UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-K   xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010  or  oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to _____   Commission file number 000-51105  ALCO, INC. (Exact name of registrant as specified in its charter)  Nevada11-3644700(State or other jurisdiction of incorporation)(IRS Employer Identification Number)  Suite 501, Bank of America Tower
12 Harcourt Road, Central
Hong Kong(Address of principal executive office)Registrants telephone number, including area code:  852-2521-0373 Securities registered pursuant to Section 12(b) of the Act:  Title of each className of each exchange on which registeredN/AN/A  Securities to be registered under Section 12(g) of the Act:  Common Stock (Title of Class)  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. oYesxNo  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. oYesxNo  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. xYesoNo   - 1 -    Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports). N/A     o Yes   o No  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.  Large accelerated filer
oAccelerated filer
oNon-accelerated filer
o
(Do not check if a smaller reporting company)Smaller reporting company
x  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o  No x  State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter:  0  APPLICABLE ONLY TO CORPORATE REGISTRANTS  Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date.  As of March 30, 2011, there were 10,342,000 shares of the registrants common stock, $0.001 par value, outstanding.  DOCUMENTS INCORPORATED BY REFERENCE  List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933.  The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).  - 2 -    INDEX


|         |                                                                                                                      |                                 |  
|-------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------------- | -
|PART I   | 4                                                                                                                   
|         | ITEM 1. BUSINESS                                                                                                     | 4                              
|         |                                                                                                                      | BACKGROUND                      | 4
|         |                                                                                                                      | PRINCIPAL PRODUCTS AND SERVICES | 5
|         |                                                                                                                      | DESCRIPTION OF INDUSTRY         | 7
|         |                                                                                                                      | GOVERNMENT REGULATION           | 7
|         |                                                                                                                      | CUSTOMERS AND MARKETING         | 8
|         |                                                                                                                      | COMPETITION                     | 8
|         |                                                                                                                      | EMPLOYEES                       | 8
|         |                                                                                                                      | REPORTS TO SECURITY HOLDERS     | 8
|         | ITEM 1A. RISK FACTORS                                                                                                | 8                              
|         | ITEM 1B. UNRESOLVED STAFF COMMENTS                                                                                   | 8                              
|         | ITEM 2. PROPERTIES                                                                                                   | 9                              
|         | ITEM 3. LEGAL PROCEEDINGS                                                                                            | 9                              
|         | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                          | 9                              
|PART II  | 9                                                                                                                   
|         | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 9                              
|         | ITEM 6. SELECTED FINANCIAL DATA                                                                                      | 10                             
|         | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        | 10                             
|         | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS                                                 | 14                             
|         | ITEM 8. FINANCIAL STATEMENTS                                                                                         | 14                             
|         | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         | 35                             
|         | ITEM 9A(T). CONTROLS AND PROCEDURES                                                                                  | 35                             
|         | ITEM 9B. OTHER INFORMATION                                                                                           | 36                             
|PART III | 36                                                                                                                  
|         | ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                      | 36                             
|         | ITEM 11. EXECUTIVE COMPENSATION                                                                                      | 37                             
|         | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS              | 39                             
|         | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                   | 40                             
|         | ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                      | 40                             
|PART IV  | 41                                                                                                                  
|         | ITEM 15. EXHIBITS                                                                                                    | 41                             

- 3 -    PART I  DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS  Certain statements in this report, including statements in the following discussion, are what are known as forward-looking statements, which are basically statements about the future.  For that reason, these statements involve risk and uncertainty since no one can accurately predict the future.  Words such as plans, intends, will, hopes, seeks, anticipates, expects, and the like, often identify such forward-looking statements, but are not the only indication that a statement is a forward-looking statement.  Such forward-looking statements include statements concerning our plans and objectives with respect to the present and future operations of the Company, and statements which express or imply that such present and future operations will or may produce revenues, income or profits.  Numerous factors and future events could cause the Company to change such plans and objectives, or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce revenues, income or profits.  Therefore, the reader is advised that the following discussion should be considered in light of the discussion of risks and other factors contained in this report on Form 10-K and in the Companys other filings with the Securities and Exchange Commission.  No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.   ITEM 1. BUSINESS    BACKGROUND  ALCO  ALCO, Inc. (ALCO, we, us, the Company) was incorporated under the laws of the State of Nevada on June 7, 1999 under the name Sea Horse, Inc.  On September 20, 2004, we changed our name to Lotus Capital Corp.  On February 13, 2006, we changed our name to ALCO, Inc.  ALCO was formed as a "blind pool" or "blank check" company whose business plan was to acquire one or more properties or businesses and to pursue other related activities intended to enhance shareholder value.  From the date of its incorporation until December 9, 2005, ALCOs only business activities were organizational activities directed at developing its business plan, raising its initial capital and registering under the Securities Exchange Act of 1934.  On November 22, 2005, ALCO entered into an Agreement for Share Exchange with AL Marine Holdings (BVI) Ltd (AL Marine) and the individual shareholders of AL Marine pursuant to which it agreed to acquire all of the issued and outstanding stock of AL Marine in exchange for the issuance of 9,766,480 shares of ALCOs common stock.  The closing under the Agreement for Share Exchange was completed on December 9, 2005, and upon completion of the closing, AL Marine became a wholly-owned subsidiary of ALCO.  AL Marine  AL Marine was incorporated under the laws of the British Virgin Islands on May 30, 2005 for the sole purpose of acting as a holding company for interests in several affiliated operating businesses.  On July 15, 2005, AL Marine acquired 100% of the outstanding shares of Andrew Liu & Company Limited (ALC), a Hong Kong corporation, 85% of the outstanding shares of EduShip Asia, Ltd. (ESA), a Hong Kong corporation, and 60% of the outstanding shares of Chang An Consultants Limited (CAC), a Hong Kong corporation.  On July 28, 2010, AL Marine set up a Hong Kong corporation called AL Marine Holdings (Hong Kong) Limited (ALM HK).  On December 16, 2010, ALM HK acquired 100% of the outstanding shares of Shanghai Heshili Broker Co. Ltd (SHB), a China corporation.  In order to hold and run SHB effectively, ALM HK appoints a local Chinese through an agency agreement to hold SHB on behalf of ALM HK.  In addition, ALM, HK and SHB enter into an exclusive agreement on December 16, 2010.  Under this agreement, ALM HK is entitled to receive all the profits earned from SHB.   - 4 -    The business of ALCO is now carried on through AL Marine and its subsidiaries.     PRINCIPAL PRODUCTS AND SERVICES  ALCO operates through its subsidiaries: ALC, CAC, ESA and SHB.  These subsidiaries operate primarily in Hong Kong and China.  ALC  ALCO is principally engaged in the marine insurance brokerage business though its wholly owned subsidiary, ALC, which was incorporated in 1989 as an insurance brokerage firm specializing in marine hull protection and indemnity insurance.  ALC began operations in Hong Kong and moved into China in 1991.  Under Hong Kong regulations, a person who acts as an insurance broker must have authorization from the Insurance Authority or be a member of a body of insurance brokers approved by the Insurance Authority.  The Hong Kong Confederation of Insurance Brokers (HKCIB) is such a body that has been approved by the Insurance Authority.  ALC became a member of the HKCIB in 1993.  In order to be admitted to the Confederation, an insurance broker must meet minimum requirements in regard to qualifications and experience; capital and net assets; professional indemnity insurance; keeping of separate records; and the keeping of proper books and accounts.  These requirements are determined by the Insurance Authority.  If an insurance broker does not meet these standards, the Confederation can withdraw the insurance brokers membership.  Insurance brokers represent the insured in negotiating and placing insurance coverage with insurers, as well as handling claims when they occur.  Insurance brokers generate revenue from commissions and fees on insurance premiums and earn interest on premiums held before remittance to the insurers.  Brokers do not issue the policies themselves; they only find and place policies with insurance carriers on behalf of their clients and act as a liaison between the insurer and the client during the claims process.  ALC works in placing insurance coverage with both hull and machinery coverage (H&M) providers and protection and indemnity coverage (P&I) providers.  H&M covers the physical loss of or damage to the vessel arising from accidents, while P&I covers liabilities, losses, expenses and costs incurred in relation to injury or death on board.  Business from China-based clients accounts for 95% of the business of ALC.  While ALC deals directly with most of its clients, it also engages a sub-broker, Jiangsu Oriental Navigators Insurance Brokers, in China.  The percentage of business of ALC generated by the sub-broker is approximately 0.9%.  ALC does not have any written agreements with this sub-broker, and the relationship with them could be terminated at any time without cause.  However, ALC could replace this sub-broker, if needed, so it would not suffer a material adverse effect if the relationship is terminated.  ALC places insurance coverages with approximately twenty different insurance providers.  For P&I insurance, the company places insurance with The West of England Ship Owners Insurance Association, American P&I Club, and The South of England Protection & Indemnity Association (Bermuda) Ltd., among others.  For H&M coverage, ALC places coverages with Lloyds Underwriters, among others.  ALC does not have any written agreements with these insurance providers.   Strike Club  In 2002, the Strike Club appointed ALC as its exclusive representative in China.  The Strike Club is an international insurer that was formed to cover losses that could occur in the marine industry, such as lost profits from labor strikes, which were not typically covered by other insurance.  The Strike Club is owned by its members and is a mutual insurer.  The Strike Club covers vessels loss of work resulting from delay due to strikes or other circumstances that are outside the control of the operator.  As the exclusive representative of the Strike Club in China, ALC is the only channel through which any shipowner, charterer or insurance broker in China may place insurance with the Strike Club.  For each policy placed through it, ALC takes 20% of the premium as its commission.  ALC cannot place any business with any other company offering the same coverage as the Strike Club during the term of the agreement.  We do not pay Strike Club for this representation.   - 5 -    Our written contract with the Strike Club expired in 2004, and no new agreement has been created.  However, we continue to operate as if the 2004 contract were still in effect.  Either party may terminate the relationship at any time, without cause.  During 2010, ALC received US$132,435 (2.2% of total commission income) in commission income due to this agreement with the Strike Club.  ESA  AL Marine owns 85% of ESA.  In 2004, ESA was appointed as an exclusive agent by the Institute of Chartered Shipbrokers (UK) ("ICS") to set up ICS's first distant learning center in Shanghai, China.  ICS is an internationally recognized professional body representing shipbrokers, managers, and agents throughout the world.  ICS has approximately 3,500 members in over 60 countries.  We believe that many students in China will take advantage of the ICS training being offered in their country because they will not be required to travel overseas.  As the exclusive agent of ICS in China, ALCO plans to provide delivery of courses in accordance with the syllabus of ICS, promotion of membership in ICS, and management of the examination center.  ICS is the only internationally recognized professional and vocational qualification in the shipping industry.  Pursuant to its contract with ICS, ESA is required to provide seminars, review sessions, revision workshops and other assistance to the students who enroll in the learning center.  Students will be charged GBP255 (approximately US$415), of which GBP137.5 (approximately US$224) will be paid to ICS.  The fees may be revised in the future upon the agreement of both parties.  ESA is responsible for paying the set up and maintenance for the center.  ESA has limited assets and its operations to date have not been significant.  As of December 31, 2010, ESA had net assets of $(51,148) with a cash balance of $31,190, accounts receivable of $809, due to related parties of $77,210 and accounts payable of $6,897.  During the 2010 fiscal year, ESA received $3,678 from enrollment fees from this arrangement and $13,679 from other income.  It spent approximately $25,134 setting up and maintaining the learning center. CAC  AL Marine owns 60% of CAC which participates in a joint venture with a large state-owned shipping group in China, the China Chanjiang Shipping Corporation (the "CSC Group").  CAC, which was incorporated in Hong Kong in March 1999, acts as an in-house insurance brokerage firm and general consultant for the CSC Group.  CAC looks for business opportunities for the CSC Group and uses the CSC Groups connections in China to create business opportunities for other foreign shipping interests.  The CSC Group owns a substantial and growing fleet of ships, advertising space, and seafarers schools in China.  The CSC Group has a large share of the market in logistics, cruising, shipbuilding and other related businesses along the Changjang region in China and has expanded its businesses all over the country.  The CSC Groups other business activities include shipbuilding, crane manufacturing, cruising, advertising, and seafarers training.  CAC has no formal agreement with the CSC Group.  In 2010, about 6.9% of ALCOs revenue was generated from CAC.  SHB  AL Marine indirectly owns 100% of SHB through ALM HK and a local Chinese.  SHB, which was incorporated in China in July 2005, is an insurance brokerage firm engaging in general insurance such as property, motor vehicle, liability & indemnity, health and accident, etc.  SHB primary operations are in China.  Under Chinese government regulations, a person who acts as an insurance broker must obtain a license from the China Insurance Regulatory Commission.  SHB obtained the necessary license since June 2005.  In order to maintain the license, an insurance broker must meet minimum requirements in regard to qualifications and experience; paid-up capital; professional indemnity insurance; and keeping of proper books and accounts.  These requirements are determined by the Chinese government.  If an insurance broker does not meet these standards, the Commission can withdraw the insurance brokers license.   - 6 -    SHB becomes ALCOs subsidiary since December 16, 2010.  From December 16 to 31, 2010, about 0.2% of ALCOs revenue was generated from SHB.      DESCRIPTION OF INDUSTRY  Marine Insurance Brokerage  Marine insurance is a mature industry, which is diverse in terms of types of coverage and insurers.  These different options are intended to suit the risk profile and requirements of different types of vessels, voyages, shipowners, and charterers.  Within marine insurance, the two most common forms of insurance are hull and machinery (H&M) and protection and indemnity (P&I).  H&M covers the physical loss of or damage to the vessel arising from accidents, while P&I covers liabilities, losses, expenses and costs incurred in relation to injury or death.  Various insurers differ significantly in the coverages and options they provide.  Most shipowners and charterers rely on professional insurance brokers for advice to make an informed decision on the choice of insurer and coverage that will suit their needs.  Insurance brokers represent the insured in negotiating and placing insurances with the insurers.  Brokers generate revenue primarily from commissions and fees on insurance calls and premiums.  Revenue is also generated from interest on calls and premiums held before remittance to the insurers and on claims held before payment to the insured.  Commission revenue varies based on the calls and premiums on the policies that are placed on behalf of clients.  When call and premium rates in the market rise, revenue for brokers increases, and revenue declines when call and premium rates decline.  The standard rate of commission for an insurance broker is approximately 10% on the call or premium of the insurance placed.  In addition, as part of the brokerage service, the brokers have a duty to make claims for their clients.  In doing so, they appraise the merits of the claim, devise a strategy for the claim and submit it to the insurer at the right place and in the correct form.     GOVERNMENT REGULATION  ALCOs subsidiaries, ALC and CAC, as members of HKCIB, must comply with the minimum requirements specified by the Insurance Authority under Section 70(2) of the Insurance Companies Ordinance of Hong Kong.  The minimum requirements specified by the Insurance Authority (IA) under Section 70(2) of the Insurance Companies Ordinance are:  (a) To maintain paid up share capital or minimum net assets of HK$100,000 (b) To maintain adequate accounting records to reflect the transactions of its business (c) To maintain client accounts in accordance with the minimum requirements specified by the IA under Section 70(2) of the Ordinance (d) To maintain a professional indemnity insurance policy in accordance with the minimum requirements specified by the IA under Section 70(2) of the ordinance.  These restrictions and other laws with which we must comply are subject to change.  Any change in these laws may cause our cost of doing business to increase or cause a change in the demand for our services.  ALCOs subsidiary, SHB, must comply with the minimum requirements specified by the Chinese government under the Rules on Administration of Insurance Brokerage Institutions.  The minimum requirements specified by the rules include:  (a) To maintain adequate accounting books to record the revenue and expenditure of insurance brokerage business (b) To maintain a professional indemnity insurance policy (c) To submit auditors report to the Commission within three months after the year-end closing date.  These restrictions and other laws with which we must comply are subject to change.  Any change in these laws may cause our cost of doing business to increase or cause a change in the demand for our services.        - 7 -    CUSTOMERS AND MARKETING  While members of the senior management regularly appear at industry-targeted functions and speak at seminars organized for the shipping industry, ALCO believes that the best marketing channel is by word-of-mouth and clients referrals based on quality of service and results in providing a solution to difficult claims.  The very close-knit nature of the Chinese shipping community places ALCO in a good position.  This strategy has so far proven to be effective.  Historically, ALCO has had a customer retention rate around 76% in 2010.  We anticipate that we will maintain this retention rate in the future because we have been able to maintain this rate for the last three years.  In 2010, ALCO had over 285 customers, and its customers were mainly from China.  ALCO obtains new clients through the channels of existing clients or sub-broker.     COMPETITION  ALCOs major competitors are large US insurance brokers such as Aon, Marsh and Willis, who provide a wide range of insurances and are not focused on marine insurance.  These competitors are much larger than ALCO and have access to significantly more financial resources than ALCO.  However, these competitors are international companies who focus on many different types of insurance.  We believe that ALCO is one of the few insurance providers that specializes in the marine insurance business.  Competition for business is intense in all of ALCOs business lines and in every insurance market, and other providers of global risk management services have substantially greater market shares than ALCO does.  Competition on premium rates has also exacerbated the pressures caused by a continuing reduction in demand in some classes of business.  Additional competitive pressures arise from the entry of new market participants, such as banks, accounting firms and insurance carriers themselves, offering risk management or transfer services.     EMPLOYEES  At the time of this report, ALCO had 54 employees, including 40 in operations and 14 in supporting and administrative functions.  All employees are full time.    REPORTS TO SECURITY HOLDERS  ALCO is subject to the reporting requirements of the Exchange Act and the rules and regulations promulgated thereunder, and, accordingly, files reports, information statements or other information with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, annual reports on Form 10-K, reports of current events on Form 8-K, and proxy or information statements with respect to shareholder meetings.  Although ALCO may not be obligated to deliver an annual report to its shareholders, we will voluntarily provide electronic or paper copies of the companys filings free of charge upon request.  The public may read and copy any materials ALCO files with the SEC at the SECs Public Reference Room at 450 Fifth Street, N.W. Washington, D.C. 20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.  The address is http://www.sec.gov.   ITEM 1A. RISK FACTORS  N/A   ITEM 1B. UNRESOLVED STAFF COMMENTS  N/A  - 8 -    ITEM 2. PROPERTIES  ALCO rents a portion of its facilities from companies owned by the directors of ALCO and rents a portion of its facilities from third parties.  As of December 31, 2010, ALCO leased approximately 6,084 square feet of office space for its operations.  Its current leased properties are:  LocationSizeDescriptionCentral, Hong Kong4,060 sq. ftHeadquartersShanghai, China3,251 sq. ftOfficesFuzhou, China1,243 sq. ftOffice  The Hong Kong office was leased from Fortune Ocean Ltd., whose directors and shareholders are Andrew Liu, John Liu, and Madam Yap.  In February 2010, Fortune Ocean Ltd sold the properties of the Hong Kong Office to a third party.  In this connection, the company ceased to pay rent to Fortune Ocean Ltd starting in March 2010.  At the same time, the company entered into a tenancy agreement with the new landlord to rent the Hong Kong office.  Starting from December 2007, an additional flat at the existing building of the Hong Kong Office was leased from a third party for office expansion.  In December 2009, this lease was ceased and another flat in the same building is leased from another third party for further expansion.  The Shanghai offices have been leasing from a third party since December 2007.   For expansion purpose, another flat in the same building is leased from another third party starting in December 2010.  The Fuzhou office is leased from a third party staring from October 2010.  ALCOs current total monthly rental payment for the facilities mentioned as above is approximately US$26,461.  We intend to renew these leases upon their expiration.   ITEM 3. LEGAL PROCEEDINGS  ALCO is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.  None of ALCOs directors, officers or affiliates, and no owner of record or owner of more than five percent (5%) of its securities, or any associate of any such directors, officer or security holder is a party adverse to ALCO or has a material interest adverse to it in reference to pending litigation.   ITEM 4. (REMOVED AND RESERVED)    PART II  ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  Our shares are approved for trading on the OTC Bulletin Board under the symbol ALCQ, but there has been no trading activity in the shares and no trading market has been established.  There is no assurance as to when, or whether, an active trading market in our shares will be established.  None of ALCOs common equities are subject to any outstanding options, warrants to purchase, or securities convertible into, common stock.  ALCO filed a registration statement on Form SB-2 to register a total of 500,000 shares for resale on behalf of certain selling shareholders.  The registration statement was declared effective on November 13, 2006.  Other than the  - 9 -    500,000 shares registered for resale on behalf of certain selling shareholders,  there are no common equities of ALCO that are being, or have been proposed to be, publicly offered by ALCO, the offering of which could have a material effect on the market price of its common stock.  As of December 31, 2010, ALCO had 10,342,000 shares of common stock issued and outstanding.  The shares are held by 30 stockholders of record.  On June 1, 2010, the company issued 198,000 shares of restricted stock to certain key employees and directors of the Company under the 2010 Restricted Share Stock Compensation Plan.  The plan was approved by the board of directors on June 1, 2010.  The restricted shares which were issued subject to certain terms and conditions such as that the shares may not be transferred during the applicable restriction period and that the shares will be forfeited if the employment is terminated by the holder or the Company. The shares were issued in reliance upon an exemption from registration provided by Regulation S under the Securities Act of 1933.  The shares were issued at a strike price of approximately $1.57, which was equal to the fair value of the Companys stock on June 1, 2010, the date of grant.  Therefore, the aggregate value of these shares as of the date of issuance was $301,440, of which $58,613 (6,000 shares with fair value of $9,420 was forfeited during the period) was recognized as stock-based compensation expense in salaries and compensation expenses during the year ended December 31, 2010.  The balance will be recognized as stock-based compensation expenses in the coming three years.  ALCO has never declared any cash dividends on its common stock and does not anticipate declaring dividends in the foreseeable future.   ITEM 6. SELECTED FINANCIAL DATA  N/A     ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PLAN OF OPERATIONS  In order to deal with the worldwide financial and shipping turmoil began in 2008, the company implemented a plan in 2009 and 2010 to improve our cost competitiveness and enhance the credit control and marketing function.  From the result of 2009 and 2010, it clearly shows that ALCOs plan is successful.  Although recovery is noted in the worldwide economy and financial market, depression of world trade and piracy issue still bothers the shipping industry especially the charters and shipowners.  Therefore, in 2011, the company will continue to enhance our credit control and marketing functions.  For enhancement of our credit control, we are continuing our effort to closely monitor the aging of client premium receivables and trying to increase the receivable turnover further.  Since 2009, we established a marketing function, the main responsibilities of which are maintaining our existing client base and promoting the companys business to potential new clients.  Additional headcounts are added to this new function in 2010.  The company will allocate more resources to the marketing function in 2011.  In order to expand our insurance brokerage business, the company has been looking for investment opportunities in Asia since last year.  In December 2010, the company acquired a general insurance broker firm in China for this purpose.  We will continue to seek investment opportunities in 2011.  In addition, the company does have a plan to hire additional employees in the next twelve months to enhance our operations including operations and supporting functions.  However, the plans of investment and employee hiring will depend on the market situation, associated risk factors and our internal resources.  There is no assurance that we will able to implement these plans within the foreseeable future.  We do not have any material off-balance sheet arrangements.  - 10 -      RESULTS OF OPERATIONS  Year ended December 31, 2010 compared with 2009  Revenue: Revenue for 2010 was $6,205,647 as compared to $5,041,711 for 2009.  The increase of $1,163,936 or approximately 23% was mainly due to increases of commission income fee from the existing clients and enrollment fee income.  This increase was partially offset by a decrease in consulting income.  Commission income is based on a percentage of the premiums paid by the insured.  Because of an increase in insurance call and premium rates in the market, commission income increased by $1,217,351 or 25%.  On the other hand, consulting income for 2010 decreased to $69,500 from $134,882 in 2009.  The decrease of $65,382 or 48% was because demand for consulting services decreased.  Furthermore, enrollment fee for 2010 was $17,357 as compared to $5,894 for 2009.  The increase was mainly due to the increases of customers demand and enrollment.  In addition, website advertising and other revenues for 2010 were maintained at the similar with last year.  They were $14,000 and $25,967 respectively.  Income before tax: Income before tax for 2010 was $1,988,339 compared to $1,814,762 for 2009.  The increase of $173,577, or approximately 10%, was mainly due to an increase of revenue and other income which was partially offset by an increase in the operating expenses during the year.  The reasons for increases in revenue from operations are discussed above, while the increases of operating expense are discussed in the section below.  For the other income, the increase was mainly due to an increase of interest and investment incomes.  Interest income for 2010 was $90,067 as compared to $5,377 for 2009.  The increase of $84,690 or approximately 1575% was mainly because of the secured loan made to a third party during the year. The loan was collected in full before December 31, 2010. Investment income for 2010 was $11,084 as compared to $9,820 for 2009.  The increase of $1,264 or approximately 13% was mainly due to the increase of dividend received from the publicly traded equity securities.  Operating expenses: Total operating expenses were $4,318,459 for 2010, as compared to $3,241,749 for 2009.  The increase of $1,076,710 or 33% was mainly due to increases in salaries, travel expenses, rents, bad debt expense, depreciation, exchange loss and other general and administrative expenses during the year.  The reasons for the increases in the major items are as follows:  · Salaries  increased by $385,227 or 21% from $1,796,679 in 2009 to $2,181,906 in 2010.  The increase was mainly due to increases in headcounts and pay rates during the year of 2010.  In addition, the Restricted Share Stock Compensation Plan is implemented in June 2010, $58,613 was recognized as stock-based compensation expense in salaries during the year ended December 31, 2010. · Travel expenses  increased by $106,985 or 37% from $289,963 in 2009 to $396,948 in 2010.  The increase was mainly because of the growth of client base and general price inflation. · Rents  increased $21,840 or 5% from $484,892 in 2009 to $506,732 in 2010.  The increase was mainly due to the company set up an office in Fuzhou, China and rented a temporary office during the renovation of the Hong Kong office in late 2010. · Bad debt expenses  increased by $335,449 or 256% from $130,816 in 2009 to $466,265 in 2010.  The increase was mainly due to an increase in the provision of doubtful debts in 2010. · Depreciation  increased by $6,139 or 18% from $34,697 in 2009 to $40,836 in 2010.  The increase was primarily due to the addition of fixed assets during the whole year of 2010. · Exchange loss  increased by $2,691 or 12% from $22,276 in 2009 to $24,967 in 2010.  The increase was mainly because the exchange rate of US dollar against HK dollar in the market throughout 2010 was under HK$7.8 which is used by the company as standard rate in accounting purpose. · Other general and administrative expenses  increased by $218,379 or 45% from $482,426 in 2009 to $700,805 in 2010. In general, the increase was due to the general price inflation, increment of headcount causing office administrative expense and staff medical increased, and the growth of client base causing telecommunication and postage expenses increased.  Another reason is that additional consulting and legal expenses were spending due to the acquisition of China firm during the year.   LIQUIDITY AND CAPITAL RESOURCES  - 11 -     Cash flow  For 2010, cash provided by operating activities totaled $1,974,738 compared to $1,190,680 for 2009.  The receipt of funds was primarily due to net income for the year plus increases in deposit and prepayment, fiduciary asset, other receivable, accounts payable, accrued expenses and income tax payable as well as decreases in commission receivable, income tax prepaid, claims payable and other payable.  For 2010, cash used in investing activities amounted to $439,921 compared to $123,279 for 2009.  The use of funds was for the purchase of the subsidiary in China and fixed assets such as office equipment and leasehold improvement.  For 2010, cash used by financing activities amounted to $86,301, compared to $43,772 for 2009.  The use of funds was for the repayment of obligations under finance leases, and amount due to minority shareholders and director.  Assets and liabilities  As of December 31, 2010, the Companys balance sheet reflects total current assets of $9,249,143, which increased by $1,496,181 (or 19%) as compared to $7,752,962 as of December 31, 2009.  Total current liabilities as of December 31, 2010 were $1,409,294, which increased by $494,225 (or 54%) as compared to $915,069 as of December 31, 2009.  The increase of total current assets was mainly due to increases of cash and cash equivalents and fiduciary asset which partially offset by a decrease of commission receivable.  The increase of total current liabilities was mainly due to increases of trade accounts payable, other payable, accrued expenses, and income tax payable which partially offset by a decrease of claim payable and amount due to directors.  As of December 31, 2010, commission receivable was $208,843 as compared to $658,795 for the same period in 2009, while trade accounts payable and other payable were $879,087 and $240,370 respectively, as compared to December 31, 2009 balances of $625,385 and $144,092.  Each of these changes was due to the timing of commissions received from customers and making payments to insurers at the year end.  In addition, because the credit control was tightened during 2010, commission receivable for 2010 was significantly reduced by $449,952 or 68%.  In addition, because rate of insurance premium paid by customers to insurers was raised, cash and cash equivalents and fiduciary asset increased during the year ended December 31, 2010.  Furthermore, because certain claims received from insurers on behalf of customers were repaid, the claim payable significantly decreased as compared to the year end of 2009.  As of December 31, 2010, there was $1,917 deferred revenue included in the liabilities.  This item is in relation to the income received in advance for the website advertising.  Because the interest rate is maintained at a very low level in the recent years, the company purchased publicly traded equity securities with high dividend yield since 2008 for long term investment purpose.  As of December 31, 2010, the market value of the equity securities was $340,401.  It decreased by $28,959 as compared to $369,360 for the last year.  The decrease was mainly because the market value of such equity securities dropped at the year-end date of December 2010 when compared to the year-end date of December 2009.  Due to the company acquiring a new subsidiary during the year, certain assets such as customer list and goodwill were recognized in 2010.  As of December 31, 2010, carrying values of such assets were $62,418 and $249,034 respectively.  The Company has bank and cash equivalents of approximately $8,051,872 as at December 31, 2010.  The Company has sufficient funds to satisfy its financial commitments and working capital requirements for the next twelve months.  As of December 31, 2010, the Company had $0 of commitments for capital expenditures and off-balance sheet arrangements as well as lease commitments of $514,902.   CRITICAL ACCOUNTING POLICIES  Estimates And Assumptions  In preparing financial statements that conform to generally accepted accounting principles, management makes estimates and assumptions that may affect the reported amount of assets and liabilities.  Actual results could differ from these estimates.  - 12 -    Particularly, the areas requiring the use of management estimates relate to the valuation of accounts receivable and payable, equipment, accrued liabilities, and the useful lives for amortization and depreciation.  Consolidation policy  The consolidated financial statements include the accounts of the Company and all its majority-owned subsidiaries and other entity which require consolidation.  Inter-company transactions have been eliminated in consolidation.  In accordance with ASC 810 (SFAS No.167 Amendments to FASB Interpretation No. 46(R)), the company consolidates variable interest entities (VIEs) for which it is the primary beneficiary.  The company has evaluated the provisions of ASC 810 and determined that it applies to its interest in China.  VIEs are generally entities that lack sufficient equity to operate without additional subordinated financial support from other parties or are entities whose equity holders do not have adequate decision making authority.  The primary beneficiary of a VIE is the party that (a) has the power to direct the activities of a VIE that significantly impacts its economic performance and (b) has the obligation to absorb the losses or the rights to receive the benefits that could be significant to the VIE.  According to the requirements of ASC 810, we have evaluated our relationships with SHB.  We have concluded that SHB is a VIE, and the company is the primary beneficiary of the VIE.  Accordingly, we adopted the provisions of ASC 810 and consolidated SHB into our financial statements as of and for the year ended December 31, 2010.  Earnings Per Share  The Earnings per share is determined by dividing the net earnings by the weighted average number of outstanding shares during that period.  Currency  ALCOs main subsidiaries, ALC, CAC and ESA use the Hong Kong dollar as its currency.  The exchange rate for HK$ to US dollars has varied by very little during the period between 2002 and 2010.  Thus, the consistent exchange rate used has been 7.80 HK$ per each US dollar.  Since there have been no greater fluctuations in the exchange rate, there is no gain or loss from foreign currency translation and no resulting other comprehensive income or loss.  There were no material gains or losses recognized as a result of translating foreign currencies to the U.S. or Hong Kong dollar.  No assurance can be given as to the future value of foreign currency and how fluctuations in such value could affect ALCOs earnings.  The balance sheets of ALC, CAC and ESA were translated at year-end exchange rates.  Income and expenses were translated at exchange rates in effect during the year, substantially the same as the year-end rates.  Functional currency of SHB is the local currency, the Chinese Yuan (CNY).  The financial statements of SHB are translated into United States dollars in accordance with FASB Accounting Standards Codification TM (ASC) No. 830, "Foreign Currency Matters, using year-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for the equity.  Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income.  At December 31, 2010, the cumulative translation adjustment of $23,600 was classified as an item of other comprehensive income in the shareholders equity section of the consolidated balance sheet.  For the year ended December 31, 2010, accumulated other comprehensive income was $103,784.  The exchange rates used to translate amounts in CNY into U.S. Dollars for the purposes of preparing the consolidated financial statements were as follows:  Balance sheet items, as of year-end date: US$0.15090:CNY1  Amounts included in the statements of operations, statements of changes in shareholders equity and statements of cash flows for the year: US$0.14714:CNY1  Revenue Recognition  - 13 -     Commission revenue is recognized as of the effective date of the insurance policy or the date the customer is billed, whichever is later.  At that date, the earnings process has been completed, and the Company can reliably estimate the impact of policy cancellations based upon historical cancellation experience adjusted by known circumstances.  The Company keeps a policy cancellation reserve fund to use if policies are cancelled.  Subsequent commission adjustments are recognized upon notification from the insurance companies.  Fee income is recognized as services are rendered.  Income Taxes  Income tax expense is based on reported income before income taxes.  Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes.  In accordance with FASB Accounting Standards Codification TM (ASC) No. 740, " Income Taxes, these deferred taxes are measured by applying currently enacted tax laws.   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS N/A   ITEM 8. FINANCIAL STATEMENTS   - 14 -          ALCO, INC. FINANCIAL STATEMENTS AT DECEMBER 31, 2010    INDEX


|                                                                                                              |   
|------------------------------------------------------------------------------------------------------------- | --
|CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2010 AND 2009                                                  | 17
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 | 18
|CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2010 AND 2009                           | 19
|CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009                    | 21
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                    | 22

- 15 -    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors ALCO, Inc. Hong Kong  We have audited the accompanying consolidated balance sheets of ALCO, Inc., as of December 31, 2010 and 2009 and the related statements of operations and comprehensive income, changes in stockholders equity and cash flows for the years then ended.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ALCO, Inc. as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.  /s/ MALONEBAILEY, LLP www.malone-bailey.com Houston, Texas March 30, 2011  - 16 -    ALCO, INC   CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2010 AND 2009


|                                                                                                                                |   |                   |   |                  
|------------------------------------------------------------------------------------------------------------------------------- | - | ----------------- | - | -----------------
|ASSETS                                                                                                                          |   | December 31, 2010 |   | December 31, 2009
|Current assets:                                                                                                                 |   |                   |   |                  
|Cash and cash equivalents                                                                                                       | $ | 8,051,872         | $ | 6,587,876        
|Commissions receivable, net                                                                                                     |   | 208,843           |   | 658,795          
|Enrollment fee receivable                                                                                                       |   | 809               |   | 1,500            
|Fiduciary asset                                                                                                                 |   | 964,542           |   | 504,791          
|Due from related party                                                                                                          |   | 23,077            |   | -                
|Total current assets                                                                                                            |   | 9,249,143         |   | 7,752,962        
|Property, plant and equipment, net                                                                                              |   | 296,313           |   | 117,815          
|Goodwill                                                                                                                        |   | 249,034           |   | -                
|Intangible asset                                                                                                                |   | 62,418            |   | -                
|Other non-current assets:                                                                                                       |   |                   |   |                  
|Deposits and prepayment                                                                                                         |   | 144,017           |   | 106,139          
|Income tax refundable                                                                                                           |   | -                 |   | 12,253           
|Marketable securities                                                                                                           |   | 340,401           |   | 369,360          
|Other receivable                                                                                                                |   | 542,026           |   | 476,955          
|Total other non-assets                                                                                                          |   | 1,026,444         |   | 964,707          
|                                                                                                                                |   |                   |   |                  
|Total Assets                                                                                                                    | $ | 10,883,352        | $ | 8,835,484        
|LIABILITIES                                                                                                                     |   |                   |   |                  
|Current Liabilities:                                                                                                            |   |                   |   |                  
|Trade accounts payable                                                                                                          | $ | 879,087           | $ | 625,385          
|Claim payable                                                                                                                   |   | 19,645            |   | 48,504           
|Other payable                                                                                                                   |   | 240,370           |   | 144,092          
|Accrued expenses                                                                                                                |   | 164,752           |   | 77,481           
|Income tax payable                                                                                                              |   | 94,527            |   | -                
|Due to directors                                                                                                                |   | 8,996             |   | 15,091           
|Deferred revenue                                                                                                                |   | 1,917             |   | 1,917            
|Current portion of obligation from hire purchase lease                                                                          |   | -                 |   | 2,599            
|Total Current Liabilities                                                                                                       |   | 1,409,294         |   | 915,069          
|Long term portion of obligation from hire purchases lease                                                                       |   | -                 |   | 685              
|Total Liabilities                                                                                                               | $ | 1,409,294         | $ | 915,754          
|COMMITMENTS AND CONTINGENCIES                                                                                                   |   |                   |   |                  
|EQUITY                                                                                                                          |   |                   |   |                  
|ALCO, Inc. shareholders' equity:                                                                                                |   |                   |   |                  
|Preferred stock, par value $0.01, 5,000,000 shares authorized;                                                                  |   |                   |   |                  
|no shares issued and outstanding                                                                                                | $ | -                 | $ | -                
|Common stock, par value $0.001, 50,000,000 shares authorized;                                                                   |   |                   |   |                  
|10,342,000 shares issued and outstanding at December 31, 2010 and 10,150,000 shares issued and outstanding at December 31, 2009 |   | 10,342            |   | 10,150           
|Additional Paid-in capital                                                                                                      |   | 118,784           |   | 60,363           
|Accumulated other comprehensive income                                                                                          |   | 103,784           |   | 120,213          
|Retained earnings                                                                                                               |   | 9,110,581         |   | 7,623,855        
|Total ALCO, Inc. shareholders' equity                                                                                           |   | 9,343,491         |   | 7,814,581        
|Noncontrolling interest                                                                                                         |   | 130,567           |   | 105,149          
|Total equity                                                                                                                    |   | 9,474,058         |   | 7,919,730        
|Total Liabilities and Equity                                                                                                    | $ | 10,883,352        | $ | 8,835,484        
|                                                                                                                                |   |                   |   |                  
|See Notes to Financial Statements                                                                                              

- 17 -    ALCO, INC  CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009  Year ended December 31,Revenues20102009Commission income$6,078,823$4,861,472Consulting income69,500134,882Website advertising14,00014,000Enrollment fee income17,3575,894Other revenues25,96725,463Total revenues6,205,6475,041,711Operating ExpensesSalaries2,181,9061,796,679Travel expenses396,948289,963Rents506,732484,892Bad debt expenses466,265130,816Depreciation40,83634,697Exchange loss24,96722,276Other general and administrative700,805482,426Total operating expenses4,318,4593,241,749Income from Operations1,887,1881,799,962Other Income (Expense)Interest income90,0675,377Investment income11,0849,820Interest expense-(397)Total other income101,15114,800Income Before Provision for Income Taxes1,988,3391,814,762Provision for income taxes399,272315,128Net Income1,589,0671,499,634Less: Net income attributable to the noncontrolling interest(102,341)(76,386)Net Income attributable to ALCO, Inc.$1,486,726$1,423,248Comprehensive Income:Net income1,589,0671,499,634Other Comprehensive Income (loss)Marketable securities(40,029)126,156Foreign currency translation adjustments23,600-Comprehensive Income$1,572,638$1,625,790Less: comprehensive income attributable to non-controlling interest(102,341)(76,386)Comprehensive Income attributable to ALCO. Inc.1,470,2971,549,404Basic and Fully Diluted Earnings per ShareNet income attributable to ALCO, Inccommon shareholders$0.14$0.14Weighted average shares outstanding10,263,04710,150,000See Notes to Consolidated Financial Statements  - 18 -    ALCO, INC  CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2010 AND 2009  Year ended December 31,20102009Operating ActivitiesNet income$1,589,067$1,499,634Adjustments to reconcile net income (loss ) to net cash:Bad debt466,265130,816Depreciation40,83634,697Stock-based compensation58,613-Fixed asset written off10,051118Changes in operating assets and liabilities:(Increase)/Decrease in commission receivable22,109(428,854)(Increase)/Decrease in enrolment fee receivable(37)(801)(Increase)/Decrease in deposit and prepayment(60,669)(35,093)Increase/(Decrease) in income tax prepaid12,253-(Increase)/Decrease in fiduciary asset(459,743)939,387(Increase)/Decrease in other receivable(76,087)(40,115)Increase/(Decrease) in accounts payable253,701(800,561)Increase/(Decrease) in claims payable(28,859)(51,148)Increase/(Decrease) in other payable(29,043)(64,201)Increase/(Decrease) in accrued expenses81,97719,459Increase/(Decrease) in income tax payable94,304(12,658)Net cash (used) / provided by operating activities1,974,7381,190,680Investing ActivitiesCash paid for acquisition of SHB(287,236)-Cash paid for purchase of fixed assets(152,685)(23,696)Purchase of equity investment-(99,583)Net cash (used) by investing activities(439,921)(123,279)Financing ActivitiesDividend paid to minority shareholders(76,923)(41,025)Repayment of obligations under finance leases(3,284)(2,342)Borrowings on related party debt24,6873,326Principal payments on related party debt(30,781)(3,731)Net cash (used) by financing activities(86,301)(43,772)(Decrease) / increase in cash1,448,5161,023,629Effect of exchange rate changes on cash15,480-Cash at beginning of period6,587,8765,564,247Cash at end of period$8,051,872$6,587,876Supplemental Disclosures of Cash Flow Information:Cash paid / (receive) during year for:Interest$-$397Income taxes$(292,492)$327,786Non-Cash TransactionsReclassification from Deposit to Due from Related Parties$23,077$-Restricted shares issued$192$-  - 19 -     Dividend received$11,070$8,311Change in fair value for Available-for-sales securities$40,029$126,156See Notes to Financial Statements  - 20 -


ALCO, INC  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009   ALCO, Inc ShareholdersAccumulated Other Comprehensive Income (loss)Common StockAdditional Paid-in CapitalRetained EarningsTotal Stockholders' EquityNon-controlling InterestTotal      EquitySharesPar ValueBalance, January 1, 200910,150,000$10,150$60,363$(5,943)$6,200,607$6,265,177$28,763$6,293,940Unrealized gain on marketable securities126,156126,156126,156Net Income1,423,2481,423,24876,3861,499,634Dividend paidBalance, December 31, 200910,150,00010,15060,363120,2137,623,8557,814,581105,1497,919,730Restricted Shares issued toStock issued198,000198(198)--Stock forfeited(6,000)(6)6--Stock based compensation58,61358,61358,613Unrealized loss on marketable securities(40,029)(40,029)(40,029)Foreign currency translation adjustments23,60023,60023,600Net Income1,486,7261,486,726102,3411,589,067Dividend paid(76,923)(76,923)Balance, December 31, 201010,342,00010,342118,784103,7849,110,5819,343,491130,5679,474,058See Notes to Consolidated Financial Statements  - 21 -


ALCO, INC.   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010  Note 1  Organization and Operations  Description of Business  ALCO, Inc. (ALCO, we, us, the Company) was incorporated in Nevada on June 7, 1999 as Seahorse, Inc. and changed its name to Lotus Capital Corp. on September 20, 2004.  The Company changed its name to ALCO, Inc. on February 13, 2006.  The Company is principally engaged in the marine insurance brokerage business in the Asia Pacific region, through its wholly owned subsidiary, AL Marine Holdings (BVI), Ltd., a British Virgin Islands corporation ("AL Marine").  AL Marine is the 100% owner of Andrew Liu and Co., Ltd., a corporation principally engaged in the business of marine insurance brokerage in Asia.  AL Marine owns 60% of Chang An Consultants Ltd., a joint venture with China Changjiang National Shipping Corporation (CSC Group) that serves as a vehicle for the provision of marine insurance brokerage and other marine business services by AL Marine.  AL Marine owns 85% of EdushipAsia Ltd.  In 2005 and 2004, EdushipAsia Ltd was appointed as an exclusive agent by the Institute of Chartered Shipbrokers (UK) (ICS) to set up ICSs first distant learning centre in Shanghai, PRC.  AL Marine owns 100% of AL Marine Holdings (Hong Kong) Limited, a corporation principally engaged in the investment holding.  AL Marine Holdings (Hong Kong) Limited (ALM HK), through an agency arrangement, owns 100% of Shanghai Heshili Broker Co. Limited (SHB), a corporation principally engaged in the business of general insurance brokerage in China.  ALCO, Inc. and AL Marine are hereafter referred to as the Company.  Under the current Chinese regulations, there are restrictions on the percentage interest foreign or foreign-invested companies may have in Chinese companies providing insurance brokerage services in China.  In addition, the operation by foreign or foreign-invested companies of insurance brokerage business in China is subject to government approval.  In order to comply with these restrictions and other Chinese rules and regulations, AL Marine Holdings (Hong Kong) Limited entered into an exclusive agreement with Shanghai Heshili Broker Co. Ltd.  Under the agreement, the company provides all management and administration services and financial support to SHB for its operations.  SHB is prohibited from entering into any exclusive agreement without the companys prior approval.  SHB is 100% beneficially owned by a Chinese party.  An agency agreement is entered into between the Chinese party and ALM HK.  Under this agreement, the Chinese party is holding the shares of SHB on behalf of ALM HK.  The company does not have any direct ownership interest in SHB.  As a result of our contractual arrangements with SHB above, we bear the risks of, and enjoy the rewards associated with, and therefore are the primary beneficiary of our investments in SHB, and we have begun to consolidate its results of operations in our consolidated financial statements commencing in the fiscal year 2010.   Control by Principal Stockholders  The directors, executive officers, their affiliates and related parties own, beneficially and in the aggregate, the majority of the voting power of the outstanding share capital of the Company.  Accordingly, directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including approving significant expenses, increasing the authorized capital stock and the dissolution, merger or sale of the Company's assets.   - 22 -  Reclassification  Certain prior year amounts have been reclassified to conform to the current year presentation.   Note 2  Significant Accounting Policies  Economic and Political Risks  The Company faces a number of risks and challenges since its assets are located in Hong Kong, a Special Administrative Region of the People's Republic of China ("PRC"), and its revenues are derived from its operations therein.  The PRC is a developing country with an early stage market economic system, overshadowed by the state.  Its political and economic systems are very different from the more developed countries and are in a state of change.  The PRC also faces many social, economic and political challenges that may produce major shocks and instabilities and even crises, in both its domestic arena and in its relationships with other countries, including the United States.  Such shocks, instabilities and crises may in turn significantly and negatively affect the Company's performance.  Basis of Presentation  The consolidated financial statements include the accounts of the Company and all its majority-owned subsidiaries and other entity which require consolidation.  Inter-company transactions have been eliminated in consolidation.  In accordance with ASC 810 (SFAS No.167 Amendments to FASB Interpretation No. 46(R)), the company consolidates variable interest entities (VIEs) for which it is the primary beneficiary.  The company has evaluated the provisions of ASC 810 and determined that it applies to its interest in China.  VIEs are generally entities that lack sufficient equity to operate without additional subordinated financial support from other parties or are entities whose equity holders do not have adequate decision making authority.  The primary beneficiary of a VIE is the party that (a) has the power to direct the activities of a VIE that significantly impacts its economic performance and (b) has the obligation to absorb the losses or the rights to receive the benefits that could be significant to the VIE.  According to the requirements of ASC 810, we have evaluated our relationships with SHB.  We have concluded that SHB is a VIE, and the company is the primary beneficiary of the VIE.  Accordingly, we adopted the provisions of ASC 810and consolidated SHB into our financial statements as of and for the year ended December 31, 2010.  The companys VIE consolidated net assets were US$852,123 at December 31, 2010.  The consolidated financial statements have been prepared in accordance with US GAAP and the instructions to Form 10-K and Regulation S-K.  In the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flows at December 31, 2010 and 2009 for all periods presented have been made.  Certain accounting principles, which are stipulated by US GAAP, are not applicable in the HKAS.  The difference between HKAS accounts of the Company and its US GAAP financial statements is immaterial.  The Company maintains its books and accounting records in Hong Kong dollar ("HK$"), which is determined as the functional currency.  Assets and liabilities of the Company are translated at the prevailing exchange rate at each year end.  Contributed capital accounts are translated using the historical rate of exchange when capital is injected.  Income statement accounts are translated at the average rate of exchange during the year.  Translation adjustments arising from the use of different exchange rates from period to period are included in the cumulative translation adjustment account in shareholders' equity.  Gain and losses resulting from foreign currency transactions are included in operations.  - 23 -   Concentration of Credit Risk  Financial instruments which subject the Company to concentrations of credit risk consist principally of accounts receivable and cash.  Exposure to losses on receivables is dependent on each customer's financial condition.  The Company controls its exposure to credit risk through a process of credit approvals, credit limits and monitoring procedures, establishing allowances for anticipated losses.  Use of Estimates  The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.  Actual results, when ultimately realized could differ from those estimates.  Significant Estimates  Several areas require significant management estimates relating to uncertainties for which it is reasonably possible that there will be a material change in the near term.  The more significant areas requiring the use of management estimates relate to the valuation of accounts receivable and payable, equipment, accrued liabilities, and the useful lives for amortization and depreciation.  Revenue Recognition  Commission revenue is recognized as of the effective date of the insurance policy or the date the customer is billed, whichever is later.  At that date, the earnings process has been completed and the Company can reliably estimate the impact of policy cancellations based upon historical cancellation experience adjusted by known circumstances.  The policy cancellation reserve is periodically evaluated and adjusted as necessary.  Subsequent commission adjustments are recognized upon notification from the insurance companies.  Commission revenues are reported net of commissions paid to sub-brokers.  Fee income is recognized as services are rendered.  Cash and Cash Equivalents  The Company invests idle cash primarily in money market accounts, certificates of deposit and short-term commercial paper.  Money market funds and all highly liquid debt instruments with an original maturity of three months or less are considered cash equivalents.  Commissions and Other Receivables  Commissions and other receivables are recognized and carried at original invoice amount less an allowance for any uncollectible amounts.  An estimate for doubtful accounts is made when collection of the full amount becomes questionable.  We made allowance for doubtful accounts based on a review of all outstanding amounts on a monthly basis.  We analyze the aging of receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms.  Significant changes in customer concentration or payment terms, deterioration of customer credit-worthiness or weakening in economics trends could have a significant impact on the collectibility of receivables and the allowance.  If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances will be made.  Allowances are applied to commissions and other receivables where events or changes in circumstance indicate that the balances may not be collectible.  The identification of doubtful debts requires the use of judgment and estimates as mentioned above.  Where the expectation on or the actual recoverability of commissions and other receivables is different from the original estimate,  - 24 -  such difference will impact the carrying value of commissions and other receivables and doubtful debts expenses in the periods in which such estimate is changed or the receivable are collected.  Property, Plant and Equipment  Property, plant and equipment are carried at cost.  The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized.  When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the income statement in the year of disposition.  Depreciation is calculated on a straight-line basis over the estimated useful life of the assets.  The annual percentages applied are:  Motor vehicles 20% Furniture and fixtures 15% Office equipment 15% Leasehold improvements 20%   Marketable Securities   All marketable securities are classified as available-for-sale securities. Available-for-sale securities are carried at fair value with resulting unrealized gains and losses, reported as a component of accumulated other comprehensive loss. Long-term marketable securities have remaining maturities at the balance sheet date of one year or greater.  Accounts Payable and Claims Payable  In its capacity as an insurance agent or broker, the Company collects premiums from customers and, after deducting its commissions, remits the premiums to the respective insurers; the Company also collects claims or refunds from insurers on behalf of customers.  Unremitted insurance premiums and claims are held in a fiduciary capacity.  The obligation to remit premiums is recorded as accounts payable and the obligation to remit claims and refunds is recorded as claims payable on the balance sheet.  Pension Costs  Mandatory contributions are made to the Hong Kong's Mandatory Provident Fund (MPF), based on a percentage of the employees' basic salaries.  The cost of these payments are charged to the profit and loss accounts as they become payable in accordance with the rule of the MPF Scheme.  The employer contributions vest fully with the employees when contributed into the MPF Scheme.  Income Taxes  Income tax expense is based on reported income before income taxes.  Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes.  In accordance with FASB Accounting Standards Codification TM No. 740, "Income Taxes, these deferred taxes are measured by applying currently enacted tax laws.  The Company's effective tax rate for December 31, 2010 and 2009 was 20.08% and 17.36%, respectively.  The Company did not provide any current or deferred income tax provision or benefit for any period presented to date because book income is substantially equal to taxable income, with only minor timing differences with regard to the depreciation of fixed assets.  Management has determined that any deferred tax asset or liability is inconsequential, and not material to the financial statements.  Fair Value of Measurements  The Company adopted Statement of ASC No. 820, Fair Value Measurements and Disclosures, effective January 1, 2008.  The provisions of ASC 820 are to be applied prospectively.   - 25 -  ASC 820 clarifies that fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date).  Under ASC 820, fair value measurements are not adjusted for transaction cost.  ASC 820 provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels:  Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities  Level 2: Input other than quoted market prices that are observable, either directly or indirectly, and reasonably available.  Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.  Level 3: Unobservable inputs.  Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.  An asset or liabilitys level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Availability of observable inputs can vary and is affected by a variety of factors.  The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities.  Valuation of Goodwill and Other Intangible Assets  The Company records the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired as goodwill.  Current authoritative guidance requires goodwill to be tested for impairment annually as well as when an event or change in circumstance indicates impairment may have occurred.  Goodwill is tested for impairment by comparing the fair value of the Companys individual reporting units to their carrying amount to determine if there is potential goodwill impairment.  If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value.  Long-lived assets, including fixed assets and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.  In reviewing for impairment, the carrying value of such assets is compared to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition.  If such cash flows are not sufficient to support the assets recorded value, an impairment charge is recognized to reduce the carrying value of the long-lived asset to its estimated fair value.  The determination of future cash flows, as well as the estimated fair value of long-lived assets, involves significant estimates on the part of management.  In order to estimate the fair value of a long-lived asset, the Company may engage a third-party to assist with the valuation.  If there is a material change in economic conditions or other circumstances influencing the estimate of future cash flows or fair value, the Company could be required to recognize impairment charges in the future.  Related Party Transactions  The Company rented an office space in Hong Kong and rents an quarter in Shanghai from a company owned by directors of the Company.  Foreign Currency and Other Comprehensive Income  The accompanying financial statements are presented in United States (US) dollars.  The functional currency of ALC, CAC and ESA is the Hong Kong dollar (HK$).  The financial statements are translated into US dollars from HK$ at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses.  Capital accounts are translated at their historical exchange rates when the capital transactions occurred.   - 26 -  The Hong Kong Monetary Authority (HKMA), Hong Kong's central bank, maintains a Linked Exchange Rate System since 1983.  The HKMA operates Convertibility Undertakings on both the strong side and the weak side of the Linked Rate of US$1: HK$7.8.  In fact, the exchange rate for HK$ to US dollars has varied by only 100ths during 2010 and 2009.  Thus, the consistent exchange rate used has been 7.80 HK$ per each US dollar.  Since there have been no greater fluctuations in the exchange rate, there is no gain or loss from foreign currency translation and no resulting other comprehensive income or loss.  Foreign currency transactions are those that required settlement in a currency other than HK$.  Gain or loss from foreign currency transactions, or exchange loss, are recognized in income in the period they occur.  The functional currency of SHB is the Chinese Yuan (CNY).  The financial statements of SHB are translated into United States dollars in accordance with FASB Accounting Standards Codification TM (ASC) No. 830, " Foreign Currency Matters, using year-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for the equity.  Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income.  The exchange rates used to translate amounts in CNY into U.S. Dollars for the purposes of preparing the consolidated financial statements were as follows:  Balance sheet items, as of year-end date: US$0.15090:CNY1  Amounts included in the statements of operations, statements of changes in shareholders equity and statements of cash flows for the year: US$0.14714:CNY1  Earnings Per Share  Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period.  Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.     Recent Accounting Pronouncements  In January 2010, the FASB issued authoritative guidance which requires additional disclosures about transfers between Levels 1 and 2 of the fair value hierarchy and disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. This guidance was effective for the Company January 1, 2010, except for the Level 3 activity disclosures, which are effective for fiscal years beginning after December 15, 2010. The adoption of this guidance, which is related to disclosure only, did not have a material impact on the Companys financial position or results of operations.  In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for the consolidation of VIEs. This amendment requires an analysis to determine whether a variable interest gives the entity a controlling financial interest in a variable interest entity for financial reporting purposes. The amendment requires an ongoing reassessment and eliminates the quantitative approach previously required for determining whether an entity is the primary beneficiary. This amendment was effective for the Company beginning January 1, 2010. The Company adopted the amendment January 1, 2010 and it did not have any impact on the Companys financial position or results of operations.  In October 2009, the FASB issued authoritative guidance about the accounting for revenue contracts containing multiple elements, allowing the use of companies estimated selling prices as the value for deliverable elements under certain circumstances and to eliminate the use of the residual method for allocation of deliverable elements. This guidance is effective for the Company beginning January 1, 2011. The Company does not expect that this standard will have a significant impact on its financial position or results of operations.   - 27 -  The Company does not believe that there are any new pronouncements that have been recently issued that might have a material impact on its consolidated financial statements other than those which have been disclosed.   Note 3  Cash December 31,December 31,Cash consist of the following:20102009Cash in hand$4,755$8,153Cash in bank - Saving & CheckingChina Construction Bank (Asia) (formerly known as Bank of America (Asia))7,487,2054,035,514United Overseas Bank5,7735,580Bank of China4,1764,253Sun Hung Kei Financial10633Bank of Shanghai538,400-Industrial and Commercial Bank of China516-Hui Shang Bank10,941Cash in bank - Fixed Deposit-2,534,343$8,051,872$6,587,876  Cash balances are held principally at one financial institution and are not insured.  The Company believes it mitigates its risk by investing in or through major financial institutions.  Recoverability is dependent upon the performance of the institution.  Although the cash balances are not insured, however, starting in September 2006, cash balances (except accounts with overdraft facilities) are protected by the Deposit Protection Scheme which is maintaining by the Hong Kong Deposit Protection Board, an independent statutory body established under the Deposit Protection Scheme Ordinance (Cap. 581).  Under the scheme, compensation up to a limit of HK$100,000 (US$12,821) per depositor would be paid from the scheme to depositor if the bank with which the depositor holds his/her eligible deposits fails.  On October 14, 2008, the Hong Kong Government announced that they would use the Exchange Fund to guarantee the repayment of all customer deposits held in authorized institutions in Hong Kong, following the principles of the Deposit Protection Scheme.  This action began on October 14, 2008 and expired at the end of 2010.  Following the enactment of the Deposit Protection Scheme (Amendment) Ordinance 2010 in June 2010, the protection limit of the Deposit Protection Scheme is increased from HK$100,000 per depositor to HK$500,000 (approximately US$64,103) per depositor with effect from January 1, 2011.   Note 4  Commissions Receivable December 31,December 31,Commissions receivable consist of the following:20102009Commissions receivable$773,391$1,093,893Less: allowances for doubtful accounts564,548435,098$208,843$658,795   Note 5  Fiduciary Assets  Fiduciary assets are cash balances held by a bank, mainly consisting of premiums collected from customers and payable to insurers, and claims received from insurers and payable to policyholders.   - 28 -  When the Company receives a premium from a customer, it debits the lump sum amount into one bank account and establishes a schedule to keep track of the amount of premium payable to the insurer.  At the monthly closing, the Company reclassifies the amount of premium payable to insurers as fiduciary assets.  Also, when the Company receives a claim on behalf of a policyholder, it debits fiduciary assets and credits claims payable and other payables, if necessary.  The fiduciary assets balance for December 31, 2010 and 2009 are as follows:  December 31,December 31,20102009Fiduciary asset$964,542$504,791  Note 6  Due From Related Party  In February 2010, Fortune Ocean Ltd, a corporation owned by directors of the company, sold the properties of Room 501, 502A and 502B of the Hong Kong Office to a third party.  In this connection, the company ceased to rent the properties from Fortune Ocean Ltd starting in March 2010.  The amount of US$23,077 due from Fortune Ocean Ltd is the rental deposit and has not been returned to the company yet.   Note 7  Property, Plant and Equipment December 31,December 31,Property, Plant and Equipment consists of the following:20092009Furniture and fixtures$181,912$164,605Office equipment171,960160,649Leasehold improvements196,22199,196Motor Vehicle109,55941,787659,652466,237Less: Accumulated depreciation363,339348,422$296,313$117,815  Depreciation expense for 2010 and 2009 was $40,836 and $34,697 respectively.  Note 8  Acquisition  On December 16, 2010, the company acquired Shanghai Heshili Broker Co. Limited (SHB).  The total amount of cash paid was $852,223.  In accordance with the purchase acquisition accounting, the company initially allocated the consideration to the net tangible and identifiable intangible assets, based on their estimated fair values as of the date of acquisition.  Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets.  The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date.  The company has finalized its purchase price allocation.


|                              |   |          
|----------------------------- | - | ---------
|Property, plant and equipment | $ | 74,649   
|Intangible asset              |   | 60,735   
|Cash in banks                 |   | 565,585  
|Accounts receivable           |   | 37,578   
|Current liabilities           |   | (128,648)
|Goodwill                      |   | 242,324  
|Total purchase price          | $ | 852,223  

- 29 -  Intangible asset is in relation to the acquired customer list with a useful life of 3 years.  The fair value of goodwill will be under the companys annual goodwill impairment testing staring in next year.  None of the goodwill is expected to be deductible for income tax purposes.  The unaudited pro forma information of the Company set forth below gives effect to the acquisition of Shanghai Heshili Broker Co. Limited as if it had been consummated as of the beginning of the applicable period. The unaudited pro forma information has been derived from the historical consolidated financial statement of the Company and of SHB.  The unaudited pro forma information is for illustrative purposes only.


|            |   |                        |   |          
|----------- | - | ---------------------- | - | ---------
|            |   | Year Ended December 31
|            |   | 2010                   |   | 2009     
|Net Revenue | $ | 5,318,442              | $ | 6,901,584
|Net Income  | $ | 1,476,492              | $ | 1,574,388

Note 9  Fair Value of Marketable Securities Investment and Investment Income  The following are the Companys investments owned and securities sold short by level within the fair value hierarchy at December 31, 2010 and 2009 are as follows:  AssetsFair valueFair value HierarchyDecember 31, 2010December 31, 2009Stocks$340,401$369,360Level 1 Unrealized loss of $40,029 and gain of $126,156 for the investments were recognized in the other comprehensive income for2010 and 2009, respectively.  All these gain and loss are related to the investments listed in the Hong Kong Stock Exchange.  December 31,December 31,Investment Income20102009Dividend from the publicly traded equity securities$11,084$9,820   Note 10  Loan Receivable  On July 27, 2010, the company subsidiary Andrew Liu & Company Limited (ALC) entered into a loan agreement and a mortgage with its client, HK Huajinyuan Shipping Co., Limited (HKHS).  Under the loan agreement and the mortgage, ALC will make available to HKHS an on demand loan facility in the principal amount of up to US$3,500,000.  The loan is interest bearing and secured by a vessel owned by HKHS.  The loan is payable in full at any time upon demand.  Furthermore, HKHS is required to perform, observe, and comply with certain covenants, terms and conditions including, but not limited to, the requirement to keep the vessel operationally seaworthy, fit for service and in compliance with all related laws and regulations such as ISM Code, the ISPS Code, the MARPOL and all other laws and regulations including all Environmental Laws and Environmental Authorizations.  Moreover, HKHS cannot create or permit to subsist any security interest over the vessel except certain conditions that are in relation to the ordinary course of business.  As of December 31, 2010, the loan has been fully repaid and recognized interest income of $87,500 in 2010.    - 30 -  Note 11  Due to Directors December 31,December 31,Due to directors consist of the following:20102009Andrew Liu Fu Kang$8,851$15,091John Liu Shou Kang145-$8,996$15,091  Due to director represents loans payable that are unsecured, non-interest bearing and have no fixed terms of repayment, therefore, deemed payable on demand.   Note 12  Stock-based Compensation  On June 1, 2010, the board of directors approved and the Company granted an award of 198,000 shares of restricted stock to certain key employees and directors of the Company.  The award was made pursuant to the 2010 Restricted Share Stock Compensation Plan as approved by the Companys Board of Directors.  Under the plan, a maximum of 500,000 common shares may be delivered in satisfaction of awards.  Key employees and directors are eligible to participate in the plan.  Each grant of restricted shares under the Plan is subject to certain terms and conditions such as the shares cannot be transferred during the restriction period and the shares will be forfeited if the employment is terminated by the holder or the Company.  Restricted stocks are granted at a strike price that is equal to the fair value of the Companys stock on the date of grant.  The aggregate value of this award was $310,860, as determined by multiplying the number of shares times the fair value of the Companys stock on June 1, 2010, the date of the grant award.  The fair value is based on discounted free cash flow analyses, which involve managements best estimate of future revenue, operation expenses, investing activities, and financing activities.  In the valuation, the free cash flow is projected for five years and is determined by using the companys historical figures such as revenue and operation expenses which are compounded annually with 5% growth rate.  Free cash flow occurring beyond the five-year projection period is assumed to be in perpetuity and determined by using the Perpetuity Growth Model in which the project net cash flow is divided by the risk-free rate.  The sums of the five-year free cash flow together with the perpetual free cash flow are then discounted by the risk-free rate.  As a result, the fair value of the Companys stock on the date of the grant award is $1.57 per share.  When determining the risk-free rate, Hong Kong unsecured long term loan rate, 7.25%, in effect at the time of grant is used in the calculation.  During 2010, the Company recognized $58,613 of stock-based compensation expense.   Note 13  Related Party Transaction  The Company rents office space in Hong Kong and Shanghai from companies owned by directors of the Company.  The relevant rent expenses consist of following:  December 31,December 31,20102009LocationLandlordHK Office Room 501 & 502AFortune Ocean Ltd$23,846$143,077HK Office Room 502BFortune Ocean Ltd7,69246,154Shanghai QuarterFortune Ocean and Andrew Liu Fu Kang30,76930,769Director (Andrew) QuarterFirst Pacific Development Ltd20,00020,000$82,307$240,000  - 31 -  Note 14  Income Taxes  The Company's effective tax rate for 2010 and 2009 was 20.08% and 17.36%, respectively.  The provisions for income taxes for 2010 and 2009 are summarized as follows:   Hong Kong only:20102009Current$399,272$315,128Deferred--$399,272$315,128  A reconciliation between the income tax computed at the U.S. statutory rate and the Companys provision for income tax is as follows:  20102009U.S. statutory rate34.00%34.00%Foreign income not recognized in the U.S.-34.00%-34.00%Miscellaneous permanent differences3.58%0.86%Hong Kong income tax rate16.50%16.50%Provision for income tax20.08%17.36%  There were no significant permanent or temporary differences.  Accounting for Uncertainty in Income Taxes  The Company adopted the provisions of Accounting for Uncertainty in Income Taxes on January 1, 2007.  The provisions clarify the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with the standard Accounting for Income Taxes, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The provisions of Accounting for Uncertainty in Income Taxes also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Based on the Companys evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements.  The Company may from time to time be assessed interest or penalties by major tax jurisdictions.  In the event it receives an assessment for interest and/or penalties, it will be classified in the financial statements as tax expense.    - 32 -  Note 15  Operating Leases  Future minimum lease payments for operating leases for the succeeding years consists of following:


|                                                                      |   |         |   |         |   |                     |   |        
|--------------------------------------------------------------------- | - | ------- | - | ------- | - | ------------------- | - | -------
|                                                                      |   | 2011    |   | 2012    |   | 2013 and thereafter |   | Total  
|                                                                      |   |         |   |         |   |                     |   |        
|Carmel Hill, Hong Kong (Director Quarter)                             | $ | 127,692 | $ | 63,846  | $ | -                   | $ | 191,538
|Room 501 and 502, Bank of America Tower, Hong Kong (Hong Kong Office) |   | 155,138 |   | 25,856  |   | -                   |   | 180,994
|Room 505, Bank of America Tower, Hong Kong (Hong Kong Office)         |   | 64,000  |   | -       |   | -                   |   | 64,000 
|Union Building, Shanghai, China (Shanghai Office)                     |   | 18,998  |   | -       |   | -                   |   | 18,998 
|Union Building, Shanghai, China (SHB Office)                          |   | 27,400  |   | -       |   | -                   |   | 27,400 
|Sino Plaza, Fuzhou (Fuzhou Office)                                    |   | 20,193  |   | 11,779  |   | -                   |   | 31,972 
|                                                                      | $ | 413,421 | $ | 101,481 | $ | -                   | $ | 514,902

The Company has six material operating lease commitments for its facilities.  The initial term of the lease arrangement for Director Quarter is two years beginning July 19, 2010 with a minimum lease commitment of $191,538.  For the Shanghai Office, the initial term of the lease is two years beginning July 3, 2009 with a minimum lease commitment of $18,998.  For the SHB Office, the initial term of the lease is one year beginning January 1, 2011 with a minimum lease commitment of $27,400.  All the lease arrangements mentioned above have no renewal option and rent holiday.  For the Hong Kong Office of Room 501 and 502, Bank of America Tower, the initial term of the lease is two years beginning March 1, 2010 with a minimum lease commitment of $180,994.  This lease arrangement has no rent holiday but have a renewal option that, when the lease is ended in February 2012, the company can renew the lease for two years (from March 1, 2012 to February 28, 2014) at the prevailing market rent.  For the Hong Kong Office of Room 505, Bank of America Tower, the initial term of the lease is two years beginning November 15, 2009 with a minimum lease commitment of $64,000.  This lease arrangement has a three-month rent free period from November 15, 2009 to February 14, 2010.  In addition, when the lease is ended in 2011, the company has an option to renew the lease for two years (from November 15, 2011 to November 14, 2013) at the prevailing market rent.  For the Fuzhou Office, the initial term of the lease is two years beginning August 1, 2010 with a minimum lease commitment of $31,972.  This lease arrangement has a one-month rent free period from August 1 to August 31, 2010.  In addition, the lease arrangement has no renewal option.   Note 16  Noncontrolling Interest  On February 1, 2010, the company subsidiary Chang An Consultants Ltd., declared dividends of approximately $192,000. The company has paid $76,923 to the noncontrolling shareholders.   Note 17  Subsequent Event  On February 25, 2011, the company subsidiary Chang An Consultants Ltd., declared dividends of$321,795. The company has paid $128,718 to the noncontrolling shareholders in February 2011.    - 33 -  Note 18  Commitments and Contingencies  The Company's business operations exist solely in the PRC and are subject to significant risks not typically associated with companies in North America and Western Europe.  These include risks associated with, among others, the political, economic and legal environments and foreign currency limitations.  The Company's results may thus be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies, laws, regulations, anti-inflationary measures, currency conversion and remittance limitation, and rates and methods of taxation, among other things.  - 34 -    ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  None.   ITEM 9A(T). CONTROLS AND PROCEDURES  Management's Annual Report on Internal Control over Financial Reporting  The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.  The Companys internal control over financial reporting is designed to provide reasonable assurance for the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.  Because of its inherent limitations (further discussed in next paragraphs below), internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  The Companys management assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2010.  In this assessment, the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework were used.  Based on our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2010.  Inherent Limitations in Control Systems  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.  As a result, our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures, or our internal control over financial reporting, will prevent all error and all fraud.  Evaluation of Disclosure on Controls and Procedures  The Company's management, with the participation of the chief executive officer and the chief financial officer, carried out an evaluation of the effectiveness of the design and operation of the Company's "disclosure, controls and procedures" (as defined in the Exchange Act Rules 13a-15(3) and 15-d-15(3) as of the end of the period covered by this annual report (the "Evaluation Date").  Based upon that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are designed to provide reasonable assurance of achieving the  - 35 -  objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of December 31, 2010 to provide reasonable assurance of the achievement of these objectives.  This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting.  Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.   Changes in Internal Control over Financial Reporting  There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) or any other factors during the quarter of the fiscal year ended December 31, 2010, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.    ITEM 9B. OTHER INFORMATION  None   PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  DIRECTORS AND OFFICERS  The directors and executive officers currently serving ALCO are as follows:  NameAgePositionDirector/Officer SinceAndrew Liu Fu Kang49President and Chairman of the Board2005John Liu Shou Kang50Director2005Colman Au Kwok Wai45Chief Financial Officer, Secretary2008  BIOGRAPHICAL INFORMATION  Mr. Andrew Liu Fu Kang, is the founder and Chairman of AL Marine and has been the Chairman and Chief Executive Officer of the Company since December 9, 2005.  He is responsible for the overall management, development, and strategic planning of AL Marine.  He also oversees certain key client accounts and is frequently consulted on insurance claims of a more complex nature.  Before establishing AL Marine, he worked for Richard Hogg International Adjusters in London and Stevens Elmslie & Co. in Hong Kong for a total of 6 years handling all aspects of shipowners rights under the hull policy and vis-a-vis third parties, such as general average and salvage, legal defense work and arbitrations.  He was awarded an honors degree in Naval Architecture & Shipbuilding from the University of Newcastle Upon Tyne, U.K, a Masters degree in Marine Law from Cardiff  - 36 -  University, U.K and a Diploma in International Trade Law from the City of London Polytechnic.  He passed the Common Professional Exams in Law from Manchester Polytechnic.  He is a member of the Chartered Insurance Institute and the Chartered Institute of Shipbrokers.  He is the brother of John Liu Shou Kang.  Mr. John Liu Shou Kang is a Director of AL Marine and has been a Director and Vice President of the Company since December 9, 2005.  He is responsible for the overall management of AL Marine, in particular, human resources and operational activities.  Prior to joining AL Marine in 1990, he worked in Sembawang Shipyard, Singapore for 2 years and was in charge of the supervision of all aspects of ship repairs including, design, conversion and costing.  He later worked in Sembawang Shipping Co., Singapore for another 4 years as manager in charge of operations including charter parties, litigation and Hull and P&I claims.  He was awarded an honors degree in Naval Architecture & Shipbuilding from the University of Newcastle Upon Tyne, U.K and a Masters degree in International Shipping from Plymouth University, U.K.  He is the brother of Andrew Liu Fu Kang.  Mr. Colman Au Kwok Wai is the Financial Controller of AL Marine and has been the Chief Financial Officer and Secretary of the Company since January 7, 2008.  He has worked for an accounting firm and a number of listed companies and multi-national corporations in Hong Kong and China and has over 15 years' experience in internal auditing, statutory auditing and accounting.  From September 2002 to November 2004, he was the Internal Audit Manager of Huawei Technology Co., Ltd, a China based multi-national corporation specializing in development, production and sales of communication equipment and solutions for telecom carriers, where he was responsible for performing risk assessments, preparing audit plans and conducing audit reviews on the operations of Huawei in China, Hong Kong and overseas.  From November 2004 to January 2008, he was the Senior Internal Audit Manager of Esquel Enterprises Limited, a Hong Kong based multi-national corporation with production facilities in China, Hong Kong and overseas producing premium cotton shirts for high-end brand names, where he was responsible for overseeing the internal audit function of the operations of Esquel in China and Hong Kong.  He obtained a Bachelor of Commerce degree in Accounting from the Curtin University of Technology in 1999 and a Master degree in Professional Accounting from the Hong Kong Polytechnic University in 2002.  He is a fellow member of the Association of Chartered Certified Accountants, a member of Hong Kong Institute of Certified Public Accountants, a certified information system auditor (CISA) of the Information Systems Audit and Control Association and a certified internal auditor (CIA) of the Institute of Internal Auditors.   COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT  Section 16(a) of the Securities Exchange Act of 1934, as amended, requires each of our officers and directors and each person who owns more than 10% of a registered class of our equity securities to file with the SEC an initial report of ownership and subsequent reports of changes in such ownership.  Such persons are further required by SEC regulation to furnish us with copies of all Section 16(a) forms (including Forms 3, 4 and 5) that they file.  Based solely on our review of the copies of such forms received by us with respect to fiscal year 2010, or written representations from certain reporting persons, we believe all of our directors and executive officers met all applicable filing requirements.    ITEM 11. EXECUTIVE COMPENSATION  The following table provides summary information concerning compensation awarded to, earned by, or paid to any of ALCOs officers and directors for all services rendered to ALCO and its consolidated subsidiaries, in all capacities for the fiscal years ended December 31, 2008, 2009 and 2010.  - 37 -


|                            |          |            |             |                  |                   |                                            |                                                                         |                            |                       
|--------------------------- | -------- | ---------- | ----------- | ---------------- | ----------------- | ------------------------------------------ | ----------------------------------------------------------------------- | -------------------------- | ----------------------
|Name and Principal Position | Year     | Salary ($) | Bonus  ($)  | Stock Awards ($) | Option Awards ($) | Non-equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total Compensation ($)
|Andrew Liu, CEO             | 2008     | $207,194   | $47,976     | --               | --                | --                                         | --                                                                      | $55,948 (2)                | $311,118              
|2009                        | $215,058 | $48,974    | --          | --               | --                | --                                         | $80,055 (3)                                                             | $344,087                  
|2010                        | $237,237 | $108,149   | $15,111 (1) | --               | --                | --                                         | $74,877 (4)                                                             | $435,374                  
|Colman Au, CFO              | 2008     | $90,947    | $7,566      | --               | --                | --                                         | --                                                                      | $1,538 (5)                 | $100,051              
|2009                        | $102,692 | $8,846     | --          | --               | --                | --                                         | $1,538 (6)                                                              | $113,076                  
|2010                        | $114,244 | $9,603     | $4,121(1)   | --               | --                | --                                         | $1,538 (7)                                                              | $129,506                  

(1) The figures reflect the shares of restricted stock of the company granted under the 2010 Restricted Share Stock Compensation Plan.  The amounts represent the proportionate amount of the total fair value of restricted stock recognized by the company as an expense in fiscal year 2010 for financial accounting purposes, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions.  The fair values of these awards and the amounts expensed in fiscal year 2010 were determined in accordance with Statement of ASC No. 820 Fair Value Measurements and Disclosures (ASC820).  (2) Includes expense reimbursement of $54,410 and Mandatory Provident Fund contributions of $1,538.  (3) Includes expense reimbursement of $78,517 and Mandatory Provident Fund contributions of $1,538.  (4) Includes expense reimbursement of $73,339 and Mandatory Provident Fund contributions of $1,538.  (5) Being Mandatory Provident Fund contributions of $1,538.  (6) Being Mandatory Provident Fund contributions of $1,538.  (7) Being Mandatory Provident Fund contributions of $1,538.  The Mandatory Provident Fund is a compulsory savings/retirement scheme for the residents of Hong Kong.  Most employees and employers are required to contribute monthly to schemes provided by government approved private organizations.  Contributions are based on a percentage of an employees salaries.  The contribution vests fully with the employee immediately upon payment into the scheme.  Director Compensation  The following table provides summary information concerning compensation awarded to, earned by, or paid to any of our directors for all services rendered to the Company in all capacities for the fiscal year ended December 31, 2010.  - 38 -


|           |                                        |                  |                   |                                            |                                                                         |                            |                   
|---------- | -------------------------------------- | ---------------- | ----------------- | ------------------------------------------ | ----------------------------------------------------------------------- | -------------------------- | ------------------
|Name       | Salary/Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total Compensation
|           |                                        |                  |                   |                                            |                                                                         |                            |                   
|Andrew Liu | $348,386                               | 15,111           | --                | --                                         | --                                                                      | $74,877                    | $435,374          
|John Liu   | $208,115                               | 15,111-          | --                | --                                         | --                                                                      | $ 56,918 (1)               | $280,144          

(1) Includes expense reimbursement of $55,380 and Mandatory Provident Fund contributions of $1,538  Our subsidiary, Andrew Liu & Company, has entered into written employment agreements with Andrew Liu and John Liu.  The agreements remain in effect until terminated by either party with three (3) months notice.  The agreement sets out the duties of the officers, their compensation (as stated above), and their benefits (20 days of vacation time, health insurance, 2 days of sick time per month, etc.).  Pursuant to the agreement, the officers cannot conduct marine insurance brokering or any other business conducted by the Company in the Hong Kong area for a period of two years after the termination of the employment agreement.    ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS  The following table sets forth, as of the date of this report, the stock ownership of each executive officer of ALCO, of all the executive officers and directors of ALCO as a group, and of each person known by ALCO to be a beneficial owner of 5% or more of its Common Stock.  Except as otherwise noted, each person listed below is the sole beneficial owner of the shares and has sole investment and voting power as to such shares.  No person listed below has any options, warrant or other right to acquire additional securities of ALCO, except as may be otherwise noted.


|                                                                                                                       |               |                 
|---------------------------------------------------------------------------------------------------------------------- | ------------- | ----------------
|Name                                                                                                                   | No. of shares | Percent of Class
|Andrew Liu, President and Chairman (1)
Flat 3, 24/F., Blk A, Viking Garden
42 Hing Fat Street, Hong Kong               | 6,203,668 (2) | 61.12%          
|John Liu, Director (1)
House No. 12, Carmel Hill, Stanley, Hong Kong                                                   | 2,553,935 (3) | 25.16%          
|Colman Au, Chief Financial Officer, Secretary (1)
Room 505, Bank of America Tower
12 Harcourt Road, Central, Hong Kong | 0 (4)         | 0%              
|All Officers and Directors as a group (3 in number)                                                                    | 8,757,603     | 86.28%          

(1) The person named is an officer, director, or both. (2) 49,500 shares of restricted stock of the company granted under the 2010 Restricted Share Stock Compensation Plan are excluded as the Share Certificate hadnt been issued as at the year-ended date. (3) 49,500 shares of restricted stock of the company granted under the 2010 Restricted Share Stock Compensation Plan are excluded as the Share Certificate hadnt been issued as at the year-ended date. (4) 13,500 shares of restricted stock of the company granted under the 2010 Restricted Share Stock Compensation Plan are excluded as the Share Certificate hadnt been issued as at the year-ended date.     - 39 -  ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE  Other than the related transactions mentioned in the Note 11 of the Notes to Consolidated Financial Statements, no officer, director, promoter, or affiliate of ALCO has, or proposes to have, any transactions and any direct or indirect material interest in any asset proposed to be acquired by ALCO through security holdings, contracts, options, or otherwise.    ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES  Audit-Related Fees  (1) The aggregate fee billed by MaloneBailey, LLP for audit of the Companys annual financial statements was $41,000 for the fiscal year ended December 31, 2010 and $39,000 for the fiscal year ended December 31, 2009.  The aggregate fees billed by MaloneBailey, LLP for the reviews of the Companys financial statements included in its quarterly reports on Form 10-Q during 2010 were $12,000 and Kempisty & Company, CPA (the former auditor) during 2009 were $14,500.  (2) MaloneBailey, LLP and Kempisty & Co, CPA did not bill the Company any amounts for assurance and related services that were related to its audit or review of the Companys financial statements during the fiscal years ending 2010.  Tax Fees  (3) The aggregate fees billed by MaloneBailey, LLP for tax compliance, tax advice and tax planning were $2,500 for the fiscal year ended December 31, 2009.  No aggregate fees for the fiscal year ended December 31, 2010 are accrued yet.  All Other Fees  (4) MaloneBailey, LLP and Kempisty & Co, CPA did not bill the Company for any products and services other than the foregoing during the fiscal year ended December 31, 2010.  Audit Committees Pre-approval policies and procedures  (5) ALCO, which is not yet publicly traded, does not have an audit committee.  The current board of directors functions as the audit committee.    - 40 -  PART IV   ITEM 15. EXHIBITS  The Exhibits listed below are filed as part of this Annual Report.  2.1 Agreement for Share Exchange dated November 22, 2005, by and among LOTUS CAPITAL CORP., a Nevada corporation, AL MARINE HOLDINGS LTD., a British Virgin Islands corporation, and the Shareholders of AL MARINE (herein incorporated by reference from report on Form 8-K for report dated November 22, 2005 and filed with the Securities and Exchange Commission on December 9, 2005).  3.1 Articles of Incorporation (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 6, 2005).  3.2 Bylaws (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 6, 2005).  10.1 Exclusive representative agreement between ALC and The Strike Club (herein incorporated by reference from the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on June 5, 2006).  10.2 Agreement between EduShipAsia Ltd. and the Institute of Chartered Shipbrokers appointing EduShipAsia Ltd. as ICSs exclusive agent in China (herein incorporated by reference from the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on June 5, 2006).  10.3 Employment Agreement between Andrew Liu & Company, Ltd. and Andrew Liu.  (herein incorporated by reference from the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on September 14, 2006)  10.4 Employment Agreement between Andrew Liu & Company, Ltd. and John Liu.  (herein incorporated by reference from the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on September 14, 2006)  31.1 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.  31.2 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.  32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     - 41 -  SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALCO, INC.(Registrant)  By: /s/ Andrew Liu, CEO and Chairman Date: March 30, 2011   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.  By: /s/ Andrew Liu, CEO and Chairman Date:  March 30, 2011  By: /s/ John Liu, Director Date:  March 30, 2011  By: /s/ Colman Au, Chief Financial Officer Date:  March 30, 2011    - 42 -