      recognition, price, shipping offers, product selection, product availability
      and
      customer service. We currently compete against other retailers within the
      specialized niche of travel retail in Asia.




We
      may
      also experience significant competitive pressure if any of our suppliers were
      to
      initiate their own retail operations in the locations we serve. Since our
      suppliers have access to merchandise at very low costs, they could sell products
      at lower prices and maintain a higher gross margin on their product sales than
      we can. In this event, our current and potential customers may decide to
      purchase directly from these suppliers. Increased competition from any supplier
      capable of maintaining high sales volumes and acquiring products at lower prices
      than us could significantly reduce our market share and adversely impact our
      financial results.





We
      compete not only for customers, but also for favorable product allocations
      from
      product manufacturers. Some of our competitors could enter into exclusive
      distribution arrangements with our suppliers, deny us access to their products
      and devote greater resources to marketing and promotional
      campaigns.





**The
      seasonality of our business places increased strain on our
      operations.**





We
      generally experience increases in sales during the summer months, as travel
      and
      tourist activity increases. On the other hand, we generally experience a
      decrease in sales during the winter months when there are fewer travelers.
      In
      addition, if we are unable to meet customer demand for our products during
      these
      peak periods, our revenues and future growth could be adversely affected.
      Furthermore, we may be unable to adequately staff our retail outlets and
      warehousing operations during these periods.




7





**Our
      future operating results may fluctuate and cause the price of our common stock
      to decline.**





We
      expect
      that our revenues and operating results will continue to fluctuate significantly
      from quarter to quarter due to various factors, many of which are beyond our
      control. The factors that could cause our operating results to fluctuate
      include, but are not limited to:




•
            
            seasonality
                of the business;•
            
            price
                competition from other retailers;•
            
            general
                price increases by suppliers and manufacturers;•
            
            our
                ability to maintain and expand our distribution
                relationships;•
            
            increases
                in the cost of advertising;•
            
            unexpected
                increases in shipping costs or delivery times;•
            
            our
                ability to build and maintain customer loyalty;•
            
            the
                introduction of new services, products and strategic alliances by
                us and
                our competitors;•
            
            the
                success of our brand-building and marketing campaigns;•
            
            government
                regulations, changes in tariffs, duties, and taxes;•
            
            our
                ability to maintain, upgrade and develop our retail
                stores;•
            
            changes
                in our store leasing costs;•
            
            the
                amount and timing of operating costs and capital expenditures relating
                to
                expansion of our business, operations and infrastructure;
                and•
            
            general
                economic conditions as well as economic conditions specific to the
                retail
                sector.





If
      our
      quarterly revenues or operating results fall below the expectations of investors
      or securities analysts, the price of our common stock could significantly
      decline.





**Our
      efforts to successfully develop private label brands are costly and may not
      generate corresponding revenues.**





Developing
      private label brands is an important part of our strategy to build future
      revenue and achieve higher profit margins. Accordingly, we intend to continue
      to
      invest in the development of our own brand of products in selected categories.
      These initiatives require significant expenditures. If we are unsuccessful
      in
      our development efforts, we may not be able to recover these expenses or
      increase our revenues or margins.





To
      promote our private label brands in response to competitive pressures, we may
      increase our marketing budget or otherwise increase our financial commitment
      to
      creating and maintaining brand loyalty among our customers. We cannot be certain
      that our advertising efforts will be a successful means of attracting customers
      or that this allocation of resources will provide additional revenues
      commensurate with this dedication of our resources. If we fail to promote and
      maintain our brand, or if we incur excessive expenses attempting to promote
      and
      maintain our brand, our business may be adversely affected.





**We
      depend on our relationships with tour companies to bring customers to retail
      locations, and losing these sources would adversely affect our revenues and
      financial results.**





We
      attract retail traffic by entering into arrangements with tour companies who
      schedule shopping tours with their customers. In order to maintain a flow of
      tourist traffic, we must continually monitor and maintain our relationships
      with
      the tour companies with which we do business. If the tour companies modify
      or
      terminate their relationship with us, we could lose customers, and traffic
      in
      our retail stores could decrease.





**If
      we fail to offer a broad selection of products and brands that customers find
      attractive, our revenues could decrease.**





In
      order
      to meet our strategic goals, we must successfully offer, on a continuous basis,
      a broad selection of appealing products that reflect our customers’ preferences.
      Consumer tastes are subject to frequent, significant and sometimes unpredictable
      changes. To be successful in our line of business, our product offerings must
      be
      broad, deep in scope and affordable to a wide range of consumers whose
      preferences may change regularly. We cannot predict with certainty that we
      will
      be successful in offering products that meet these requirements. If our product
      offerings fail to satisfy customers’ tastes or respond to changes in customer
      preferences, our revenues could decline. In addition, any failure to offer
      products that satisfy customers’ preferences could allow our competitors to gain
      market share.




8





**If
      we do not successfully optimize and operate our retail locations, our business
      could decline.**





If
      we do
      not successfully operate our retail locations, this could significantly limit
      our ability to meet customer demand. Because it is difficult to predict demand,
      we may not manage our facilities optimally, which may result in excess or
      insufficient inventory, and distribution capacity. Failure to optimize inventory
      will increase our net shipping cost by requiring us to make long-distance
      shipments or partial shipments from different locations. As we continue to
      add
      warehouse capability or add new businesses with different inventory management
      requirements, operating our inventory management system becomes more challenging
      and there can be no assurance that we will be able to operate our system
      effectively.




**We
      have limited control over the actions of our distributors, retailers or their
      vendors.**





We
      rely
      on distributors for the sale of our branded products, and those distributors
      maintain inventory and prepare merchandise for shipment to retailers and
      individual customers. We have limited control over the products that our
      distributors purchase or keep in stock, and our arrangements with our
      distributors do not require them to set aside any amount of inventory to satisfy
      demand. Our distributors may not accurately forecast the products that will
      be
      in high demand. In addition, we have limited control over their sales process,
      shipping and order processing procedures. Although we have not experienced
      disruptions in the past, and we do not presently foresee possible disruptions
      in
      the near future, a widespread inability of our distributors to successfully
      supply our branded products, if it occurred, would substantially harm our
      business.





**We
      are dependent upon third parties for significant functions, and if these
      functions or operations are interrupted for any significant period of time
      or if
      we experience other problems with our third-party service providers, our
      business and results of operations would be substantially
      harmed.**





In
      addition, we rely upon third party tour operators for a large portion of our
      customer flow. As a result, we are subject to cancellations and disruptions
      due
      to factors that are beyond our control, including employee strikes and inclement
      weather. Further, increased fuel costs may adversely affect tourist traffic.
      If
      cooperating tour companies were to experience cancellations and disruptions,
      this could negatively affect our sales revenue.





**We
      rely on foreign sources for the supply of many of the products we
      sell.**





We
      rely
      on long term supply relationships with several manufacturers in the PRC, and
      in
      the future may rely upon supply relationships with other foreign sources.
      Regional disruptions relating to political or environmental conditions could
      cause shipping delays, which could interfere with our ability to supply our
      customers and harm our financial results. A significant breakdown in the
      manufacturing process or among suppliers could result in product shortages,
      and
      our revenues could decline due to the loss of these suppliers and
      manufacturers.





**Our
      ability to manage our future growth is uncertain.**





We
      are
      currently anticipating a period of growth as a result of our corporate growth
      strategy, which aims to among other things, further develop our distribution
      channels, expand our merchandise offerings, leverage our customer database,
      reach new customer segments, and increase traffic. In pursuing these objectives,
      the resulting strain on our managerial, operational, financial and other
      resources could be significant. Success in managing such expansion and growth
      will depend, in part, upon the ability of senior management to manage
      effectively. Any failure to manage the anticipated growth and expansion could
      have a material adverse effect on our business.





**Our
      operations are based, to a certain extent, on the successful integration of
      certain supply chain and operating technologies. Our inability to integrate
      these technologies may negatively impact our ability to effectively manage
      inventory, and may harm our business and operating
      results.**





We
      rely
      on certain hardware and software systems, purchased from a third-party and
      customized by our technicians, to perform vital functions with respect to our
      operations. In addition, we rely upon hardware and software systems for
      warehouse management. Our inability to properly operate, implement or integrate
      these technologies will negatively impact our product supply chain and may
      harm
      our business and operating results.




9





**Increased
      product returns will decrease our revenues and impact
      profitability.**





We
      make
      allowances for product returns in our financial statements based on historical
      return rates. In order to keep product returns low or at our estimated rates,
      we
      continuously monitor product purchases and returns and may change our product
      offerings based on the rates of returns. If our actual product returns
      significantly exceed our allowances for returns, especially as we expand into
      new product categories, our revenues and profitability could decrease. In
      addition, because our allowances are based on historical return rates, the
      introduction of new merchandise categories or new products, changes in our
      product mix or other factors may cause actual returns to increase. Any new
      policies intended to reduce the number of product returns may result in customer
      dissatisfaction and fewer repeat customers.





**Our
      growth and operating results could be impaired if we are unable to meet our
      future capital needs.**





We
      may
      need to raise additional capital in the future to:




•
            
            fund
                more rapid expansion;•
            
            acquire
                or expand into new retail locations, warehousing facilities or office
                space;•
            
            maintain,
                enhance and further develop our information technology
                systems;•
            
            develop
                new product categories or enhanced services;•
            
            fund
                acquisitions; or•
            
            respond
                to competitive pressures.





If
      we
      raise additional funds by issuing equity or convertible debt securities, the
      percentage ownership of our stockholders will be diluted. Furthermore, any
      new
      securities could have rights, preferences and privileges senior to those of
      our
      common stock. We currently do not have any commitments for additional financing.
      We cannot be certain that additional financing will be available when and to
      the
      extent required or that, if available, it will be on acceptable terms. If
      adequate funds are not available on acceptable terms, we may not be able to
      fund
      our expansion, develop or enhance our products or services or respond to
      competitive pressures.





**The
      loss of key members of our executive management could negatively affect our
      business.**





We
      depend
      on the continued services and performance of our executive management and other
      key personnel, in particular, Alex Chun Shan Yue, our Chief Executive Officer,
      and Danny Sau Kwong Leung, our Chief Operating Officer. The loss of any of
      these
      executive officers or other key persons could harm our business.





**We
      may be adversely affected by the financial health of the retail industry in
      Asia.**





We
      are
      subject to broad economic factors that drive consumer spending and maintain
      the
      health of the retail industry in Asia. These factors include, but are not
      limited to, unemployment rates, consumer credit levels, consumer confidence,
      and
      household discretionary income. If any of these or other economic factors should
      erode, consumer spending may fall and the Asian retail industry may suffer
      a
      downturn. Consequently, our earnings would be adversely impacted by lower
      sales.





**We
      may be adversely affected by the trend towards retail trade
      consolidation.**





As
      we
      pursue our retail distribution strategy, our sales will be contingent upon
      favorable wholesale prices that we can obtain from retailers. If retailers
      merge
      or the retail industry consolidates, the larger, combined retailers will have
      significant pricing power because of the sheer size of their retail networks.
      As
      a result, we may not be able to obtain reasonable prices for our products.
      Consequently, our margins may decline and our results of operations may be
      reduced. There can be no assurance that we will be able to obtain reasonable
      wholesale prices for our products under a scenario where retailers merge and
      consolidate into larger entities.




10





**Risks
      Related to Doing Business in China**





**Adverse
      changes in economic and political policies of the PRC government could have
      a
      material adverse effect on the overall economic growth of China, which could
      adversely affect our business.**





All
      of
      our business operations are currently conducted in Hong Kong, under the
      jurisdiction of the PRC government. Accordingly, our results of operations,
      financial condition and prospects are subject to a significant degree to
      economic, political and legal developments in China. China’s economy differs
      from the economies of most developed countries in many respects, including
      with respect to the amount of government involvement, level of development,
      growth rate, control of foreign exchange and allocation of resources. While
      the
      PRC economy has experienced significant growth in the past 20 years, growth
      has
      been uneven across different regions and among various economic sectors of
      China. The PRC government has implemented various measures to encourage economic
      development and guide the allocation of resources. Some of these measures
      benefit the overall PRC economy, but may also have a negative effect on us.
      For
      example, our financial condition and results of operations may be adversely
      affected by government control over capital investments or changes in tax
      regulations that are applicable to us. Since early 2004, the PRC government
      has
      implemented certain measures to control the pace of economic growth. Such
      measures may cause a decrease in the level of economic activity in China, which
      in turn could adversely affect our results of operations and financial
      condition.




**Abrupt
      and forceful regulation by governmental authorities may impose costly
      requirements on our business, which could have a material adverse effect on
      our
      business and overall financial results.**





Our
      industry, particularly the market segment dealing with inbound visitors from
      China, is relatively new, and until recent times it has been left unregulated.
      Governmental authorities in the PRC and in Hong Kong may impose regulations
      designed to protect consumers, or even to curtail what the PRC government might
      view as a loss of domestic retail sales, import duties and tax revenue. Changes
      in policies affecting the tourist retail industry may be enacted abruptly
      without transitional periods that may force us to make rapid and costly
      adjustments in our operations in an effort to comply. It is not always possible
      for management to anticipate changes in government policies, or the impact
      of
      those changes to our business.





On
      June
      15, 2007, the Hong Kong government implemented its “Refund Protection Scheme for
      Mainland China’s Inbound Tour Group Shoppers,” enacted by the Travel Industry
      Council of Hong Kong. The Refund Protection Scheme is aimed at protecting the
      consumer rights of mainland China’s tourist visitors to Hong Kong, and improving
      the service standards in the industry as a whole.





Under
      the
      Refund Protection Scheme, retailers who intend to arrange for mainland China's
      Inbound group visitors must register with the Travel Industry Council and one
      of
      the conditions of registration is that registered retailers shall offer
      six-month, full refund protection to mainland China's inbound group visitors.
      As
      a part of the conditions of the Refund Protection Scheme, registered retailers
      must assist tour operators and inbound visitors seeking refunds. Registered
      retailers who fail to comply may be subjected to penalties imposed by the Travel
      Industry Council. We have registered with the Travel Industry Council under
      the
      new rules and offer a 180-day refund policy to our customers.





Our
      operations may be negatively impacted by these heightened standards and
      implementation of the new rules.





**Fluctuation
      in the value of RMB and the Hong Kong Dollar relative to other currencies may
      have a material adverse effect on our business and/or an investment in our
      shares.**





The
      value
      of RMB and the Hong Kong Dollar against the U.S. dollar and other currencies
      may
      fluctuate and is affected by, among other things, changes in political and
      economic conditions. Although the exchange rate between RMB and the U.S. dollar
      has been effectively pegged by the People’s Bank of China since 1994, and the
      rate between the Hong Kong Dollar has been pegged to the U.S. dollar since
      1983,
      there can be no assurance that these currencies will remain pegged to the U.S.
      dollar, especially in light of the significant international pressure on the
      Chinese government to permit the free floatation of the RMB, which would result
      in fluctuations in the exchange rate between the RMB and the U.S. dollar, and
      other geopolitical factors If the RMB were to increase in value against the
      dollar, for example, mainland Chinese consumers would experience a reduction
      in
      the relative prices of goods and services, which may translate into a positive
      increase in sales. On the other hand, a decrease in the value of the RMB against
      the dollar would have the opposite effect. In addition, a strengthening of
      the
      U.S. dollar against the Hong Kong Dollar, if it occurred, would adversely affect
      the value of your investment.




11





**We
      face risks related to health epidemics and other
      outbreaks.**





Our
      business could be adversely affected by the effects of SARS and other epidemics
      or outbreaks. China reported a number of cases of SARS in the spring of 2003,
      which severely impacted the tourism industry for many months. Any prolonged
      recurrence of SARS or other adverse public health developments in China could
      negatively impact tourism in Hong Kong, which would have a material adverse
      effect on our business operations. For instance, health or other government
      regulations adopted in response may require temporary travel restrictions,
      or
      even closure of our facilities or offices. Such closures would severely disrupt
      our customer flow and business operations, and adversely affect our results
      of
      operations. We have not adopted any written preventive measures or contingency
      plans to combat any future outbreak of SARS or any other epidemic.





**Risks
      Related to an Investment in Our Securities**





**We
      will need additional capital, which may not be accessible on attractive terms
      or
      at all.**





We
      anticipate that we will need to raise additional funds in the future through
      public or private financing. Our ability to obtain additional financing will
      be
      subject to a number of factors, including market conditions, our operating
      performance and the terms of our existing indebtedness. The terms of our senior
      convertible debentures limit our ability to incur additional debt because any
      such additional debt we incur, other than a limited senior credit facility,
      must
      be contractually subordinated, as to payment and liquidation, to the payment
      in
      full of the debentures. We cannot assure you that we will be able to raise
      additional funds on terms favorable to us or at all. If we raise additional
      funds through the sale of equity or convertible debt securities, your ownership
      percentage of our common stock will be reduced. In addition, any such
      transactions may dilute the value of our common stock. We may have to issue
      securities that have rights, preferences and privileges senior to our common
      stock. The terms of any additional indebtedness may include restrictive
      financial and operating covenants that would limit our ability to compete and
      expand. Our failure to obtain any required future financing could materially
      and
      adversely affect our financial condition.





**Conversion
      of the debentures into shares of our common stock will dilute the ownership
      interests of existing stockholders, including holders who will have already
      converted their debentures.**





The
      conversion of some or all of the debentures into our shares of our common stock
      will dilute the ownership interests of existing stockholders. Any sales in
      the
      public market of the shares of common stock issuable upon such conversion could
      adversely affect prevailing market prices of our shares of common stock. In
      addition, the existence of the debentures may encourage short selling by market
      participants because the conversion of the debentures could depress the price
      of
      our shares of common stock.





**To
      date, we have not paid any cash dividends and no cash dividends will be paid
      in
      the foreseeable future.**





We
      do not
      anticipate paying cash dividends on our common stock in the foreseeable future
      and we may not have sufficient funds legally available to pay dividends. Even
      if
      the funds are legally available for distribution, we may nevertheless decide
      not
      to pay any dividends. We intend to retain all earnings for our
      operations.





**The
      application of the “penny stock” rules could adversely affect the market price
      of our common stock and increase your transaction costs to sell those
      shares.**





If
      our
      stock becomes quoted on an exchange, as long as the trading price of our common
      shares is below $5 per share, the open-market trading of our common shares
      will
      be subject to the “penny stock” rules. The “penny stock” rules impose additional
      sales practice requirements on broker-dealers who sell securities to persons
      other than established customers and accredited investors (generally those
      with
      assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
      together with their spouse). For transactions covered by these rules, the
      broker-dealer must make a special suitability determination for the purchase
      of
      securities and have received the purchaser’s written consent to the transaction
      before the purchase. Additionally, for any transaction involving a penny stock,
      unless exempt, the broker-dealer must deliver, before the transaction, a
      disclosure schedule prescribed by the Securities and Exchange Commission
      relating to the penny stock market. The broker-dealer also must disclose the
      commissions payable to both the broker-dealer and the registered representative
      and current quotations for the securities. Finally, monthly statements must
      be
      sent disclosing recent price information on the limited market in penny stocks.
      These additional burdens imposed on broker-dealers may restrict the ability
      or
      decrease the willingness of broker-dealers to sell our common shares, and may
      result in decreased liquidity for our common shares and increased transaction
      costs for sales and purchases of our common shares as compared to other
      securities.




12




**Our
      common shares are not currently traded at high volume, and you may be unable
      to
      sell at or near ask prices or at all if you need to sell or liquidate a
      substantial number of shares at one time.**





We
      cannot
      predict the extent to which an active public market for its common stock will
      develop or be sustained. However, the Company does not rule out the possibility
      of applying for listing on the Nasdaq Capital Market or other
      markets.





Our
      common shares are currently traded, but currently with low volume, based on
      quotations on the “Over-the-Counter Bulletin Board”, meaning that the number of
      persons interested in purchasing our common shares at or near
      bid prices at any given time may be relatively small or non-existent. This
      situation is attributable to a number of factors, including the fact that we
      are
      a small company which is still relatively unknown to stock analysts, stock
      brokers, institutional investors and others in the investment community that
      generate or influence sales volume, and that even if we came to the attention
      of
      such persons, they tend to be risk-averse and would be reluctant to follow
      an
      unproven company such as ours or purchase or recommend the purchase of our
      shares until such time as we became more seasoned and viable. As a consequence,
      there may be periods of several days or more when trading activity in our shares
      is minimal or non-existent, as compared to a seasoned issuer which has a large
      and steady volume of trading activity that will generally support continuous
      sales without an adverse effect on share price. We cannot give you any assurance
      that a broader or more active public trading market for our common stock will
      develop or be sustained, or that trading levels will be
      sustained.





Stockholders
      should be aware that, according to SEC Release No. 34-29093, the market for
“penny stocks” has suffered in recent years from patterns of fraud and abuse.
      Such patterns include (1) control of the market for the security by one or
      a few broker-dealers that are often related to the promoter or issuer;
      (2) manipulation of prices through prearranged matching of purchases and
      sales and false and misleading press releases; (3) boiler room practices
      involving high-pressure sales tactics and unrealistic price projections by
      inexperienced sales persons; (4) excessive and undisclosed bid-ask
      differential and markups by selling broker-dealers; and (5) the wholesale
      dumping of the same securities by promoters and broker-dealers after prices
      have
      been manipulated to a desired level, along with the resulting inevitable
      collapse of those prices and with consequent investor losses. Our management
      is
      aware of the abuses that have occurred historically in the penny stock market.
      Although we do not expect to be in a position to dictate the behavior of the
      market or of broker-dealers who participate in the market, management will
      strive within the confines of practical limitations to prevent the described
      patterns from being established with respect to our securities. The occurrence
      of these patterns or practices could increase the future volatility of our
      share
      price.





**Our
      corporate actions are substantially controlled by our principal stockholders
      and
      affiliated entities.**





Our
      principal stockholders and their affiliated entities own approximately 80%
      of
      our outstanding ordinary shares, representing approximately 80% of our voting
      power. These stockholders, acting individually or as a group, could exert
      substantial influence over matters such as electing directors and approving
      mergers or other business combination transactions. In addition, because of
      the
      percentage of ownership and voting concentration in these principal stockholders
      and their affiliated entities, elections of our board of directors will
      generally be within the control of these stockholders and their affiliated
      entities. While all of our stockholders are entitled to vote on matters
      submitted to our stockholders for approval, the concentration of shares and
      voting control presently lies with these principal stockholders and their
      affiliated entities. As such, it would be difficult for stockholders to propose
      and have approved proposals not supported by management. There can be no
      assurances that matters voted upon by our officers and directors in their
      capacity as stockholders will be viewed favorably by all of our
      stockholders.





**The
      elimination of monetary liability against our directors, officers and employees
      under Delaware law and the existence of indemnification rights to our directors,
      officers and employees may result in substantial expenditures by our company
      and
      may discourage lawsuits against our directors, officers and
      employees.**





Our
      certificate of incorporation does not contain any specific provisions that
      eliminate the liability of our directors for monetary damages to our company
      and
      stockholders, but we are prepared to give such indemnification to our directors
      and officers to the extent provided by Delaware law. We may also have
      contractual indemnification obligations under our employment agreements with
      our
      officers. The foregoing indemnification obligations could result in our company
      incurring substantial expenditures to cover the cost of settlement or damage
      awards against directors and officers, which we may be unable to recoup. These
      provisions and resultant costs may also discourage our company from bringing
      a
      lawsuit against directors and officers for breaches of their fiduciary duties,
      and may similarly discourage the filing of derivative litigation by our
      stockholders against our directors and officers even though such actions, if
      successful, might otherwise benefit our company and stockholders.




13




**Legislative
      actions, higher insurance costs and potential new accounting pronouncements
      may
      impact our future financial position and results of
      operations.**





There
      have been regulatory changes, including the Sarbanes-Oxley Act of 2002, and
      there may potentially be new accounting pronouncements or additional regulatory
      rulings that will have an impact on our future financial position and results
      of
      operations. The Sarbanes-Oxley Act of 2002 and other rule changes as well as
      proposed legislative initiatives following the Enron bankruptcy are likely
      to increase general and administrative costs and expenses. In addition, insurers
      are likely to increase premiums as a result of high claims rates over the past
      several years, which we expect will increase our premiums for insurance
      policies. Further, there could be changes in certain accounting rules. These
      and
      other potential changes could materially increase the expenses we report under
      generally accepted accounting principles, and adversely affect our operating
      results.





**Past
      activities of the company and our affiliates may lead to future liability for
      us.**





Prior
      to
      our entry into the Agreement and Plan of Share Exchange (“Share Exchange
      Agreement”) on June 22, 2006, the Horizon Group was engaged in the
      Company’s operations. Although for a period of two years after the Closing Date
      the major shareholders of the Horizon Group will indemnify the Company against
      any loss, liability, claim, damage, or expense arising out of or based on any
      breach of or inaccuracy in any of their representations and warranties made
      in
      the Share Exchange Agreement, any liabilities relating to such prior business
      against which the Company is not completely indemnified may have a material
      adverse effect on the Company.





**We
      may need additional capital, and the sale of additional shares or other equity
      securities could result in additional dilution to our shareholders.**





We
      believe that our current cash and cash equivalents, anticipated cash flow from
      operations and the net proceeds from this offering will be sufficient to meet
      our anticipated cash needs for the near future. We may, however, require
      additional cash resources due to changed business conditions or other future
      developments, including any investments or acquisitions we may decide to pursue.
      If our resources are insufficient to satisfy our cash requirements, we may
      seek
      to sell additional equity or debt securities or obtain a credit facility. The
      sale of additional equity securities could result in additional dilution to
      our
      shareholders. The incurrence of indebtedness would result in increased debt
      service obligations and could result in operating and financing covenants that
      would restrict our operations. We cannot assure you that financing will be
      available in amounts or on terms acceptable to us, if at all.





**You
      may face difficulties in protecting your interests, and your ability to protect
      your rights through the U.S. federal courts may be limited because our
      subsidiaries are incorporated in non-U.S. jurisdictions, we conduct
      substantially all of our operations in Hong Kong, and all of our officers reside
      outside the United States.**





Although
      we are incorporated in Delaware, we conduct substantially all of our operations
      in China through our wholly owned subsidiaries in Hong Kon. All of our officers
      reside outside the United States and some or all of the assets of those persons
      are located outside of the United States. As a result, it may be difficult
      or
      impossible for you to bring an action against us or against these individuals
      in
      Hong Kong in the event that you believe that your rights have been violated
      under U.S. securities laws or otherwise. Even if you are successful in bringing
      an action of this kind, the laws of Hong Kong may render you unable to enforce
      a
      judgment against our assets or the assets of our directors and
      officers.





As
      a
      result of all of the above, our public shareholders may have more difficulty
      in
      protecting their interests through actions against our management, directors
      or
      major stockholders than would shareholders of a corporation doing business
      entirely within the United States.





**If
      we fail to maintain an effective system of internal controls, we may not be
      able
      to accurately report our financial results or prevent
      fraud.**





We
      will
      be subject to reporting obligations under the U.S. securities laws. The
      Securities and Exchange Commission, as required by Section 404 of the
      Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), adopted rules requiring every
      public company to include a management report on such company’s internal
      controls over financial reporting in its annual report, which contains
      management’s assessment of the effectiveness of the company’s internal controls
      over financial reporting. In addition, an independent registered public
      accounting firm must attest to and report on management’s assessment of the
      effectiveness of the company’s internal controls over financial reporting. These
      requirements will first apply to our annual report on Form 10-K for the fiscal
      year ending December 31, 2007. Our management may conclude that our
      internal controls over our financial reporting are not effective. Moreover,
      even
      if our management concludes that our internal controls over financial reporting
      are effective, our independent registered public accounting firm may still
      decline to attest to our management’s assessment or may issue a report that is
      qualified if it is not satisfied with our controls or the level at which our
      controls are documented, designed, operated, or reviewed, or if it interprets
      the relevant requirements differently from us. Our reporting obligations as
      a
      public company will place a significant strain on our management, operational,
      and financial resources and systems for the foreseeable future. Effective
      internal controls, particularly those related to revenue recognition, are
      necessary for us to produce reliable financial reports and are important to
      help
      prevent fraud. As a result, our failure to achieve and maintain effective
      internal controls over financial reporting could result in the loss of investor
      confidence in the reliability of our financial statements, which in turn could
      harm our business and negatively impact the trading price of our stock.
      Furthermore, we anticipate that we will incur considerable costs and use
      significant management time and other resources in an effort to comply with
      Section 404 and other requirements of the Sarbanes-Oxley
      Act.





14





**We
      will incur increased costs as a result of being a public
      company.**





As
      a
      public company, we will incur significant legal, accounting and other expenses
      that we did not incur as a private company. In addition, the Sarbanes-Oxley
      Act,
      as well as new rules subsequently implemented by the SEC, have required changes
      in corporate governance practices of public companies. We expect these new
      rules
      and regulations to increase our legal, accounting and financial compliance
      costs
      and to make certain corporate activities more time-consuming and costly. In
      addition, we will incur additional costs associated with our public company
      reporting requirements. We are currently evaluating and monitoring developments
      with respect to these new rules, and we cannot predict or estimate the amount
      of
      additional costs we may incur, or the timing of such costs.





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





None.





**ITEM
      3.****DEFAULTS
      UPON SENIOR SECURITIES******





None.





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





None.




**ITEM
      5.****OTHER
      INFORMATION**





None.





**ITEM
      6.          EXHIBITS AND REPORTS ON
      FORM 8-K**





The
      following exhibits are included in this report or incorporated by reference
      into
      this report:





**Exhibit**
              **Number**
            
            **Description**31.1
            
            Rule 13a-14(a)
                / 15d-14(a)(4) Certification by the Company’s Chief Executive Officer.
                (Filed herewith.)31.2
            
            Rule
                13a-14(a) / 15d-14(a)(4) Certification by the Company’s Chief Financial
                Officer. (Filed herewith.)32.1
            
            Section
                1350 Certification by the Company’s Chief Executive Officer. (Filed
                herewith.)32.2
            
            Section
                1350 Certification by the Company’s Chief Financial Officer. (Filed
                herewith.)




15


**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.





**ASIAMART, INC.**Dated:  May
                20, 2008
            By:
            /s/ Alex YueAlex Yue
              President and Chief Executive Officer
                (Principal Executive Officer)





Dated:  May
                20, 2008
            By:
            /s/ Kwan Pui WongKwan Pui Wong
              Chief Financial Officer
                (Principal Financial and Accounting Officer)


16