UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




WASHINGTON,
D.C. 20549




FORM
20-F


(Mark One)




 ̈
            REGISTRATION
      STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE
      ACT OF 1934





OR





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





For the
fiscal year ended December 31, 2008




OR





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




For the transition period from
___________ to ___________.





OR





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




Date of
event requiring this shell company report _________________________




For the transition period from
___________ to ___________.




Commission
file number: 000-53594




GOLDEN
GREEN ENTERPRISES LIMITED


(Exact
name of Registrant as specified in its charter)




Not
Applicable


(Translation
of Registrant’s name into English)




British Virgin
Islands


(Jurisdiction
of incorporation or organization)




No.
69 Huaibei Street, Longhai Middle Road


Zhengzhou,
China, 451191


(Address
of principal executive offices)





Securities
registered or to be registered pursuant to Section 12(b) of the
Act.





None





Securities
registered or to be registered pursuant to Section 12(g) of the Act.





Units


Ordinary
Shares, no par value


Warrants
to Purchase Ordinary Shares


(Title of
Class)




Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act.


None




Indicate
the number of outstanding shares of each of the issuer’s classes of capital or
common stock as of the close of the period covered by the annual report
(December 31, 2008): 100 ordinary shares.




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


 ̈ Yes  x No




If this
report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.


 ̈ Yes  xNo




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.


x Yes   ̈ No




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). o o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.




Large
accelerated filer  ̈Accelerated
filer  ̈Non-accelerated
filer x




Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:





U.S.
      GAAP x
              International
      Financial Reporting
                Standards
      as issued by the
                International
      Accounting Standards
                Board
       ̈
              Other
       ̈





If
“Other” has been checked in response to the previous question, indicate by check
mark which financial statement item the registrant has elected to
follow.





 ̈ Item
17       ̈ Item 18





If this
is an annual report, indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).


 ̈ Yes       x No





GOLDEN
GREEN ENTERPRISES LIMITED





ANNUAL
REPORT ON FORM 20-F





TABLE
OF CONTENTS





PagePART
      IITEM
      1.
                              IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
                              2ITEM
      2.
                              OFFER
      STATISTICS AND EXPECTED TIMETABLE
                              2ITEM
      3.
                              KEY
      INFORMATION
                              2ITEM
      4.
                              INFORMATION
      ON THE COMPANY
                              20ITEM
      4A.
                              UNRESOLVED
      STAFF COMMENTS
                              27ITEM
      5.
                              OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS
                              28ITEM
      6.
                              DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES
                              41ITEM
      7.
                              MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
                              48ITEM
      8.
                              FINANCIAL
      INFORMATION
                              51ITEM
      9.
                              THE
      OFFER AND LISTING
                              51ITEM
      10.
                              ADDITIONAL
      INFORMATION
                              52ITEM
      11.
                              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                              63ITEM
      12.
                              DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES
                              64PART
      IIITEM
      13.
                              DEFAULTS,
      DIVIDEND ARREARAGES AND DELINQUENCIES
                              64ITEM
      14.
                              MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITIES HOLDERS AND USE OF
      PROCEEDS
                              64ITEM
      15T.
                              CONTROLS
      AND PROCEDURES
                              64ITEM
      16A.
                              AUDIT
      COMMITTEE FINANCIAL EXPERT
                              65ITEM
      16B.
                              CODE
      OF ETHICS
                              65ITEM
      16C.
                              PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                              65ITEM
      16D.
                              EXEMPTIONS
      FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
                              66ITEM
      16E.
                              PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS
                              66ITEM
      16F.
                              CHANGE
      IN REGISTRANT’S CERTIFYING ACCOUNTANT
                              66ITEM
      16G.
                              CORPORATE
      GOVERNANCE
                              66PART
      IIIITEM
      17.
                              FINANCIAL
      STATEMENTS
                              66ITEM
      18.
                              FINANCIAL
      STATEMENTS
                              66ITEM
      19.
                              EXHIBITS
                              67




i


USE
OF CERTAIN DEFINED TERMS




Except as otherwise indicated by the
context, references in this annual report to:




·
            “Golden
      Green” “we,” “us,” or “our,” and the “Company,” are references to the
      combined business of Golden Green Enterprises Limited, a British Virgin
      Islands company, and its wholly-owned subsidiary, Wealth Rainbow
      Development Limited, or “Wealth Rainbow,” a Hong Kong company, and Wealth
      Rainbow’s wholly-owned PRC subsidiary, Henan Green Complex Materials Co.,
      Ltd., or “Henan Green.”




·
            “COAC,”
      are references to China Opportunity Acquisition Corp., a Delaware
      corporation that merged with and into Golden
  Green.




·
            “China”
      and “PRC,” are references to the People’s Republic of
    China;




·
            “BVI,”
      are references to the British Virgin
Islands;




·
            “Hong
      Kong,” are references to the Hong Kong Special Administrative Region of
      China;




·
            “RMB,”
      are references to Renminbi, the legal currency of
  China;




·
            “U.S.
      dollars,” “$” and “US$,” are to the legal currency of the United States;
      and




·
            “Securities
      Act,” are references to the Securities Act of 1933, as amended and
      references to “Exchange Act” are references to the Securities Exchange Act
      of 1934, as amended.




FORWARD-LOOKING
INFORMATION





This annual report contains
forward-looking statements and information relating to us that are based on the
current beliefs, expectations, assumptions, estimates and projections of our
management regarding our company and industry.  When used in this
annual report, the words “may”, “will”, “anticipate”, “believe”, “estimate”,
“expect”, “intend”, “plan” and similar expressions, as they relate to us or our
management, are intended to identify forward-looking
statements.  These statements reflect management's current view of us
concerning future events and are subject to certain risks, uncertainties and
assumptions, including among many others: our potential inability to achieve
similar growth in future periods as we did historically, a decrease in the
availability of our raw materials, the emergence of additional competing
technologies, changes in domestic and foreign laws, regulations and taxes,
changes in economic conditions, uncertainties related to China’s legal system
and economic, political and social events in China, a general economic downturn,
a downturn in the securities markets, and other risks and uncertainties which
are generally set forth under the heading, “Key information — Risk Factors” and
elsewhere in this annual report.  Should any of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described as anticipated,
estimated or expected in this annual report.





All forward-looking statements included
herein attributable to us or other parties or any person acting on our behalf
are expressly qualified in their entirety by the cautionary statements contained
or referred to in this section. Except to the extent required by applicable laws
and regulations, we undertake no obligations to update these forward-looking
statements to reflect events or circumstances after the date of this annual
report or to reflect the occurrence of unanticipated events.


1





PART I




ITEM
1.            IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS







Not applicable.





ITEM
2.            OFFER
STATISTICS AND EXPECTED TIMETABLE







Not applicable.





ITEM
3.            KEY
INFORMATION




Selected
Consolidated Financial Data





The following table presents selected
financial data regarding our business.  It should be read in
conjunction with our consolidated and unconsolidated financial statements and
related notes contained elsewhere in this annual report and the information
under Item 5, “Operating and Financial Review and Prospects.”  The
selected consolidated statement of income data for the fiscal years ended
December 31, 2007 and 2008 and the consolidated balance sheet data as of
December 31, 2007 and 2008 have been derived from the audited consolidated
financial statements of Golden Green that are included in this annual report
beginning on page F-1.  The selected statement of income data for the
fiscal year ended December 31, 2006 and the balance sheet data as of December
31, 2006 have been derived from the audited financial statements of Henan Green
that are included in this annual report beginning on page F-24. The
selected statement of income data for the fiscal years ended December 31, 2004
and 2005 and balance sheet data as of December 31, 2004 and 2005 have been
derived from the unaudited financial statements of Henan Green that are not
included in this annual report.





The consolidated financial statements
for the years ended December 31, 2007 and 2008 are prepared and presented in
accordance with generally accepted accounting principles in the United States,
or U.S. GAAP.  The selected financial data information is only a
summary and should be read in conjunction with the historical consolidated
financial statements and related notes of Golden Green and Henan Green contained
elsewhere herein.  The financial statements contained elsewhere fully
represent our financial condition and operations; however, they are not
indicative of our future performance.





YearsEndedDecember31,2004
                              (Henan
                              Green,
                              unaudited)
                            
                            
                            2005
                              (Henan
                              Green,
                              unaudited)
                            
                            
                            2006
                              (Henan
                              Green,
                              audited)
                            
                            
                            2007
                              (Consolidated,
                              audited)
                            
                            
                            2008
                              (Consolidated,
                              audited)(In thousands of U.S. Dollars, except number of shares and per share data)Statement of Income DataRevenue
                            
                            
                            45,530
                            
                            
                            
                            62,520
                            
                            
                            
                            99,017
                            
                            
                            
                            139,649
                            
                            
                            
                            196,264Operating
      income
                            
                            
                            6,413
                            
                            
                            
                            11,725
                            
                            
                            
                            23,893
                            
                            
                            
                            35,771
                            
                            
                            
                            49,594Net
      income before income taxes and minority interest
                            
                            
                            5,939
                            
                            
                            
                            11,568
                            
                            
                            
                            23,649
                            
                            
                            
                            35,072
                            
                            
                            
                            47,375Net
      income before minority interest (1)
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            23,650
                            
                            
                            
                            35,506Net
      income (1)(2)
                            
                            
                            2,189
                            
                            
                            
                            4,285
                            
                            
                            
                            15,879
                            
                            
                            
                            13,012
                            
                            
                            
                            21,585Weighted
      average ordinary common shares(3)(4)
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            30,000,000
                            
                            
                            
                            30,000,000Weighted
      average number of diluted ordinary shares(3)(4)
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            30,000,000
                            
                            
                            
                            30,000,000Basic
      earnings per share (1)(3)(4)
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            $
                            0.43
                            
                            
                            $
                            0.72Diluted
      earnings per share(1)(3)(4)
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            $
                            0.43
                            
                            
                            $
                            0.72Balance Sheet DataTotal
      current assets
                            
                            
                            40,841
                            
                            
                            
                            71,020
                            
                            
                            
                            68,822
                            
                            
                            
                            74,654
                            
                            
                            
                            94,019Total
      assets
                            
                            
                            49,157
                            
                            
                            
                            85,695
                            
                            
                            
                            85,782
                            
                            
                            
                            91,817
                            
                            
                            
                            115,376Total
      current liabilities
                            
                            
                            39,555
                            
                            
                            
                            71,533
                            
                            
                            
                            62,781
                            
                            
                            
                            60,119
                            
                            
                            
                            102,808Total
      liabilities
                            
                            
                            39,867
                            
                            
                            
                            72,051
                            
                            
                            
                            63,239
                            
                            
                            
                            60,273
                            
                            
                            
                            102,836Minority
      Interest(1)
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            N/A
                            
                            
                            
                            14,188
                            
                            
                            
                            0Stockholders’
      equity
                            
                            
                            9,290
                            
                            
                            
                            13,644
                            
                            
                            
                            22,543
                            
                            
                            
                            17,356
                            
                            
                            
                            12,540




2




(1)Henan
Green was acquired by Golden Green on October 21, 2008 and for reporting
purposes a 44.98% interest of Henan Green has been accounted for as a minority
interest prior to the date of acquisition during the years ended December 31,
2007 and 2008.  Net income and per share data have been calculated
after giving effect to the minority interest in such
periods.  Minority Interest was not accounted for during the years
ended December 31, 2004, 2005 and 2006 in respect of Henan Green.
 
 (2)We have
no discontinued operations, therefore net income and net income per share has
been provided in lieu of income from continuing operations and income from
continuing operations per share.
 
 (3)In
anticipation of the merger transaction with China Acquisition Opportunity
Corporation, Golden Green effectuated a recapitalization on March 13, 2009
pursuant which 29,999,900 newly issued ordinary shares were issued to Golden
Green’s then-current shareholders pro rata with their relative ownership
percentages.  Consequently, the foregoing table presents ordinary
shares outstanding (actual and diluted) and per share data (basic and diluted)
on a pro forma basis assuming that the recapitalization had already occurred at
all times during the periods presented.
  (4)Ordinary
shares outstanding (actual and diluted) and per share data (basis and diluted)
of Henan Green have been omitted for 2004, 2005 and 2006 because of differences
in the capital structures of Golden Green and Henan Green.  Presenting such
data in this report is not particularly helpful and could be misleading to
readers.




Exchange
Rate Information





The conversion of RMB into U.S. dollars
in this annual report is based on the noon buying rate in the city of New York
for cable transfers of RMB as certified for customs purposes by the Federal
Reserve Bank of New York. We make no representation that any RMB or U.S. dollar
amounts could have been, or could be, converted into U.S. dollars or RMB, as the
case may be, at any particular rate, the rates stated below, or at all. The PRC
government imposes controls over its foreign currency reserves in part through
direct regulation of the conversion of RMB into foreign exchange and through
restrictions on foreign trade.





The following table sets forth various
information concerning exchange rates between the RMB and the U.S. dollar for
the periods indicated.  These rates are provided solely for your
convenience and are not necessarily the exchange rates that we used in this
annual report or will use in the preparation of our periodic reports or any
other information to be provided to you.  The source of these rates is
the Federal Reserve Bank of New York.  As of July 10, 2009, the noon
buying rate was RMB6.8325 to US$1.00.





Noon
      Buying RateRenminbi
      per U.S. Dollar
                        
                        Average(2)
                        
                        
                        High
                        
                        
                        Low
                        
                        
                        Period-end2004(1)
                        
                        
                        8.2768
                        
                        
                        
                        8.2774
                        
                        
                        
                        8.2764
                        
                        
                        
                        8.27652005 (1)
                        
                        
                        8.1826
                        
                        
                        
                        8.2765
                        
                        
                        
                        8.0702
                        
                        
                        
                        8.07022006 (1)
                        
                        
                        7.9579
                        
                        
                        
                        8.0702
                        
                        
                        
                        7.8041
                        
                        
                        
                        7.80412007 (1)
                        
                        
                        7.5806
                        
                        
                        
                        7.8127
                        
                        
                        
                        7.2946
                        
                        
                        
                        7.29462008 (1)
                        
                        
                        6.9193
                        
                        
                        
                        7.2946
                        
                        
                        
                        6.7800
                        
                        
                        
                        6.8225January
      2009
                        
                        
                        6.8360
                        
                        
                        
                        6.8403
                        
                        
                        
                        6.8225
                        
                        
                        
                        6.8392February
      2009
                        
                        
                        6.8363
                        
                        
                        
                        6.8470
                        
                        
                        
                        6.8241
                        
                        
                        
                        6.8395March
      2009
                        
                        
                        6.8360
                        
                        
                        
                        6.8438
                        
                        
                        
                        6.8240
                        
                        
                        
                        6.8329April
      2009
                        
                        
                        6.8306
                        
                        
                        
                        6.8361
                        
                        
                        
                        6.8180
                        
                        
                        
                        6.8180May
      2009
                        
                        
                        6.8235
                        
                        
                        
                        6.8326
                        
                        
                        
                        6.8176
                        
                        
                        
                        6.8278June
      2009
                        
                        
                        6.8334
                        
                        
                        
                        6.8371
                        
                        
                        
                        6.8264
                        
                        
                        
                        6.8302July
      2009 (through July 10, 2009)
                        
                        
                        6.8325
                        
                        
                        
                        6.8342
                        
                        
                        
                        6.8312
                        
                        
                        
                        6.8325




3




(1)All
periods end December 31 of the stated year.





(2)Averages
for a period are calculated by using the average of the exchange rates on the
end of each month during the period.  Monthly averages are calculated
by using the average of the daily rates during the relevant period.





Capitalization
and Indebtedness





Not applicable.





Reasons
for the Offer and Use of Proceeds





Not applicable.





Risk
Factors




An
investment in our capital stock involves a high degree of risk. You should
carefully consider the risks described below, together with all of the other
information included in this annual report, before making an investment
decision. If any of the following risks actually occurs, our business, financial
condition or results of operations could suffer. In that case, the trading price
of our capital stock could decline, and you may lose all or part of your
investment.
  RISKS
RELATED TO OUR BUSINESS





Due
to our rapid growth in recent years, our past results may not be indicative of
our future performance so evaluating our business and prospects may be
difficult.




Our
business has grown and evolved rapidly in recent years as demonstrated by our
growth in sales revenue from approximately $139.6 million in 2007 to $196.3
million in 2008.  Our net income has grown from approximately $13.0
million in 2007 to approximately $21.6 million in 2008.  We may not be able
to achieve similar growth in future periods.  Therefore, our
historical operating results may not provide a meaningful basis for evaluating
our business, financial performance and prospects in the
future.  Moreover, our ability to achieve satisfactory operating
results at higher production and sales volumes is unproven.  You
should not rely on our past results or our historical rate of growth as an
indication of our future performance.





A
large percentage of our revenues are derived from sales to a limited number of
customers and our business will suffer if sales to these customers
decline.





We
currently sell high precision steel products to more than 20 major customers in
the Chinese domestic market.  For the fiscal years ended December 31,
2008 and 2007, sales revenues generated from our top 10 customers amounted to
45.5% and 47.1% of total sales revenues, respectively and sales to our largest
single customer for the same periods amounted to 10.0% and 15.2% of our total
sales revenues, respectively.  We do not enter into long-term
contracts with our customers and therefore cannot be certain that sales to these
customers will continue. The loss of any of our largest customers would likely
have a material negative impact on our sales revenues and business.




4




If
our customers which operate in highly competitive markets are willing to accept
substitutes in lieu of our products, our business and results of operations will
suffer.





Our
customers and other users of cold-rolled steel products operate in highly
competitive markets, which are becoming increasingly
cost-conscious.  Cold-rolled precision steel competes with other
materials, such as aluminum, plastics, composite materials and glass, among
others, for industrial and commercial applications. Customers have demonstrated
a willingness to substitute other materials for cold-rolled steel.  If
our customers increasingly utilize substitutes for cold-rolled steel products in
their operations, sales of our products will decline and our business and
results of operations will suffer.





We
may be unable to fund the substantial ongoing capital and maintenance
expenditures that our operations require.





Our
operations are capital intensive and our business strategy is likely to require
additional substantial capital investment.  Our growth strategy
includes increasing our annual production capacity, which was 250,000 tons
as of December 31, 2008, to 500,000 tons within the next 12 months and building
an additional manufacturing facility on 50 acres of land which we recently
acquired.  In the future, we may require additional capital for
building new production lines and acquiring new equipment as well as for
maintaining the condition of our existing equipment and complying with
environmental laws and regulation.  Sourcing external capital funds
for these purposes are key factors that have constrained and may in the future
constrain our growth, production capability and profitability.  There
can be no assurance that such capital will be available in sufficient amounts or
on terms acceptable to us or at all.   If we need to raise
capital by selling a substantial number of additional ordinary shares or
securities convertible into ordinary shares, this will cause dilution to the
holders of our ordinary shares and could also cause the market price of our
ordinary shares to decline.





A
downturn or negative changes in the highly volatile steel industry will harm our
business and profitability.





Steel
consumption is highly cyclical and generally follows general economic and
industrial conditions, both worldwide and in various smaller geographic areas.
Pricing can be volatile as a result of general economic conditions, labor costs,
competition, import duties, tariffs and currency exchange rates. The steel
industry has historically been characterized by excess world supply and
wide fluctuations in results of operations both in China and globally. This
has led to substantial price decreases during periods of economic weakness,
which have not been offset by commensurate price increases during periods of
economic strength.  Substitute materials are increasingly available
for many steel products, which may further reduce demand for
steel.  Additional overcapacity or the use of alternative products
could hurt our results of operations.





Our
revenues will decrease if there is less demand for the end product in which our
products are installed.





Our
finished steel products mainly serve as key components in food and packaging
materials, telecommunications cable and equipment, household decorations,
construction materials, and electrical appliance.  Therefore, we are
subject to the general changes in economic conditions affecting the food and
beverage, chemical, telecommunications, construction and household appliance
industry participants.  If our customers which operate in these
industries experience a downturn in their business or if they utilize
substitutes for our products in their manufacturing operations, demand for our
products and our business results will suffer.





Environmental
compliance and remediation could result in substantially increased capital
requirements and operating costs.





Steel
manufacturing and processing operations are subject to numerous Chinese
provincial and local laws and regulations relating to the protection of the
environment.  We are subject to regulations regarding emissions and
waste disposal and management.  These laws continue to evolve and are
becoming increasingly stringent. The ultimate impact of complying with such laws
and regulations is not always clearly known or determinable because regulations
under some of these laws have not yet been promulgated or are undergoing
revision. Our business and operating results could suffer if we were required to
increase our expenditures to comply with any new environmental regulations
affecting our operations.




5




Our
capital improvement and expansion plans require us to obtain significant capital
which may be unavailable to us on favorable terms or at all.





We plan
to expand our annual production capacity from 250,000 metric tons as of the end
of 2008 to 500,000 metric tons within the next 12 months in order to meet
expected demand for our products.  Our expansion plans may require us
to acquire new property or land use rights, expand existing buildings or
construct new buildings and procure additional highly specialized manufacturing
equipment.  Each of these activities will require considerable capital
and we expect that we will need external sources of financing to complete these
capital expansion projects.  To the extent that we finance our capital
expansion projects with debt financing, we may become subject to financial
covenants or operating covenants that restrict our ability to freely operate our
business or take actions that are desired by shareholders, such as the payment
of dividends.  If we elect to finance our capital expansion plans
through equity financing, our shareholders may experience dilution or may have
their voting or economic rights as shareholders subordinated to a senior class
of stock.  In either event, we may be unable to find external sources
of financing on favorable terms or at all.  Our failure to obtain
external financing for our capital expansion projects can severely impede our
growth plans and strategy and impair our revenue, earnings and overall financial
performance.





Our
level of indebtedness may make it more difficult for us to fulfill all of our
debt obligations and may reduce the amount of cash available for maintaining and
growing our operations, which could have an adverse effect on our
revenues.





Our total
debt under existing bank loans to the Company as of December 31, 2008 was
approximately $57.6 million.  This indebtedness and the incurrence of
any new indebtedness could (i) make it more difficult for us to satisfy and pay
our existing liabilities and obligations, which could in turn result in an event
of default, (ii) require us to dedicate a substantial portion of our cash flow
from operations to debt service payments, thereby reducing the availability of
cash for working capital, capital expenditures, acquisitions, general corporate
purposes or other purposes, (iii) impair our ability to obtain additional
financing in the future for working capital, capital expenditures, acquisitions,
general corporate purposes or other purposes, (iv) diminish our ability to
withstand a downturn in our business, the industry in which we operate or the
economy generally, (v) limit our flexibility in planning for, or reacting to,
changes in our business and the industry in which we operate, or (vi) place us
at a competitive disadvantage compared to competitors that have proportionately
less debt.  If we are unable to meet our debt service obligations, we
could be forced to restructure or refinance our indebtedness, seek additional
equity capital or sell assets. We may be unable to obtain financing or sell
assets on satisfactory terms, or at all, which could cause us default on our
debt service obligations and be subject to foreclosure on such
loans.  Additionally, we could incur additional indebtedness in the
future and, if new debt is added to our current debt levels, the risks above
could intensify.





We
face significant competition from competitors with greater resources, and we may
not have the resources necessary to successfully compete with them.





The steel
manufacturing and processing business is highly fragmented and competitive. We
compete with a large number of other steel manufacturers and processors in
China, on a region-by-region basis, and with foreign steel manufacturers, such
as Pasco Steel, on a world wide basis.  Our competitors are of various
sizes, some of which have more established brand names and relationships in
certain markets than we do.  We are not in direct competition with
China’s local state-owned steel giants because those companies concentrate on
the production of hot rolled steel.  As such, they are more often a
raw material supplier to us, rather than a competitor.  We are one of
a limited number of specialty precision cold-rolled steel producers in
China.  Differences in the type and nature of the specialty precision
steel products in China’s steel industry are relatively small and, coupled with
intense competition from international and local suppliers and customer price
sensitivity, competition can be fierce.  Our competitors may increase
their market share through pricing strategies that damage our
business.  Since our industry is capital intensive, our competitors
may be able to successfully compete with us if their financial resources, staff
and facilities are substantially greater than ours, placing us at a competitive
disadvantage to these larger companies.




6




Any
decrease in the availability, or increase in the cost, of raw materials could
materially reduce our earnings.





Our
business operations depend heavily on the availability of various raw materials
and energy resources, primarily steel coil, but also zinc, oil paint,
electricity and natural gas.  Steel coil has historically accounted
for approximately 90% of our total cost of sales.  The availability of
raw materials and energy resources may decrease and their prices may fluctuate
greatly.  We purchase a large portion of our raw materials from
Zhengzhou Zhongchu Materials Distribution Center and Henan Baoyuxin Technology
and Trading Co. Ltd., but we currently do not have long-term supply contracts
with any particular supplier to assure a continued supply of raw
materials.  While we maintain good relationships with these suppliers,
the supply of raw materials may nevertheless be interrupted on account of events
outside our control, which will negatively impact our operations.  If
these or any other important suppliers are unable or unwilling to provide us
with raw materials on terms favorable to us, we may be unable to produce certain
products.  This could result in a decrease in profit and damage to our
reputation in our industry.  So far we have been able to pass raw
material cost increases on to our customers.  However, if our raw
material and energy costs increase to such an extent that we cannot pass these
higher costs on to our customers in full or at all, our margins will
suffer.  Although we currently benefit from favorable pricing in some
of these supply contracts, if market prices for these raw materials decline, we
may not be able to take advantage of decreasing market prices, and our profit
margins may suffer.





We
produce a limited number of products and may not be able to respond quickly to
significant changes in the market or new market entrants.





Cold-rolled
specialty precision steel manufacturing is a relatively new industry in
China.  Previously, our customers which manufacture durable goods have
relied solely on imports from Japan, Korea, the European Union and the United
States.  We believe the average quality and standards of products of
China’s high precision steel industry lags behind international
standards.  While we offer more than 40 high precision steel products
and believe we have developed a nationally recognizable brand, there are many
other specialty precision steel products of similar nature in the
market.  We have not yet developed an internationally recognizable
brand for specialty steel products.   If there are significant
changes in market demand and/or competitive forces, we may not be able to change
our product mix or adapt our production equipment quickly enough to meet
customers’ needs.  Under such circumstances, our narrow band of
precision steel products and/or new market entrants may negatively impact our
financial performance.





Increased
imports of steel products into China could negatively affect domestic steel
demand and prices and reduce our profitability.





While
China’s steel production capability has increased rapidly in recent years, we
believe that domestic production continues to be insufficient to meet
demand.  As a result, China is expected to continue to import a
significant portion of its steel products. Foreign competitors may have lower
labor costs, and are often owned, controlled or subsidized by their governments,
which allows their production and pricing decisions to be influenced by
political and economic policy considerations as well as prevailing market
conditions.  Import levels may also be impacted by decisions of
government agencies, under trade laws.  Increases in future levels of
imported steel could negatively impact future market prices and demand levels
for our precision steel products.





While
virtually all of our operations, customers and sales are in China, some limited
administrative matters are geographically dispersed so any deterioration of
general business conditions in China may make it difficult or prohibitive to
continue to operate or expand our business.





Our
manufacturing operations are located in China, some of our administrative
offices are located in Hong Kong and a limited number of administrative matters
are handled in the BVI.  We have regulatory filing obligations in the
United States.  The geographical distances between our facilities create a
number of logistical and communications challenges, including time differences
and differences in the cultures in each location, which makes communication and
effective cooperation more difficult. In addition, because of the location of
the manufacturing facilities in China, our operations could be affected by,
among other things:





·
            economic
      and political instability in China, including problems related to labor
      unrest,


·
            lack
      of developed infrastructure,


·
            variances
      in payment cycles,


·
            currency
      fluctuations,


·
            overlapping
      taxes and multiple taxation issues,


·
            employment
      and severance taxes,


·
            compliance
      with local laws and regulatory
requirements,




7




·
            greater
      difficulty in collecting accounts receivable,
  and


·
            the
      burdens of cost and compliance with a variety of foreign
    laws.





Moreover,
inadequate development or maintenance of infrastructure in China, including
adequate power and water supplies, transportation, raw materials availability or
the deterioration in the general political, economic or social environment could
make it difficult, more expensive and possibly prohibitive to continue to
operate or expand our facilities in China.





Our
rapid expansion could significantly strain our resources, management and
operational infrastructure which could impair our ability to meet increased
demand for our products and hurt our business results.




To
accommodate our anticipated growth, we will need to expend capital resources and
dedicate personnel to implement and upgrade our accounting, operational and
internal management systems and enhance our record keeping and contract tracking
system. Such measures will require us to dedicate additional financial resources
and personnel to optimize our operational infrastructure and to recruit more
personnel to train and manage our growing employee base. If we cannot
successfully implement these measures efficiently and cost-effectively, we will
be unable to satisfy the demand for our products, which will impair our revenue
growth and hurt our overall financial performance.





We
will be at a competitive disadvantage if we cannot successful adapt to changing
technology and manufacturing techniques





The
successful implementation of our business strategy requires us to continuously
evolve our existing products and services and introduce new products and
services to meet customers’ needs.   We produce steel products
that are characterized by stringent performance and specification requirements
that mandate a high degree of manufacturing and engineering
expertise.  We believe that our customers rigorously evaluate our
services and products on the basis of a number of factors, including, but not
limited to:





·
            quality,


·
            price
      competitiveness,


·
            technical
      expertise and development
capability,


·
            innovation,


·
            reliability
      and timeliness of delivery,


·
            product
      design capability,


·
            operational
      flexibility,


·
            customer
      service, and


·
            overall
      management.





Our
success depends on our ability to continue to meet our customers’ changing
requirements and specifications with respect to these and other criteria. There
can be no assurance that we will be able to address technological advances or
introduce new designs or products that may be necessary to remain competitive
within the precision steel industry.





Our
production facilities are subject to risks of power shortages which may impair
our ability to meet our customers’ needs.





Our
manufacturing processes are extremely specialized and depend on critical pieces
of equipment and a constant availability of energy to power
them.  Many cities and provinces in China have suffered serious power
shortages in recent times, largely as a result of the growth and
commercialization of formerly rural regions of China. Many of the regional
grids do not have sufficient power generating capacity to fully satisfy the
increased demand for electricity driven by continual economic growth and
persistent hot weather. Local governments have occasionally required local
factories to temporarily shut down their operations or reduce their daily
operational hours in order to reduce local power consumption levels. To date,
our operations have not been affected by those administrative
measures.  While we have not experienced any severe or lengthy power
outages in the past, we do not have any back up power generation
systems.  However, there is a risk that we may be affected by those
administrative measures or power outages in the future, thereby causing material
production disruption and delay in delivery schedule. In such event, our
business, results of operation and financial conditions could be
damaged.




8




Unexpected
equipment failures may damage our business due to production curtailments or
shutdowns.





Highly
specialized machinery is used in our manufacturing processes which cannot be
repaired or replaced without significant expense and time delay. On
occasion, our equipment may be out of service as a result of unanticipated
failures which may result in plant shutdowns or periods of materially reduced
production. Interruptions in production capabilities will inevitably increase
production costs and reduce our sales and earnings. In addition to
equipment failures, our facilities are also subject to the risk of catastrophic
loss due to unanticipated events such as fires, explosions or adverse weather
conditions. Furthermore, any interruption in production capability may require
us to make large capital expenditures to remedy the situation, which could
have a negative effect on our profitability and cash flows. We do not have
business interruption insurance to cover losses as a result of equipment
failures. In addition, longer-term business disruption could result in a loss of
customers. If this were to occur, our future sales levels, and therefore our
profitability, could decline.





We
might fail to adequately protect our intellectual property and third parties may
claim that our products infringe upon their intellectual property.





As part
of our business strategy, we intend to accelerate our investment in new
technologies in an effort to strengthen and differentiate our product portfolio
and make our manufacturing processes more efficient.   Our
primary focus will be to develop new and better technologies to allow us to
manufacture higher valued-added products, such as chrome finished, zinc coated
and galvanized products. As a result, we believe that the protection of our
intellectual property will become increasingly important to our business.
Currently, we have one patent application pending. We expect to rely on a
combination of patents, trade secrets, trademarks and copyrights to provide
protection in this regard, but this protection might be inadequate. For example,
our pending or future patent applications might not be approved or, if allowed,
they might not be of sufficient strength or scope. Conversely, third parties
might assert that our technologies infringe their proprietary rights. In either
case, litigation could result in substantial costs and diversion of our
resources, and whether or not we are ultimately successful, the litigation could
hurt our business and financial condition.





We
face risks associated with future investments or acquisitions.





An
important component of our growth strategy is to invest in or acquire businesses
complementary to ours that will enable us, among other things, to expand the
products we offer to our existing target customer base, and that will provide
opportunities to expand into new markets. We may be unable to identify suitable
investment or acquisition candidates or to make these investments or
acquisitions on a commercially reasonable basis, if at all. If we complete an
investment or acquisition, we may not realize the anticipated benefits from the
transaction.  Integrating an acquired company or technology is
complex, distracting and time consuming, as well as a potentially expensive
process.  The successful integration of an acquisition would require
us to:





·
            integrate
      and retain key management, sales, research and development, and other
      personnel;


·
            incorporate
      the acquired products or capabilities into our offerings both from an
      engineering and sales and marketing
perspective;


·
            coordinate
      research and development efforts;


·
            integrate
      and support pre-existing supplier, distribution and customer
      relationships; and


·
            consolidate
      duplicate facilities and functions and combine back office accounting,
      order processing and support
functions.





The
geographic distance between the companies, the complexity of the technologies
and operations being integrated and the disparate corporate cultures being
combined may increase the difficulties of combining an acquired company or
technology.  Acquired businesses are likely to have different
standards, controls, contracts, procedures and policies, making it more
difficult to implement and harmonize company-wide financial, accounting,
billing, information and other systems.  Management’s focus on
integrating operations may distract attention from our day-to-day business and
may disrupt key research and development, marketing or sales
efforts.




9




Our
acquisition strategy also depends on our ability to obtain necessary government
approvals that may be required, as described under “Risks Related to Doing
Business in China”.  We may be unable to complete a business combination
transaction efficiently or on favorable terms due to complicated merger and
acquisition regulations implemented on September 8, 2006.





We
do not carry any business interruption insurance, product liability or recall
insurance or third-party liability insurance.





Operation
of our business and facilities involves many risks, including equipment
failures, natural disasters, industrial accidents, power outages, labor
disturbances, business interruptions, property damage, product liability,
personal injury and death.  We do not carry any business interruption
insurance or third-party liability insurance for our business to cover claims in
respect of product liability, personal injury or property or environmental
damage arising from accidents on our property or relating to our operations.
Therefore, our existing insurance coverage may not be sufficient to cover all
risks associated with our business. As a result, we may be required to pay for
financial and other losses, damages and liabilities, including those caused by
natural disasters and other events beyond our control, out of our own funds,
which could have a material adverse effect on our business, financial condition
and results of operations.





Henan
Green’s business will suffer if it loses its land use rights.





There is
no private ownership of land in China and all land ownership is held by the
government of China, its agencies, and collectives.  In the case of
land used for business purposes, land use rights can be obtained from the
government for a period up to 50 years, and are typically
renewable.  Land use rights can be transferred upon approval by the
land administrative authorities of China (State Land Administration Bureau) upon
payment of the required land transfer fee. Henan Green holds land use rights for
some of its occupied properties and leases the land and the building on which
its main facilities are located from third parties that it believes have proper
land use rights, but no assurance can be given that these land use rights will
be renewed or that our lessors will maintain their land use
rights.  The land use certificate relating to the land on which our
employee dormitory is located has expired and we are in the process of obtaining
a new land use permit for this property.  If  the land use
right certificates needed for our operations are determined by the government of
China to be invalid or if they are not renewed, or if we are unable to renew the
lease for our facilities when it expires in 2027, we may lose production
facilities or employee accommodations that would be difficult or impossible to
replace.  Should we have to relocate, our workforce may be unable or
unwilling to work in the new location and its operations will be disrupted
during the relocation. The relocation or loss of facilities could cause us to
lose sales and/or increase its costs of production, which would negatively
impact financial results.





If
we fail to maintain an effective system of internal control over financial
reporting, our ability to accurately and timely report our financial results or
prevent fraud may be adversely affected and  investor confidence and
the market price of our ordinary shares may be adversely impacted.





As
directed by Section 404 of the Sarbanes-Oxley Act of 2002, the Securities and
Exchange Commission, or the SEC, adopted rules requiring public companies to
include a report of management on the company’s internal controls over financial
reporting in their annual reports, including Form 20-F.  In addition, the
independent registered public accounting firm auditing a company’s financial
statements must also attest to and report on the effectiveness of the company’s
internal controls over financial reporting.  Under current SEC rules, we
will be required to include a management report and our independent registered
public accounting firm’s attestation report beginning with our annual report for
the fiscal year ending December 31, 2009.  Our management may conclude
that our internal controls over our financial reporting are not effective.
 Even if our management concludes that our internal controls over financial
reporting are effective, our independent registered public accounting firm may
issue a report that is qualified if it is not satisfied with our controls or the
level at which our controls are documented, designed, operated or reviewed, or
if it interprets the relevant requirements differently from us. Any of
these possible outcomes could result in an adverse reaction in the financial
marketplace due to a loss of investor confidence in the reliability of our
reporting processes, which could adversely impact the market price of our
ordinary shares.




10





Failure
to comply with the U.S. Foreign Corrupt Practices Act could subject us to
penalties and other adverse consequences.





We are
subject to the U.S. Foreign Corrupt Practices Act, which generally prohibits
United States companies from engaging in bribery or other prohibited payments to
foreign officials for the purpose of obtaining or retaining business. In
addition, we are required to maintain records that accurately and fairly
represent our transactions and have an adequate system of internal accounting
controls. Foreign companies, including some that may compete with us, are not
subject to these prohibitions, and therefore may have a competitive advantage
over us. Corruption, extortion, bribery, pay-offs, theft and other fraudulent
practices occur from time-to-time in the PRC, and our executive officers and
employees have not been subject to the U.S. Foreign Corrupt Practices Act prior
to the completion of our merger in March of 2009. While we intend to implement
measure to ensure compliance with the FCPA by all individuals involved with our
company, we can make no assurance that our employees or other agents will
not engage in such conduct for which we might be held responsible. If our
employees or other agents are found to have engaged in such practices, we could
suffer severe penalties and other consequences that may have a material adverse
effect on our business, financial condition and results of
operations.





We
rely heavily on our management team.





Our
executive management team has a specialized knowledge of steel markets and works
closely with our customers to provide products to exact
specifications.  Our Chairman and founder, Mr. Lu, has twenty-three
years experience in the steel industry in China.  In addition, the
executive management team has an average of fifteen years of industry
experience. Their long tenure with the company and the industry has enabled the
management team to build close relationships with suppliers and customers. The
expertise of management and technical innovation of the company give it a strong
competitive advantage.  The loss of Mr. Lu’s services or any of our
other management poses a risk to our business.





RISKS
RELATED TO DOING BUSINESS IN CHINA





Substantially all of our operating
assets are located in China and substantially all of our revenue will be derived fromouroperations in China so our
business, results of
operations and prospects are subject to the economic, political
and legal policies, developments and conditions in China.





The PRC’s
economic, political and social conditions, as well as government policies, could
impair our business.  The PRC economy differs from the economies of
most developed countries in many respects.  China’s GDP has grown
consistently since 1978 (National Bureau of Statistics of China). However,
we cannot assure you that such growth will be sustained in the future. If, in
the future, China’s economy experiences a downturn or grows at a slower rate
than expected, there may be less demand for spending in certain industries. A
decrease in demand for spending in certain industries could impair our ability
to remain profitable.  The PRC’s economic growth has been uneven, both
geographically and among various sectors of the economy. The PRC government has
implemented various measures to encourage economic growth and guide the
allocation of resources. Some of these measures benefit the overall PRC
economy, but may have a negative effect on us.  For example, our
financial condition and results of operations may be hindered by PRC government
control over capital investments or changes in tax regulations.





The PRC
economy has been transitioning from a planned economy to a more market-oriented
economy. Although in recent years the PRC government has implemented measures
emphasizing the use of market forces for economic reform, the reduction of state
ownership of productive assets and the establishment of sound corporate
governance in business enterprises, a substantial portion of productive assets
in China is still owned by the PRC government. In addition, the PRC government
continues to play a significant role in regulating industry development by
imposing industrial policies. It also exercises significant control over PRC
economic growth through the allocation of resources, controlling payment of
foreign currency-denominated obligations, setting monetary policy and providing
preferential treatment to particular industries or companies.




11




If
the China Securities Regulatory Commission, or CSRC, or another PRC regulatory
agency, determines that CSRC approval of our recent merger was required or if
other regulatory obligations are imposed upon us, we may incur sanctions,
penalties or additional costs which would damage our business





On August
8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the
Regulations on Mergers and Acquisitions of Domestic Companies by Foreign
Investors, which became effective on September 8, 2006. Under these regulations,
the prior approval of the CSRC is required for the overseas listing of offshore
special purpose vehicles that are directly or indirectly controlled by PRC
companies or individuals and used for the purpose of listing PRC onshore
interests on an overseas stock exchange.





On March
17, 2009, we completed a merger transaction with China Opportunity Acquisition
Corp., or COAC, which resulted in our current ownership and corporate
structure.  We believe, based on the opinion of the PRC legal counsel,
Jingtian & Gongcheng, Attorneys at Law, that CSRC approval was not required
for our merger transaction or for the listing and trading of our securities on a
trading market because we are not an offshore special purpose vehicle that is
directly or indirectly controlled by PRC companies or individuals. Although
the merger and acquisition regulations provide specific requirements and
procedures, there are still many ambiguities in the meaning of many
provisions.  Further regulations are anticipated in the future, but
until there has been clarification either by pronouncements, regulation or
practice, there is some uncertainty in the scope of the regulations and the
regulators have wide latitude in the enforcement of the regulations and approval
of transactions.  If the CSRC or another PRC regulatory agency subsequently
determines that the CSRC’s approval was required, we may face sanctions by the
CSRC or another PRC regulatory agency.  If this happens, these regulatory
agencies may impose fines and penalties on our operations in China, limit our
operating privileges in China, restrict or prohibit payment or remittance of
dividends paid by Henan Green, or take other actions that could damage our
business, financial condition, results of operations, reputation and prospects,
as well as the trading price of our securities.





If
the PRC imposes restrictions designed to reduce inflation, future economic
growth in the PRC could be severely curtailed which could hurt our business and
profitability.





While the
economy of the PRC has experienced rapid growth, this growth has been uneven
among various sectors of the economy and in different geographical areas of the
country. Rapid economic growth often can lead to growth in the supply of
money and rising inflation. In order to control inflation in the past, the
PRC has imposed controls on bank credits, limits on loans for fixed assets and
restrictions on state bank lending. Imposition of similar restrictions may
lead to a slowing of economic growth, a decrease in demand for our steel
products and generally damage our business and profitability.





Fluctuations
in exchange rates could harm our business and the value of our
securities.





The value
of our securities will be indirectly affected by the foreign exchange rate
between U.S. dollars and RMB and between those currencies and other currencies
in which our sales may be denominated. Because substantially all of our earnings
and cash assets are denominated in RMB and our financial results are reported in
U.S. dollars, fluctuations in the exchange rate between the U.S. dollar and the
RMB will affect our balance sheet and our earnings per share in U.S.
dollars.  In addition, appreciation or depreciation in the value of
the RMB relative to the U.S. dollar would affect our financial results reported
in U.S. dollar terms without giving effect to any underlying change in our
business or results of operations.  Fluctuations in the exchange rate
will also affect the relative value of any dividend we issue that will be
exchanged into U.S. dollars as well as earnings from, and the value of, any U.S.
dollar-denominated investments we make in the future.  Since July
2005, the RMB has no longer been pegged to the U.S. dollar. Although the
People’s Bank of China regularly intervenes in the foreign exchange market to
prevent significant short-term fluctuations in the exchange rate, the RMB may
appreciate or depreciate significantly in value against the U.S. dollar in the
medium to long term. Moreover, it is possible that in the future PRC authorities
may lift restrictions on fluctuations in the RMB exchange rate and lessen
intervention in the foreign exchange market.





Very
limited hedging transactions are available in China to reduce our exposure to
exchange rate fluctuations. To date, we have not entered into any hedging
transactions. While we may enter into hedging transactions in the future, the
availability and effectiveness of these transactions may be limited, and we may
not be able to successfully hedge our exposure at all. In addition, our foreign
currency exchange losses may be magnified by PRC exchange control regulations
that restrict our ability to convert RMB into foreign currencies.




12




Exchange
controls that exist in the PRC may limit our ability to utilize our cash flow
effectively.





We are
subject to the PRC’s rules and regulations on currency conversion. In the
PRC, the State Administration for Foreign Exchange, or SAFE, regulates the
conversion of the Renminbi into foreign currencies. Currently, foreign
investment enterprises, or FIEs, are required to apply to the SAFE for “Foreign
Exchange Registration Certificates for FIEs.”  We believe that we will
likely be an FIE as a result of our ownership of Henan Green. With such
registration certificates, which need to be renewed annually, FIEs are allowed
to open foreign currency accounts including a “basic account” and “capital
account.” Currency conversion within the scope of the “basic account,” such as
remittance of foreign currencies for payment of dividends, can be effected
without requiring the approval of the SAFE. However, conversion of currency in
the “capital account,” including capital items such as direct investment, loans
and securities, still require approval of the SAFE. We cannot assure you that
the PRC regulatory authorities will not impose further restrictions on the
convertibility of the Renminbi. Any future restrictions on currency exchanges
may limit our ability to use our cash flow for the distribution of dividends to
our shareholders or to fund operations it may have outside of the
PRC.





A
failure by our shareholders or beneficial owners who are PRC citizens or
residents in China to comply with certain PRC foreign exchange regulations could
restrict our ability to distribute profits, restrict our overseas and
cross-border investment activities or subject us to liability under PRC
laws.





Notice on
Issues Relating to Administration of Foreign Exchange in Fund-raising and
Reverse Investment Activities of Domestic Residents Conducted via Offshore
Special Purpose Companies, or Notice 75, was issued on October 21, 2005 by SAFE
(that replaced two previously issued regulations on January 24, 2005 and April
8, 2005, respectively) that requires approvals from, and registrations with, PRC
government authorities in connection with direct or indirect offshore investment
activities by PRC residents and PRC corporate entities. The SAFE regulations
require retroactive approval and registration of direct or indirect investments
previously made by PRC residents in offshore companies. In the event that a PRC
shareholder with a direct or indirect stake in an offshore parent company fails
to obtain the required SAFE approval and make the required registration, the PRC
subsidiaries of such offshore parent company may be prohibited from making
distributions of profit to the offshore parent and from paying the offshore
parent proceeds from any reduction in capital, share transfer or liquidation in
respect of the PRC subsidiaries. Further, failure to comply with the various
SAFE approval and registration requirements described above, as currently
drafted, could result in liability under PRC law for foreign exchange
evasion.





Although
SAFE issued an implementation Notice No. 106, or Notice 106, on May 29, 2007 to
our local branches or agencies, because of the uncertainty as to when and how
the new procedure and requirements will take effect or be enforced, and
uncertainty concerning the reconciliation of the new regulations with other
approval requirements, it remains unclear how these existing regulations, and
any future legislation concerning offshore or cross-border transactions, will be
interpreted, amended and implemented by the relevant government authorities.
Although we are committed to complying with the relevant rules, we cannot assure
you that we will never have shareholders or beneficial owners who are PRC
citizens or residents, or that such persons have always complied with and will
in the future make or obtain any applicable registrations or approvals required
by SAFE Circular 75, Notice 106 or other related regulations.  Failure by
such shareholders or beneficial owners to comply with SAFE Circular 75 and
Notice 106 could subject us to fines or legal sanctions, restrict our overseas
or cross-border investment activities, limit our subsidiary’s ability to make
distributions or pay dividends or affect our ownership structure, which could
adversely affect our business and prospects.





Because
Chinese law governs many of our material agreements, we may not be able to
enforce our rights within the PRC or elsewhere, which could result in a
significant loss of business, business opportunities or capital.





Chinese
law governs many of our material agreements, some of which may be with Chinese
governmental agencies. We cannot assure you that we will be able to enforce any
of our material agreements or that remedies will be available outside of the
PRC. The system of laws and the enforcement of existing laws and contracts
in the PRC may not be as certain in implementation and interpretation as in the
United States. The Chinese judiciary is relatively inexperienced in enforcing
corporate and commercial law, leading to a higher than usual degree of
uncertainty as to the outcome of any litigation. The inability to enforce or
obtain a remedy under any of our future agreements could result in a significant
loss of business, business opportunities or capital.




13




Our
management is unfamiliar with United States securities laws and will have to
expend time and resources becoming familiar with such laws which could lead to
various regulatory issues.





Many
members of our management team are not familiar with United States securities
laws and will have to expend time and resources becoming familiar with such
laws. This could be expensive and time-consuming and could lead to various
regulatory issues and a diversion of management attention, which may harm our
operations.





The
ability of our Chinese operating subsidiary to pay certain foreign currency
obligations, including dividends, is subject to restrictions.





Our
ability to pay dividends may be restricted due to the foreign exchange control
policies and availability of cash balances. Since substantially all of our
operations are conducted in China and a majority of our revenues are generated
in China, a significant portion of our revenue earned and currency received are
denominated in Renminbi.  The Chinese government imposes controls on
the convertibility of Renminbi into foreign currencies and, in certain cases,
the remittance of currency out of China. Renminbi is currently not a freely
convertible currency. Shortages in the availability of foreign currency may
restrict our ability to remit sufficient foreign currency to pay dividends, if
any, on our ordinary shares or otherwise satisfy foreign currency denominated
obligations. Under existing Chinese foreign exchange regulations, payments of
current account items, including profit distributions, interest payments and
expenditures from the transaction, can be made in foreign currencies without
prior approval from the State Administration of Foreign Exchange by complying
with certain procedural requirements. However, approval from appropriate
governmental authorities is required where Renminbi is to be converted into
foreign currency and remitted out of China to pay capital expenses such as the
repayment of bank loans denominated in foreign currencies.  The
Chinese government may also at its discretion restrict access in the future to
foreign currencies for current account transactions. If the foreign exchange
control system prevents us from obtaining sufficient foreign currency to satisfy
our currency demands, we may not be able to pay certain of our expenses as they
come due.  In addition, current regulations in China would permit
Henan Green to pay dividends to us only out of Henan Green’s accumulated
distributable profits, if any, determined in accordance with Chinese accounting
standards and regulations. In addition, Henan Green will be required to set
aside at least 10% (up to an aggregate amount equal to half of its registered
capital) of its accumulated profits each year. Such reserve account may not be
distributed as cash dividends.





If
any dividend is declared in the future and paid in a foreign currency, you may
be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you
will actually ultimately receive.





If you
are a U.S. holder, you will be taxed on the U.S. dollar value of your dividends
at the time you receive them, even if you actually receive a smaller amount of
U.S. dollars when the payment is in fact converted into U.S. dollars.
Specifically, if a dividend is declared and paid in a foreign currency, the
amount of the dividend distribution that you must include in your income as a
U.S. holder will be the U.S. dollar value of the payments made in the foreign
currency, determined at the conversion rate of the foreign currency to the U.S.
dollar on the date the dividend distribution is includible in your income,
regardless of whether the payment is in fact converted into U.S. dollars.
Thus, if the value of the foreign currency decreases before you actually convert
the currency into U.S. dollars, you will be taxed on a larger amount in U.S.
dollars than the U.S. dollar amount that you will actually ultimately
receive.





Our
business could be severely harmed if the Chinese government changes its
policies, laws, regulations, tax structure or its current interpretations of its
laws, rules and regulations relating to our operations in China.





Our manufacturing
facility is located in Henan, China and virtually all of our assets are located
in China.  We generate our sales revenue only from customers located
in China. Our results of operations, financial state of affairs and future
growth are, to a significant degree, subject to China’s economic, political and
legal development and related uncertainties. Our operations and results could be
materially affected by a number of factors, including, but not limited
to





·
            Changes
      in policies by the Chinese government resulting in changes in laws or
      regulations or the interpretation of laws or
  regulations,


·
            changes
      in taxation,


·
            changes
      in employment restrictions,


·
            restrictions
      on imports and sources of supply,


·
            import
      duties, and




14




·
            currency
      revaluation.





Over the
past several years, the Chinese government has pursued economic reform policies
including the encouragement of private economic activities and greater economic
decentralization. If the Chinese government does not continue to pursue its
present policies that encourage foreign investment and operations in China, or
if these policies are either not successful or are significantly altered, then
our business could be harmed. Following the Chinese government’s policy of
privatizing many state-owned enterprises, the Chinese government has attempted
to augment its revenues through increased tax collection. It also exercises
significant control over China’s economic growth through the allocation of
resources, controlling payment of foreign currency-denominated obligations,
setting monetary policy and providing preferential treatment to particular
industries or companies.  Continued efforts to increase tax revenues
could result in increased taxation expenses being incurred by us. Economic
development may be limited as well by the imposition of austerity measures
intended to reduce inflation, the inadequate development of infrastructure and
the potential unavailability of adequate power and water supplies,
transportation and communications. In addition, the Chinese government
continues to play a significant role in regulating industry by imposing
industrial policies.





The
Chinese laws and regulations which govern our current business operations are
sometimes vague and uncertain and may be changed in a way that hurts our
business.





China’s
legal system is a civil law system based on written statutes, in which system
decided legal cases have little value as precedents, unlike the common law
system prevalent in the United States. There are substantial uncertainties
regarding the interpretation and application of Chinese laws and regulations,
including but not limited to the laws and regulations governing our business, or
the enforcement and performance of our arrangements with customers in the event
of the imposition of statutory liens, death, bankruptcy and criminal
proceedings. The Chinese government has been developing a comprehensive
system of commercial laws, and considerable progress has been made in
introducing laws and regulations dealing with economic matters such as foreign
investment, corporate organization and governance, commerce, taxation and
trade. However, because these laws and regulations are relatively new, and
because of the limited volume of published cases and judicial interpretation and
their lack of force as precedents, interpretation and enforcement of these laws
and regulations involve significant uncertainties. New laws and regulations that
affect existing and proposed future businesses may also be applied
retroactively.   We are considered an FIE under Chinese
laws, and as a result, we must comply with Chinese laws and
regulations.  We cannot predict what effect the interpretation of
existing or new Chinese laws or regulations may have on our business. If
the relevant authorities find us to be in violation of Chinese laws or
regulations, they would have broad discretion in dealing with such a violation,
including, without limitation: levying fines; revoking our business and other
licenses; requiring that we restructure our ownership or operations; and
requiring that we discontinue any portion or all of our business.





A
slowdown or other adverse developments in the Chinese economy may materially and
adversely affect our customers’ demand for our services and our
business.





All of
our operations are conducted in China and all of our revenues are generated from
sales to businesses operating in China.  Although the Chinese economy has
grown significantly in recent years, such growth may not continue. we do not
know how sensitive we are to a slowdown in economic growth or other adverse
changes in Chinese economy which may affect demand for precision steel products.
 A slowdown in overall economic growth, an economic downturn or recession
or other adverse economic developments in China may materially reduce the demand
for our products and in turn reduce Our results of operations.





Controversies
affecting China’s trade with the United States could depress the price of our
securities.





While
China has been granted permanent most favored nation trade status in the United
States through its entry into the World Trade Organization, controversies and
trade disagreements between the United States and China may arise that
depress our the price of our securities. Political or trade
friction between the United States and China, whether or not actually affecting
our business, could also materially and adversely affect the prevailing market
price of our securities.




15




Imposition
of trade barriers and taxes may reduce our ability to do business
internationally, and the resulting loss of revenue could harm our
profitability.





We may
experience barriers to conducting business and trade in Our targeted emerging
markets in the form of delayed customs clearances, customs duties and tariffs.
In addition, we may be subject to repatriation taxes levied upon the exchange of
income from local currency into foreign currency, substantial taxes of profits,
revenues, assets and payroll, as well as value-added tax. The markets in which
we plan to operate may impose onerous and unpredictable duties, tariffs and
taxes on our business and products, and there can be no assurance that this will
not reduce the level of sales that we achieve in such markets, which would
reduce our revenues and profits.





There
can be no guarantee that China will comply with the membership requirements of
the World Trade Organization, which could leave us subject to retaliatory
actions by other governments and reduce our ability to sell our products
internationally.





China has
agreed that foreign companies will be allowed to import most products into any
part of China. In the sensitive area of intellectual property rights, China has
agreed to implement the trade-related intellectual property agreement of the
Uruguay Round. There can be no assurances that China will implement any or all
of the requirements of its membership in the World Trade Organization in a
timely manner, if at all. If China does not fulfill its obligations to the World
Trade Organization, we may be subject to retaliatory actions by the governments
of the countries into which it sell our products, which could render its
products less attractive, thus reducing revenues and profits.





The
implementation of the new PRC employment contract law and increases in the labor
costs in China may hurt our business and profitability.





A new
employment contract law became effective on January 1, 2008 in China. It
imposes more stringent requirements on employers in relation to entry into
fixed-term employment contracts, recruitment of temporary employees and
dismissal of employees. In addition, under the newly promulgated Regulations on
Paid Annual Leave for Employees, which also became effective on January 1, 2008,
employees who have worked continuously for more than one year are entitled to
paid vacation ranging from 5 to 15 days, depending on the length of the
employee’s service. Employees who waive such vacation entitlements at the
request of the employer will be compensated for three times their normal daily
salaries for each vacation day so waived. As a result of the new law and
regulations, our labor costs may increase. There is no assurance that disputes,
work stoppages or strikes will not arise in the future. Increases in the labor
costs or future disputes with our employees could damage our business, financial
condition or operating results.





The
Chinese government has been adopting increasingly stringent environmental,
health and safety protection requirements, which could hurt our
business.





The
continuance of our operations depends upon compliance with the applicable
environmental, health and safety, fire prevention and other regulations.
 Any change in the scope or application of these laws and regulations may
limit our production capacity or increase our cost of operation and could
therefore have an adverse effect on our business operations, financial condition
and operating results.  Our failure to comply with these laws and
regulations could result in fines, penalties or legal proceedings. There can be
no assurance that the Chinese government will not impose additional or stricter
laws or regulations, compliance with which may cause us to incur significant
capital expenditures, which it may not be able to pass on to our
customers.





Under
the New EIT Law, we may be classified as a “resident enterprise” of
China.  Such classification will likely result in unfavorable tax
consequences to us and our non-PRC shareholders.





China
passed a new Enterprise Income Tax Law, or the New EIT Law, and its implementing
rules, both of which became effective on January 1, 2008.  Under the
New EIT Law, an enterprise established outside of China with “de facto
management bodies” within China is considered a “resident enterprise,” meaning
that it can be treated in a manner similar to a Chinese domestic enterprise for
enterprise income tax purposes.  The implementing rules of the New EIT
Law define de facto management as “substantial and overall management and
control over the production and operations, personnel, accounting, and
properties” of the enterprise.




16




On April
22, 2009, the State Administration of Taxation issued the Notice Concerning
Relevant Issues Regarding Cognizance of Chinese Investment Controlled
Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria
of de facto Management Bodies, or the Notice, further interpreting the
application of the New EIT Law and its implementation non-Chinese enterprise or
group controlled offshore entities.  Pursuant to the Notice, an
enterprise incorporated in an offshore jurisdiction and controlled by a Chinese
enterprise or group will be classified as a “non-domestically incorporated
resident enterprise” if (i) its senior management in charge of daily operations
reside or perform their duties mainly in China; (ii) its financial or personnel
decisions are made or approved by bodies or persons in China; (iii) substantial
assets and properties, accounting books, corporate chops, board and shareholder
minutes are kept in China; and (iv) at least half of its directors with voting
rights or senior management often resident in China.  A resident
enterprise would be subject to an enterprise income tax rate of 25% on its
worldwide income and must pay a withholding tax at a rate of 10% when paying
dividends to its non-PRC shareholders.  However, it remains unclear as
to whether the Notice is applicable to an offshore enterprise incorporated by a
Chinese natural person.  Nor are detailed measures on imposition of
tax from non-domestically incorporated resident enterprises are
available.  Therefore, it is unclear how tax authorities will
determine tax residency based on the facts of each case.





We may be
deemed to be a resident enterprise by Chinese tax authorities. If the PRC
tax authorities determine that Golden Green is a “resident enterprise” for PRC
enterprise income tax purposes, a number of unfavorable PRC tax consequences
could follow. First, we may be subject to the enterprise income tax at a rate of
25% on our worldwide taxable income as well as PRC enterprise income tax
reporting obligations. In our case, this would mean that income such as interest
on financing proceeds and non-China source income would be subject to PRC
enterprise income tax at a rate of 25%. Second, although under the New EIT Law
and its implementing rules, dividends paid to us from our PRC subsidiaries would
qualify as “tax-exempt income,” we cannot guarantee that such dividends will not
be subject to a 10% withholding tax, as the PRC foreign exchange control
authorities, which enforce the withholding tax, have not yet issued guidance
with respect to the processing of outbound remittances to entities that are
treated as resident enterprises for PRC enterprise income tax purposes. Finally,
it is possible that future guidance issued with respect to the new “resident
enterprise” classification could result in a situation in which a 10%
withholding tax is imposed on dividends we pay to our non-PRC shareholders and
with respect to gains derived by our non-PRC shareholders from transferring our
shares. We are actively monitoring the possibility of “resident enterprise”
treatment for the 2008 tax year and are evaluating appropriate organizational
changes to avoid this treatment, to the extent possible.





If we
were treated as a “resident enterprise” by PRC tax authorities, we would be
subject to taxation in both the U.S. and China, and our PRC tax may not be
credited against our U.S. tax.





RISKS
RELATED TO THE MARKET FOR OUR ORDINARY SHARES GENERALLY





Our
ordinary shares, warrants and units are quoted on the Over-the-Counter Bulletin
Board, which may have an unfavorable impact on our share price and
liquidity.





Our
ordinary shares, warrants and units are traded on the Over-the-Counter Bulletin
Board under the symbols GGEEF, GGENF and GGETF, respectively.  The
Over-the-Counter Bulletin Board is a significantly more limited market than the
New York Stock Exchange or Nasdaq system.  As a result, our securities
are not actively traded and the price of our securities is volatile, and this
volatility may continue.  For instance, since the completion of our
merger transaction, the closing bid price of our ordinary shares, as reported on
the Over-the-Counter Bulletin Board ranged between $5.10 and
$6.50.  Numerous factors, many of which are beyond our control, may
cause the market price of our securities to fluctuate significantly. These
factors include:





·
            our
      earnings releases, actual or anticipated changes in our earnings,
      fluctuations in our operating results or our failure to meet the
      expectations of financial market analysts and
  investors;


·
            changes
      in financial estimates by us or by any securities analysts who might cover
      our stock;


·
            speculation
      about our business in the press or the investment
    community;


·
            significant
      developments relating to our relationships with our customers or
      suppliers;


17




·
            stock
      market price and volume fluctuations of other publicly traded companies
      and, in particular, those that are in the steel
  industry;


·
            customer
      demand for our products;


·
            investor
      perceptions of the steel industry in general and our company in
      particular;


·
            the
      operating and stock performance of comparable
  companies;


·
            general
      economic conditions and trends;


·
            major
      catastrophic events;


·
            announcements
      by us or our competitors of new products, significant acquisitions,
      strategic partnerships or
divestitures;


·
            changes
      in accounting standards, policies, guidance, interpretation or
      principles;


·
            loss
      of external funding sources;


·
            sales
      of our stock, including sales by our directors, officers or significant
      shareholders; and


·
            additions
      or departures of key personnel.





Securities
class action litigation is often instituted against companies following periods
of volatility in their stock price. This type of litigation could result in
substantial costs to us and divert our management’s attention and
resources.





Moreover,
securities markets may from time to time experience significant price and volume
fluctuations for reasons unrelated to operating performance of particular
companies. For example, from October until June 2009, securities markets in the
United States, China and throughout the world experienced an historically large
decline in share price. These market fluctuations may adversely affect the price
of our ordinary shares and other interests in our company at a time when you
want to sell your interest in us.





The
exercise of outstanding warrants may result in dilution.





Dilution
of the per share value of our ordinary shares could result from the exercise of
outstanding warrants which we assumed in connection with our merger with
COAC.  As of March 31, 2009, there were outstanding warrants to
purchase 16,066,667 ordinary shares at an exercise price of $5.00 per share as
well as an Underwriter’s Unit Purchase Option to purchase 600,000 units at an
exercise price of $6.60 per unit (which consists of 1 ordinary share and 2
warrants to purchase our ordinary shares with the warrants exercisable at $5.00
per ordinary share).  The warrants will expire and cease to be
exercisable on March 19, 2011.  When the exercise price of the
warrants is less than the trading price of our ordinary shares, exercise of the
warrant would have a dilutive effect on our shareholders.  The
possibility of the issuance of shares of our ordinary shares upon exercise of
the warrants could cause the trading price of our ordinary shares to
decline.  The impact of potentially issuing additional warrants can
have a dilutive effect on our shareholders.





Future
sales or perceived sales of our ordinary shares could depress our stock
price.





A
substantial number of shares of our ordinary shares held by our current
shareholders are freely tradable.  If the holders of these shares were to
attempt to sell a substantial amount of their holdings at once, the market price
of our ordinary shares could decline. Moreover, the perceived risk of this
potential dilution could cause shareholders to attempt to sell their shares and
investors to short the ordinary shares, a practice in which an investor sells
shares that he or she does not own at prevailing market prices, hoping to
purchase shares later at a lower price to cover the sale. As each of these
events would cause the number of shares of our ordinary shares for sale to
increase, our ordinary shares market price would likely further
decline.





We
do not intend to pay dividends on shares of our ordinary shares for the
foreseeable future.





Prior to
our March 2009 merger with COAC, our operating subsidiary, Henan Green, declared
and paid dividends of $23.2 million and $8.9 million in 2008 and 2007,
respectively.  Notwithstanding Henan Green’s past history of making
dividend payments, we intend to retain any future earnings to fund the operation
and expansion of our business and, therefore, we do not anticipate paying cash
dividends on shares of our ordinary shares in the foreseeable
future.


18





We
are a “foreign private issuer,” and have disclosure obligations that are
different than those of other U.S. domestic reporting companies so you should
not expect to receive the same information about us at the same time as a U.S.
domestic reporting company may provide.





We are a
foreign private issuer and, as a result, we are not subject to certain of the
requirements imposed upon U.S. domestic issuers by the SEC. For example, we
are not required to issue quarterly reports or proxy
statements.  Through the fiscal year ending December 31, 2010, we are
allowed six months to file our annual report with the SEC and thereafter must
file our annual report within four months of our fiscal year end.  We
are not required to disclose certain detailed information regarding executive
compensation that is required from U.S. domestic issuers. Further, our directors
and executive officers are not required to report equity holdings under Section
16 of the Securities Act.  As a foreign private issuer, we are also
exempt from the requirements of Regulation FD (Fair Disclosure) which,
generally, are meant to ensure that select groups of investors are not privy to
specific information about an issuer before other investors. We are, however,
still subject to the anti-fraud and anti-manipulation rules of the SEC, such as
Rule 10b-5.  Since many of the disclosure obligations required of us
as a foreign private issuer are different than those required by other
U.S. domestic reporting companies, our shareholders should not expect to
receive information about us in the same amount and at the same time as
information is received from, or provided by, other U.S. domestic reporting
companies. We are liable for violations of the rules and regulations of the SEC
which do apply to us as a foreign private issuer. Violations of these rules
could affect our business, results of operations and financial
condition.





You
may have difficulty enforcing judgments obtained against us.





We are a
BVI company and substantially all of our assets are located outside of the
United States. Virtually all of our assets and a substantial portion of our
current business operations are conducted in the PRC. In addition, almost
all of our directors and officers are nationals and residents of countries other
than the United States. A substantial portion of the assets of these persons are
located outside the United States. As a result, it may be difficult for you to
effect service of process within the United States upon these persons. It
may also be difficult for you to enforce in U.S. courts judgments obtained
in U.S. courts based on the civil liability provisions of the
U.S. federal securities laws against us and our officers and directors,
many of whom are not residents in the United States and whose assets are located
in significant part outside of the United States. In addition, there is
uncertainty as to whether the courts of the British Virgin Islands or the PRC
would recognize or enforce judgments of U.S. courts against us or such
persons predicated upon the civil liability provisions of the securities laws of
the United States or any state.  In addition, it is uncertain whether such
British Virgin Islands or PRC courts would be competent to hear original actions
brought in the British Virgin Islands or the PRC against us or such persons
predicated upon the securities laws of the United States or any
state.





Because
we are incorporated under the laws of the BVI, it may be more difficult for our
shareholders to protect their rights than it would be for a shareholder of a
corporation incorporated in another jurisdiction.





Our
corporate affairs are governed by our Memorandum and Articles of Association and
by the BVI Companies Act, 2004 (No. 16 of 2004) of the BVI. Principles of law
relating to such matters as the validity of corporate procedures, the fiduciary
duties of management and the rights of our shareholders differ from those that
would apply if we were incorporated in the United States or another
jurisdiction.  The rights of shareholders under BVI law are not as
clearly established as are the rights of shareholders in many other
jurisdictions.  Under the laws of most jurisdictions in the United
States, majority and controlling shareholders generally have certain fiduciary
responsibilities to the minority shareholders. Shareholder action must be taken
in good faith, and actions by controlling shareholders which are obviously
unreasonable may be declared null and void. BVI law protecting the interests of
minority shareholders may not be as protective in all circumstances as the law
protecting minority shareholders in US jurisdictions.  In addition,
the circumstances in which a shareholder of a BVI company may sue the company
derivatively, and the procedures and defenses that may be available to the
company, may result in the rights of shareholders of a BVI company being more
limited than those of shareholders of a company organized in the
US.  Furthermore, our directors have the power to take certain actions
without shareholder approval which would require shareholder approval under the
laws of most US jurisdictions.  The directors of a BVI corporation,
subject in certain cases to court approval but without shareholder approval, may
implement a reorganization, merger or consolidation, the sale of any assets,
property, part of the business, or securities of the corporation.  The
ability of our board of directors to create new classes or series of shares and
the rights attached by amending our Memorandum of Association and Articles of
Association without shareholder approval could have the effect of delaying,
deterring or preventing a change in our control without any further action by
the shareholders, including a tender offer to purchase our ordinary shares at a
premium over then current market prices. Thus, our shareholders may have more
difficulty protecting their interests in the face of actions by our board of
directors or our controlling shareholders than they would have as shareholders
of a corporation incorporated in another jurisdiction.


19






ITEM
      4.
            INFORMATION
      ON THE COMPANY




A.
History and Development of the Company





General





We are a
BVI company that was incorporated on March 11, 2008 under the BVI Business
Companies Act, 2004.  We were incorporated solely for the purpose of
acquiring the issued share capital of Wealth Rainbow.  Our registered
office is Palm Grove House, PO Box 438, Road Town, Tortola, BVI and our
registered agent is Equity Trust (BVI) Limited of Palm Grove House, PO Box 438,
Road Town, Tortola, BVI.  Our
business operations are conducted through our wholly-owned indirect subsidiary,
Henan Green.Our principal executive offices are located at No. 69
Huaibei Street, Longhai Middle Road, Zhengzhou, Henan Province,
China.  Our telephone number is (86) 371-6897-0951.





On March 17, 2009, we completed a
business combination transaction with China Opportunity Acquisition Corp., or
COAC, which resulted in our current ownership and corporate
structure.





China Opportunity Acquisition Corp.
was incorporated in Delaware on August 7, 2006 as a blank check company whose
objective was to acquire an operating business with its principal operations
located in China.  All business activity conducted by COAC from its
inception on August 7, 2006 until our merger with COAC on March 17, 2009 related
its formation, initial public offering and search for a business combination
partners a special purposes acquisition company, or SPAC.  On March
26, 2007, COAC consummated its initial public offering in which it raised
approximately $41.4 million through the sale of its capital stock and,
thereafter, its primary objective was to complete a business combination
transaction prior to March 20, 2009.





On November 12, 2008, COAC entered
into an Agreement of Merger and Plan of Reorganization, or the Merger Agreement,
with Golden Green, Wealth Rainbow, Henan Green and the shareholders of Golden
Green pursuant to which COAC merged with and into Golden Green with Golden Green
being the surviving corporation thereby implementing our
current corporate structure.





Upon completion of the merger, the
three shareholders of Golden Green owned 30,000,000 of our ordinary shares and
the holders of ordinary shares of COAC received 2,245,723 of our ordinary
shares.  In addition, the holders of the existing COAC warrants and
units received like securities that are exercisable or exchangeable into our
securities.   In addition, we are obligated under the Merger
Agreement to issue an aggregate of 1,000,000 of our ordinary shares to certain
of our shareholders, Oasis Green Investments Limited, Plumpton Group Limited,
and Honest Joy Group Limited for each of the years ending on December 31, 2009,
2010 and 2011 in which Henan Green, has net after tax income that equals or
exceeds the target specified for such year in the merger agreement ($45 million,
$60 million and $80 million, respectively).  However, we are currently
in the process of renegotiating the after tax income targets with the
aforementioned shareholders because COAC had less cash at the closing of the
merger than the originally expected, which could potentially cause us to delay
our capital expansion plans and modestly slow our growth rate.





Upon completion of the merger
transaction, we succeeded to foreign private issuer status under applicable
securities laws and the individuals who currently comprise our Board of
Directors were so appointed.





B. Business Overview





We are one of the leading private
manufacturers of cold-rolled specialty steel products in China.  We
utilize a variety of processes and technological methodologies to convert raw
steel manufactured by third parties into premium, high-precision,
cold-rolled steel products, such as steel sheets and plates, carbon steel, low
alloy steel, stainless steel strips and composite metal strips.


20




Our products are manufactured from
steel substrate of cold-rolled or hot-rolled pickled coils and made to extreme
and precise specifications and tolerances in terms of strength, flexibility,
thinness and width, shape, surface and finish based on the needs of our
customers.  Our finished steel products range from 0.05 mm to 0.25mm
in thinness and can be produced in varying widths of up to 650mm.  We
are also constructing an additional manufacturing facility to expand our ability
to produce finished steel products with custom coatings and finishes, such as
chrome, zinc coated or galvanized steel products.





Our finished steel products are used as
components in a large variety of downstream goods, such as electrical
appliances, construction materials, telecommunications cable and equipment,
chemical and food packaging products and military equipment.  Most of
our products are sold to customers who operate primarily in the food and
packaging, telecommunications, decoration materials and electrical appliance
industries.





China is our principal market with
domestic sales accounting for all of our sales revenue in 2007 and
2008.  Our products are sold to China-based customers located in the
eastern and coastal areas of China, including Guangdong, Jiansu, Shanghai,
Shandong, Liaoning, Shaanxi and Sichuan.  We sell our products using
our own sales staff that has been organized into a diversified sales network
that covers many provinces and regions in China, allowing us to broadly and
effectively market our products and services to customers.  In the high
precision, cold-rolled steel product segment, we believe that we have
approximately 9.35% of the domestic market share in China.  We believe
that our focus on quality allows us to command prices for our products that are
3% to 5% higher than our other Chinese competitors.  We can
effectively compete with our international competitors in China by selling our
products at lower prices due to our knowledge of the domestic market, lower
shipping and labor costs and faster delivery times.





Our revenue increased from $45.5
million in 2004 to $62.5 million in 2005, $99.0 million in 2006, $139.6 million
in 2007 and $196.3 million in 2008, representing a compound annual growth rate
(CAGR) of approximately 44.1%. We believe that these significant increases
reflect our success in expanding our production lines and increasing market
penetration. We plan to broaden our product capacity and mix by introducing new
production lines and improve our profit margin by introducing higher
valued-added products such as zinc coated or galvanized products.





Our primary PRC manufacturing facility,
which is located in Zhengzhou, Henan Province.  As of December 31,
2008, we operated six sets of cold-rolled steel production lines and two
auxiliary acid pickling lines with an annual production capacity of
approximately 250,000 metric tons of finished products.  In 2006, 2007
and 2008, our capital expenditures totaled $4.1 million, $2.3 million and $6.6
million, respectively.  In the past, our capital expenditures were
used primarily to expand existing production capacity.  We estimate
that our capital expenditures in 2009 will range from approximately $11.0
million to $16.0 million.  We submitted an application and obtained an
approval from the local government for a plan to expand overall capacity to
500,000 metric tons within the next 12 months and expect that the addition of
this new production will help the further growth of revenue in 2009 and
beyond.





Our
Industry





The global steel industry is a large,
cyclical and highly competitive industry whose overall performance is closely
tied to the global economy. Historically, steel prices have increased during
periods of overall economic growth and decreased during recessionary periods.
 Growth in the global steel industry has been driven primarily by economic
development in the Asia-Pacific region and increased commercial activity in
Europe over the last five years. The Asia-Pacific area is the largest steel
production region, accounting for approximately 51% of the global market’s steel
production value. Europe accounts for approximately 29.6% of the market
value.





China is the largest steel producing
country with more than four times the steel output of Japan, the second largest
producer.  According to China Steel Industry Statistical Book, 2007
version, China produced 565 million metric tons of steel products in
2007.  Globally, the demand for steel increased 6.8% in 2007 and was
expected to increase the same amount in 2008 according to the World Steel
Association.  China’s demand for steel rose 11.4% in 2007 and
approximately 11.5% in 2008, despite the global economic
slowdown.  China is the largest consumer of steel, requiring about 35%
of the world output of steel. It is expected that Asia, led by China, will
continue as a world largest consumer of steel through 2017 according to the
Global Steel Industry Outlook published by Eurostrategy
Consultants.


21




The growth of the steel market in
China has grown in tandem with the growth in overall economic activity in China,
but the expansion rate of steel industry is well above the growth rate of the
overall Chinese economy.  Similar to the global steel market, the rate
of growth in the Chinese steel market continues to increase, but at a decreasing
growth rate due to oversupply in certain segments of the marketplace,
particularly the low- and middle-grade segments.





Steel products are generally
categorized as low-end (long products such as pipes, tubes, wires and rods) and
high-end (flat products such as hot-rolled steel or cold-rolled steel
sheets).  We believe that approximately 65% of China’s steel producers
manufacture low-end and middle-grade products and approximately 35% manufacture
high-end high value cold-rolled steel sheets.  We operate in the
high-end segment of this market as we produce and sell high precision
cold-rolled steel products.





Notwithstanding the oversupply trend
in the low-and middle-grade steel segments, the demand in China for high-end
products that utilize steel as a component, such as the steel products we
produce, still exceeds the supply in China. According to China Steel
Industry Statistical Book, 2007 version, total domestic consumption of
cold-rolled plates amounts to approximately 30 million metric tons. The
consumption of the cold-rolled products with width above 1,000mm, which are
generally called wide plates, amount to 23.7 million metric tons, whereas the
products with width below 1,000 mm and with thinness up to 1.5mm, which are
generally called narrow plates, amount to approximately 6.2 million metric tons.
Our current products are up to 650mm in width and therefore categorized as
narrow plates. The cold-rolled products can also be measured by thinness. Among
the narrow plates, products with thinness below 0.3mm are called ultra-thin
products, and this is where our product line resides (Our current product widths
range from 0.05mm to 0.25mm). China consumes approximately 2 million metric tons
of these ultra-thin steel products annually. Based on our 2007 volume and
figures in China Steel Industry Statistical Book, 2007 version, we believe we
supply approximately 9.35% of the market for ultra-thin cold-steel products in
China. In 2006, the Chinese government issued the industrial structure reform
directive for controlling low-end production. We believe that this directive
will have a positive impact on our business.





Like most marketplaces, there are
various grades of products within the steel industry. We produce high-end
steel products, with extreme thinness and specifications, using an advanced
production technology that meets requirements and specifications of our
customers.  Due to the specialized nature of high-end steel products,
they have higher selling prices and a greater profit margin.





Continued strong demand in China
for electrical appliances, telecommunications equipment, microelectronics,
packaging materials and containers, has required and is expected to continue to
require increasing quantities of high precision steel products.





Cold-rolled specialty precision steel
is a relatively new industry in China and manufacturers of products that use
specialty precision steel products have traditionally imported precision steel
products from Japan, Korea, the European Union and the United States.
Cold-rolled steel products represent hot-rolled de-scaled (pickled) steel coils,
which are used as raw materials in the precision steel industry, are processed
by cold reduction through a cold-rolling mill to the desired thinness. The
process does not involve heating and the primary feature of cold reduction is to
reduce the thickness of the steel coils. However, because the cold reduction
operation induces very high strains (work hardening) into the steel sheet, the
precision steel sheet not only becomes thinner, but also becomes much harder,
less ductile and very difficult to form. Thus, cold-reduced steel products are
annealed (heated to high temperatures) to become soft and formable. Cold rolled
sheet products are used in a wide variety of such end applications as appliances
(refrigerators, washers, dryers, and other small appliances), automobiles
(exposed as well as unexposed parts), electric motors and bathtubs, food and
packaging. Cold rolled sheet products are used in these and many other areas of
manufacturing.





In addition, China is a large
architectural material manufacturer. Given that a significant portion of China’s
GDP is driven by fixed asset investment, it is expected that the market for
high-end construction steel will grow, which will result in a large consumption
of high-end coated steel. We have already started the process of expanding our
capacity into coated steel products.


22




Several characteristics about the
coated steel markets and production in China are noteworthy:





·
            Despite the over-expansion of
      low and medium-end coated steel production, the high-end coated steel
      products are under-supplied.  Although low and medium-end
      coated steel production capacities have over expanded and the total supply
      has recently outpaced demand, high-end coated steel products in China
      remain in short supply and China continues to rely, in a significant part,
      on imports. Since high-end coated steel products require advanced
      technology and capital-intensive equipment, most Chinese manufactures are
      not technically capable of producing high-end coated steel
      products.





·
            The coated steel market is
      highly fragmented. There is no significant market leader in
      the Chinese steel industry. Most manufacturers are small-scale private
      companies operating with out-of-date equipment and technology. Large
      state-owned enterprises are the main manufacturers; however, only a few of
      them can produce high-end coated steel
products.





·
            CapitalIntensive Industry
      Segment.Due to the nature of the high-end steel
      products industry, there are significant barriers to entry for new
      players. The steel industry is capital-intensive. Companies in this
      industry must maintain large and advanced pieces of equipment that are
      used in the manufacturing process and that require considerable initial
      investment, maintenance and repair
expenses.





Our
Competitive Strengths





We
believe that the following competitive strengths contribute to our strong market
position and will enable us to continue to improve our profitability and cash
flow:





·
            We have a strong track record
      of growth.  Our yearly revenue increased from $45.5
      million to $62.5 million to $99.0 million to $139.6 million to $196.3
      million for the years from 2004 through 2008, representing a CAGR of
      approximately 44.1%, as a result of our success in expanding our
      production lines and increasing our market penetration.  We
      intend to strategically grow our business in the near future by expanding
      our annual production capacity to 500,000 tons and by introducing new
      higher margin, finished steel products with custom coatings and
      finishes.





·
            Demand for our high-end coated
      steel products remains strong.  Our business focuses on
      high-end coated steel products, which is a niche product segment within
      steel industry that has been growing at a rate of 20% annually over the
      past five years in China and which we believe remains a strong and
      undersupplied product segment, unlike the market for lower-end steel
      products.





·
            Our market position is strong
      in a fragmented industry segment.   We believe that
      our market share in the high precision, cold-rolled steel product segment
      in China is approximately 9.35%, which establishes us as one of the market
      leaders in a fragmented industry with no dominant
      competitor.  Based on the competitive environment in our
      industry, which includes many small-scale private companies operating with
      outdated equipment and a few large state-owned enterprises with limited
      capacity to produce products like ours, we believe our market position is
      strong.





·
            Our potential competitors face
      significant barriers to entry.  Our high-end coated steel
      products are produced in capital intensive manufacturing operations using
      large and advanced pieces of equipment which require considerable initial
      investment, maintenance and repair expenses, thereby creating a
      significant barrier for new market entrants.  Companies which
      lack substantial resources or access to capital will face significant
      difficulties in entering or effectively competing in our market
      segment.


23





Our
Growth Strategy





We believe that our strong competitive
position and our ability to meet customer demand will enable us to benefit from
the resurgence and growth in China’s manufacturing and construction
industries.





We are committed to enhancing our
sales, profitability and cash flows through the following
strategies:





·
            Increase
      production capacity.We recently submitted an application and
      obtained an approval from the local government for a plan to expand
      overall capacity to 500,000 metric tons within the next 12 months and
      expect that the addition of this new production will help us meet demand
      and contribute to the further growth of revenue in 2009 and
      beyond.





·
            Broaden our
      product portfolio and mix.  We are developing and introducing
      new, higher valued-added products, such as chrome coated, zinc coated and
      galvanized products, that we expect will expand our margins and meet the
      increasing demands of new and existing
  customers.





·
            Increase
      market penetration. We intend to further enhance our leadership
      position in the high-end coated steel product segment by expanding our
      sales channels, increasing our product offerings and focusing on customer
      satisfaction and our other competitive strengths to gain additional market
      share.





·
            Pursue
      strategic relationships and acquisition
      opportunities.  We intend to continue to evaluate and
      pursue acquisition opportunities which enhance our product offerings,
      customer base or geographic reach or which allow us to capitalize on a
      more efficient cost structure and economies of
  scale.





·
            Strengthen
      our research and development capabilities.  Our research
      and development efforts to meet the extreme product specification of our
      customers will be a key driver of our future success.  We plan
      to continue to invest in research and development efforts and expect that
      this investment will contribute to our ability to manufacture new high
      quality products to more extreme and precise specifications and
      tolerances.





Our
Products





Our current products include high
precision various cold-rolled steel, with different specifications in terms of
width and thinness.  We have 5 series and over 20 types of high
precision strip steel products.  Our products are typically up to
650mm in width and between 0.05mm – 0.25mm in thinness that are
manufactured from steel substrate of cold-rolled or hot-rolled pickled coils. We
are also capable of manufacturing more extreme specifications based on the needs
of our customers. We have the flexibility to adjust our production
specifications to meet changes in market demand.





Our products are used for producing a
large variety of down stream goods in electrical appliances, construction
materials, chemicals, food and packaging, telecommunications cable and equipment
and military products. For example, we are the leading producer of galvanized
steel materials with width of 0.15mm for use in the telecommunication fiber
wires in China.





Our deliveries of products amounted to
approximately 187,000 metric tons in 2007, representing increase of 32.6% from
previous year. We believe that our high precision cold-rolled products have
about 9.35% of the domestic market share in the segment.





Raw
Materials and Suppliers





The principal raw material used in
producing our products is steel coil, which has historically accounted for
approximately 90% of our total production cost.  We source steel coil
from various suppliers and believe that our suppliers are sufficient
to meet our present and anticipated future needs. We do not depend on any one
single supplier for our steel raw materials.  Our largest supplier of
steel coil supplied us with approximately 10.0% of our total steel coil in
2008.


24





The prices of steel rolls can be quite
competitive, volatile and dependent on supply and demand.  To provide some
protection from the pressure and volatility of the market, we make bulk
purchases after taking into account customers’ orders on hand whenever steel
prices are considered to be lower in the market.  As steel rolls have an
extremely long shelf-life, obsolescence is not a major concern and we may build
up our inventory during such periods when prices are low. When we execute
sales orders with our customers, we set our pricing based on the currently
prevailing selling price of steel coil thereby allowing us to pass incremental
cost increases in raw materials to our customers or capitalize on higher margins
due to our lower raw material costs.





Customers,
Sales and Marketing





Our products can be applied to various
industries.  During the past three fiscal years, we have sold our
products mainly to customers in the manufacturing sectors of chemical and food
packaging products, telecommunications equipment, construction and decoration
materials, electrical appliances and military equipment.  The
following table sets forth the percentages of our products sold to each sector
during each of the last three fiscal years.





Sectors
                
                2006
                
                
                2007
                
                
                2008chemical
      and food packaging products
                
                
                67.7
                %
                
                
                63.1
                %
                
                
                49.7
                %telecommunications
      equipment
                
                
                3.5
                %
                
                
                3.5
                %
                
                
                20.0
                %construction
      and decoration materials
                
                
                15.3
                %
                
                
                27.5
                %
                
                
                21.7
                %electrical
      appliances
                
                
                13.5
                %
                
                
                5.9
                %
                
                
                8.7
                %





Our high precision steel products are
sold directly to the end users in various parts of China and our production is
based on confirmed sales orders. Generally, an initial deposit (approximately
30% of the aggregate contracted sales amount) is pre-paid when the contract is
signed. Our major customers are located in Shanghai, Zhejiang, Jiangsu,
Shandong, Guangdong, Hebei, Tianjin, Guangxi, Fujian, Liaoning, and other
provinces.





During the last three years, we have
sold our products to more than 200 customers.  Our major customers
during 2008 were:





Customer Name
                
                Quantity Sold (Tons)
                
                
                % of Total SalesLuo
      Yang Lixin Commerce and Trading Co. Ltd
                
                
                22,705
                
                
                
                10.1Jiangsu
      Surui Precision Composite Materials Co. Ltd.
                
                
                9,999
                
                
                
                5.3Shanhai
      Netinfo New Materials Co., Xian Branch
                
                
                9,040
                
                
                
                5.3Wuxi
      Changmao Metal Products Co
                
                
                9,794
                
                
                
                4.9Chengdu
      Xinglianrong Materials Trading Co. Ltd
                
                
                9,005
                
                
                
                4.1





We currently sell our products in China
using our own sales staff and network which cover many Chinese provinces and
regions, especially in the eastern coastal regions in China.  We have
developed and strive to maintain a diversified sales network that allows us to
effectively market products and services to us customers based on their location
and product demands. Our sales and marketing department currently consists of 30
employees.





Members of our sales team generate
sales leads by contacting customers and customer prospects directly and by
attending industry trade shows and exhibitions. Given our established status as
one of China’s leading suppliers of cold rolled precision steel products, our
customers often contact us directly regarding new projects. Although most of our
business is developed by direct personal contact and referrals from our
customers, we also advertise our products in steel industry
periodicals.  We also have been marketing and promoting our products
through the following means:





·
            Hosting
      annual product promotion meeting with current and potential customers, in
      which we introduce our products and new improvements to the
      market;


·
            Attending
      various exhibitions to improve our name recognition;
  and


·
            Visiting
      our customers and collecting information regarding their
      needs.


25


Competition
and Our Market Position





Competition within the steel industry,
both in China and worldwide, is intense. There are many large state-owned
enterprises and smaller private steel companies in China. In addition, Chinese
steel makers also face competition from international steel
manufacturers.





For high precision cold-rolled
products, we are not in direct competition with China’s local state-owned steel
giants because those companies concentrate on the production of hot rolled
de-scaled (pickled) steel coils and steel sheets from iron ore. Steel sheets
produced by these large Chinese companies are then supplied as raw materials to
high precision steel manufacturers, like us, for cold reduction processing
to the desired thickness. Cold rolled products like ours are then sold to
downstream, end-product manufacturers in industries such as electric alliances,
construction, chemical and automobile industries.





Private steel product manufacturers in
China generally focus on low-end products. Many of our competitors are much
smaller than us and use older equipment and production techniques. In contrast,
our products are aimed at the high-end markets so we attempt to manufacture
them with superior quality and broader range of specifications. We use advanced
manufacturing equipment that it has purchased from developed countries, such as
Italy, and employs engineers and researchers who are experienced with different
production techniques.





Our business is becoming increasingly
competitive and capital intensive, and our main competition comes from
local Chinese firms and importers. Our main direct competitors in China are
smaller Chinese non-state-owned specialty steel producers and foreign steel
producers that export their products to China.  We believe that we are
one of the largest privately-owned cold-rolled precision steel makers in China,
and that our products have superior quality and consistency which meet the needs
of our customers. We enjoy a high reputation among our customers and will
continue to leverage these strengths in expanding our product mix and
services.





We estimate that our current market
share in China for high precision cold-rolled thin steel products to be
approximately 9.35%, based on the sales volume in 2007.





We also compete with international
steel product manufacturers in the global market, such as Posco Steel. As
compared to our competitors in Korea and Japan, we believe we have lower
production costs and can offer more competitive pricing.





Regulation





We are subject to numerous provincial
and local laws and regulations, which may be changed from time to time in
response to economic or political conditions and have a significant impact upon
overall operations. Changes in these regulations could require us to expend
significant resources to comply with new laws or regulations or changes to
current requirements and could have a material adverse effect on our
company.





Included among these laws and
regulations are numerous central and local laws and regulations relating to the
protection of the environment. These laws continue to evolve and are becoming
increasingly stringent. The ultimate impact of complying with such laws and
regulations is not always clearly known or determinable because regulations
under some of these laws have not yet been promulgated or are undergoing
revision. The State Environmental Protection Administration Bureau is
responsible for the supervision of environmental protection in, implementation
of national standards for environmental quality and discharge of pollutants for
and supervision of the environmental management system of the PRC. Environmental
protection bureaus at the county level or above are responsible for
environmental protection within their jurisdictions.





Seasonality





Our operating results and operating
cash flows historically have not been subject to seasonal variations. This
pattern may change, however, as a result of new market opportunities or new
product introductions.





26




C.
Organizational Structure




The following diagram illustrates our
corporate structure as of the date of this annual report.  We are a
holding company with no operations of our own.  We conduct our
operations in China through our Chinese operating company, Henan Green.











D.
Property, Plants and Equipment





Our manufacturing facilities are
located on land and buildings in Zhengzhou, Henan Province, China, that it
leases from Zhengzhou No. 2 Iron and Steel Company Limited, a related party.
 The total land area is approximately 1,194,000 square feet.  Our
facilities have a total area of approximately 264,000 square feet, of which
226,000 square feet is devoted to production facilities, 9,100 square feet is
raw material warehouse space, 6,350 square feet is finished product warehouse
space and 22,700 square feet is an office building.  The lease will
expire on December 31, 2027.  The lessor has pledged the land and
buildings to guarantee our obligations under certain of our short term bank
loans.





As of December 31, 2008, our facilities
contained six sets of cold-rolled steel production lines with an annual
production capacity of approximately 250,000 metric tons of finished
products.





We also have land use rights for
additional land of approximately 300 mu (approximately 2,152,780 square feet),
adjacent to our present facilities, from the Zhengzhou local government on which
we have received permission to construct, and is presently constructing,
additional facilities to produce chrome coated, zinc coated and tin coated
products. When completed, this facility is expected to add an additional annual
capacity of 250,000 metric tons of finished products.  We have pledged
the land use rights for this property to the lenders of certain of our
short-term bank loans to secure our obligations under these loans.







ITEM
      4A.
            UNRESOLVED
      STAFF COMMENTS




Not
Applicable


27





ITEM
      5.
            OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS




You should read the following
discussion and analysis of our financial condition and results of operations in
conjunction with our consolidated and unconsolidated financial statements and
the related notes included elsewhere in this annual report on Form
20-F.  This discussion may contain forward-looking statements based
upon current expectations that involve risks and uncertainties.  Our
actual results may differ materially from those anticipated in these
forward-looking statements as a result of various factors, including those set
forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this
annual report on Form 20-F.





A.
Operating Results





Overview





We are one of the leading manufacturers
of high-precision, cold-rolled specialty steel products in China. We
utilize a variety of processes and technological methodologies to convert steel
manufactured by third parties into thin steel sheets and plates and other
high-end, value-added finished steel products, and generate our revenues from
the sales of these products.





Our finished steel products serve as
raw materials for end-products that are manufactured by our customers who
operate primarily in the food and packaging, telecommunications, decoration
materials and electrical appliance industries.  We source the raw
materials, which are comprised primarily of steel coil, from a variety of
suppliers in China and sell our products through our diversified sales network
that covers various provinces and regions in China.





Our revenue increased from $45.5
million to $62.5 million to $99.0 million to $139.6 million to $196.3 million
for the years from 2004 through 2008, representing a CAGR of approximately
44.1%.  We believe that these significant increases reflect our
success in addressing customer needs, strategically expanding our production
lines and increasing market penetration.





Our annual production capacity as of
December 31, 2008 was approximately 250,000 metric tons of finished steel
products and we plan to expand our overall manufacturing capacity to 500,000
metric tons within the next 12 months.  We also intend to add new
production lines and higher value-adding products, such as chrome finished, zinc
coated and galvanized products to improve our profit margin.  We
believe that our current market share in the high-precision, cold-rolled
specialty steel product segment is 9.35% according to our internal
competition analysis and China Steel Industry Almanac of 2007.  We
expect that the expansion of production capacity and broadening of our product
mix will help the further growth of our revenue in 2009 and beyond.





Important
Factors Affecting our Results of Operations





The most significant factors that
affect our financial condition and results of operations are:





Factors Specific to Our
Business





·
            Growth in the Chinese
      Economy. We operate our manufacturing facilities in China and
      derive almost all of our revenues from sales to customers in
      China.  Economic conditions in China, therefore, affect
      virtually all aspects of our operations, including the demand for our
      products, the availability and prices of our raw materials and our other
      expenses.  China has experienced significant economic growth,
      achieving a CAGR, of 11% in gross domestic product from 1996 through
      2007.  China is expected to experience continued growth in all
      areas of investment and consumption, even in the face of a global economic
      recession.  However, China has been affected by the global economic
      slowdown and is experiencing a slowing of its growth
  rate.





·
            Supply andDemand for High-End Precision
      Cold-Rolled Steel.  While the overall Chinese steel
      industry has recently experienced a period of excess supply, there is an
      increasing shortage of high-end thin steel sheets and galvanized
      steel products in China due primarily to the limited number of producers
      of high-end thin steel sheet in China.  We expect that the
      shortage of supply in this steel market will continue. In addition,
      due to the continuing improvement of the standard of living in China, the
      demand for telecommunications cable and equipment, electrical household
      appliances and upscale architectural materials in which our products serve
      as components has risen in recent years, thereby increasing the demand for
      the high-end steel products that we
produce.


28




·
            Recent Economic
      Events: Despite the recent global economic crisis and market
      turmoil, we have experienced continued growth, albeit at a less rapid
      pace.  While the first half of 2009 was challenging for
      virtually every industry in every geographic region, we believe we will be
      able to continue the growth of our operating results in 2009. The
      recent decline in steel prices in China has not materially affected our
      gross margins as we have experienced a symmetrical drop in our raw
      materials costs, offsetting the sales price reductions.  We also
      customarily carry a rolling order backlog of approximately two months.
       Although some uncertainty can be expected in demand for the rest of
      2009 and into 2010 due to the general slowdown in China’s economy,
      our customers have given no indication of a reduction in orders
      through the end of 2009.  If we continue to produce innovative,
      high quality products that meet our customers’ demands, we believe that we
      will continue to experience strong demand over the next 12
      months.





·
            PRC Economic Stimulus
      Plans.The PRC government has issued a policy entitled
      “Central Government
      Policy On Stimulating Domestic Consumption To Counter The Damage Result
      From Export Business Of The Country.”  Under
      this policy, the PRC Central Government is dedicating approximately $580
      billion to stimulate domestic consumption.  Companies that are
      either directly or indirectly related to construction, building material,
      electrical household appliances and telecommunication are expected to
      benefit. An executive order has been announced that the PRC Central
      Government will improve the living standard in the country’s rural areas
      by subsidizing the purchase of any electric household appliance for every
      household in the rural area. In addition, the policy indicates a strong
      determination to improve telecommunication in all rural areas. We expect
      to benefit from order growth due to this economic stimulus
      plan.





·
            Expansion of our production
      capacity and product mix.  We anticipate that our future
      results will be further supported by the expected sales of our new product
      lines, which include zinc coated steel sheets and chrome coated steel
      sheets.  In August 2008, we accelerated our expansion plan by
      installing a new processing line producing chrome coated steel products,
      which are higher-end, value-added products with a higher selling price and
      higher profit margin.  We completed pilot production of the
      chrome coated steel products, and commenced mass production in January
      2009.  We also plan to introduce tin coated steel products in
      the near future, while gradually increasing our annual fabricating
      capacity to 500,000 metric tons within the next 12
      months.





Factors Specific to Our
Industry





·
            Cyclicality.The steel
      industry is highly cyclical and significantly affected by general economic
      conditions and other factors, such as worldwide production capacity,
      fluctuations in imports and exports, fluctuations in metal purchase prices
      and tariffs. Recently, the global steel markets have been experiencing
      larger and more pronounced cyclical fluctuations, primarily driven by
      slower global economic growth and the increase in Chinese production and
      consumption. This trend, combined with the upward pressure on costs of key
      inputs, comprising mainly metals, energy and transportation and
      logistics costs, presents increasing uncertainty and challenge for steel
      producers on a worldwide basis. However, processed steel demand and
      prices for the precision steel products, like those we manufacture,
      are driven by and sensitive to other factors, such as product
      differentiation, customer service and cost reductions through improved
      efficiencies and economies of scale, so we are comparatively less affected
      by cyclicality than other companies within our
  industry.





·
            Raw Materials
      Prices. The market for our principal raw material, cold-rolled
      steel, is price sensitive.  In recent months, because of the
      general slowdown in economic activity experienced in China and the rest of
      the world, prices for this material have declined. Consequently, our
      cost of sales has also declined and we have passed the savings onto our
      customers. While we frequently prepay suppliers for our raw materials
      in order to ensure an ample supply of raw materials, pricing of our orders
      is not established until the order and physical delivery are confirmed, at
      which time the price is confirmed at the then-current market price. 
      We account for inventory at cost and any adjustment required to value
      inventory at the lower of cost or market is made at the year-end and not
      at interim periods.  Because of the relatively short periods during
      which inventory is kept on hand, we believe that differences between cost
      and market are not significant.  Other than cold-rolled steel,
      no other raw materials are significantly used in our manufacturing
      processes.


29




·
            Steel prices. Unprecedented demand
      for steel in China has played a major role in the movement of
      international steel prices.  The price of steel rose on a global
      basis from 2004 to June 2008, after which time the price of steel has
      declined by approximately 30%.  The cost of the cold rolled
      steel, which accounts for most of our costs of sales, and its market price
      are correlative to the general steel pricing trend.  However,
      cost savings that result from reduced steel prices are generally passed
      onto customers.  For this reason, our revenue and cost of sales
      are directly related to the market price of, as well as the demand and
      supply in, the steel.





·
            Product mix and effect on
      gross margin.Our gross margin is primarily
      affected by our product mix.For years ended
      December 31, 2008, 2007 and 2006, our gross margins were 27.4%, 28.0%
      and 26.6%, respectively.  Fluctuations in our gross margin were
      primarily driven by changes in our product mix. Our high-end and high
      value-added products generally have a higher profit margin.  Our
      production costs are generally higher in early phases of production
      introduction due to higher start-up costs and low production yield
      rate.  Over time we typically improve our manufacturing
      efficiency.  Furthermore, while the gross profit in dollar value
      remains constantly a higher level of sales revenue and cost of sales will
      lead to lower level of gross profit
margin.





·
            InventoryRevaluation. Inventory
      revaluation arises from a de-valuation of our inventory and results in (1)
      a write-down of the inventory as inventory is valued at lower of actual
      cost or market value; and (2) a charge to net income as a result of the
      write-down. Under our procurement policy, we do not carry material
      amounts of raw material inventory without confirmed purchase orders with a
      predetermined sales price and delivery schedule.  Thus, we were
      not negatively affected by the inventory revaluation as a result of the
      steel price decline in 2008.





·
            Consolidation in the Steel
      Industry.  There has been significant consolidation in
      the global steel industry and consolidation is also taking place in China.
      The government of China has publicly stated that it expects consolidation
      of the Chinese steel industry and the top several producers in China to
      account for the majority of national production.  Cross border
      consolidation has also occurred with the aim of achieving greater
      efficiency and economies of scale, particularly in response to the
      effective consolidation undertaken by raw material suppliers and consumers
      of steel products. Notwithstanding the general trend towards
      consolidation in the industry, China’s specialty steel sector in which the
      Company operates is dominated by privately-owned enterprises and is still
      highly fragmented.  This presents an opportunity for companies like
      Henan Green to grow rapidly both through internal expansion and
      acquisitions to develop into an industry
leader.





Minority
Interest





Henan Green was acquired by Golden
Green on October 21, 2008 and the acquisition was accounted for as a
reorganization under common control with the purchase of a minority
interest. For the reporting purposes, a control group comprised of our
Chairman and CEO, Mr. Lu and his two direct relatives (Mr. Lu’s son, Yi Lu and
Mr. Lu’s brother, Baiwang Lu) held 55.02% of the shares of Henan Green on the
date of acquisition.  Upon the acquisition, we were wholly owned by
Oasis Green Investments Limited, whose sole shareholder is Ms. Yuying Lu, the
daughter of Mr. Lu.  Therefore, under U.S. GAAP reporting rules the
control group’s 55.02% interest of Henan Green that was acquired constitutes an
exchange of equity interests between entities under common control, and the
remaining 44.98% interest of Henan Green was accounted for as a minority
interest prior to the date of acquisition.





Gross
Profit and Gross Margin





For the years ended December 31, 2008,
2007 and 2006, our gross margin was 27.4%, 28.0% and 26.6%,
respectively.  Our direct costs of manufacturing are generally high
when we first introduce a new product due to higher start-up costs and higher
raw material consumption rate. As production volumes increase, we typically
improve our manufacturing efficiency and are able to strengthen our purchasing
power by buying raw materials in greater quantities.


30




Changes in our gross margin are
primarily driven by changes in our product mix and other strategic operating
decisions. Our high-end, value-added products generally tend to have higher
profit margin and we have moved to emphasize these products in our
mix.  Further, general economic conditions and our response to them,
cost of raw materials as well as supply and demand of steel finishing
fabrication products within our markets influence sales prices.





To gain market penetration, we price
our products at levels that we believe are competitive compared to imported
products. Through our continuous efforts to improve manufacturing efficiency and
reduce production costs, we believe that we are able to offer products of
comparable quality to our Chinese state-owned competitors and international
competitors at more competitive prices. Our sales prices are influenced by
general economic conditions, cost of raw materials as well as supply and demand
of steel finishing fabrication products within our markets.  Our
high-end, value-added products generally tend to have higher profit
margin.





Taxation





BVI.  Golden Green
was incorporated in the BVI.  Under the current law of the BVI, we are
not subject to income or capital gains tax.  In addition, dividend
payments are not subject to withholding tax in the BVI.





Hong Kong.We did not have
any assessable profits subject to the Hong Kong profits tax from 2006 to
2008.  We do not anticipate having any income subject to income taxes
in Hong Kong in the foreseeable future.





PRC.  According to
the new Enterprise Income Tax Law, or EIT Law, which has been effective since
January 1, 2008, dividend distributions paid out of earnings from our PRC
subsidiary are subject to a withholding tax at 20%.  This new dividend
withholding tax, however, will only be levied on our PRC subsidiary in respect
of profits earned in 2008 onwards.  Profits distributed after January
1, 2008 but related to financial results generated in the year ended December
31, 2007 and prior years will not be subject to dividend withholding
tax.  On November 28, 2007, the State Council of China passed the
Implementing Rules for the EIT Law, or Implementing Rules, which took effect on
January 1, 2008. The Implementing Rules reduced the withholding tax rate to
10%.  Moreover, in accordance with the Arrangement between the PRC and
the Hong Kong Special Administrative Region on the Avoidance of Double Taxation
and Prevention of Fiscal Evasion, which became effective on January 1, 2007,
dividends from our PRC subsidiary paid to us through our Hong Kong subsidiary
will be subject to a withholding tax at a rate of 5%.





The EIT Law and the Implementing Rules
also imposes a unified EIT of 25% on both foreign invested enterprises and
domestic enterprises, effective January 1, 2008.  As a result, our PRC
subsidiary, Henan Green, was subject to the EIT rates of 33% from 2006 to 2007
and 25% in 2008.





Critical
Accounting Policies





1.
            Basis
      of consolidation





The consolidated financial statements
include the accounts of Golden Green and all entities in which a direct or
indirect controlling interest exists. All intercompany balances and transactions
have been eliminated in the consolidated financial statements.





Our consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
in the United States of America, or US GAAP.  The preparation of the
consolidated financial statements in accordance with US GAAP requires our
management to make a number of estimates and assumptions relating to the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported  amounts of revenues and expenses during the
year.  Significant items subject to such estimates and assumptions
include the recoverability of the carrying amount and the estimated useful lives
of long-lived assets; valuation allowances for receivables, realizable values
for inventories. Actual results could differ from those
estimates.


31




Net income is reduced by the portion
attributable to minority interests. The minority interests are disclosed
separately in the consolidated statements of income and in the consolidated
balance sheets. Minority interests consist of the amount of those interests at
the date the controlling interest was established and the minority’s share of
changes in equity since that date.





2.
            Foreign
      currency translation





Assets and liabilities of foreign
operations are translated at the rate of exchange in effect on the balance
 sheet date; income and expenses are translated at the average rate of
exchange prevailing during the year. The year-end rates for December 31, 2008
and 2007 of Renminbi to one US dollar were 6.8225 and 7.2946 respectively;
average rates for the year-end December 31, 2008 and 2007 were 6.9351 and 7.5973
respectively. The related translation adjustments are reflected in "Accumulated
other comprehensive income" in the stockholders’ equity section of the
balance sheet, net of the amount attributable to the minority interest. As of
December 31, 2008 and 2007, the accumulated foreign currency translation gain
was $2,403,547 and $1,057,886 respectively. Foreign currency gains and losses
resulting from transactions are included in earnings.





3.
            Cash





Cash represents cash in bank and cash
on hand.  We consider all highly liquid investments with original
maturities of three months or less to be cash.  We maintain bank
accounts in the PRC.





4.
            Accounts
      receivable





Accounts receivable are recorded at the
invoiced amount, net of allowances for doubtful accounts sales returns and trade
discounts.  The allowance for doubtful accounts is our management’s
best estimate of the amount of probable credit losses in our existing accounts
receivable.  Management determines the allowance based on historical
write-off experience, customer specific facts and economic
conditions.  We have historically been able to collect virtually all
of our receivable balances.  Accordingly, we have reserved only a 2%
allowance for doubtful accounts.





Outstanding account balances are
reviewed individually for collectability.  Account balances are charged off
against the allowance after all means of collection have been exhausted and the
potential for recovery is considered remote.  We do not have any
off-balance-sheet credit exposure to its customers.





5.
            Inventories





Inventories are stated at the lower of
cost or market and consist primarily of flat rolled steel.  Cost is
determined using the weighted average cost method.  In the case of
work in process and finished goods, such costs comprise of direct materials,
direct labor and an appropriate proportion of overheads.





6.
            Property,
      plant and equipment





Property, plant and equipment are
recorded at cost less accumulated depreciation.  Expenditures for
major additions and betterments are capitalized.  Maintenance and
repairs are charged to general and administrative expenses as incurred.
Depreciation of property, plant and equipment is computed by the straight-line
method over the assets estimated useful lives ranging from five to fifty years.
Building improvements, if any, are amortized on a straight-line basis over the
estimated useful life.





Upon sale or retirement of property,
plant and equipment, the related cost and accumulated depreciation are removed
from the accounts and any gain or loss is reflected in operations.





Construction in progress represents the
costs of property, plant and equipment under construction or
installation.  Depreciation commences when the asset is placed in
service. The accumulated costs are reclassified as property, plant and equipment
when installation or construction is completed. Government subsidies received
reduce the cost of construction.


32




The estimated useful lives of the
assets are as follows:





Type
      of Asset
                  
                  YearsLand
      use right
                  
                  50Leasehold
      land improvement
                  
                  46.5Buildings
                  
                  10
      - 20Machinery
      and equipment
                  
                  5
      - 20Vehicles
                  
                  5Furniture
      fixtures and office equipment
                  
                  5





7.
            Land
      use right





Land use right is recorded at cost less
accumulated amortization. Under Statement of Financial Accounting Standards
(SFAS) No. 142, “Goodwill and
Other Intangible Assets", land use right classified as definite lived
intangible assets and are amortized over its useful life.  According
to the laws of the PRC, the government owns all of the land in the PRC.
Companies or individuals are authorized to possess and use the land only through
land use rights granted by the PRC government.  Land use right is
amortized using the straight-line method over the lease term of 50
years.





8.
            Impairment
      of long-lived assets





Long-lived assets, including property,
plant and equipment are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to the estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount
of an asset exceeds its estimated future cash flows, an impairment charge is
recognized by the amount by which the carrying amount of the asset exceeds the
fair value of the asset.





Assets to be disposed of are separately
presented in the balance sheet and reported at the lower of the carrying amount
or fair value less costs to sell, and are no longer depreciated. The assets and
liabilities of a disposed group classified as held for sale are presented
separately in the appropriate asset and liability sections of the balance
sheet.





9.
            Revenue
      recognition





We generate revenue primarily from
sales of steel mill cold rolled specialty steel products.





Revenue is recognized when products
have been delivered to the buyer and title and risk of ownership has passed to
the buyer, the sales price is fixed and determinable and collectability is
reasonably assured.





In the PRC, value added tax (VAT) of
17% on the invoice amount is collected in respect of the sales of goods on
behalf of tax authorities. The VAT collected is not our revenue; instead, the
amount is recorded as a liability on the balance sheet until such VAT is paid to
the authorities.





10.
            Income
      taxes





We account for income taxes under
Financial Accounting Standards Board (FASB) No. 109, "Accounting for Income
Taxes". Deferred income tax assets and liabilities are determined based upon
differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
effective when the differences are expected to reverse.


33





Deferred tax assets are reduced by a
valuation allowance to the extent management concludes it is more likely than
not that the assets will not be realized.  Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.  The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statements of income
in the period that includes the enactment date.





Management has elected to defer the
application of FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, in accordance with FASB Staff Position No. 48-3, Effective Date of FASB
Interpretation No. 48 for Certain Nonpublic Companies.  We will
continue to evaluate uncertain tax positions in accordance with FASB Statement
No. 5 Accounting for Contingencies. Under that Statement, if it is probable that
an uncertain tax position will result in a material liability and the amount of
the liability can be estimated, then the estimated liability is accrued. As of
December 31, 2008 and 2007, there were no amounts that had been accrued with
respect to uncertain tax positions.





11.
            Comprehensive
      income





We have adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income".  This statement establishes rules for the reporting of
comprehensive income and its components.  Comprehensive income
consists of net income and foreign currency translation.





12.
            Fair
      value accounting





Statement
of Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements",
defines fair value, establishes a framework for measuring fair value under
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS 157 emphasizes that fair value is a market-based
measurement, not an entity-specific measurement, and states that a fair value
measurement should be determined based on assumptions that market participants
would use in pricing an asset or a liability.  In February 2008, the
FASB issued FASB Staff Position No. FAS 157-2 ("FSP 157-2") Effective Date of
FASB Statement No. 157, which amended SFAS 157 to defer the effective date of
SFAS 157 for non-financial assets and non-financial liabilities, except for
items that are recognized or disclosed at fair value in the financial statements
on a recurring basis, at least annually, including goodwill and
trademarks.  In accordance with FSP 157-2, we will delay application
of SFAS 157 for non-financial assets and non-financial liabilities, until
January 1, 2009.  The application of SFAS 157 in situations where that
market for a financial asset is not active was clarified by the issuance of
Financial Accounting Standards Board Staff Position 157-3. Determining the Fair
Value of a Financial Asset When the Market for That Asset Is Not Active ("FSP
157-3") in October 2008. FSP 157-3 became effective immediately and did not
significantly impact the methods by which we determine the fair values of our
financial assets.





13.
            Commitments
      and contingencies





In the normal course of business, we
are subject to contingencies, including legal proceedings and claims arising out
of the normal course of businesses that relate to a wide range of matters,
including among others, product liability.  We record accruals for
such contingencies based upon the assessment of the probability of occurrence
and, where determinable, an estimate of the liability.  Management may
consider many factors in making these assessments including past history,
scientific evidence and the specifics of each matter.  As management
has not become aware of any product liability claims arising from any incident
over the year, we have not recognized a liability for product liability
claims.





14.
            Segment
      information





Statement
of Financial Accounting Standards (SFAS) No. 131, "Disclosure About Segments of an
Enterprise and Related Information" establishes standards for reporting
information on operating segments in interim and annual financial
statements.  We have only one segment and all of our operations and
customers are in the PRC and all income are derived from the sales of steel mill
flat-rolled products.  Accordingly, no geographic information is
presented.


34





Recently
Issued Accounting Standards





In April 2008, the Financial Accounting
Standards Board (FASB) issued FASB Staff Position No. 142-3 ("FSP 142-3") "Determination of the Useful Life of
Intangible Assets." FSP 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FAS 142, "Goodwill and Other Intangible
Assets," to include an entity's historical experience in renewing or
extending similar arrangements, adjusted for entity-specific factors, even when
there is likely to be "substantial cost or material
modifications." FSP FAS 142-3 states that in the absence of historical
experience an entity should use assumptions that market participants would make
regarding renewals or extensions, adjusted for entity-specific factors. The
guidance for determining the useful life of intangible assets included in this
FSP will be applied prospectively to intangible assets acquired after the
effective date of January 1, 2009. The Group does not expect FSP 142-3 to
have a material impact on our financial statements.





In May 2008, the Financial Accounting
Standards Board (FASB) issued Financial Accounting Standard No. 162 ("FAS 162"),
“The Hierarchy of Generally
Accepted Accounting
Principles”. Under FAS 162, the GAAP hierarchy will now reside in the
accounting literature established by the Financial Accounting Standards Board.
FAS 162 identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements in
conformity with GAAP. FAS 162 is effective 60 days following the SEC’s approval
of the Public Company Accounting Oversight Board Auditing amendments to AU
Section 411, "The Meaning of
Present Fairly inConformity with Generally Accepted
Accounting Principles." FAS 162 will not impact the
Group’s financial statements.





In December 2008, the Financial
Accounting Standards Board (FASB) issued Financial Staff Position  No.
132(R)-1 ("FSP No. 132(R)-1"), "Employers’ Disclosures about Postretirement
Benefit Plan Assets,” FSP No. 132(R)-1 amends the Financial Accounting Standards
Board (FASB) No. 132 to provide guidance on an employer’s disclosures about plan
assets of a defined benefit pension or other postretirement plan. The additional
disclosures required focus on disclosures of fair value by category of plan
assets. This Financial Staff Position is effective for fiscal years ending after
December 15, 2009.  We do not expect a material impact on our
financial statements when these additional provisions are adopted.





Management does not believe that any
recently issued, but not yet effective accounting pronouncements, if adopted,
would have a material effect on the accompanying financial
statements.





Results
of Operations





The following tables set forth key
components of our results of operations for the periods indicated, in dollars
and as a percentage of revenue. The statement of income data for the years ended
December 31, 2008 and 2007 has been derived from the audited consolidated
financial statements of Golden Green and the statement of income data for the
year ended December 31, 2006 has been derived from the audited financial
statements of Henan Green.




35




For
      the years ended December 31,
                      (All
      amounts in thousands of U.S. dollars, except for the
      percentages)2008(Consolidated,audited)
                    
                    
                    2007(Consolidated,audited)
                    
                    
                    2006(Henan
      Green,audited)USD
                    
                    
                    %
      of
                      Revenue
                    
                    
                    USD
                    
                    
                    %
      of
                      Revenue
                    
                    
                    USD
                    
                    
                    %
      of
                      RevenueRevenue
                    
                    
                    196,265
                    
                    
                    
                    100.0
                    
                    
                    
                    139,649
                    
                    
                    
                    100.0
                    
                    
                    
                    99,017
                    
                    
                    
                    100.0Raw
      material
                    
                    
                    (131,805
                    )
                    
                    
                    -67.2
                    
                    
                    
                    (92,888
                    )
                    
                    
                    -66.5
                    
                    
                    
                    (69,861
                    )
                    
                    
                    -70.6Labor
                    
                    
                    (1,665
                    )
                    
                    
                    -0.8
                    
                    
                    
                    (1,407
                    )
                    
                    
                    -1.0
                    
                    
                    
                    (1,009
                    )
                    
                    
                    -1.0Cost
      of production
                    
                    
                    (8,938
                    )
                    
                    
                    -4.6
                    
                    
                    
                    (6,282
                    )
                    
                    
                    -4.5
                    
                    
                    
                    (1,784
                    )
                    
                    
                    -1.8Total
      cost of revenue
                    
                    
                    (142,408
                    )
                    
                    
                    -72.6
                    
                    
                    
                    (100,577
                    )
                    
                    
                    -72.0
                    
                    
                    
                    (72,654
                    )
                    
                    
                    -73.4Gross
      profit
                    
                    
                    53,857
                    
                    
                    
                    27.4
                    
                    
                    
                    39,072
                    
                    
                    
                    28.0
                    
                    
                    
                    26,363
                    
                    
                    
                    26.6General
      and administrative expenses
                    
                    
                    (3,432
                    )
                    
                    
                    -1.7
                    
                    
                    
                    (2,767
                    )
                    
                    
                    -2.0
                    
                    
                    
                    (1,999
                    )
                    
                    
                    -2.0Selling
      and marketing expenses
                    
                    
                    (831
                    )
                    
                    
                    -0.4
                    
                    
                    
                    (534
                    )
                    
                    
                    -0.4
                    
                    
                    
                    (471
                    )
                    
                    
                    -0.5Operating
      income
                    
                    
                    49,594
                    
                    
                    
                    25.3
                    
                    
                    
                    35,771
                    
                    
                    
                    25.6
                    
                    
                    
                    23,893
                    
                    
                    
                    24.1Other
      income and (expense)Interest
      income
                    
                    
                    1,395
                    
                    
                    
                    0.7
                    
                    
                    
                    1,432
                    
                    
                    
                    1.0
                    
                    
                    
                    1,068
                    
                    
                    
                    1.1Interest
      expenses
                    
                    
                    (3,769
                    )
                    
                    
                    -1.9
                    
                    
                    
                    (2,147
                    )
                    
                    
                    -1.5
                    
                    
                    
                    (1,312
                    )
                    
                    
                    -1.3Sundry
      income
                    
                    
                    156
                    
                    
                    
                    0.1
                    
                    
                    
                    16
                    
                    
                    
                    0.0
                    
                    
                    
                    -Income
      before income taxes
                    
                    
                    47,375
                    
                    
                    
                    24.1
                    
                    
                    
                    35,072
                    
                    
                    
                    25.1
                    
                    
                    
                    23,649
                    
                    
                    
                    23.9Income
      tax expense
                    
                    
                    (11,870
                    )
                    
                    
                    -6.0
                    
                    
                    
                    (11,422
                    )
                    
                    
                    -8.2
                    
                    
                    
                    (7,770
                    )
                    
                    
                    -7.8Net
      income before Minority interests
                    
                    
                    35,506
                    
                    
                    
                    18.1
                    
                    
                    
                    23,650
                    
                    
                    
                    16.9
                    
                    
                    
                    15,879
                    
                    
                    
                    16.0Minority
      interests
                    
                    
                    (13,921
                    )
                    
                    
                    -7.2
                    
                    
                    
                    (10,638
                    )
                    
                    
                    -7.6
                    
                    
                    
                    N/A
                    
                    
                    
                    N/ANet
      Income
                    
                    
                    21,585
                    
                    
                    
                    11.0
                    
                    
                    
                    13,012
                    
                    
                    
                    9.3
                    
                    
                    
                    15,879
                    
                    
                    
                    16.0





Comparison
of Fiscal Years Ended December 31, 2008 and 2007





Revenue. Our revenue
increased $56.6 million, or 40.5% to $196.3 million in 2008 from $139.6 million
in 2007.  The increase was attributable to the growing demand for our
specialty steel products purchased primarily by customers in the
telecommunications sectors as these end markets have continued to generate
considerable demand.  In addition, we expanded our production capacity
with an addition of approximately 50,000 tons in the second half of 2008,
which allowed us to satisfy the increasing demand for our products.





Cost of Revenue. Our
cost of revenue increased approximately $41.8 million, or 41.6% to approximately
$142.4 million in 2008 from approximately $100.6 million in 2007.  The
increases were primarily due to (i) costs associated with the overall
increase in the volume of products sold including raw materials, labor, energy
and other costs, which we believe were in line with our increased sales and (ii)
other factors such as additional depreciation resulting from newly acquired
equipment and direct labor input which contributed to the increased level of
manufacturing overhead.


36


Gross Profit.  Our gross
profit increased approximately $14.8 million to approximately $53.9 million in
2008 from approximately $39.1 million in 2007.  Gross profit as a
percentage of revenue (gross margin) was 27.4% in 2008, as compared to 28.0% in
2007.  The decrease in overall gross profit margin was primarily a
result of increased energy and other direct material costs during this
period.





General and Administrative
Expenses.  Our general and administrative expenses increased
by  approximately $0.7 million to approximately $3.4 million in 2008
from $2.8 million in 2007.  As a percentage of revenue, general and
administrative expenses were 1.7% of revenue in 2008 as compared to 2.0% in
2007.  The dollar increase was mainly attributable to the addition of
employees and related salary, benefits and other labor costs as our scale of
operations expanded and revenues increased.





Selling Expenses.  Our
selling expenses increased approximately $0.3 million, or 55.5% to approximately
$0.8 million in 2008 from $0.5 million in 2007. As a percentage of revenue, our
selling expenses were consistent at 0.4% in 2008 and 2007, respectively.
 Such dollar increase reflected the increased salary, benefits, travel, and
other costs related to selling activities in 2008, which corresponded with our
growth in sales and operations.





Interest Income and Interest
Expenses.  Our interest income, decreased slightly by $36,898 or 2.6%
from $1,432,019 in 2007 to $1,395,121 in 2008.  Our interest expense
increased approximately $1.6 million, or 75.5% to $3.8 million in 2008 from
interest expense of $2.1 million in 2007.  The overall increase in net
interest expenses was attributable to our increased borrowing from local Chinese
banks.





Provision for Income
Taxes.  We incurred income tax expense of $11.9 million and
$11.4 million in 2008 and 2007, respectively.  The effective EIT rates
were 25% and 33% respectively in the two aforesaid years.





Net
Income.   Our net income, after accounting for minority
interests of $13.9 million and $10.6 million in 2008 and 2007,
respectively, increased approximately $8.6 million, or 65.9% to $21.6 million in
2008 from approximately $13.0 million in 2007.





Comparison
of Fiscal Years Ended December 31, 2007 and 2006





Revenue. Our revenue
increased $40.6 million, or 41.0% to $139.6 million in 2007 from $99.0 million
in 2006.  Approximately 71% of this increase was attributable to the growth
in sales volume during the periods. The increase was largely attributable
to the growing demand for the specialty steel products used in the
telecommunications sectors as these end markets have continued to exhibit
strong growth. The increase was also helped by the higher product prices
for specialty steel products.





Cost of
Revenue.  Our cost of revenue increased approximately $27.9
million, or 38.4% to approximately $100.6 million in 2007 from approximately
$72.7 million in 2006.  The increase in cost of revenue resulted
primarily from costs associated with the overall increase in the volume of
products sold, which resulted in increases in raw materials, labor and other
costs; and (ii) higher material costs due to higher steel
prices.





Gross
Profit.   Our gross profit increased approximately $12.7
million to approximately $39.1 million in 2007 from approximately $26.4 million
in 2006.  Gross profit as a percentage of revenue (gross margin) was 28.0%
in 2007, as compared to 26.6% in 2006, which was primarily due to the fact that
we benefited from a transition of our product mix from rolled carbon steel to
high margin coated products.





General and Administrative
Expenses.  Our general and administrative expenses increased
$0.8 million to $2.8 million in 2007 from $2.0 million in 2006. As a percentage
of revenue, general and administrative expenses at 2.0% of revenue in 2007 were
unchanged from 2.0% in 2006. The dollar increase was mainly attributable to the
increase in indirect labor and utility cost to support the overall increased
production activity.  In addition, the depreciation expenses increased from
the added equipment and land use rights.





Selling
Expenses.  Our selling expenses increased $63,762 to $534,468
in 2007 from $470,706 in 2006.  As a percentage of revenue, selling
expenses were 0.4% in 2007 and 0.5% in 2006.  Such dollar amount
increase reflected the increased salary, benefits, travel, and other related
costs in 2007, which corresponded with our growth in sales and
operations.


37







Interest Income and Interest
Expense.Our interest income increased $379,739 to $1,448,184
in 2007 from $1,068,446 in 2006.  Our interest expenses were incurred
as a result of our notes payable and short term bank borrowing.
 Interest expense increased $835,195 or 63.5% from interest expense of
$1,312,256 in 2006 to $2,147,451 in 2007.  The general interest
level in China was higher compared to that of 2006, and we had higher average
balance in short-term loans during 2007 as a result of the growth in our
operations.





Provision for Income Taxes.
We incurred income tax expense of $11.4 million and $7.8 million in 2007 and
2006, respectively.  Our effective EIT rates for the two aforesaid
years were both 33%.





Net Income. Our net
income before minority interests increased approximately $7.8 million, or 49.0%
from $15.8 million in 2006 to $23.7 million in 2007, as a result of the factors
described above.  There was a minority interest of $10.6 million in
2007 as a result of Golden Green’s acquisition of Henan Green on October 21,
2008.  For reporting purposes a 44.98% interest of Henan Green was
accounted for as the minority interest prior to the date of acquisition, or
during the period from January 1, 2007 to October 20, 2008 in our consolidated
income statement.





B.
Liquidity and Capital Resources





The following table sets forth a
summary of our net cash flow information for the periods indicated:





(All
amounts in thousands of U.S. dollars)





Years Ended December 31,2008
                            
                            2007
                            
                            2006(Consolidated,
                              audited)
                            
                            (Consolidated,
                              audited)
                            
                            (Henan
      Green,
                              audited)Net
      cash provided by operating activities
                            
                            
                            50,467
                            
                            21,506
                            
                            
                            17,404Net
      cash provided by (used in) investing activities
                            
                            
                            13,068
                            
                            (1,145)
                            
                            
                            5,968Net
      cash (used in) financing activities
                            
                            
                            (22,690)
                            
                            (22,300)
                            
                            
                            (23,443)Net
      cash inflow(outflow)
                            
                            
                            40,846
                            
                            (1,940)
                            
                            
                            (70)





* The
above financial data have been derived from the audited consolidated financial
statements of Golden Green for the years ended December 31, 2008 and 2007, as
well as the audited financial statements of Henan Green for the year ended
December 31, 2006.





Operating
Activities





Net cash
provided by operating activities for 2008 was $50.5 million, increased 135% from
$21.5 million for 2007.  The increase was mainly due to (1) the
increased operating income as a result of the business expansion; (2) lower raw
materials and finished goods inventory level as of December 31, 2008 due to the
better management of inventory; (3) an increase in cash collection from
customers, partially offset by increased accounts payable; (4) increased overall
cash advance received from customers after deducting the prepayment made to
suppliers for raw material procurement; and (5) the increased income tax payment
resulting from the higher net income base for calculating the tax
liability.





Net cash
provided by operating activities for 2007 was $21.5 million, an increase by
23.6% from $17.4 million for 2006.  The increase was mainly due to (1)
the increased operating income as a result of the business expansion; and (2) a
lower level of work in process and finished goods inventory build-up as the
business expanded, offset partially by amount paid to suppliers.





We
strategically manage our cash resources as a means to optimize our available
cash flows in the following manner:





·
            We
      have not experienced any deterioration in the collection of our
      receivables and we are unaware of any trends that pose collections
      problems.  We intend to extend credit to certain customers
      prospectively as part of our growth strategy but will apply stringent
      and prudent criteria for determining qualification for such credit,
      including securing us with underlying assets and required cash
      minimums.


38


·
            We
      manage the year-end accounts payable and accrued liabilities to improve
      cashflow.





·
            Our
      operating cashflow can also be affected by timing of prepayments made to
      suppliers for raw materials procurement and the corresponding receipt of
      advances from customers.  There is no material effect on cashflow as
      a result of this practice over time but interim and annual period-end
      balances can be distributed unevenly.  On a rolling twelve-month
      basis, our prepayments and inventory growth are expected to be consistent
      with our backlog of customer orders and sales
  growth.





Investing
Activities





Cash used in investing activities
mainly consists of capital expenditures, shareholders' borrowings, and increases
in restricted cash.





Net cash provided by investing
activities in 2008 was $13.1 million as compared to net cash used in
investing activities of $1.1 million in 2007.  The change resulted
from increased cash collected from our shareholders, offset by a larger amount
in capital expenditure.





Net cash
used in investing activities in 2007 was $1.1 million as compared to net cash
provided by investing activities of $6.0 million in 2006.




We paid
$6.6 million in 2008, $2.3 million in 2007 and $4.1 million 2006 to acquire
capital equipment.  In 2007 and 2006, our major shareholders borrowed $7.2
million and $11.2 million from us, respectively. We received $25.1 million when
our former shareholders repaid their borrowings in 2008. Restricted cash
had an increase of $5.5 million in 2008, a decrease of $8.3 million in 2007, and
a decrease of $21.2 million in 2006.





Financing
Activities





Cash used in financing activities
mainly consists of dividends paid, distributions to shareholders, repayment of
bank loans, withdrawal and repayment of borrowings from related
parties.





Net cash used in financing activities
was $22.7 million in 2008, $22.3 million in 2007 and $23.4 million in
2006.





We paid
dividends of $42.3 million in 2008, $16.1 million in 2007 and $7.4 million in
2006.  We repaid short-term loans of $26.7 million in 2008, $5.9
million in 2007 and $4.4 million in 2006, while incurred new short-term
borrowings of $40.0 million in 2008, $15.1 million in 2007 and 10.6 million in
2006.  We increased our notes receivable financing by $6.4 million in
2008, and we reduced our notes receivable financing by $15 million in 2007 and
by $22 million in 2006.





Capital
Expenditure





We believe that our future capital
expenditures will be incurred primarily in connection with (i) purchases of
property, plant and equipment and construction of our facilities, (ii) leasehold
improvements, (iii) investment in equipment, technology and operating systems,
and (iv) capitalized interest.  Our planned capital expenditures for
2009 and 2010 are for expansion of our manufacturing capacity from 250,000
metric tons to 500,000 metric tons by adding cold-rolled thin steel and a
new zinc coated steel sheet production lines.  The expansion will take
place in two phases, with the first phase projected to cost approximately $36
million and the second phase costing approximately $22 million.  We
expect to finance the capital expenditure by using cash on hand, internal cash
flow to be generated, short-term bank borrowings as well as fund-raising from
the capital market.





Loan
Facilities





We believe that we currently maintain a
good business relationship with many banks. As of December 31, 2008, our
outstanding bank loans were as follows:


39




(All
Amounts in U.S. Dollars)





Commercial
      Bank of Zhengzhou
                      
                      $
                      7,328,691Shanghai
      Pu Dong Development Bank
                      
                      
                      5,862,953China
      Development Bank
                      
                      
                      4,397,216China
      Merchants Bank
                      
                      
                      4,397,216China
      Citic Bank
                      
                      
                      3,664,345Guangdong
      Development Bank
                      
                      
                      2,198,607Minsheng
      Bank of China Branch in Zhengzhou
                      
                      
                      1,465,739Zhengzhou
      City Rural Credit Cooperative
                      
                      
                      806,156Zhengzhou
      City Urban Credit Cooperative
                      
                      
                      556,980Total
                      
                      $
                      30,677,903




We believe that our currently
available working capital, including anticipated cash flow from operations and
available credit facilities referred to above are adequate to finance our
operations at current levels through at least the next twelve months. In
this regard, we are not experiencing any obstacles to acquisition and rollover
of our short term credit facilities that fund our daily
operations.  We anticipate rollovers of all current facilities
coming due in the 2009 operating year and do not foresee a squeeze on the
availability of credit to fund our operations and meet our growth
objectives.





C.
Research and Development, Patents and Licenses, Etc.





We believe that the development of new
products and new technology is critical to our success.  We are
continuously working to improve the quality, efficiency and cost-effectiveness
of our existing products and develop technology to expand the range of
specifications of our products.





We have a strong research and
development team that has 20 employees devoted to research and development, all
of whom have at least a bachelor’s degree.  Our research and
development staff has developed several production techniques that it believes
improved its product quality and reduced its production costs.





In 2008, 2007 and 2006, our research
and development expenses amounted to about $3.2 million, $4.0 million and $2.7
million, respectively.  These expenses were mainly composed of staff
costs, equipment purchases and other research and development-related
expenses.





Intellectual Property
Rights





All of our products are sold with the
trademark of ,which is widely accepted
by our customers. In addition, we have registered the www.henangr.com and www.hngerui.com.cn domain
names.





All our employees, including key
employees and engineers, have signed our standard form of labor contracts,
pursuant to which they are obligated to hold in confidence any of our trade
secrets, know-how or other confidential information and not to compete with us,
both during the employment term and within five years after the termination of
employment.  Where appropriate for our business strategy, we will continue
to take steps to protect our intellectual property rights.





D.
Trend Information





Other than as disclosed in the
foregoing disclosures and elsewhere in this annual report, we are not aware of
any trends, uncertainties, demands, commitments or events for the period from
January 1, 2009 to December 31, 2009 that are reasonably likely to have a
material adverse effect on our net revenues, income, profitability, liquidity or
capital resources, or that caused the disclosed financial information to be not
necessarily indicative of future operating results or financial
conditions.


40


E.
Off-Balance Sheet Arrangements





We have not entered into, nor do we
expect to enter into, any off-balance sheet arrangements.  We also
have not entered into any financial guarantees or other commitments to guarantee
the payment obligations of third parties.  In addition, we have not
entered into any derivative contracts that are indexed to our equity interests
and classified as shareholders’ equity.  Furthermore, we do not have
any retained or contingent interest in assets transferred to an unconsolidated
entity that serves as credit, liquidity or market risk support to such
entity.  We do not have any variable interest in any unconsolidated
entity that provides financing, liquidity, market risk or credit support to us
or that engages in leasing, hedging or research and development services with
us.





F.
Tabular Disclosure of Contractual Obligations





The following table sets forth our
contractual obligations in respect of operating leases as of December 31,
2008.





Payment due by periodTotal
                      
                      
                      Less than 1 year
                      
                      
                      1-3 years
                      
                      
                      3-5 years
                      
                      
                      More than 5 yearsOperating
      Lease Obligations
                      
                      $
                      593,439
                      
                      
                      $
                      23,200
                      
                      
                      $
                      49,124
                      
                      
                      $
                      53,383
                      
                      
                      $
                      467,732





G.
Safe Harbor





See the section headed “Forward-Looking
Information.”





ITEM
6.             DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES




A.
Directors and Senior Management





The
following table sets forth certain information regarding our directors and
senior management as of the date of this annual report.





Name
                              
                              Age
                              
                              PositionMingwang
      Lu
                              
                              56
                              
                              Chairman
      of the Board and Chief Executive OfficerLiyong
      Qu
                              
                              36
                              
                              Chief
      Accounting Officer and Interim Chief Financial OfficerYi
      Lu
                              
                              33
                              
                              General
      Manager and DirectorQihong
      Zhang
                              
                              41
                              
                              Director
      of FinancePing
      Li
                              
                              36
                              
                              Deputy
      General ManagerZheyu
      Chen
                              
                              54
                              
                              Deputy
      General Manager & Chief of Engineering Research
  CenterYingxin
      Fan
                              
                              32
                              
                              Director
      of Sales and MarketingHarry
      Edelson
                              
                              75
                              
                              DirectorJ.P.
      Huang
                              
                              48
                              
                              DirectorKwok
      Keung Wong
                              
                              59
                              
                              DirectorYunlong
      Wang
                              
                              46
                              
                              DirectorMaotong
      Xu
                              
                              69
                              
                              Director




Mingwang Luhas served as Henan Green’s general manager since 2000 and became our
chairman of the board and chief executive officer on March 17, 2009. He was
previously senior economist and engineer of Henan Green. Mr. Lu has been in the
steel industry since 1985, with expertise in managing and marketing cold-rolled
steel construction, technologies, production and marketing. Mr. Lu was
elected as a member of the 9th, 10th and 11th National People Congress
in Henan Province. He has been awarded numerous honors including the “Wuyi
Labor Medal,” “Excellent Director/Manager in Henan Province,” “National
Excellent Township Entrepreneur,” “Expert in Steel Industry of Henan
Province.”


41


Liyong Quhas served as Henan Green’s deputy general manager in charge of its
finance and accounting departments since December 2007.  Prior to
this, he served as an accountant in Henan Green’s finance ministry from July
1995 to December 2000 and as the director of the finance ministry from
December 2000 to December 2007.  Mr. Qu became our Interim Chief Financial
Officer on July 10, 2009. Mr. Qu graduated from Henan College of
Finance and Economics.





Yi Luhas
served as the deputy general manager of Henan Green since May 2008 and became
our director on March 17, 2009.  From July 2003 to May 2008, he served
as general manager of Henan Green. While with Henan Green, Mr. Lu has
helped develop 5 series as well as over 20 types of high precision strip
steel products. Prior to joining Henan Green, Mr. Lu served as the recording
department director of Zhengzhou Television Station. He has been honored as
one of the sixth top ten excellent youth of Xinzheng in Jun. 2005, and elected
into the second Union of Youth Committee in Apr. 2006. Mr. Lu graduated
from Northwest College in business administration.





Qihong Zhangserved as a civil servant from 1986 to 1982. She joined Zhengzhou No. 2
Steel and Iron Company Limited from 1992-2000 in charge of the Accounts
Department. She worked as accounting supervisor of Henan Green since 2000
and promoted to Finance Director in 2007. She holds a degree in Finance
Accounting and graduated from Zhengzhou Institute of Finance, Commerce and
Accounting in 1995.





Ping Lihas served as general manager and minister of the production department
of Henan Green since April 2007. From April 2004 to April 2007, he served
as the assistant of the Henan Green general manager and minister of production
department. From 2001 to April 2004, Mr. Li served as chief of the
production division of the cold-rolled steel subsidiary of Zhengzhou No. 2
Steel. Prior to this, he worked as the technician in Delong Steel Company
in Jiaxing, Zhejiang, mainly engaged in management of technics and
production process. Mr. Li graduated from Chong High Steel College.





Zheyu Chenhas served as assistant to the chief of the Henan Special Steel Complex
Material Engineering Research Center since December 2000. From July 1998 to
December 2000, he served as the deputy general manager of Henan Green.
From July 1972 to July 1998, he had worked in Luoyang Steel Group as
chief in the mechanism and repairing workshop, director in the power
service department, party general secretary in the oxygen subplant, and
director in its second smelting subsidiary. He began his career in 1970 as a
fitter in Lizishan Iron Mechanism and Repairing Factory in Heilongjiang
Province. Mr. Chan graduated from Beijing Economic Correspondence College and
Henan Economic College.





Yingxin
Fan joined Henan Green in April 1998 upon graduation from
college.  Mr. Fan has extensive exposure to operational and sales
activities within the company and is instrumental in boosting the Company’s
sales performance.  He joined the Company as sales representative,
responsible for promoting company products and cultivating new customers.
 From 2002 to 2005, he was Deputy Director of Sales and Marketing,
responsible for assisting in the execution of Company sales policies and plans
and ensuring achievement of sales targets by sales representative under his
supervision.  He was promoted to his current position of Director of Sales
and Marketing in 2006.  Mr. Fan’s duties include developing strategic
marketing plans, customer relations management and supervising sales and
marketing staff ofapproximately
30.  He holds a Bachelor’s degree from Henan University of
Technology.





Harry Edelsonserved as COAC’s chairman of the board and chief executive officer since
its inception and became our director on March 17, 2009.  Since
August 1984, he has been the managing partner of Edelson Technology
Partners, which manages a series of five venture capital technology funds
(the “Edelson Funds”) for ten multinational corporations (AT&T, Viacom, Ford
Motor, Cincinnati Bell, Colgate Palmolive, Reed Elsevier, Imation, Asea
Brown Boveri and UPS) and two large pension funds. Mr. Edelson
previously worked for Merrill Lynch, Drexel Burnham Lambert and CS First
Boston and was ranked by Institutional InvestorMagazine
as an All Staranalyst. Mr. Edelson is a former president of the Analyst Club, the
oldest club on Wall Street, founded in 1925, and is President and a
founding member of the China Investment Group LLC, an organization formed to
provide a forum for update and exchange of its members’ knowledge of China.
He has been a member of the Juilliard Council since 2001. The Julliard is one
of the world’s leading schools in the fields of music, dance and acting.
Mr. Edelson was honored in the Knesset by receiving the Israel 50th
Anniversary Award from the Prime Minister of Israel. Mr. Edelson is a member of
the Asia Society and the China Cultural Foundation. He is also an advisor
to the China Cultural Foundation. He has given numerous speeches in Hong
Kong, China and the United States on investing in China. Mr. Edelson
received a B.S. from Brooklyn College and an MBA from New York University
Graduate School of Business.


42


Dr. J.P. Huanghas been Founder, Chairman Emeritus and Chief Strategic Adviser of
Jpigroup Inc. since 1988.  Dr. Huang became our director on March 17,
2009.  Under Dr. Huang’s advisory guidance, Jpigroup has become
one of China's major private investment and development companies that
has invested and advised in the areas of manufacturing, human capital
development, technologies and financial services. From 1985 and prior to
founding Jpigroup, Dr. Huang worked for the Government of China in the former
Ministry of Foreign Economic Relations and Trade and during this time, he
was very active and instrumental in helping formulating some of China's first
open door strategies and reform plans, especially in the area of
international investment and trade. Dr. Huang holds a Ph.D. in economics
from University of International Business and Economics in Beijing, where he now
concurrently holds a Professorship in Finance. Dr. Huang acted as a
consultant to COAC in connection with our merger with COAC.





Kwok KeungWonghas been our director since March 17, 2009.  Mr. Wong has
in-depth and practical business working experience in dealing with Chinese
companies and the Chinese government and assisting foreign investors in
doing investments in China for more than twenty years. Since 2000, he has
been the Senior Consultant of Thundercap Investments Consultant Limited, a
consulting company that advises Chinese clients regarding the raising of
funds through Sino-foreign joint ventures, private investment and overseas
initial public offerings. Since 1986, Mr. Wong has been a private
consultant providing services in the areas of marketing,
manufacturing, production, financing and management to more than twenty
Chinese enterprises. From 2000 to 2007, he provided consultation services
and successfully assisted three Chinese companies in completing initial public
offerings in Singapore.





Yunlong Wanghas been the Head and Chief Engineer of Biotech Research Center of Henan
Province in China since 2000 and our director since March 17,
2009.  Professor Wang is one of the leading scholars and experts in
human cell research and has published over twenty one theses in that and
related fields. He has been admitted and recognized as a member Specialist in
Bio-engineering by the State Council of China.  He also served as a
Professor at the Henan Vocational Institute since 2005.





Maotong Xuhas been the secretary of the board of directors of Henan Green since
2000 and our director since March 17, 2009.  Prior to joining Henan Green,
Mr. Xu had served with Henan Luoyang Steel Group from 1966 to 1997 as
technician, engineer, vice general engineer and vice factory director. Mr.
Xu received a Bachelor's degree from Beijing Steel College.





In connection with the business
combination with COAC, the then shareholders of Golden Green and Mr. Edelson
entered into a voting agreement with Golden Green, pursuant to which, each of
the shareholders of Golden Green and Mr. Edelson agreed to vote their Golden
Green ordinary shares in favor of the election of Mingwang Lu, Yi Lu, Wong Kwok
Keung, Maotong Xu, Yunlong Wang, Harry Edelson, and J.P. Huang as directors of
Golden Green in specified classes in all elections through the annual meeting of
Golden Green that will be held in 2011.





The address of our directors and
executive officers is c/o Henan Green Complex Materials Co., Ltd., No. 69
Huaibei Street, Longhai Middle Road, Zhengzhou, Henan Province, China,
451191.  No family relationship exists between any of our directors
and executive officers, except that Mr. Yi Lu is the son of our Chairman and
CEO, Mingwang Lu.





B.
Compensation





Compensation





The
following sets forth summary information concerning the compensation paid by us
to our executive officers and directors during the last fiscal
year.  These amounts include compensation paid to any of them who
officers of our subsidiary companies prior to the merger.


43


Annual Compensation
 Year Ended December 31, 2008


Name
                                          
                                          Position
                                          
                                          Salary ($)
                                          
                                          
                                          Cash Bonus ($)Mingwang
      Lu
                                          
                                          Chairman
      of the Board and Chief Executive Officer
                                          
                                          $
                                          18,677
                                          
                                          
                                          
                                          0Liyong
      Qu
                                          
                                          Chief
      Accounting Officer
                                          
                                          
                                          8,579
                                          
                                          
                                          
                                          0Yi
      Lu
                                          
                                          General
      Manager and Director
                                          
                                          
                                          10,115
                                          
                                          
                                          
                                          0Qihong
      Zhang
                                          
                                          Director
      of Finance
                                          
                                          
                                          8,500
                                          
                                          
                                          
                                          0Ping
      Li
                                          
                                          Deputy
      General Manager
                                          
                                          
                                          8,567
                                          
                                          
                                          
                                          0Zheyu
      Chen
                                          
                                          Deputy
      General Manager
                                          
                                          
                                          10,121
                                          
                                          
                                          
                                          0Yingxin
      Fan
                                          
                                          Director
      of Sales and Marketing
                                          
                                          
                                          7,950
                                          
                                          
                                          
                                          0Yunlong
      Wang
                                          
                                          Director
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0Harry
      Edelson
                                          
                                          Director
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0





Employment
Agreements





As requested by local Chinese labor
law, our indirect subsidiary Henan Green has entered into employment agreements
with each of our executive officers, which have substantially similar
terms.  Under these agreements, each of our executive officers is
employed for a specified time period, but Henan Green may terminate his or her
employment for cause, at any time, without notice or remuneration, for certain
acts, including but not limited to, his or her conviction of crimes, his or her
breach of material corporate policy and his or her failure to perform his or her
duties to our material detriment.  Furthermore, either we or an
executive officer may terminate his or her employment at any time without cause
upon advance written notice to the other party.  If we terminate an
executive officer’s employment without cause, we will pay the executive officer
severance pay in accordance with applicable law. We do not have other
arrangements with any executive officers for special termination
benefits.




Each executive officer has agreed to
hold, both during the employment term and after employment terminates, in
confidence any of our trade secrets, know-how or financial, trading or other
confidential information.  In addition, each executive officer has
agreed to be bound by non-competition restrictions set forth in his or her
employment agreement and is prohibited from providing services to our
competitors or operating businesses that compete against us for a period of five
years following termination or expiration of his or her employment agreement.





C.
Board Practices





Terms
of Directors and Executive Officers




Our board
consists of seven members, who were elected as our directors in connection with
the business combination with COAC on March 17, 2009.  Our board is a
classified board consisting of three classes of directors.  The Class
I directors shall be elected for a three year term of office, the Class II
directors shall be elected for a two year term of office and the Class III
directors shall be elected for a one year term of office.  The current
board members are classified as follows:




·
            in
      the class to stand for reelection in 2010: Maotong Xu and J.P.
      Huang;




·
            in
      the class to stand for reelection in 2011: Kwok Keung Wong and Harry
      Edelson; and




·
            in
      the class to stand for reelection in 2012: Mingwang Lu, Yi Lu and Yunlong
      Wang.




44


At a general meeting in each year,
successors to the class of directors whose term expires in that year shall be
elected for a three year term.  A plurality of votes cast shall be
sufficient to elect directors.  The directors may appoint one or more
directors to fill a vacancy on the Board.




Our
executive officers are appointed by our board.  The executive officers
shall hold office until their successors are duly elected and qualified, but any
officer elected or appointed by the directors may be removed at any time, with
or without cause, by resolution of directors.  Any vacancy occurring
in any office may be filled by resolution of directors.




Independence
of Directors




We have
elected to follow the rules of NASDAQ to determine whether a director is
independent.  Our board will also consult with counsel to ensure that
our board’s determinations are consistent with those rules and all relevant
securities and other laws and regulations regarding the independence of
directors.  Rule 5605(a)(2) of Listing Rules of The Nasdaq Stock
Market, Inc., or the Nasdaq Listing Rules, defines an “independent director”
generally as a person, other than an officer of the Company, who does not have a
relationship with the Company that would interfere with the director’s exercise
of independent judgment.  Consistent with these considerations, our
board has affirmatively determined that, Yunlong Wang, Maotong Xu, Kwok Keung
Wong and J.P. Huang are our independent directors.





Board Committees




Our board
has established an audit committee, a nominating committee and a compensation
committee.  Each committee is comprised solely of independent
directors within the meaning of Rule 5605(a)(2) of the Nasdaq Listing Rules, and
meet the criteria for independence set forth in Rule 10A-3(b)(1) of the Exchange
Act.




Audit
Committee




Our audit committee consists of Messrs.
Maotong Xu, Kwok Keung Wong and J.P. Huang, with Maotong Xu serving as
chairman.  Our board has also determined that J.P. Huang possesses the
accounting or related financial management experience that qualifies him as
financially sophisticated within the meaning of Rule 5605(c)(2)(A) of the Nasdaq
Listing Rules and that he is an “audit committee financial expert” as defined by
the rules and regulations of the SEC.





The audit committee is mainly
responsible for, among other things:




·
            selecting
      our independent auditors and pre-approving all auditing and non-auditing
      services permitted to be performed by our independent
      auditors;




·
            reviewing
      with our independent auditors any audit problems or difficulties and
      management’s response;




·
            reviewing
      and approving all proposed related party transactions, as defined in Item
      404 of Regulation S-K under the Securities
Act;




·
            discussing
      the annual audited financial statements with management and our
      independent auditors;




·
            monitoring
      the independence of the independent
auditor;




·
            verifying
      the rotation of the audit partners having primary responsibility for the
      audit and the audit partner responsible for reviewing the audit as
      required by law;




·
            inquiring
      and discussing with management the Company’s compliance with applicable
      laws and regulations;




45




·
            determining
      the compensation and oversight of the work of the independent auditor
      (including resolution of disagreements between management and the
      independent auditor regarding financial reporting) for the purpose of
      preparing or issuing an audit report or related work;
  and




·
            establishing
      procedures for the receipt, retention and treatment of complaints received
      by the Company regarding accountinginternal accounting
      controls or reports which raise material issues regarding the Company’s
      financial statements or accounting
policies.




Compensation
Committee





Our compensation committee consists of
Messrs. Maotong Xu, Kwok Keung Wong and J.P. Huang, with Maotong Xu serving as
chairman.  Our compensation committee reviews and approves
compensation paid to our officers and directors and to administer our
incentive compensation plans, should any such plans be adopted in the future,
including authority to make and modify awards under such plans.





The
Compensation Committee is mainly responsible for, among other
things:





·
            approving
      and overseeing the compensation for our executive
  officers;




·
            reviewing
      and approving corporate goals and objectives relevant to the compensation
      of our chief executive officer, evaluating the performance of our chief
      executive officer in light of those goals and objectives, and setting the
      compensation level of our chief executive officer based on this
      evaluation; and




·
            reviewing
      periodically and making recommendations to the board regarding any
      long-term incentive compensation or equity plans, programs or similar
      arrangements, annual bonuses, employee pension and welfare benefit plans;
      and reviewing and making recommendations to the board regarding succession
      plans for the chief executive officer and other senior
      officers.




Corporate Governance and
Nominating Committee





Our corporate governance and nominating
committee consists of Messrs. Maotong Xu, Kwok Keung Wong and J.P. Huang, with
Maotong Xu serving as chairman.  The corporate governance and
nominating committee assists the board of directors in identifying individuals
qualified to become our directors and in determining the composition of the
board and its committees.  The corporate governance and nominating
committee is mainly responsible for, among other things:





·
            selecting
      or recommending to the board the nominees for election as directors or for
      appointment to fill any vacancy;


·
            selecting
      or recommending to the board the directors to be appointed to each
      committee of the board;




·
            Overseeing
      the board in the board’s annual review of its performance and will make
      appropriate recommendations to improve performance;
  and




·
            performing
      any other duties or responsibilities expressly delegated to the committee
      by the board from time to time relating to the nomination of board and
      committee members.




D.
Employees




We had 588, 560 and 552 employees as of
December 31, 2008, 2007 and 2006, respectively.  The following table
sets forth the number of our employees for each of our areas of operations and
as a percentage of our total workforce as of December 31, 2008:


46





As of December 31, 2008Category
                    
                    Employees
                    
                    
                    PercentageProduction
                    
                    
                    503
                    
                    
                    
                    86
                    %Sales
                    
                    
                    32
                    
                    
                    
                    5
                    %Management
      and Administration
                    
                    
                    31
                    
                    
                    
                    5
                    %Research
      & Development
                    
                    
                    22
                    
                    
                    
                    4
                    %Total
                    
                    
                    588
                    
                    
                    
                    100
                    %





Approximately 20% of our employees hold
at least a bachelor's degree.  We believe that we maintain a
satisfactory working relationship with our employees and we have not experienced
any significant labor disputes or any difficulty in recruiting staff for our
operations.





As required by applicable Chinese law,
through Henan Green, we have entered into employment contracts with all of our
officers, managers and employees.  It is required by Chinese law to
make several mandatory contributions for our employees, including social
pension, medical insurance, unemployment insurance, work-related injury
insurance and maternity insurance.  As of the date of this report, we
are in compliance with the applicable PRC employee law and regulations and have
made the contributions required by the applicable laws.





E.
Share Ownership





The following table sets forth
information, as of July 9, 2009, with respect to the beneficial ownership of our
ordinary shares by (i) each person who is known by us to beneficially own more
than 5% of our ordinary shares; (ii) by each of our officers and directors; and
(iii) by all of our officers and directors as a group.  The address of
each of the persons set forth below is in care of Golden Green Enterprises
Limited, No. 69 Huaibei Street, Longhai Middle Road, Zhengzhou, Henan Province,
China, 451191.





Name&Addressof
                                  BeneficialOwner
                                
                                Office,ifAny
                                
                                TitleofClass
                                
                                Amount&Nature
                                  ofBeneficial
                                  Ownership(1)
                                
                                Percentof
                                  Class(2)Officers and DirectorsMingwang
      Lu
                                
                                CEO
      and Chairman
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Liyong
      Qu
                                
                                Chief
      Accounting Officer
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Yi
      Lu
                                
                                General
      Manager and Director
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Qihong
      Zhang
                                
                                Director
      of Finance
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Ping
      Li
                                
                                Deputy
      General Manager
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Zheyu
      Chen
                                
                                Deputy
      General Manager & Chief of Engineering Research Center
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Yingxin
      Fan
                                
                                Director
      of Sales and Marketing
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Harry
      Edelson
                                
                                Director
                                
                                Ordinary
      Shares
                                
                                3,276,188(3)
                                
                                9.66%J.P.
      Huang
                                
                                Director
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Kwok
      Keung Wong
                                
                                Director
                                
                                Ordinary
      Shares
                                
                                900,000(4)
                                
                                2.79%Yunlong
      Wang
                                
                                Director
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *Maotong
      Xu
                                
                                Director
                                
                                Ordinary
      Shares
                                
                                0
                                
                                *All
      officers and directors as a group (12 persons named above)
                                
                                
                                
                                Ordinary
      Shares
                                
                                4,176,188(3)(4)
                                
                                12.45%5%
      Securities HolderOasis
      Green Investments Group
                                
                                
                                
                                Ordinary
      Shares
                                
                                27,600,000(5)
                                
                                85.59%All
      persons named above as a group
                                
                                
                                
                                Ordinary
      Shares
                                
                                31,776,188
                                
                                98.04%


47


* Less
than 1%.





(1)
            Beneficial
      Ownership is determined in accordance with the rules of the Securities and
      Exchange Commission and generally includes voting or investment power with
      respect to securities.  Except as otherwise indicated, each of the
      beneficial owners listed above has direct ownership of and sole voting
      power and investment power with respect to our ordinary
      shares.





(2)
            A
      total of 32,245,723 shares (including shares included in the units) of our
      ordinary shares as of July 9, 2009 are outstanding pursuant to SEC
      Rule 13d-3(d)(1).  For each beneficial owner above, any options or
      warrants exercisable within 60 days have been included in the
      denominator.





(3)
            Includes
      1,666,667 shares underlying the warrant to purchase shares of our ordinary
      shares.





(4)
            Includes
      900,000 shares of our ordinary shares owned by Honest Joy Group Limited,
      which is wholly-owned by Mr. Wong.  Mr. Wong may be deemed to be
      a beneficial owner of the shares held by Honest Honest Joy Group
      Limited.





(5)
            Oasis
      Green Investments Group is wholly owned by Ms. Yuying Lu, an Australian
      citizen.  Ms. Lu is the daughter of and who does not live in the
      same household as our Chairman and CEO, Mingwang Lu.  Ms. Lu may
      be deemed to be a beneficial owner of the shares held by Oasis Green
      Investments Group.





None of our major shareholders have
different voting rights from other shareholders.  We are not aware of
any arrangement that may, at a subsequent date, result in a change of control of
our company.





ITEM
7.             MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS




A.
Major Shareholders





Please
refer to Item 6.E “Directors, Senior Management and Employees — Share
Ownership.”





B.
Related Party Transactions





Prior
Issuances





In August 2006, COAC issued the
1,500,000 shares of its common stock, or the Original Shares, to the individuals
set forth below for an aggregate of $25,000 in cash, at a purchase price of
approximately $0.009 per share, as follows:





Shareholders
                            
                            Number
                              of Shares
                            
                            Relationship to COACHarry
      Edelson
                            
                            1,130,000
                            
                            Chairman
      of the Board and Chief Executive OfficerNicholas
      Puro
                            
                            70,000
                            
                            President,
      Secretary and DirectorBarry
      M. Shereck
                            
                            70,000
                            
                            Chief
      Financial Officer and DirectorRose-Marie
      Fox
                            
                            70,000
                            
                            DirectorBailin
      Zheng
                            
                            60,000
                            
                            Special
      AdvisorDaxi
      Li
                            
                            60,000
                            
                            Special
      AdvisorChina
      Investment Group LLC
                            
                            40,000
                            
                            Special
      Advisor


48


In November 2006, Mr. Zheng transferred
60,000 Original Shares to Shengyun Qiu, one of our special advisors, for $0.0167
per share (for a purchase price of $1,000).  Mr. Zheng is no longer
our special advisor.  In February 2007, Mr. Edelson transferred 30,000
Original Shares to Ms. Fox for $0.0167 per share (for a purchase price of
$500).





Initial
Shareholder Warrant Purchase





In connection with the closing of
COAC’s initial public offering, or IPO, COAC sold 2,266,667 warrants, or Insider
Warrants, to the individuals set forth below for $1,360,000 in cash, at a
purchase price of $0.60 per warrant as follows:





Name
      of Holder
                      
                      Number
      of WarrantsHarry
      Edelson
                      
                      1,666,667Nicholas
      Puro
                      
                      200,000Barry
      M. Shereck
                      
                      50,000Rose-Marie
      Fox
                      
                      100,000Daxi
      Li
                      
                      150,000Eliot
      Clauss(1)
                      
                      50,000John
      Allen(1)
                      
                      50,000





(1)Messrs.
Clauss and Allen are members of China Investment Group LLC, one of our special
advisors.





These purchases took place on a private
placement basis simultaneously with the consummation of the IPO.  The
Insider Warrants are identical to our other warrants except that if we call the
warrants for redemption, the Insider Warrants will not be redeemable by us so
long as they are held by these purchasers or their affiliates.  The
Insider Warrants will be redeemable, at our option, at a price of $.01 per
warrant upon 30 days’ notice after the Insider Warrants become exercisable, only
in the event that the last sale price of our ordinary shares is at least $8.50
per share for any 20 trading days within a 30 trading day period ending on the
third day prior to the date on which notice of redemption is
given."





Registration
Rights





The holders of the majority of the
Original Shares and the holders of the majority of the Insider Warrants (or
underlying shares) each will be entitled to make up to two demands that we
register such shares or warrants (or underlying shares) pursuant to a
registration rights agreement entered into with COAC in connection with the
IPO.  In addition, these holders have certain “piggy-back”
registration rights on future registration statements that we file.





Escrow
Agreement among Golden Green, Oasis Green Investments Limited and Continental
Stock Transfer & Trust Company





In
connection with our merger with COAC, Oasis Green Investments Limited, the
majority shareholder of Golden Green, agreed to deposit 3,000,000 of the
ordinary shares it owns in escrow, pursuant to the Escrow Agreement among Golden
Green, Oasis Green and Continental Stock Transfer & Trust Company, as escrow
agent, to secure Oasis Green’s obligations under the Agreement of Merger and
Plan of Reorganization, or the Merger Agreement, to indemnify the surviving
entity of the merger for damages arising out of the merger until the later of
(i) 30 days after the date on which Golden Green has filed its Annual Report on
Form 20-F for its 2009 fiscal year or (ii) one year after the closing of the
merger.





Earnout
Shares





Oasis
Green Investments Limited, Plumpton Group Limited and Honest Joy Group Limited,
or the Original Shareholders, are entitled under the Merger Agreement to be
issued an aggregate of 1,000,000 of our ordinary shares for each of the years
ending on December 31, 2009, 2010 and 2011 in which we have net after tax income
that equals or exceeds the target specified for such year in the Merger
Agreement ($45 million, $60 million and $80 million,
respectively).


49


At the
time of our merger with COAC, we received less cash than was originally expected
which caused us to temporarily delay some of our anticipated capital expansion
and improvement projects.  Consequently, it is possible that we may
grow at a slower rate than anticipated at the time of the merger.  Due
to this change, our board of directors and the Original Shareholders are
discussing appropriate adjustments to the after tax net income targets for 2009,
2010 and 2011.





Lock-Up
Agreement with Pre-Merger Shareholders





In
connection with our merger with COAC, each of the Original Shareholders agreed
not to sell its ordinary shares for 12 months (in the case of Oasis Green
Investments Limited) and six months (in the case of the other two shareholders)
after the closing of the merger, subject to limited exceptions (including
transfer to family, transfer after death, transfer to entities control by the
transferor).





Other
Transactions





Other than reimbursable out-of-pocket
expenses payable to the officers and directors of COAC in connection with our
merger transaction, no compensation or fees of any kind, including finder’s
fees, consulting fees or other similar compensation, has been or will be paid to
any of our officers, directors or substantial shareholder, or to any of their
respective affiliates, except for a $7,500 monthly fee paid to Edelson
Technology Inc., an affiliate of Mr. Edelson, for office space and secretarial
and administrative services.  This arrangement and payment of the fee
terminated upon consummation of the merger. A total of $180,000 was paid to
Edelson Technology Inc. pursuant to such arrangement.





In connection with the IPO, Mr. Edelson
entered into an agreement with EarlyBirdCapital, which is intended to comply
with Rule 10b5-1 under the Exchange Act, pursuant to which he placed limit
orders for $3 million of our ordinary shares commencing November 26, 2008 which,
pursuant to such agreement, was ten business days after COAC filed its Current
Report on Form 8-K announcing our execution of the merger agreement. Mr. Edelson
purchased an aggregate of 509,521 shares of COAC ordinary shares in accordance
with such agreement at an average price of $5.89 per share. Mr. Edelson may vote
these shares any way he chooses. Mr. Edelson has agreed that he will not sell or
transfer any ordinary shares purchased by him pursuant to this agreement until
one year after COAC has completed the merger. It is intended that these
purchases will comply with Rule 10b-18 under the Exchange Act. These purchases
were made by EarlyBirdCapital in such amounts and at such times as
EarlyBirdCapital determined, in its sole discretion. As a result of
EarlyBirdCapital’s interest in our consummation of a business combination, it
may not be deemed to be independent for purposes of this agreement.





Our director, Dr. J.P. Huang, was paid
a total of $35,000 for his consulting services for the period from April through
October 2008 as a consultant to COAC in connection with potential merger
transactions and was reimbursed $4,158 for travel expenses in connection with
his consulting activities.





Before 2007, Zhengzhou No. 2 Iron and
Steel Company Limited was one of the owners of Henan Green with 76.93% of the
total ownership.  In December 2006, Zhengzhou No. 2 Iron and Steel
Company Limited sold all of its ownership to our Chairman and CEO, Mingwang Lu
and others, whereby Mr. Lu became a major owner holding 40% of the total
ownership.  In 2008, the holders transferred their ownership interests
in Henan Green to Golden Green.  Mingwang Lu was a common owner of
Henan Green and Zhengzhou No. 2 Iron and Steel Company Limited. Zhengzhou No. 2
Iron and Steel Company Limited engaged in the same type of industry as Henan
Green but ceased its processing and selling of steel operation in 2003.
Zhengzhou No. 2 Iron and Steel Company Limited’s principal business activity
after the cessation of its steel operations is receiving rental income from its
investments.





In 2004, Henan Green entered into a
rental agreement for land use rights with Zhengzhou No. 2 Iron and Steel Company
Limited with the term from January 1, 2005 to December 30, 2014.  In
December 2008, we entered into a new lease with the related party lessor, which
replaces the 2004 rental agreement.  The new lease term commenced on
January 1, 2008 and terminates on December 31, 2027.  Rental paid to
Zhengzhou No. 2 Iron and Steel Company Limited for the fiscal year ended
December 31, 2008 was $8,781.  Rent payable under the lease in 2009
will be the same as in 2008, and will increase by 10% annually beginning in
2010.


50


Zhengzhou No. 2 Iron and Steel Company
Limited guarantees our obligations under short term bank loans.  We do
not pay any consideration to this related guarantor for guaranteeing our
obligations.





C.
Interests of Experts and Counsel





Not
applicable.





ITEM
8.             FINANCIAL
INFORMATION




A.
Consolidated Statements and Other Financial Information




We have
appended consolidated financial statements filed as part of this Annual Report.
See Item 18 “Financial Statements.”





Legal
Proceedings




We are
currently not a party to any material legal or administrative proceedings, and
we are not aware of threatened material legal or administrative proceedings
against us.  We may from time to time become a party to various legal
or administrative proceedings arising in the ordinary course of our
business.





Dividend
Policy





Our operating subsidiary, Henan Green,
paid dividends of $42.3 million and $16.1 million and in 2008 and 2007,
respectively, prior to our 2009 merger with COAC.  For the foreseeable
future, we intend to retain any future earnings to fund the operation and
expansion of our business and do not anticipate paying cash dividends on our
ordinary shares.





The payment of any dividends in the
future will be within the discretion of our board of directors, subject to the
relevant provision of BVI law.  The payment of dividends subsequent to
the merger will be contingent upon our consolidated revenues and earnings, if
any, capital requirements and general financial condition subsequent to
completion of the merger, as well as contractual restrictions and other
considerations deemed relevant by our board of directors.





B.
Significant Changes





See our disclosures on our business
combination with COAC in March 2009 under “Item 4. Information on the Company –
A. History and Development of the Company.”




ITEM
9.             THE
OFFER AND LISTING




A.
Offer and Listing Details





The common stock, warrants and units of
COAC, were quoted on the Over-the-Counter Bulletin Board maintained by the
Financial Industry Regulatory Authority, under the symbols of CHNQ, CHNQW and
CHNQU, respectively.  COAC units commenced public trading on March 22,
2007 and common stock and warrants commenced public trading on April 18,
2007.





On March
17, 2009, COAC merged with and into us.  As a result of the merger,
COAC’s outstanding shares of common stock, warrants and units have been
converted into like securities of us on a one-to-one basis.  Our
ordinary shares, warrants and units are quoted on the Over-the-Counter Bulletin
Board under the symbols of GGEEF, GGENF and GGETF, respectively, effective April
27, 2009.





The following table provides the high
and low trading prices for our ordinary shares, units and warrants and the
historical prices for our common stock, warrants and units prior to the merger,
for the periods indicated below.  The over-the-counter market
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily reflect actual transactions.


51





Ordinary
                      Share/Common
                      Stock
                    
                    
                    Warrants
                    
                    
                    UnitHigh
                    
                    
                    Low
                    
                    
                    High
                    
                    
                    Low
                    
                    
                    High
                    
                    
                    LowAnnual
      Market PricesYear
      2007 (from March 22, 2007)
                    
                    
                    5.76
                    
                    
                    
                    5.33
                    
                    
                    
                    1.08
                    
                    
                    
                    0.55
                    
                    
                    
                    7.85
                    
                    
                    
                    6.05Year
      2008
                    
                    
                    5.85
                    
                    
                    
                    5.40
                    
                    
                    
                    0.99
                    
                    
                    
                    0.03
                    
                    
                    
                    7.75
                    
                    
                    
                    5.40Year
      2009 (through July 13, 2009)
                    
                    
                    6.50
                    
                    
                    
                    5.10
                    
                    
                    
                    0.75
                    
                    
                    
                    0.10
                    
                    
                    
                    6.25
                    
                    
                    
                    6.00Quarterly
      Market PricesFirst
      Quarter 2008
                    
                    
                    5.62
                    
                    
                    
                    5.50
                    
                    
                    
                    0.99
                    
                    
                    
                    0.62
                    
                    
                    
                    7.75
                    
                    
                    
                    6.95Second
      Quarter 2008
                    
                    
                    5.75
                    
                    
                    
                    5.52
                    
                    
                    
                    0.62
                    
                    
                    
                    0.46
                    
                    
                    
                    6.95
                    
                    
                    
                    6.51Third
      Quarter 2008
                    
                    
                    5.85
                    
                    
                    
                    5.60
                    
                    
                    
                    0.50
                    
                    
                    
                    0.23
                    
                    
                    
                    6.75
                    
                    
                    
                    5.60Fourth
      Quarter 2008
                    
                    
                    5.80
                    
                    
                    
                    5.40
                    
                    
                    
                    0.30
                    
                    
                    
                    0.03
                    
                    
                    
                    6.00
                    
                    
                    
                    5.40First
      Quarter 2009
                    
                    
                    6.00
                    
                    
                    
                    5.10
                    
                    
                    
                    0.40
                    
                    
                    
                    0.10
                    
                    
                    
                    6.25
                    
                    
                    
                    5.95Second
      Quarter 2009
                    
                    
                    6.50
                    
                    
                    
                    5.55
                    
                    
                    
                    0.75
                    
                    
                    
                    0.32
                    
                    
                    
                    6.01
                    
                    
                    
                    5.95Monthly
      Market PricesFebruary
      2009
                    
                    
                    5.92
                    
                    
                    
                    5.55
                    
                    
                    
                    0.27
                    
                    
                    
                    0.12
                    
                    
                    
                    6.25
                    
                    
                    
                    6.10Mach
      2009
                    
                    
                    6.00
                    
                    
                    
                    5.10
                    
                    
                    
                    0.40
                    
                    
                    
                    0.24
                    
                    
                    
                    6.10
                    
                    
                    
                    6.00April
      2009
                    
                    
                    6.00
                    
                    
                    
                    5.55
                    
                    
                    
                    0.50
                    
                    
                    
                    0.32
                    
                    
                    
                    6.00
                    
                    
                    
                    6.10May
      2009
                    
                    
                    6.00
                    
                    
                    
                    6.00
                    
                    
                    
                    0.55
                    
                    
                    
                    0.50
                    
                    
                    
                    6.10
                    
                    
                    
                    6.10June
      2009
                    
                    
                    6.50
                    
                    
                    
                    6.00
                    
                    
                    
                    0.75
                    
                    
                    
                    0.55
                    
                    
                    
                    6.01
                    
                    
                    
                    6.01July
      2009 (through July 13, 2009)
                    
                    
                    6.50
                    
                    
                    
                    6.50
                    
                    
                    
                    0.75
                    
                    
                    
                    0.63
                    
                    
                    
                    6.01
                    
                    
                    
                    6.01




B.
Plan of Distribution





Not
applicable





C.
Markets





See our disclosures under “Item 9. A.
Offer and Listing.”





D.
Selling Shareholders





Not
applicable





E.
Dilution





Not
applicable





F.
Expenses of the Issue





Not
applicable





ITEM
10.           ADDITIONAL
INFORMATION




A.
Share Capital





Not
applicable





B.
Memorandum and Articles of Association


52


The
following represents a summary of certain key provisions of the Company’s
amended and restated memorandum and articles of association.  The
summary does not purport to be a summary of all of the provisions of our
memorandum and articles of association and of all relevant provisions of BVI law
governing the management and regulation of BVI companies.





Register




The
Company was incorporated in the BVI on March 11, 2008 under the BVI Business
Companies Act, 2004, or the 2004 Act.  The Company’s amended and
restated memorandum of association authorizes the issuance of up to 100,000,000
shares without par value.





Objects
and Purposes




The
Company’s amended and restated memorandum of association grants the Company full
power and capacity to carry on or undertake any business or activity and do any
act or enter into any transaction not prohibited by the 2004 Act or any other
BVI legislation.





Directors




The
Company has a classified board of directors consisting of three classes of
directors, Class I, Class II and Class III.  At the first general
meeting, the Class I directors shall be elected for a three year term of office,
the Class II directors shall be elected for a two year term of office and the
Class III directors shall be elected for a one year term of
office.  At a general meeting in each year, successors to the class of
directors whose term expires in that year shall be elected for a three year
term.  A plurality of votes cast shall be sufficient to elect
directors.  The directors may appoint one or more directors to fill a
vacancy on the Board.  A director shall not require a share
qualification, and may be an individual or a company.




Directors
have the powers necessary for managing, and for directing and supervising the
business and affairs of the Company.  Directors may engage in
transactions with the Company and vote on such transactions, provided the nature
of the interest is disclosed to the entire board of directors.  With
the prior or subsequent approval by an ordinary resolution of members (i.e., shareholders), the
directors may, by a resolution of directors, fix the emoluments of directors
with respect to services to be rendered in any capacity to the
Company.  The board of directors shall obtain the approval of the
Company in a general meeting before making any payment to any director or past
director of the Company by way of compensation for loss of office, or as
consideration for or in connection with his retirement from office.





Rights
and Obligations of Shareholders




Dividends




Subject
to the Act, the directors may, by resolution of directors, declare dividends and
distributions by the Company to members and authorize payment on the dividends
or distributions so long as that immediately after the distribution, the value
of the Company’s assets exceeds its liabilities and the Company is able to pay
its debts as they fall due.  Any distribution payable in respect of a
share which has remained unclaimed for three years from the date when it became
due for payment shall, if the board of the directors so resolves, be forfeited
and cease to remain owing by the Company.  The directors may, before
authorizing any distribution, set aside out of the profits of the Company such
sum as they think proper as a reserve fund, and may invest the sum so set apart
as a reserve fund upon such securities as they may select.




The
holder of each ordinary share has the right to an equal share in any
distribution paid by the Company.


53


Voting
Rights




Each ordinary share confers on the
shareholder the right to one vote at a meeting of the members or on any
resolution of members on all matters before the shareholders of the
Company.




Rights in the event of
winding up




The holder of each ordinary share is
entitled to an equal share in the distribution of the surplus assets of the
Company on a winding up.





Redemption





The Company may purchase, redeem or
otherwise acquire and hold its own shares with the consent of members whose
shares are to be purchased, redeemed or otherwise acquired unless the Company is
permitted by the 2004 Act or any provision of the amended and restated
memorandum of association or the amended and restated articles of association to
purchase, redeem or otherwise acquire the shares without their
consent.





The Company may purchase, deem or
otherwise acquire its shares at a price lower than the fair value if permitted
by, and then only in accordance with, the terms of the amended and restated
memorandum of association or the amended and restated articles of association or
a written agreement for the subscription for the shares to be purchased,
redeemed or otherwise acquired.





Changes
in the rights of shareholders





The
directors are authorized to issue new classes or series of shares and the rights
attached thereto.  However, the rights attached to any class or series
of shares (unless otherwise provided by the terms of issue of the shares of that
class or series), whether or not the Company is being wound-up, must be varied
with the consent in writing of all the holders of the issued shares of that
class or series or with the sanction of a resolution passed by a majority of the
votes cast at a separate meeting of the holders of the shares of the class or
series.





Meetings





An annual meeting of members must be
held each year at such date and time as may be determined by the directors and
if requested to do so by members holding at least 30% of the voting rights in
respect of the matter for which the meeting is being held.  No less
than ten days and not more than sixty days notice of meetings is required to be
given to members.





A meeting of members is properly
constituted if at the commencement of the meeting there are two members present
in person or by proxy or (in the case of a member being a corporation) by its
duly authorized representative representing not less than one third of the votes
of the shares or class or series of shares entitled to vote on resolutions of
members to be considered at the meeting.





A member shall be deemed to be present
at the meeting if he participates by telephone or other electronic means and all
members participating in the meeting are able to hear each other.





An ordinary resolution of members may
be approved at a duly constituted meeting of members by the affirmative vote of
a simple majority of the votes of those members entitled to vote and voting on
the resolution.





A special resolution of members may be
approved at a duly constituted meeting of members by a vote of not less than
two-thirds of votes of those members entitled to vote.





A meeting of members convened to
consider a special resolution (other than an annual general meeting) may be
called on short notice if members holding not less than 95% of the total number
of shares entitled to attend the meeting and vote on all matters to be
considered at the meeting have agreed to short notice of the
meeting.


54


The inadvertent failure of the
directors to give notice of a meeting to a member, or the fact that a member has
not received notice, does not invalidate the meeting.





A member may be represented at a
meeting of members by a proxy who may speak and vote on behalf of the
member.  A written instrument giving the proxy such authority must be
produced at the place appointed for the meeting 48 hours before the time for
holding the meeting.





Limitations
on Ownership of Securities





There are no limitations on the right
of non-residents or foreign persons to own the Company’s securities imposed by
BVI law or by the Company’s amended and restated memorandum of association and
articles of association.





Change
in Control of Company





A special resolution of members is
required for the Company to issue shares of the Company or securities
convertible into shares of the Company resulting in a change of control of the
Company.  Additionally, the board of directors has the power to issue
preferred shares with such rights attaching to them as they decide and that this
power could be used in a manner that would delay, defer of prevent a change of
control of our company.





Ownership
Threshold





There are no provisions governing the
ownership threshold above which shareholder ownership must be
disclosed.





Changes
in Capital





Subject to the provisions of the 2004
Act, we may, by a resolution of directors or members, amend the Company’s
memorandum and articles of association to increase or decrease the number of
shares authorized to be issued.  The directors of the Company may, by
resolution, authorize a distribution (including a capital distribution) by the
Company at a time, of an amount, and to any members they think fit if they are
satisfied, on reasonable grounds, that the Company will, immediately after the
distribution, satisfy the solvency test.  The solvency test is
satisfied if the value of the Company’s assets exceeds its liabilities, and the
Company is able to pay its debts as they fall due.





Differences
in Corporate Law




The
companies law of the BVI differs from laws applicable to U.S. corporations and
their shareholders.  Set forth below is a summary of the significant
differences between the provisions of the companies law applicable to us and the
laws applicable to companies incorporated in the United States and their
shareholders.





Protection for minority
shareholders





Under the
laws of most U.S. jurisdictions, majority and controlling shareholders of a
company generally have certain “fiduciary” responsibilities to the minority
shareholders.  Corporate actions taken by majority and controlling
shareholders which are unreasonable and materially detrimental to the interests
of minority shareholders may be declared null and void.  Minority
shareholders may have less protection for their rights under BVI law than they
would have under U.S. law.




Powers of
directors




Unlike
most U.S. jurisdictions, the directors of a BVI company, subject in certain
cases to court’s approvals but without shareholders’ approval, may implement the
sale, transfer, exchange or disposition of any asset, property, part of the
business, or securities of the company, with the exception that shareholder
approval is required for the disposition of over 50% in the value of the total
assets of the company.


55


Conflict of
interests




Similar
to the laws of most U.S. jurisdictions, when a director becomes aware of the
fact that he has an interest in a transaction which the company is to enter
into, he must disclose it to our board.  However, with sufficient
disclosure of interest in relation to that transaction, the director who is
interested in a transaction entered into or to be entered into by the Company
may (i) vote on a matter relating to the transaction; (ii) attend a meeting of
directors at which a matter relating to the transaction arises and be included
in the quorum; and (iii) sign a document on behalf of the company, or do any
other thing in his capacity as a director, that relates to the
transaction.





Written consent and
cumulative voting




Similar
to the laws of most U.S. jurisdictions, under the BVI law, shareholders are
permitted to approve matters by way of written resolution in place of a formal
meeting.  BVI law does not make a specific reference to cumulative
voting, and our current Memorandum and Articles of Association have no provision
authorizing cumulative voting.




Independent
directors





There is
no requirement for a majority of the directors of the company to be independent
as a matter of BVI law.




Redemption




Our
ordinary shares are not redeemable at a shareholder’s option.  We may
redeem our shares only with the consent of the shareholders whose shares are to
be redeemed, except that the consent from the shareholders is not needed under
the circumstances of compulsory redemption, which occurs at the request of the
shareholders holding 90% of the votes of the outstanding ordinary shares
entitled to vote, of the remaining issued shares.




Takeover
provisions




The
Memorandum and Articles of Association of our Company does not alter the general
provisions of BVI law and therefore measures such as a “poison pill” would have
to be in place before a takeover offer, as, if not, the directors could be seen
as exercising their powers for an improper purpose in trying to introduce such a
measure.





Furthermore,
the creation of additional class of shares would require an amendment to the
Memorandum of Association of our Company, which would usually require a special
resolution of shareholders.  However, our directors are empowered to
amend the relevant clauses of the Memorandum of Association for the purposes of
creating new classes or series of shares and the rights attached thereto and may
amend the Articles of Association to take into account of any ancillary changes
required, provided that the directors do not however, have the power to amend
the memorandum and articles to (a) restrict the rights or powers of the members
to amend the memorandum or articles, (b) to change the percentage of members
required to pass a resolution to amend the memorandum and articles, or (c) in
circumstances where the memorandum or articles cannot be amended by the
members.




Shareholder’s access to
corporate records




A
shareholder is entitled, on giving written notice to the Company, to inspect the
Company’s (i) Memorandum and Articles of Association; (ii) register of members;
(iii) register of directors; and (iv) minutes of meetings and resolutions of
members and of those classes of members of which the shareholder is a
member.




The
directors may, if they are satisfied that it would be contrary to the company’s
interests to allow a member to inspect any document listed above (or any part
thereof), refuse the member to inspect the document or limit the inspection of
the document.  Our board may also authorize a member to review the
company account if requested.


56


Indemnification




Under our
Memorandum and Articles of Association, we must indemnify our directors or any
person who is or was, at the request of the Company, serving as a director of,
or in any other capacity is or was acting for, another body corporate or a
partnership, joint venture, trust or other enterprise against expenses
(including legal fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by such persons in connection with legal, administrative
or investigative proceedings to which they are a party or are threatened to be
made a party by reason of their acting as our directors or agents.  To
be entitled to indemnification, these persons must have acted honestly and in
good faith and in what he believes to be the best interest of the Company, and
they must have had no reasonable cause to believe their conduct was
unlawful.




Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us under the foregoing
provisions, we have been advised that in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.





Mergers and similar
arrangements




Under the
laws of the BVI, two or more companies may merge or consolidate in accordance
with Section 170 of the 2004 Act.  A merger means the merging of two
or more constituent companies into one of the constituent companies, and a
consolidation means the uniting of two or more constituent companies into a new
company.  In order to merge or consolidate, the directors of each
constituent company must approve a written plan of merger or consolidation which
must be authorized by a resolution of shareholders.




While a
director may vote on the plan even if he has a financial interest in the plan of
merger of consolidation, in order for the resolution to be valid, the interest
must have been disclosed to our board forthwith upon him becoming aware of such
interest.  The transaction will not be avoidable if the shareholders
approve or ratify it.





Shareholders
not otherwise entitled to vote on the merger or consolidation may still acquire
the right to vote if the plan of merger or consolidation contains any provision
which, if proposed as an amendment to the memorandum or articles of association,
would entitle them to vote as a class or series on the proposed
amendment.  In any event, all shareholders must be given a copy of the
plan of merger or consolidation irrespective of whether they are entitled to
vote at the meeting or consent to the written resolution to approve the plan of
merger or consolidation.




The
shareholders of the constituent companies are not required to receive shares of
the surviving or consolidated company, but may receive debt obligations or other
securities of the surviving or consolidated company, or other assets, or a
combination thereof.  Furthermore, some or all of the shares of a
class or series may be converted into a kind of asset while the other shares of
the same class or series may receive a different kind of asset.  As
such, not all the shares of a class or series must receive the same kind of
consideration.





After the
plan of merger or consolidation has been approved by the directors and
authorized by a resolution of the shareholders, articles of merger or
consolidation are executed by each company and filed with the Registrar of
Corporate Affairs in the BVI.




A
shareholder may dissent from a mandatory redemption of his shares, an
arrangement (if permitted by the court), a merger (unless the shareholder was a
shareholder of the surviving company prior to the merger and continues to hold
the same or similar shares after the merger) and a consolidation.  A
shareholder properly exercising his dissent rights is entitled to payment of the
fair value of their shares.




A
shareholder dissenting from a merger or consolidation must object in writing to
the merger or consolidation before the vote by the shareholders on the merger or
consolidation, unless notice of the meeting was not given to the
shareholder.  If the merger or consolidation is approved by the
shareholders, the company must within 20 days give notice of this fact to
each shareholder who gave written objection, and to each shareholder who did not
receive notice of the meeting.  Such shareholders then have
20 days to give to the company their written election in the form specified
by the BVI Business Companies Act to dissent from the merger or consolidation,
provided that in the case of a merger, the 20 days starts when the plan of
merger is delivered to the shareholder.


57


Upon
giving notice of his election to dissent, a shareholder ceases to have any
rights of a shareholder except the right to be paid the fair value of his
shares.  As such, the merger or consolidation may proceed in the
ordinary course notwithstanding the dissent.




Within
seven days of the later of the delivery of the notice of election to dissent and
the effective date of the merger or consolidation, the company must make a
written offer to each dissenting shareholder to purchase his shares at a
specified price that the company determines to be their fair
value.  The company and the shareholders then have 30 days to agree
upon the price.  If the company and a shareholder fail to agree on the
price within the 30 days, then the company and the shareholder shall each
designate an appraiser and these two appraisers shall designate a third
appraiser.  These three appraisers shall fix the fair value of the
shares as of the close of business on the day before the shareholders approved
the transaction without taking into account any change in value as a result of
the transaction.




Shareholders’
suits




Similar
to the laws of most U.S. jurisdictions, BVI law permits derivative actions
against its directors.  However, the circumstances under which such
actions may be brought, and the procedures and defenses available may result in
the rights of shareholders of a BVI company being more limited than those of
shareholders of a company incorporated and/or existing in the United
States.





The court
of the BVI may, on the application of a shareholder of a company, grant leave to
that shareholder to bring proceedings in the name and on behalf of that company,
or intervene in proceedings to which the company is a party for the purpose of
continuing, defending or discontinuing the proceedings on behalf of the
company.  In determining whether to grant leave, the High Court of the
BVI must take into account (i) whether the shareholder is acting in good
faith; (ii) whether the derivative action is in the interests of the company
taking account of the views of the company’s directors on commercial matters;
(iii) whether the proceedings are likely to succeed; (iv) the costs of the
proceedings in relation to the relief likely to be obtained; and (v) whether an
alternative remedy to the derivative claim is available.




Leave to
bring or intervene in proceedings may be granted only if the High Court of the
BVI is satisfied that (i) the company does not intend to bring, diligently
continue or defend, or discontinue the proceedings, as the case may be; or
(ii) it is in the interests of the company that the conduct of the
proceedings should not be left to the directors or to the determination of the
shareholders as a whole.




In
determining whether to grant leave to a shareholder in these circumstances, the
BVI Court must take the following matters into account:




(a)
whether the member is acting in good faith;





(b)
whether the derivative action is in the interests of the company taking account
of the views of the company’s directors on commercial matters;




(c)
whether the proceedings are likely to succeed;




(d) the
costs of the proceedings  in relation to the relief likely to be
obtained; and




(e)
whether an alternative remedy to the derivative claim is available.





C.
Material Contracts





Except
for the followings, we have not entered into any material contracts other than
in the ordinary course of business and other than those described in Item 4,
“Information on the Company,” Item 7, “Major Shareholders and Related Party
Transactions,” or Item 5. Operating And Financial Review And Prospects –
Contractual Obligations,” or filed (or incorporated by reference) as exhibits to
this annual report or otherwise described or referenced in this annual
report.




58




On March
17, 2009, we consummated our merger with COAC pursuant to the terms of the
Merger Agreement.  At the closing of the Merger, or the Closing, COAC
merged into us, with us being the surviving corporation.  In addition,
the holders of securities of COAC (in the aggregate, 931,186 units, each
consisting of one share of common stock and two warrants, 2,245,723 shares of
common stock (including shares included in the units), warrants to purchase
16,066,667 shares of COAC common stock (including warrants included in the
units) and one Representative’s unit purchase option to purchase 600,000 units
received our like securities, on a one-to-one basis, in exchange for their
existing COAC securities.





Immediately
prior to the Closing, the Original Shareholders owned an aggregate
30,000,000 ordinary shares of the Company, which they continued to own upon the
Closing.  The Company’s Original Shareholders are also entitled under our
Merger Agreement to be issued an aggregate of 1,000,000 of our ordinary shares
for each of the years ending on December 31, 2009, 2010 and 2011 in which we
have net after tax income that equals or exceeds the target specified for such
year in the Merger Agreement ($45 million, $60 million and $80 million,
respectively).





At the
time of our merger with COAC, we received less cash than was originally expected
which caused us to temporarily delay some of our anticipated capital expansion
and improvement projects.  Consequently, it is possible that we may
grow at a slower rate than anticipated at the time of the merger.  Due
to this change, our board of directors and the Original Shareholders are
discussing appropriate adjustments to the after tax net income targets for 2009,
2010 and 2010.





D.
Exchange Controls





BVI
Exchange Controls





There are
no material exchange controls restrictions on payment of dividends, interest or
other payments to the holders of our ordinary or preferred shares or on the
conduct of our operations in the BVI, where we were
incorporated.  There are no material BVI laws that impose any material
exchange controls on us or that affect the payment of dividends, interest or
other payments to nonresident holders of our ordinary or preferred
shares.  BVI law and our Amended and Restated Memorandum and Articles
of Association do not impose any material limitations on the right of
non-residents or foreign owners to hold or vote our ordinary or preferred
shares.




Exchange
Controls in China





Under the
Foreign Currency Administration Rules promulgated in 1996 and revised in 1997,
and various regulations issued by State Administration of Foreign Exchange, or
SAFE, and other relevant PRC government authorities, RMB is convertible into
other currencies without prior approval from SAFE only to the extent of current
account items, such as trade related receipts and payments, interest and
dividends and after complying with certain procedural
requirements.  The conversion of RMB into other currencies and
remittance of the converted foreign currency outside PRC for the purpose of
capital account items, such as direct equity investments, loans and repatriation
of investment, requires the prior approval from SAFE or its local office.
 Payments for transactions that take place within China must be made in
RMB.  Unless otherwise approved, PRC companies must repatriate foreign
currency payments received from abroad.  Foreign-invested enterprises may
retain foreign exchange in accounts with designated foreign exchange banks
subject to a cap set by SAFE or its local office. Unless otherwise
approved, domestic enterprises must convert all of their foreign currency
proceeds into RMB.




On
October 21, 2005, SAFE issued the Notice on Issues Relating to the
Administration of Foreign Exchange in Fund-raising and Reverse Investment
Activities of Domestic Residents Conducted via Offshore Special Purpose
Companies, which became effective as of November 1, 2005.  According
to the notice, a special purpose company, or SPV, refers to an offshore company
established or indirectly controlled by PRC residents for the special purpose of
carrying out financing of their assets or equity interest in PRC domestic
enterprises.  Prior to establishing or assuming control of an SPV, each PRC
resident, whether a natural or legal person, must complete the overseas
investment foreign exchange registration procedures with the relevant local SAFE
branch.  The notice applies retroactively.  As a result, PRC residents
who have established or acquired control of these SPVs that previously made
onshore investments in China were required to complete the relevant overseas
investment foreign exchange registration procedures by March 31, 2006.
 These PRC residents must also amend the registration with the relevant
SAFE branch in the following circumstances: (i) the PRC residents have completed
the injection of equity investment or assets of a domestic company into the SPV;
(ii) the overseas funding of the SPV has been completed; (iii) there
is a material change in the capital of the SPV.  Under the rules, failure
to comply with the foreign exchange registration procedures may result in
restrictions being imposed on the foreign exchange activities of the violator,
including restrictions on the payment of dividends and other distributions to
its offshore parent company, and may also subject the violators to penalties
under the PRC foreign exchange administration regulations.




59




E.
Taxation





The following is a general summary
of certain materialBVI
and U.S. federal
income tax considerations.The discussion is not intended to
be, nor should it
be construed as, legalor tax advice to any
particular prospective shareholder.The discussion is based on laws and
relevant interpretations thereof in effect as
of the date hereof, all of which are  subject to change or different
interpretations, possibly with retroactive effect.




BVI
Taxation




The BVI does not impose a withholding
tax on dividends paid by us to holders of our ordinary or preferred shares, nor
does the BVI levy any capital gains or income taxes on us.  Further, a
holder of our ordinary or preferred shares who is not a resident of the BVI is
exempt from the BVI income tax on dividends paid with respect to the ordinary or
preferred shares.  Holders of ordinary or preferred shares are not subject
to the BVI income tax on gains realized on the sale or disposition of the
ordinary or preferred shares.





Our ordinary and preferred shares are
not subject to transfer taxes, stamp duties or similar charges in the BVI. 
However, as a business company, we are required to pay the BVI government an
annual license fee based on the number of shares we are authorized to
issue.





There is no income tax treaty or
convention currently in effect between the United States and the
BVI.





Taxation
in China





In 2007,
the PRC government promulgated the new Enterprise Income Tax Law, or EIT Law,
and the relevant implementation rules, which became effective on January 1,
2008.  Under the EIT Law and its implementation rules, we, as a BVI
company with substantially all of our management located in China, may be deemed
a resident enterprise for income tax purposes, in which case our global income
may be subject to 25% of PRC income tax, and an income tax rate of 10% will
normally be applicable to dividends payable to our non-PRC investors, and gains
realized on our liquidation or the transfer of our shares by our non-PRC
investors, if such income or gain is derived from sources within
China.  According to a notice issued by the PRC State Council,
dividend from profits generated before January 1, 2008 will still be exempt from
such taxation.  However, it is currently uncertain whether we may be
deemed a resident enterprise, or how to interpret whether any income or gain is
derived from sources within China.  See “Item 3. Key information ─ D.
Risk factors ─ Risks related to doing business in China.”  We may be
treated as a resident enterprise for PRC tax purposes under the New EIT Law and
we may therefore be subject to PRC income tax for any dividends we receive from
our subsidiaries, which may materially and adversely affect the amount of
dividends we must pay to our shareholders.  In addition dividends
payable by us to our non-PRC shareholders, and gains on the sales of our
ordinary shares, may be subject to withholding taxes under PRC tax laws, which
may materially reduce the value of your investment.  If we are not
deemed a resident enterprise, then dividends payable to our non-PRC investors,
and gains realized on our liquidation or the transfer of our shares by our
non-PRC investors will not be subject to PRC income tax
withholding.




60




United States Federal
Taxation




The
following is a discussion of the material U.S. federal tax consequences of the
ownership of our ordinary shares by U.S. Holders (as described
below).  It does not purport to be a comprehensive description of
all of the tax considerations that may be relevant to a particular person’s
situation.  The discussion applies to investors in shares that hold the
shares as capital assets for U.S. federal income tax purposes and it does not
describe all of the tax consequences that may be relevant to holders subject to
special rules, such as:




·
            certain
      financial institutions;




·
            insurance
      companies;




·
            dealers
      and traders in securities or foreign
currencies;




·
            persons
      holding shares as part of a hedge, “straddle,” integrated transaction or
      similar transaction;




·
            persons
      whose functional currency for U.S. federal income tax purposes is not the
      U.S. dollar;




·
            partnerships
      or other entities classified as partnerships for U.S. federal income tax
      purposes;




·
            persons
      liable for the alternative minimum
tax;




·
            tax-exempt
      organizations;




·
            persons
      holding shares that own or are deemed to own 10% or more of our voting
      stock;




·
            persons
      who hold the shares in connection with a trade or business outside the
      United States; or




·
            persons
      who acquired our shares pursuant to the exercise of any employee stock
      option or otherwise as
compensation.




This discussion is based on the U.S.
Internal Revenue Code of 1986, as amended, or the Code, administrative
pronouncements, judicial decisions and final, temporary and proposed Treasury
regulations, all as of the date hereof.  These laws are subject to
change, and can change on a retroactive basis. You should consult your own
tax advisors with regard to the application of the U.S. federal income tax laws
to your particular situations as well as any tax consequences arising under the
laws of any state, local or non-U.S. taxing jurisdiction.





“U.S.
Holder” means a beneficial owner of shares that, for U.S. federal income tax
purposes, is:




·
            a
      citizen or resident of the United
States;




·
            a
      corporation, or other entity taxable as a corporation, created or
      organized in or under the laws of the United States or any political
      subdivision thereof; or




·
            an
      estate or trust the income of which is subject to U.S. federal income
      taxation, regardless of its source.




This
discussion assumes that we are not, and will not become, a passive foreign
investment company, or a PFIC, for U.S. federal income tax purposes, as
described below.




Taxation of
Dividends




The gross
amount of any distributions paid with respect to shares, other than certain pro
rata distributions of shares, generally will be treated as foreign source
dividend income for U.S. federal income tax purposes.  U.S. Holders will
not be entitled to claim a dividends-received deduction with respect to
distributions paid by us.  Dividends will be included in a U.S. Holder’s
income on the date of such U.S. Holder’s receipt of the dividend.





If you
are a non-corporate U.S. Holder, subject to applicable limitations, you may be
eligible to be taxed at a maximum rate of 15% in respect of dividends received
in taxable years beginning before January 1, 2011.  Please consult
your tax advisors to determine whether you are subject to any special rules that
limit your ability to be taxed at this favorable rate.




61




In the
event that we are deemed to be a Chinese “resident enterprise” under PRC tax
law, you may be subject to PRC withholding taxes on dividends paid to you with
respect to the ordinary shares.  In addition, subject to certain
conditions and limitations, PRC withholding taxes on dividends not in excess of
the rate allowed under the income tax treaty between the United States and the
PRC, or the Treaty, if applicable, may be treated as foreign taxes eligible for
credit against your U.S. federal income tax liability.  The rules
governing the foreign tax credit are complex.  You are urged to
consult your tax advisors regarding the availability of the foreign tax credit
in light of your particular circumstances.




Taxation of Capital
Gains




Upon sale
or other disposition of the shares, a U.S. Holder will generally recognize
capital gain or loss for U.S. federal income tax purposes in an amount equal to
the difference between such holder’s tax basis in the shares sold or disposed of
and the amount realized on the sale or other disposition. Such gain or loss
will be long-term capital gain or loss if the U.S. Holder has held the shares
for more than one year and will generally be U.S. source gain or loss for
foreign tax credit purposes. However, if we are deemed to be a Chinese
“resident enterprise” under PRC tax law, gains on disposal may be subject to PRC
tax. In that event, a U.S. Holder may be eligible for the benefits of the
Treaty. Under the Treaty, if any PRC tax were to be imposed on any gain
from the disposition of the shares, the gain would be treated as PRC source
income.  We urge you to consult your tax advisors regarding the tax
consequences if a foreign tax is imposed on gain on a disposition of our shares,
including the availability of the foreign tax credit in light of your particular
circumstances.




Passive Foreign Investment
Company Rules (PFIC)




We
believe that we were not a PFIC for United States federal income tax purposes
for our taxable year ended December 31, 2008.  However, since PFIC status
depends upon the composition of a company’s income and assets and the market
value of its assets (including goodwill) from time to time, there can be no
assurance that we will not be a PFIC for any taxable year.




In
general, if we were a PFIC for any taxable year during which a U.S. Holder held
shares, gain recognized by such U.S. Holder on a sale or other disposition
(including certain pledges) of the shares would be allocated ratably over the
U.S. Holder’s holding period for the shares.  The amounts allocated to
the taxable year of the sale or other disposition and to any year before we
became a PFIC would be taxed as ordinary income.  The amount allocated
to each other taxable year would be subject to tax at the highest rate in effect
for individuals or corporations, as appropriate, for such taxable year, and an
interest charge would be imposed on the amount allocated to such taxable
year.  Similar rules would apply to any distribution in respect of
shares in excess of 125% of the average of the annual distributions on shares
received by a U.S. Holder during the preceding three years or such holder’s
holding period, whichever is shorter. Certain elections may be available
that would result in alternative treatments (such as a mark-to-market treatment)
of the shares. U.S. Holders should consult their tax advisers to determine
whether such elections are available and, if so, what the consequences of the
alternative treatments would be in those holders' particular
circumstances.




Information Reporting and
Backup Withholding




Payment
of dividends and sales proceeds that are made within the United States or
through certain U.S.-related financial intermediaries generally are subject to
information reporting and to backup withholding unless (i) the U.S. Holder is a
corporation or other exempt recipient or (ii) in the case of backup withholding,
the U.S. Holder provides a correct taxpayer identification number and certifies
that backup withholding does not apply.




The
amount of any backup withholding from a payment to a U.S. Holder will be allowed
as a credit against the U.S. Holder’s U.S. federal income tax liability and may
entitle the U.S. Holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.




62




F.
Dividends and Paying Agents





Not
applicable





G.
Statement by Expert





Not
applicable





H.
Documents on Display





We have
filed this Annual Report on Form 20-F with the SEC under the Exchange
Act.  Statements made in this Annual Report as to the contents of any
document referred to are not necessarily complete.  With respect to
each such document filed as an exhibit to this Annual Report, reference is made
to the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such
reference.





We are
subject to the informational requirements of the Exchange Act as a foreign
private issuer and file reports and other information with the
SEC.  Reports and other information filed by us with the SEC,
including this Annual Report on Form 20-F, may be inspected and copied at the
public reference room of the SEC at 100 F. Street, N.E., Washington D.C.
20549.  You can also obtain copies of this Annual Report on Form 20-F
by mail from the Public Reference Section of the SEC, 100 F. Street, N.E.,
Washington D.C. 20549, at prescribed rates.  Additionally, copies of
this material may be obtained from the SEC’s Internet site at http://www.sec.gov.  The
SEC’s telephone number is 1-800-SEC-0330.





As a foreign private issuer, we are
exempt from the rules under the Exchange Act prescribing the furnishing and
content of quarterly reports and proxy statements, and officers, directors and
principal shareholders are exempt from the reporting and short-swing profit
recovery provisions contained in Section 16 of the Exchange Act.





I.
Subsidiary Information





Not applicable.




ITEM
      11.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




Interest
Rate Risk





We are exposed to interest rate risk
primarily with respect to our short-term bank loans.  Although the
interest rates, which are based on the banks’ prime rates with respect to our
short-term loans are fixed for the terms of the loans, the terms are typically
three to twelve months for short-term bank loans and interest rates are subject
to change upon renewal.  There were no material changes in interest
rates for short-term bank loans renewed during the fiscal year ended December
31, 2008.





A
hypothetical 1.0% increase in the annual interest rates for all of our credit
facilities under which we had outstanding borrowings as of December 31, 2008,
would decrease net income before provision for income taxes by approximately
$0.6 million for the fiscal year ended December 31, 2008.  Management
monitors the banks’ prime rates in conjunction with our cash requirements to
determine the appropriate level of debt balances relative to other sources of
funds.  We have not entered into any hedging transactions in an effort
to reduce our exposure to interest rate risk.




63




Foreign
Exchange Risk





While our reporting currency is the
U.S. Dollar, substantially all of our consolidated revenues and consolidated
costs and expenses are denominated in RMB.  All of our assets are
denominated in RMB except for cash.  As a result, we are exposed to
foreign exchange risk as our revenues and results of operations may be affected
by fluctuations in the exchange rate between U.S. Dollars and RMB.  If
the RMB depreciates against the U.S. Dollar, the value of our RMB revenues,
earnings and assets as expressed in our U.S. Dollar financial statements will
decline.  Assets and liabilities are translated at exchange rates at
the balance sheet dates and revenue and expenses are translated at the average
exchange rates and shareholders’ equity is translated at historical exchange
rates.  Any resulting translation adjustments are not included in
determining net income but are included in determining other comprehensive
income, a component of shareholders’ equity.  An average appreciation
(depreciation) of the RMB against the U.S. dollar of 5% would increase
(decrease) our comprehensive income by $2.77 million based on our outstanding
revenues, costs and expenses, assets, and liabilities denominated in RMB as of
December 31, 2008.





Very limited hedging transactions are
available in China to reduce our exposure to exchange rate
fluctuations.  To date, we have not entered into any hedging
transactions in an effort to reduce our exposure to foreign currency exchange
risk. While we may enter into hedging transactions in the future, the
availability and effectiveness of these transactions may be limited, and it may
not be able to successfully hedge our exposure at all. In addition, our foreign
currency exchange losses may be magnified by PRC exchange control regulations
that restrict its ability to convert RMB into foreign currencies.




Inflation





Inflationary factors such as increases
in the cost of our product and overhead costs may adversely affect our operating
results.  Although we do not believe that inflation has had a material
impact on our financial position or results of operations to date, a high rate
of inflation in the future may have an adverse effect on our ability to maintain
current levels of gross margin and selling, general and administrative expenses
as a percentage of net revenues if the selling prices of our products do not
increase with these increased costs.





ITEM
      12.
            DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY
SECURITIES




Not applicable





PART II




ITEM
      13.
            DEFAULTS,
      DIVIDEND ARREARAGES AND
DELINQUENCIES




None.





ITEM
14.           MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITIES HOLDERS AND USE OF
PROCEEDS




None.





ITEM
      15T.
            CONTROLS
      AND PROCEDURES




Disclosure
Controls and Procedures





As
required by Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act, our
management has carried out an evaluation, with the participation and under the
supervision of our chief executive officer and chief financial officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2008.





Disclosure
controls and procedures refer to controls and other procedures designed to
ensure that information required to be disclosed in the reports we file or
submit under the Securities Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC and
that such information is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.  In designing and evaluating our disclosure controls and
procedures, management recognizes that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and management is required to apply
its judgment in evaluating and implementing possible controls and
procedures.




64




Management
conducted its evaluation of disclosure controls and procedures under the
supervision of our chief executive officer and our chief financial
officer.  Based upon, and as of the date of this evaluation, our chief
executive officer and chief financial officer concluded that our disclosure
controls and procedures were effective.





Management’s
Annual Report on Internal Control Over Financial Reporting





This annual report does not include a
report of management’s assessment regarding internal control over financial
reporting or an attestation report of the company’s registered public accounting
firm due to a transition period established by rules of the Securities and
Exchange Commission for newly public companies.





Changes
in Internal Control over Financial Reporting





There has been no change in our
internal control over financial reporting during the year ended December 31,
2008, that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.





ITEM
      16A.
            AUDIT
      COMMITTEE FINANCIAL EXPERT




Our board
of directors established an audit committee on March 17, 2009.  Our
audit committee consists of three members: Maotong Xu, Kwok Keung Wong and J.P.
Huang, with Maotong Xu serving as chairman.  Each of the audit
committee members is “independent” as that term is defined under the Nasdaq
Listing Rules.  Our audit committee oversees our accounting and
financial reporting processes and the audits of the financial statements of our
company.  Our board of directors has determined that Mr. J.P. Huang
meets the criteria for an “audit committee financial expert,” as established by
the SEC.




J.P.
Huang will not be deemed an “expert” for any other purpose, including, without
limitation, for purposes of Section 11 of the Securities Act, as a result of
being designated or identified as an audit committee financial
expert.  The designation or identification of Mr. J.P. Huang as an
audit committee financial expert does not impose on him any duties, obligations
or liability that are greater than the duties, obligations and liability imposed
on him as a member of our Audit Committee and board of directors in the absence
of such designation or identification.





ITEM
      16B.
            CODE
      OF ETHICS




On July 10, 2009, our board of
directors adopted a code of ethics that applies to all of our directors,
officers and employees, including our principal executive officer, principal
financial officer, and principal accounting officer or controller, or persons
performing similar functions.  The code of ethics addresses, among
other things, ethical conduct, conflicts of interest, compliance with laws,
regulations and policies, including disclosure requirements under the federal
securities laws, confidentiality, trading on inside information, and reporting
of violations of the code.  A copy of the code of ethics has been
filed as Exhibit 14.1 to this Annual Report on Form 20-F.





ITEM
      16C.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES




The following table sets forth the
aggregate fees by categories specified below in connection with certain
professional services rendered by UHY VOCATION HK CPA Limited, or UHY, our
independent registered public accounting firm, for the fiscal years ended
December 31, 2008 and 2007:





2008
                        
                        
                        2007Audit
      fees(1)
                        
                        $
                        120,000
                        
                        
                        $
                        120,000Audit-related
      fees(2)
                        
                        
                        15,000
                        
                        
                        
                        0Tax
      fees
                        
                        
                        0
                        
                        
                        
                        0All
      other fees
                        
                        
                        0
                        
                        
                        
                        0Total
                        
                        
                        135,000
                        
                        
                        
                        120,000




65




(1)
              Consists of fees billed for each
      of the fiscal years ended December 31, 2008 and 2007 for professional
      services rendered by the principal accountant for the audit of our annual
      financial statements or services that are normally provided by the
      accountant in connection with statutory and regulatory filings or
      engagements for the fiscal years ended December 31, 2008 and
      2007
  (2)
              Consists of fees billed for each
      of the fiscal years ended December 31, 2008 and 2007 for services rendered
      in connection with the review of our regulatory
      filings.





Audit
Committee Pre-Approval Policies and Procedures




Our Audit Committee pre-approves all
auditing services and permitted non-audit services to be performed for us by our
independent auditor, including the fees and terms thereof (subject to the de
minimums exceptions for non-audit services described in Section 10A(i)(l)(B) of
the Exchange Act that are approved by our Audit Committee prior to the
completion of the audit).





ITEM
      16D.
            EXEMPTIONS
      FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES




We have not asked for nor have we been
granted an exemption from the applicable listing standards for our audit
committee.





ITEM
      16E.
            PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS




Other than otherwise disclosed in “Item
4. Information on the Company – History and Development of the Company,” there
were no purchases of equity securities by us or by any of our affiliates during
the period covered by this Annual Report.





ITEM
      16F.
            CHANGE
      IN REGISTRANT’S CERTIFYING
ACCOUNTANT




Application of this Item does not apply
until our annual report for the fiscal year ending December 31,
2009.





ITEM
      16G.
            CORPORATE
      GOVERNANCE




Not applicable.





PART III




ITEM
      17.
            FINANCIAL
      STATEMENTS




We have elected to provide financial
statements pursuant to Item 18.





ITEM
      18.
            FINANCIAL
      STATEMENTS




The following consolidated financial
statements are included in this annual report:




(1) Audited Consolidated Financial
Statements for the Years Ended December 31, 2008 and 2007 of Golden Green;
and




66




(2) Audited Financial Statements for
the Years Ended December 31, 2008, 2007 and 2006 of Henan Green.





ITEM
      19.
            EXHIBITS





Number
                                                        
                                                        Description1.1*
                                                        
                                                        Amended
      and Restated Memorandum and Articles of Association, adopted on March 17,
      20092.1**
                                                        
                                                        Specimen
      Unit Certificate2.2**
                                                        
                                                        Specimen
      Ordinary Share Certificate2.3**
                                                        
                                                        Specimen
      Warrant Certificate4.1**
                                                        
                                                        Form
      of Escrow Agreement by and among Golden Green, Oasis Green Investments
      Limited and Continental Stock Transfer & Trust
  Company4.2**
                                                        
                                                        Form
      of Voting Agreement4.3**
                                                        
                                                        Form
      of Lock-Up Agreement4.4**
                                                        
                                                        English
      Translation of Short-Term Loan Agreement, dated July 23, 2008, between
      Sub-branch of Zhengzhou Branch of Shanghai Pudong Development Bank and
      Henan Green.4.5**
                                                        
                                                        English
      Translation of Agreement for Established of Bank Payable Bills, dated
      October 14, 2008, between Shanghai Pudong Development Bank and Henan
      Green.4.6**
                                                        
                                                        English
      Translation of Renminbi Loan Agreement, dated July 16, 2008, between
      Zhengzhou Branch of China CITIC Bank and Henan Green.4.7**
                                                        
                                                        English
      Translation of Loan Agreement, dated November 9, 2007, between Commodity
      World Branch of Commercial Bank of Zhengzhou and Henan
    Green.4.8**
                                                        
                                                        English
      Translation of Real Estate Maximum Mortgage Agreement, dated March 26,
      2007, between Zhengzhou Branch of Shanghai Pudong Development Bank and
      Henan Green.4.9**
                                                        
                                                        English
      Translation of Maximum Mortgage Agreement, dated April 21, 2008, between
      Xiangyang Credit Union of Zhengzhou Rural Credit Cooperatives and Henan
      Green.4.10**
                                                        
                                                        English
      Translation of Credit Granting Agreement, valid from July 21, 2008,
      between Guangdong Development Bank Zhengzhou Huanghe Road Sub-branch and
      Henan Green.4.11**
                                                        
                                                        English
      Translation of Agreement, dated September 16, 2003, between Xinzheng City
      Longhu Town People’s Government and Henan Green.4.12**
                                                        
                                                        English
      Translation of Lease Agreement for Land Use Right and Buildings, dated
      November 10, 2008, between Zhengzhou the Second Iron & Steel Co., Ltd.
      and Henan Green.4.13**
                                                        
                                                        English
      Translation of Agreement for the Repayment, dated March 30, 2008, between
      Lu Mingwang, Lu Baiwang, Ren Shouze, Yue Tiansui, Bai Zhengsheng, Lu Yi,
      Zhang Qihong, Lu Mingwang, Chen Zheyu, Zhang Shuiping, Liu Bingshen, and
      Henan Green.4.14**
                                                        
                                                        English
      Translation of Bank Payable Bills Agreement, dated October 14, 2008,
      between Huang Sub-Branch of Zhengzhou Branch of Guangfa Bank, Da
      Sub-Branch of Zhengzhou Branch of Pufa Bank, and Henan
    Green.
  67
  4.15
                              
                              English
      Translation of Form of Labor Contract for all employees of Henan Green,
      including executive officers.8.1
                              
                              List
      of Subsidiaries11.1
                              
                              Code
      of Ethics12.1
                              
                              CEO
      Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) (17 CFR
      240.13a-14(a)) or Rule 15d-1(a) (17 CFR 240.15d-14(a))12.2
                              
                              CFO
      Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule
      15d-1(a) (17 CFR 240.15d-14(a))13.1
                              
                              CEO
      Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
      200213.2*
                              
                              CFO
      Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002





*
Incorporated by reference to our Amendment No. 1 to Form 20-F filed with the
Securities and Exchange Commission on March 23, 2009.





**
Incorporated by reference to our Registration Statement on Form S-4 (File No.
333-155312-01) filed with the Securities and Exchange Commission, as declared
effective on February 17, 2009.




68




SIGNATURE




The registrant hereby certifies that it
meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this annual report on its
behalf.




GOLDEN
      GREEN ENTERPRISES LIMITED/s/
      Mingwang LuMingwang
      LuJuly
      15, 2009
                  
                  Chief
      Executive Officer




69




GOLDEN
GREEN ENTERPRISES LIMITED


REPORT
AND CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007





CONTENTSPagesReport
      of Independent Registered Public Accounting Firm
              
              F-2Consolidated
      Balance Sheets
              
              F-3Consolidated
      Statements of Income
              
              F-4Consolidated
      Statements of Changes in Stockholders’ Equity
              
              F-5Consolidated
      Statements of Cash Flows
              
              F-6-F-7Notes
      to the Consolidated Financial Statements
              
              F-8-F-23




F-1




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





TO
THE BOARD OF DIRECTORS AND STOCKHOLDERS OF


GOLDEN
GREEN ENTERPRISES LIMITED





We have
audited the accompanying consolidated balance sheets of Golden Green Enterprises
Limited (the “Company”) as of December 31, 2008 and 2007, and the related
consolidated statements of income, consolidated statements of changes in
stockholders’ equity, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company’s
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.





We
conducted our audits in accordance with the auditing 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 misstatement. 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 consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Golden Green Enterprises
Limited as of December 31, 2008 and 2007, and the consolidated results of
its operations and its cash flows for the years ended December 31, 2008 and
2007, in conformity with accounting principles generally accepted in the United
States of America.





/s/ UHY
VOCATION HK CPA LIMITED





Hong
Kong, the People’s Republic of China,


July 13,
2009




F-2




GOLDEN
GREEN ENTERPRISES LIMITED


CONSOLIDATED
BALANCE SHEETS


(IN
US DOLLARS)





December 31
                                                                    
                                                                    
                                                                    December 312008
                                                                    
                                                                    
                                                                    2007AssetsCurrent
      assetsCash
                                                                    
                                                                    $
                                                                    42,622,404
                                                                    
                                                                    
                                                                    $
                                                                    218,351Restricted
      cash
                                                                    
                                                                    
                                                                    24,712,349
                                                                    
                                                                    
                                                                    
                                                                    19,226,551Accounts
      receivable, net
                                                                    
                                                                    
                                                                    10,304,724
                                                                    
                                                                    
                                                                    
                                                                    10,176,454Inventories
                                                                    
                                                                    
                                                                    3,554,313
                                                                    
                                                                    
                                                                    
                                                                    8,660,623Due
      from former owners
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    25,126,394Prepayments
      and other deposits
                                                                    
                                                                    
                                                                    11,558,937
                                                                    
                                                                    
                                                                    
                                                                    10,609,492Other
      receivables
                                                                    
                                                                    
                                                                    1,266,097
                                                                    
                                                                    
                                                                    
                                                                    635,718Total
      current assets
                                                                    
                                                                    
                                                                    94,018,824
                                                                    
                                                                    
                                                                    
                                                                    74,653,583Non-current
      assetsProperty,
      plant and equipment, net
                                                                    
                                                                    
                                                                    19,941,521
                                                                    
                                                                    
                                                                    
                                                                    15,816,962Land
      use right, net
                                                                    
                                                                    
                                                                    1,416,220
                                                                    
                                                                    
                                                                    
                                                                    1,346,895Total
      non-current assets
                                                                    
                                                                    
                                                                    21,357,741
                                                                    
                                                                    
                                                                    
                                                                    17,163,857Total
      assets
                                                                    
                                                                    $
                                                                    115,376,565
                                                                    
                                                                    
                                                                    $
                                                                    91,817,440Liabilities
      and stockholders’ equityCurrent
      liabilitiesAccounts
      payable
                                                                    
                                                                    $
                                                                    5,339,350
                                                                    
                                                                    
                                                                    $
                                                                    5,886,523Notes
      payable
                                                                    
                                                                    
                                                                    26,910,956
                                                                    
                                                                    
                                                                    
                                                                    20,480,903Term
      loans
                                                                    
                                                                    
                                                                    30,677,903
                                                                    
                                                                    
                                                                    
                                                                    17,355,303Income
      tax payable
                                                                    
                                                                    
                                                                    2,188,677
                                                                    
                                                                    
                                                                    
                                                                    2,596,687Customers
      deposits
                                                                    
                                                                    
                                                                    17,484,708
                                                                    
                                                                    
                                                                    
                                                                    8,448,965Accrued
      liabilities and other payables
                                                                    
                                                                    
                                                                    6,294,406
                                                                    
                                                                    
                                                                    
                                                                    5,289,171Dividend
      payable
                                                                    
                                                                    
                                                                    9,601,549
                                                                    
                                                                    
                                                                    
                                                                    -Due
      to former minority owners
                                                                    
                                                                    
                                                                    4,310,087
                                                                    
                                                                    
                                                                    
                                                                    -Due
      to former owners
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    61,688Total
      current liabilities
                                                                    
                                                                    
                                                                    102,807,636
                                                                    
                                                                    
                                                                    
                                                                    60,119,240Non-current
      liabilitiesLand
      use right payable, net
                                                                    
                                                                    
                                                                    28,521
                                                                    
                                                                    
                                                                    
                                                                    154,125Total
      non-current liabilities
                                                                    
                                                                    
                                                                    28,521
                                                                    
                                                                    
                                                                    
                                                                    154,125Total
      liabilities
                                                                    
                                                                    
                                                                    102,836,157
                                                                    
                                                                    
                                                                    
                                                                    60,273,365Minority
      interest
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    14,188,390Stockholders’
      equityCommon
      stock, 100,000,000 authorized shares with no par value, 30,000,000 shares
      issued and outstanding
                                                                    
                                                                    
                                                                    300
                                                                    
                                                                    
                                                                    
                                                                    300Additional
      paid in capital
                                                                    
                                                                    
                                                                    6,930,944
                                                                    
                                                                    
                                                                    
                                                                    1,834,940Retained
      earnings
                                                                    
                                                                    
                                                                    7,515,704
                                                                    
                                                                    
                                                                    
                                                                    14,462,559Subscription
      receivable
                                                                    
                                                                    
                                                                    (4,310,087
                                                                    )
                                                                    
                                                                    
                                                                    -Accumulated
      other comprehensive income
                                                                    
                                                                    
                                                                    2,403,547
                                                                    
                                                                    
                                                                    
                                                                    1,057,886Total
      stockholders’ equity
                                                                    
                                                                    
                                                                    12,540,408
                                                                    
                                                                    
                                                                    
                                                                    17,355,685Total
      liabilities and stockholders' equity
                                                                    
                                                                    $
                                                                    115,376,565
                                                                    
                                                                    
                                                                    $
                                                                    91,817,440





See notes
to financial statements.




F-3




GOLDEN
GREEN ENTERPRISES LIMITED


CONSOLIDATED
STATEMENTS OF INCOME


(IN US DOLLARS)





For the year ended December 312008
                                            
                                            
                                            2007Revenue
                                            
                                            $
                                            196,264,731
                                            
                                            
                                            $
                                            139,649,209Cost
      of revenue
                                            
                                            
                                            (142,407,995
                                            )
                                            
                                            
                                            (100,577,079
                                            )Gross
      profit
                                            
                                            
                                            53,856,736
                                            
                                            
                                            
                                            39,072,130Operating
      expenses:General
      and administrative expenses
                                            
                                            
                                            (3,431,745
                                            )
                                            
                                            
                                            (2,766,623
                                            )Selling
      and marketing expenses
                                            
                                            
                                            (831,108
                                            )
                                            
                                            
                                            (534,468
                                            )Total
      operating expenses
                                            
                                            
                                            (4,262,853
                                            )
                                            
                                            
                                            (3,301,091
                                            )Operating
      income
                                            
                                            
                                            49,593,883
                                            
                                            
                                            
                                            35,771,039Other
      income and (expense):Interest
      income
                                            
                                            
                                            1,395,121
                                            
                                            
                                            
                                            1,432,019Interest
      expense
                                            
                                            
                                            (3,769,423
                                            )
                                            
                                            
                                            (2,147,451
                                            )Sundry
      income
                                            
                                            
                                            155,687
                                            
                                            
                                            
                                            16,165Net
      income before income taxes and minority interest
                                            
                                            
                                            47,375,268
                                            
                                            
                                            
                                            35,071,772Income
      tax expense
                                            
                                            
                                            (11,869,735
                                            )
                                            
                                            
                                            (11,421,638
                                            )Net
      income before minority interest
                                            
                                            $
                                            35,505,533
                                            
                                            
                                            
                                            23,650,134Net
      income attributable to minority interest
                                            
                                            
                                            (13,920,944
                                            )
                                            
                                            
                                            (10,637,830
                                            )Net
      income
                                            
                                            $
                                            21,584,589
                                            
                                            
                                            $
                                            13,012,304Earnings
      per share-
      Basic
                                            
                                            $
                                            0.72
                                            
                                            
                                            $
                                            0.43-
      Diluted
                                            
                                            $
                                            0.72
                                            
                                            
                                            $
                                            0.43Weighted
      average common shares outstanding-
      Basic
                                            
                                            
                                            30,000,000
                                            
                                            
                                            
                                            30,000,000-
      Diluted
                                            
                                            
                                            30,000,000
                                            
                                            
                                            
                                            30,000,000




See notes
to financial statements.





F-4





GOLDEN
GREEN ENTERPRISES LIMITED


CONSOLIDATED
STATEMENTS OF CHANGES


IN
STOCKHOLDERS’ EQUITY


( IN US DOLLARS)





Common
      Stock, with no
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      AccumulatedPar
      Value
                                                      
                                                      
                                                      Additional
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      Other
                                                      
                                                      
                                                      TotalNumber
      of
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      Paid-in
                                                      
                                                      
                                                      Subscription
                                                      
                                                      
                                                      Comprehensive
                                                      
                                                      
                                                      Retained
                                                      
                                                      
                                                      Stockholders'Shares
                                                      
                                                      
                                                      Amount
                                                      
                                                      
                                                      Capital
                                                      
                                                      
                                                      receivable
                                                      
                                                      
                                                      Income
                                                      
                                                      
                                                      Earnings
                                                      
                                                      
                                                      EquityBalance,
      December 31, 2006
                                                      
                                                      
                                                      30,000,000
                                                      
                                                      
                                                      $
                                                      300
                                                      
                                                      
                                                      $
                                                      1,834,940
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      240,963
                                                      
                                                      
                                                      $
                                                      10,327,427
                                                      
                                                      
                                                      $
                                                      12,403,630Net
      income
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      13,012,304
                                                      
                                                      
                                                      
                                                      13,012,304Foreign
      currency translation gain
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      816,923
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      816,923Dividend
      declared
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (16,134,445
                                                      )
                                                      
                                                      
                                                      (16,134,445
                                                      )Dividend
      allocated to minorityinterest
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      7,257,273
                                                      
                                                      
                                                      
                                                      7,257,273Balance,
      December 31, 2007
                                                      
                                                      
                                                      30,000,000
                                                      
                                                      
                                                      
                                                      300
                                                      
                                                      
                                                      
                                                      1,834,940
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      1,057,886
                                                      
                                                      
                                                      
                                                      14,462,559
                                                      
                                                      
                                                      
                                                      17,355,685Net
      income
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      21,584,589
                                                      
                                                      
                                                      
                                                      21,584,589Foreign
      currency translation gain
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      1,345,661
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      1,345,661Subscription
      for ordinary shares
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      4,310,087
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      4,310,087Subscriptions
      receivable
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (4,310,087
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (4,310,087
                                                      )Contribution
      to capital on purchase of minority interest
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      785,917
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      785,917Dividend
      declared
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (51,856,496
                                                      )
                                                      
                                                      
                                                      (51,856,496
                                                      )Dividend
      allocated to minority interest
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      23,325,052
                                                      
                                                      
                                                      
                                                      23,325,052Balance,
      December 31, 2008
                                                      
                                                      
                                                      30,000,000
                                                      
                                                      
                                                      $
                                                      300
                                                      
                                                      
                                                      $
                                                      6,930,944
                                                      
                                                      
                                                      $
                                                      (4,310,087
                                                      )
                                                      
                                                      $
                                                      2,403,547
                                                      
                                                      
                                                      $
                                                      7,515,704
                                                      
                                                      
                                                      $
                                                      12,540,408





See notes
to financial statements.




F-5




GOLDEN
GREEN ENTERPRISES LIMITED


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(IN
US DOLLARS)





For the year ended December 312008
                              
                              
                              2007Cash
      flows from operating activities:Net
      income
                              
                              $
                              21,584,589
                              
                              
                              $
                              13,012,304Adjustments to reconcile net
      income to net cash provided by/(used in)
      operating
      activities:Depreciation
      of property, plant and equipment
                              
                              
                              2,447,626
                              
                              
                              
                              2,156,130Amortization
      of land use right
                              
                              
                              30,280
                              
                              
                              
                              27,641Gain
      on disposal of property, plant and equipment
                              
                              
                              -
                              
                              
                              
                              (16,133
                              )Net
      income attributable to minority interest
                              
                              
                              13,920,944
                              
                              
                              
                              10,637,830Changes
      in assets and liabilities:Accounts
      receivable, net
                              
                              
                              (128,270
                              )
                              
                              
                              (4,400,574
                              )Inventories
                              
                              
                              5,106,310
                              
                              
                              
                              (149,620
                              )Prepayments
      and other deposits
                              
                              
                              (949,445
                              )
                              
                              
                              (2,482,968
                              )Other
      receivables
                              
                              
                              (630,379
                              )
                              
                              
                              (479,174
                              )Accounts
      payable
                              
                              
                              (547,173
                              )
                              
                              
                              (76,729
                              )Income
      tax payable
                              
                              
                              (408,010
                              )
                              
                              
                              648,030Customers
      deposit
                              
                              
                              9,035,743
                              
                              
                              
                              3,146,217Accrued
      liabilities and other payables
                              
                              
                              1,005,235
                              
                              
                              
                              (517,004
                              )Net
      cash provided by operating activities
                              
                              
                              50,467,450
                              
                              
                              
                              21,505,950Cash
      flows from investing activities:Capital
      expenditures for addition of property, plant and equipment
                              
                              
                              (6,572,185
                              )
                              
                              
                              (2,277,378
                              )Changes
      in restricted cash
                              
                              
                              (5,485,798
                              )
                              
                              
                              8,335,884Proceeds
      from/(to) former owners
                              
                              
                              25,126,394
                              
                              
                              
                              (7,203,669
                              )Net
      cash provided by/(used in) investing activities
                              
                              
                              13,068,411
                              
                              
                              
                              (1,145,163
                              )





F-6




GOLDEN
GREEN ENTERPRISES LIMITED


CONSOLIDATED
STATEMENTS OF CASH FLOWS (.../Cont'd)


(IN
US DOLLARS)





For the year ended December 312008
                              
                              
                              2007Cash
      flows from financing activities:Proceeds
      from common stock issued
                              
                              
                              -
                              
                              
                              
                              300Repayment
      of  term loans
                              
                              
                              (26,662,742
                              )
                              
                              
                              (5,887,615
                              )Proceeds
      from term loans
                              
                              
                              39,985,342
                              
                              
                              
                              15,093,356Proceeds
      from notes payable
                              
                              
                              6,430,053
                              
                              
                              
                              (15,006,853
                              )Dividends
      paid
                              
                              
                              (42,254,947
                              )
                              
                              
                              (16,134,445
                              )Land
      use right payable
                              
                              
                              (125,604
                              )
                              
                              
                              (304,465
                              )Due
      to former owners
                              
                              
                              (61,688
                              )
                              
                              
                              (60,683
                              )Net
      cash used in financing activities
                              
                              
                              (22,689,586
                              )
                              
                              
                              (22,300,405
                              )Net
      increase/(decrease) in cash
                              
                              
                              40,846,275
                              
                              
                              
                              (1,939,618
                              )Effect
      on change of exchange rates
                              
                              
                              1,557,778
                              
                              
                              
                              1,353,809Cash
      as of January 1
                              
                              
                              218,351
                              
                              
                              
                              804,160Cash
      as of December 31
                              
                              $
                              42,622,404
                              
                              
                              $
                              218,351Supplemental
      disclosures of cash flow and non-cash information:Cash
      paid during the year:Interest
      paid
                              
                              $
                              3,769,423
                              
                              
                              $
                              2,147,451Income
      tax paid
                              
                              $
                              12,277,745
                              
                              
                              $
                              10,930,112Non
      - cash item:Transfer
      of prepayments and other deposits to property, plant and
      equipment
                              
                              $
                              2,288,337
                              
                              
                              $
                              -Acquisition
      of minority interest with subscription receivable
                              
                              $
                              4,310,087
                              
                              
                              $
                              -





See notes
to financial statements.





F-7




GOLDEN
GREEN ENTERPRISES LIMITED


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007


(IN
US DOLLARS)





1.
            DESCRIPTION
      OF BUSINESS AND ORGANIZATION





Golden
Green Enterprises Limited (“the Company” or “Golden Green”) was established in
the British Virgin Islands ("BVI") on March 11, 2008 as a limited liability
Company, for the purpose of effectuating a reorganization and merger with Wealth
Rainbow Development Limited (“Wealth Rainbow”) and Henan Green Complex Materials
Co., Ltd (“Henan Green”) as discussed in Note 2.





Golden
Green’s holdings are comprised of Wealth Rainbow, also a holding company and
Henan Green, an operating company. Through its investment in these entities,
Golden Green is involved with the processing and sales of steel mill flat-rolled
products which are extensively used in the manufacturing industry throughout
mainland China.  Henan Green conducts business directly with its
customers in the People's Republic of China (PRC).





Wealth
Rainbow was formed on March 1, 2007 by Lu Mingwang's family as the
Company. On October 21, 2008, Wealth Rainbow acquired 100% of the
outstanding shares of Henan Green pursuant to a stock transfer agreement.
Subsequent to the stock transfer, Wealth Rainbow became the sole shareholder of
Henan Green. The change of ownership was approved by the Chinese Government on
October 21, 2008. The principal activity of Wealth Rainbow is to hold its
interest in Henan Green.





The
consolidated financial statements include the financial statements of Golden
Green and its subsidiaries (together referred to as the "Group"). The Company
owns 100% equity interests directly and indirectly, in two subsidiaries, namely
Wealth Rainbow and Henan Green. The organization chart of the Group is as
follows:










F-8




GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 2.
              REORGANIZATION
      AND ACQUISITION OF MINORITY
INTEREST
 
 On
October 21, 2008, Wealth Rainbow acquired the minority interest in Henan Green
for $4,310,087 with the issuance of a promissory note to the minority
stockholders. This amount represented the fair value of Henan Green as
determined by and independent valuation which was performed during August 2008.
On the effective acquisition date, October 21, 2008, the fair value of Henan
Green exceeded the agreed purchase price by $785,917. Such amount has been
recorded as a contribution of capital by Henan Green.
 
 The net
assets of Henan Green were recorded by Wealth Rainbow at historical cost to the
extent of the common control group’s 55.02% ownership of Henan Green. The
remaining 44.98% of Henan Green shares acquired were accounted for as a purchase
(fair value) of the minority interest, as contemplated by Statement of Financial
Accounting Standards “SFAS No.141”, Business Combinations.
 
 The
common control group comprised of three direct relatives of the Lu family which
held approximately 55.02% of the shares of Henan Green on the date it was
acquired by Wealth Rainbow. Wealth Rainbow was wholly owned by another direct
relative of the Lu family. Under the common control reporting rules, the control
group’s 55.02% interest of Henan Green that was acquired by Wealth Rainbow
constitutes an exchange of equity interests between entities under common
control.
 
 Subsequent
to the Henan Green acquisition, Wealth Rainbow entered into a reorganization and
capitalization agreement with the Company during November 2008 in which all of
the shares of Wealth Rainbow were exchanged with shares of the Company. As a
result of these transactions, Wealth Rainbow and Henan Green became wholly owned
subsidiaries of the Company. These transactions have been accounted for as a
reorganization under common control with the purchase of a minority
interest.
 
 Accordingly,
based on the above transactions, the results of Henan Green’s operations have
been included in the consolidated financial statements of the Company for the
years ended December 31, 2008 and 2007. The controlling interest of Henan Green
was effectively acquired on December 25, 2006. However, the Company has elected
not to present such one week period since it was determined not to be material
or meaningful to the presentation and understanding of these financial
statements.
 
 During
March 2009, the Company amended its memorandum of association by
increasing its authorized number of ordinary shares from 50,000 with a $1 par
value to 100,000,000 with no par value.  Simultaneously with the
amendment, the Company effected a stock split by an additional 29,999,900 shares
to the current shareholders.  Accordingly, immediately after the
amendment and prior to the merger with China Opportunity Acquisition Corp.
(“COAC”), the Company had 30,000,000 ordinary shares outstanding. On March 17,
2009, the Company consummated a merger with COAC.
 
 In
connection with the merger, the Company issued 2,245,723 shares of its ordinary
shares in exchange for all the outstanding shares of COAC. The Company is deemed
to be the surviving entity and registered its shares pursuant to a registration
statement filed with the U.S Securities and Exchange
Commission.  Accordingly, after the merger, the former shareholders of
COAC own approximately 6.5% of the Company’s ordinary shares.
 
 The
Company has reserved approximately 16,066,667 ordinary shares in connection with
the exercise of warrants and unit purchase options outstanding at the date of
the merger.
 
 3.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES
 
 (a)
              Basis
      of consolidation
 
 The
consolidated financial statements include the accounts of Golden Green and all
entities in which a direct or indirect controlling interest exists. All
intercompany balances and transactions have been eliminated in the consolidated
financial statements.
  F-9
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 3.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (.../Cont’d)
 
 (a)
              Basis
      of consolidation (.../Cont’d)
 
 The
Group’s consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America ("US
GAAP").  The preparation of the consolidated financial statements in
accordance with US GAAP requires management of the Group to make a number of
estimates and assumptions relating to the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the
reported  amounts  of  revenues  and   expenses  during  the  year.   Significant
items  subject  to  such estimates and assumptions
include the recoverability of the carrying amount and the estimated useful lives
of long-lived assets; valuation allowances for receivables, realizable values
for inventories. Actual results could differ from those
estimates.
 
 Net
income is reduced by the portion attributable to minority interests. The
minority interests are disclosed separately in the consolidated statements of
income and in the consolidated balance sheets. Minority interests consist of the
amount of those interests at the date the controlling interest was established
and the minority’s share of changes in equity since that date.
 
 (b)
              Foreign
      currency translation
 
 Assets
and liabilities of foreign operations are translated at the rate of exchange in
effect on the balance sheet date; income and expenses are translated at the
average rate of exchange prevailing during the year. The year-end rates for
December 31, 2008 and 2007 of Renminbi to one US dollar were 6.8225 and 7.2946
respectively; average rates for the year-end December 31, 2008 and 2007 were
6.9351 and 7.5973 respectively. The related translation adjustments are
reflected in "Accumulated other comprehensive income" in the
stockholders’ equity section of the balance sheet, net of the amount
attributable to the minority interest. As of December 31, 2008 and 2007, the
accumulated foreign currency translation gain was $2,403,547 and $1,057,886
respectively. Foreign currency gains and losses resulting from transactions are
included in earnings.
 
 (c)
              Cash
 
 Cash
represents cash in bank and cash on hand.
 
 The Group
considers all highly liquid investments with original maturities of three months
or less to be cash.  The Group maintains bank accounts in the
PRC.
 
 (d)
              Accounts
      receivable
 
 Accounts
receivable are recorded at the invoiced amount, net of allowances for doubtful
accounts sales returns and trade discounts.  The allowance for
doubtful accounts is the Group’s best estimate of the amount of probable
credit losses in the Group’s existing accounts
receivable.  Management determines the allowance based on historical
write-off experience, customer specific facts and economic
conditions.  The Group has historically been able to collect all
of its receivable balances, and accordingly, 2% allowance has been provided for
doubtful accounts.
 
 Outstanding
account balances are reviewed individually for collectability. Account balances
are charged off against the allowance after all means of collection have been
exhausted and the potential for recovery is considered remote. The
Group does not have any off-balance-sheet credit exposure to its
customers.
  F-10
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 3.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (.../Cont’d)
 
 (e)
              Inventories
 
 Inventories
are stated at the lower of cost or market and consist primarily of flat rolled
steel.  Cost is determined using the weighted average cost
method.  In the case of work in process and finished goods, such costs
comprise of direct materials, direct labor and an appropriate proportion of
overheads.
 
 (f)
              Property,
      plant and equipment
 
 Property,
plant and equipment are recorded at cost less accumulated
depreciation.  Expenditures for major additions and betterments are
capitalized.  Maintenance and repairs are charged to general and
administrative expenses as incurred. Depreciation of property, plant and
equipment is computed by the straight-line method over the assets estimated
useful lives ranging from five to fifty years. Building improvements, if any,
are amortized on a straight-line basis over the estimated useful
life.
 
 Upon sale
or retirement of property, plant and equipment, the related cost and accumulated
depreciation are removed from the accounts and any gain or loss is reflected in
operations.
 
 Construction
in progress represents the costs of property, plant and equipment under
construction or installation. Depreciation commences when the asset is placed in
service. The accumulated costs are reclassified as property, plant and equipment
when installation or construction is completed. Government subsidies received
reduce the cost of construction.
 
 The
estimated useful lives of the assets are as follows:
 
 YearsLand
      use right
                    
                    50Leasehold
      land improvement
                    
                    46.5Buildings
                    
                    10
      - 20Machinery
      and equipment
                    
                    5
      - 20Vehicles
                    
                    5Furniture
      fixtures and office equipment
                    
                    5
 
 (g)
              Land
      use right
 
 Land use
right is recorded at cost less accumulated amortization. Under Statement of
Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible
Assets", land use right classified as definite lived intangible assets
and are amortized over its useful life.  According to the laws of the
PRC, the government owns all of the land in the PRC. Companies or individuals
are authorized to possess and use the land only through land use rights granted
by the PRC government.  Land use right is amortized using the
straight-line method over the lease term of 50 years.
  F-11
  GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 3.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (.../Cont’d)
 
 (h)
              Impairment
      of long-lived assets
 
 Long-lived
assets, including property, plant and equipment are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to the estimated
undiscounted future cash flows expected to be generated by the asset. If the
carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of
the asset exceeds the fair value of the asset.
 
 Assets to
be disposed of are separately presented in the balance sheet and reported at the
lower of the carrying amount or fair value less costs to sell, and are no longer
depreciated. The assets and liabilities of a disposed group classified as held
for sale are presented separately in the appropriate asset and liability
sections of the balance sheet.
 
 No
impairment was recognized as at December 31, 2008 and 2007.
 
 (i)
              Fair
      value accounting
 
 Statement
of Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements",
defines fair value, establishes a framework for measuring fair value under
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS 157 emphasizes that fair value is a market-based
measurement, not an entity-specific measurement, and states that a fair value
measurement should be determined based on assumptions that market participants
would use in pricing an asset or a liability. In February 2008, the FASB issued
FASB Staff Position No. FAS 157-2 ("FSP 157-2") Effective Date of FASB Statement
No. 157, which amended SFAS 157 to defer the effective date of SFAS 157 for
non-financial assets and non-financial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring
basis, at least annually, including goodwill and trademarks. In accordance with
FSP 157-2, the Group will delay application of SFAS 157 for non-financial assets
and non-financial liabilities, until January 1, 2009. The application of SFAS
157 in situations where that market for a financial asset is not active was
clarified by the issuance of Financial Accounting Standards Board Staff Position
157-3. Determining the Fair Value of a Financial Asset When the Market for That
Asset Is Not Active ("FSP 157-3") in October 2008. FSP 157-3 became effective
immediately and did not significantly impact the methods by which the Group
determines the fair values of its financial assets.
 
 (j)
              Revenue
      recognition
 
 The
Group generates revenue primarily from sales of steel mill flat-rolled
products.
 
 Revenue
is recognized when products have been delivered to the buyer and title and risk
of ownership has passed to the buyer, the sales price is fixed and determinable
and collectability is reasonably assured.
 
 In the
PRC, value added tax (“VAT”) of 17% on the invoice amount is collected in
respect of the sales of goods on behalf of tax authorities. The VAT collected is
not revenue of the Group; instead, the amount is recorded as a liability on the
balance sheet until such VAT is paid to the authorities.
 
 (k)
              Income
      taxes
 
 The
Group accounts for income taxes under Financial Accounting Standards Board
(FASB) No. 109, "Accounting for Income Taxes". Deferred income tax assets and
liabilities are determined based upon differences between the financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be effective when the differences are
expected to reverse.
  F-12
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 3.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (.../Cont’d)
 
 (k)
              Income
      taxes (.../Cont’d)
 
 Deferred
tax assets are reduced by a valuation allowance to the extent management
concludes it is more likely than not that the assets will not be
realized.  Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the statements of income in the period that
includes the enactment date.
 
 Management
has elected to defer the application of FASB Interpretation No. 48, Accounting
for Uncertainty in Income Taxes, in accordance with FASB Staff Position No.
48-3, Effective Date of FASB Interpretation No. 48 for Certain Nonpublic
Companies. The Group will continue to evaluate uncertain tax positions in
accordance with FASB Statement No. 5 Accounting for Contingencies. Under that
Statement, if it is probable that an uncertain tax position will result in a
material liability and the amount of the liability can be estimated, then the
estimated liability is accrued. As of December 31, 2008 and 2007, there were no
amounts that had been accrued with respect to uncertain tax
positions.
 
 (l)
              Comprehensive
      income
 
 The Group
has adopted Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income".  This statement establishes rules
for the reporting of comprehensive income and its
components.  Comprehensive income consists of net income and foreign
currency translation adjustments.
 
 Comprehensive
income consists of the following for the year ending December
31:
 
 2008
                      
                      
                      2007USD
                      
                      
                      USDNet
      income
                      
                      $
                      21,584,589
                      
                      
                      $
                      13,012,304Other
      comprehensive income - Foreign currency translation
      adjustments
                      
                      
                      1,345,661
                      
                      
                      
                      816,924Total
      comprehensive income
                      
                      $
                      22,930,250
                      
                      
                      $
                      13,829,228
 
 (m)
              Commitments
      and contingencies
 
 In the
normal course of business, the Group is subject to contingencies, including
legal proceedings and claims arising out of the normal course of businesses that
relate to a wide range of matters, including among others, product liability.
The Group records accruals for such contingencies based upon the assessment
of the probability of occurrence and, where determinable, an estimate of the
liability. Management may consider many factors in making these assessments
including past history, scientific evidence and the specifics of each matter. As
management has not become aware of any product liability claims arising from any
incident over the year, the Group has not recognized a liability for
product liability claims.
  F-13
  
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 3.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (.../Cont’d)
 
 (n)
              Segment
      information
 
 Statement
of Financial Accounting Standards (SFAS) No. 131, "Disclosure About Segments of an
Enterprise and Related Information" establishes standards for reporting
information on operating segments in interim and annual financial
statements.  The Group has only one segment, all of the Group's
operations and customers are in the PRC and all income are derived from the
sales of steel mill flat-rolled products. Accordingly, no geographic information
is presented.
 
 (o)
              Recently
      issued accounting standards
 
 In April
2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position
No. 142-3 ("FSP 142-3") "Determination of the Useful Life of
Intangible Assets." FSP 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FAS 142, "Goodwill and Other Intangible
Assets," to include an entity's historical experience in renewing or
extending similar arrangements, adjusted for entity-specific factors, even when
there is likely to be "substantial cost or material
modifications." FSP FAS 142-3 states that in the absence of historical
experience an entity should use assumptions that market participants would make
regarding renewals or extensions, adjusted for entity-specific factors. The
guidance for determining the useful life of intangible assets included in this
FSP will be applied prospectively to intangible assets acquired after the
effective date of January 1, 2009. The Group does not expect FSP 142-3 to
have a material impact on our financial statements.
 
 In May
2008, the Financial Accounting Standards Board (FASB) issued Financial
Accounting Standard No. 162 ("FAS 162"), “The Hierarchy of Generally Accepted
Accounting Principles”. Under FAS 162, the GAAP hierarchy will now reside
in the accounting literature established by the Financial Accounting Standards
Board. FAS 162 identifies the sources of accounting principles and the framework
for selecting the principles used in the preparation of financial statements in
conformity with GAAP. FAS 162 is effective 60 days following the SEC’s approval
of the Public Company Accounting Oversight Board Auditing amendments to AU
Section 411, "The Meaning of
Present Fairly in Conformity with Generally Accepted Accounting
Principles." FAS 162 will not impact the Group’s financial
statements.
 
 In
December 2008, the Financial Accounting Standards Board (FASB) issued Financial
Staff Position  No. 132(R)-1 ("FSP No. 132(R)-1"), "Employers’
Disclosures about Postretirement Benefit Plan Assets,” FSP No. 132(R)-1 amends
the Financial Accounting Standards Board (FASB) No. 132 to provide guidance on
an employer’s disclosures about plan assets of a defined benefit pension or
other postretirement plan. The additional disclosures required focus on
disclosures of fair value by category of plan assets. This Financial Staff
Position is effective for fiscal years ending after December 15, 2009. The Group
does not expect a material impact on its financial statements when these
additional provisions are adopted.
 
 Management
does not believe that any recently issued, but not yet effective accounting
pronouncements, if adopted, would have a material effect on the accompanying
financial statements.
  F-14
  GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 4.
              CASH
 
 Cash
represents cash in bank and cash on hand. Cash as of December 31, 2008 and 2007
consist of the following:
  2008
                    
                    
                    2007USD
                    
                    
                    USDBank
      balances and cash
                    
                    $
                    67,334,753
                    
                    
                    $
                    19,444,903Less:
      Restricted cash
                    
                    
                    (24,712,349
                    )
                    
                    
                    (19,226,551
                    )$
                    42,622,404
                    
                    
                    $
                    218,352
  Renminbi
is not a freely convertible currency and the remittance of funds out of the PRC
is subject to the exchange restrictions imposed by the PRC
government.
 
 As at
December 31, 2008 and 2007, the Group’s cash of approximately $24,712,349 and
$19,226,551, were restricted and deposited in certain banks as guarantee
deposits for the benefit of issuance of notes payable granted by the
banks.
 
 The
restricted cash guaranteed $26,910,956 and $20,480,903 of notes payable for the
years ended December 31, 2008 and 2007 respectively.  It can only be
released at the expiration date of corresponding notes payable.
 
 5.
              ACCOUNTS
      RECEIVABLE
 
 The
Group performs ongoing credit evaluations of its customers' financial
conditions. The Group generally encourages its customers to use its products and
settle the outstanding balance within credit terms. As of December 31 2008 and
2007, the provision on accumulated allowance for doubtful accounts were $126,790
and $86,384 respectively.
 
 6.
              INVENTORIES
 
 Inventories
as of December 31, 2008 and 2007 consist of the following:
  2008
                      
                      
                      2007USD
                      
                      
                      USDRaw
      materials
                      
                      $
                      936,280
                      
                      
                      $
                      4,763,939Work-in-process
                      
                      
                      1,378,067
                      
                      
                      
                      1,310,691Finished goods
                      
                      
                      1,239,966
                      
                      
                      
                      2,585,993$
                      3,554,313
                      
                      
                      $
                      8,660,623
 
 7.
              DUE
      FROM/(TO) FORMER OWNERS
 
 Amounts
due from/(to) former owners are unsecured, non-interest bearing and with no
fixed repayment terms. As at December 31, 2008, the balance of due from/(to)
former owners was zero as amounts were fully settled in the fourth quarter of
2008.
  F-15
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 8.
              PREPAYMENTS
      AND OTHER DEPOSITS
 
 Prepayments
and other deposits as of December 31, 2008 and 2007 consist of the
following:
 
 2008
                        
                        
                        2007USD
                        
                        
                        USDPrepaid
      purchases
                        
                        $
                        10,896,840
                        
                        
                        $
                        10,609,492Prepaid
      machinery deposit
                        
                        
                        637,882
                        
                        
                        
                        -Prepaid
      general expenses
                        
                        
                        24,215
                        
                        
                        
                        -$
                        11,558,937
                        
                        
                        $
                        10,609,492
 
 Prepaid
purchases represent amounts prepaid for the purchases of raw materials and
accessories to suppliers.
 
 9.
              OTHER
      RECEIVABLES
 
 Other
receivables as of December 31, 2008 and 2007 consist of the
following:
 
 2008
                      
                      
                      2007USD
                      
                      
                      USDOther
      receivables-
      Advances to staff
                      
                      $
                      381,224
                      
                      
                      $
                      156,404-
      Others
                      
                      
                      884,873
                      
                      
                      
                      479,314$
                      1,266,097
                      
                      
                      $
                      635,718
 
 Other
receivables represent advances to staff and petty cash to department staff for
daily expenditures. These amounts are interest free and with no fixed repayment
terms.
 
 10.
              PROPERTY,
      PLANT AND EQUIPMENT
 
 Property,
plant and equipment as of December 31, 2008 and 2007 consist of the
following:
 
 2008
                      
                      
                      2007USD
                      
                      
                      USDBuildings
                      
                      $
                      5,000,219
                      
                      
                      $
                      2,525,743Leasehold
      land improvement
                      
                      
                      20,183
                      
                      
                      
                      18,877Plant
      machinery and equipment
                      
                      
                      22,769,678
                      
                      
                      
                      20,232,099Vehicles
                      
                      
                      1,615,780
                      
                      
                      
                      842,294Office
      equipment
                      
                      
                      139,189
                      
                      
                      
                      223,123Construction
      in progress
                      
                      
                      1,233,938
                      
                      
                      
                      364,66630,778,987
                      
                      
                      
                      24,206,802Accumulated
      depreciation
                      
                      
                      (10,837,466
                      )
                      
                      
                      (8,389,840
                      )$
                      19,941,521
                      
                      
                      $
                      15,816,962
  F-16
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 10.
              PROPERTY,
      PLANT AND EQUIPMENT (.../Cont’d)
 
 Depreciation
charged to earnings for the years ended December 31, 2008 and 2007 were
$2,447,626 and $2,156,130 respectively.
 
 Construction
in progress consists of the construction of a research and development centre
("R&D centre") and buildings of staff accommodation on 300 acres land. The
total construction in progress as at December 31, 2008 was $1,233,938. $474,703
was the cost incurred net of government subsidies of $230,710 of R&D centre
during the period from July 2008 to December 2008. The R&D centre is
estimated to be completed in 2009 with total estimated cost of
$2,198,608.
 
 Buildings
of staff accommodation consist of the constructions of drainage system and
related facilities, side pavement and building of stores and building management
centre. $494,790 was the cost incurred during the period from July 2008 to
December 2008.  These buildings of staff accommodation are estimated
to be completed in 2009 with total estimated cost of $879,443.
 
 $264,445
was the cost incurred to install a production line during the period from July
2008 to December 2008, the installation of production line is estimated to be
completed in 2009 with total estimated cost of $3,078,051.
 
 No
depreciation has been provided for construction in progress.
 
 11.
              LAND
      USE RIGHT
 
 Land use
right as of December 31, 2008 and 2007 consist of the following:
 
 2008
                      
                      
                      2007USD
                      
                      
                      USDLand use right, net
                      
                      $
                      1,416,220
                      
                      
                      $
                      1,346,895
 
 Land use
right represents prepaid lease payments to the local government for land use
right held for a period of 50 years from July 9, 2004 to June 30, 2054 in
Zhengzhou, People's Republic of China. Land use right payable as at December 31,
2008 and 2007 were $28,521 and $154,125 respectively.
 
 Land use
right is amortized using the straight-line method over the lease term of 50
years. The amortization expense for the years ended December 31, 2008 and 2007
were $30,280 and $27,641 respectively.
  F-17
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 12.
              NOTES
      PAYABLES
 
 Notes
payable as of December 31, 2008 and 2007 consist of the following:
 
 2008
                          
                          
                          2007USD
                          
                          
                          USDClassified
      by financial institutions: -China
      Citic Bank
                          
                          $
                          5,862,953
                          
                          
                          $
                          3,194,143Commercial
      Bank of Zhengzhou
                          
                          
                          2,711,616
                          
                          
                          
                          411,263Guangdong
      Development Bank
                          
                          
                          6,903,628
                          
                          
                          
                          2,330,491Shanghai
      Pudong Development Bank
                          
                          
                          10,260,169
                          
                          
                          
                          8,842,157China
      Merchants Bank
                          
                          
                          1,172,590
                          
                          
                          
                          5,702,849$
                          26,910,956
                          
                          
                          $
                          20,480,903Additional
      information: -Maximum
      balance outstanding during the year
                          
                          $
                          44,902,894
                          
                          
                          $
                          55,568,497Finance
      cost
                          
                          $
                          1,333,746
                          
                          
                          $
                          1,133,708Finance
      charge per contract (basis points)
                          
                          5pt
                          
                          
                          5ptWeighted
      average interest rate
                          
                          
                          2.03
                          %
                          
                          
                          1.56
                          %
 
 All the
above notes payable are secured by either 50% or 100% corresponding restricted
cash.  As at December 31, 2008 and 2007, the Group’s cash of
approximately $24,712,349 and $19,226,551 were restricted on the such purpose.
All the notes payable have terms of six months. Commercial
Bank of Zhenzhou had imposed covenant on the Company that not more than 10% of
the net profit could be distributed as dividend.  Shanghai Pudong
Development Bank imposed covenant on the Company that any transaction which is
over 10% of the Company’s net assets must notify the Bank.  For
facilities obtained from both banks, 100% of corresponding restricted cash had
been pledged.  In the management’s point of view, covenants of both
banks do not apply to the Company.
  F-18
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 13.
              TERM
      LOANS
 
 In order
to provide working capital for operations, the Group entered into the
following short term loan agreements as of December 31, 2008 and
2007:
 
 2008
                      
                      
                      2007USD
                      
                      
                      USDClassified
      by financial institutions: -China
      Citic Bank
                      
                      $
                      3,664,345
                      
                      
                      $
                      2,056,315China
      Development Bank
                      
                      
                      4,397,216
                      
                      
                      
                      -China
      Merchants Bank
                      
                      
                      4,397,216
                      
                      
                      
                      1,370,877Commercial
      Bank of Zhengzhou
                      
                      
                      7,328,691
                      
                      
                      
                      6,854,385Guangdong
      Development Bank
                      
                      
                      2,198,607
                      
                      
                      
                      1,782,140Minsheng
      Bank of China Branch in Zhengzhou
                      
                      
                      1,465,739
                      
                      
                      
                      -Shanghai
      Pudong Development Bank
                      
                      
                      5,862,953
                      
                      
                      
                      4,112,631Zhengzhou
      City Rural Credit Cooperative
                      
                      
                      806,156
                      
                      
                      
                      1,178,955Zhengzhou
      City Urban Credit Cooperative
                      
                      
                      556,980
                      
                      
                      
                      -$
                      30,677,903
                      
                      
                      $
                      17,355,303Additional
      information: -Maximum
      balance outstanding during the year
                      
                      $
                      31,117,626
                      
                      
                      $
                      17,355,303Interest
      paid during the year
                      
                      $
                      2,430,590
                      
                      
                      $
                      974,940Range
      of interest rate (basis points)
                      
                      48.67
      - 96.5pt
                      
                      
                      52.2
      - 96.0ptWeighted
      average interest rate
                      
                      
                      4.04
                      %
                      
                      
                      4.14
                      %
 
 All of
the above short terms loans are fixed term loans with a period of 12 months or
less. These short terms loans are either guaranteed and secured by the Group’s
fixed assets, including its machinery and land use right, or guaranteed and
secured by a related party, Zhengzhou No.2 Iron and Steel Company Limited's land
and plant properties, or guaranteed by the Group’s owners or other third
parties.
 
 14.
              ACCRUED
      LIABILITIES AND OTHER PAYABLES
 
 Accrued
liabilities and other payables as of December 31, 2008 and 2007 consist of the
following:
 
 2008
                    
                    
                    2007USD
                    
                    
                    USDAccrued
      expenses
                    
                    $
                    1,142,668
                    
                    
                    $
                    989,030Other
      payables
                    
                    
                    4,278,620
                    
                    
                    
                    4,140,392Other
      tax payables
                    
                    
                    873,118
                    
                    
                    
                    159,749$
                    6,294,406
                    
                    
                    $
                    5,289,171
  Other tax
payables represent payables other than income tax which consist of value added
tax and city maintenance and construction tax.
  F-19
  GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 15.
              STOCKHOLDERS’ EQUITY
 
 (a)
              Capital
 
 The
Company was established in the British Virgin Islands ("BVI") on March 11, 2008
as a limited liability company.  Authorized common stock of the
Company included 50,000 ordinary shares with a $1.00 par value.  Prior
to the stock split described below, the Company has 100 shares outstanding.
During March 2009, the Company amended its memorandum of association by
issuing an additional 29,999,900 increasing the authorized shares to 100,000,000
with no par value.  Additionally prior to the merger with COAC, the
Company effected a stock split increasing the total number of shares outstanding
to 30,000,000.
 
 (b)
              Retained
      earnings
 
 Retained
earnings as of December 31, 2008 and 2007 consist of the following:
 
 2008
                      
                      
                      2007USD
                      
                      
                      USDRetained
      earnings
                      
                      $
                      5,932,802
                      
                      
                      $
                      12,879,657Statutory
      surplus reserves
                      
                      
                      1,582,902
                      
                      
                      
                      1,582,902$
                      7,515,704
                      
                      
                      $
                      14,462,559
 
 In
accordance with PRC Company Law, the Group is required to allocate at least 10%
of the profit of its PRC operating Company to the statutory surplus
reserve.  Appropriation to the statutory surplus reserve by the
Group is based on profit arrived at under PRC accounting standards for
business enterprises for each year.
 
 The
profit arrived at must be set off against any accumulated losses sustained by
the Group in prior years, before allocation is made to the statutory surplus
reserve.  Appropriation to the statutory surplus reserve must be made
before distribution of dividends to shareholders.  The appropriation
is required until the statutory surplus reserve reaches 50% of the owners’
equity.  This statutory surplus reserve is not distributable in the
form of cash dividends.
 
 As the
statutory surplus reserve has reached 50% of the owners' equity in 2005, the
Group ceased to allocate.
  F-20
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 16.
              DIVIDENDS
      DECLARED
 
 2008
                    
                    
                    2007USD
                    
                    
                    USDDividend
      in respect of the previous financial year declared
                    
                    $
                    24,501,225
                    
                    
                    $
                    16,134,445Interim
      dividend in respect of the current financial year
      declared
                    
                    
                    17,680,106
                    
                    
                    
                    -Final
      dividend in respect of the current financial year
      declared
                    
                    
                    9,675,165
                    
                    
                    
                    -Total
      dividends declared
                    
                    $
                    51,856,496
                    
                    
                    $
                    16,134,445Less:
      dividends allocated to minority interests
                    
                    
                    23,325,052
                    
                    
                    
                    7,257,273$
                    28,531,444
                    
                    
                    $
                    8,877,172Dividend
      paid
                    
                    $
                    42,254,947
                    
                    
                    $
                    16,134,445Less:
      dividends paid to minority interests
                    
                    
                    19,006,275
                    
                    
                    
                    7,257,273$
                    23,248,672
                    
                    
                    $
                    8,877,172
 
 17.
              INCOME
      TAXES
 
 All of
the Group’s income is generated in the PRC.
 
 2008
                    
                    
                    2007USD
                    
                    
                    USDCurrent
      income tax expense
                    
                    $
                    11,869,735
                    
                    
                    $
                    11,421,638
 
 The
Group’s income tax provision in respect of operations in PRC is calculated at
the applicable tax rates on the estimated assessable profits for the year based
on existing legislation, interpretations and practices in respect thereof. The
standard tax rate applicable to the Group changed from 33% to 25%, effective on
January 1, 2008.
 
 A
reconciliation of the expected income tax expense to the actual income tax
expense for the years ended December 31, 2008 and 2007 are as
follows:-
 
 2008
                    
                    
                    2007USD
                    
                    
                    USDIncome before
      tax
                    
                    $
                    47,375,268
                    
                    
                    $
                    35,071,772Expected
      PRC income tax expense at statutorytax rate of 25%
      (2007: 33%)
                    
                    $
                    11,843,817
                    
                    
                    $
                    11,573,684Income
      not subject to tax
                    
                    
                    77,518
                    
                    
                    
                    -Effect
      on exchange rate
                    
                    
                    (51,600
                    )
                    
                    
                    (152,046
                    )Actual
      income tax expense
                    
                    $
                    11,869,735
                    
                    
                    $
                    11,421,638
 
 The PRC
tax system is subject to substantial uncertainties and has been subject to
recently enacted changes, the interpretation and enforcement of which are also
uncertain. There can be no assurance that changes in PRC tax laws or their
interpretation or their application will not subject the Group to substantial
PRC taxes in the future.
 
 No
deferred taxation has been provided as the effect of all temporary differences
is immaterial.
  F-21
 
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 18.
              SUNDRY
      INCOME
 
 Sundry
income as of December 31, 2008 and 2007 consists of the following:-
 
 2008
                      
                      
                      2007USD
                      
                      
                      USDLocal
      government subsidy
                      
                      $
                      79,365
                      
                      
                      $
                      -Transferred
      from receipts in advanceand accounts
      payable
                      
                      
                      71,605
                      
                      
                      
                      16,165Others
                      
                      
                      4,717
                      
                      
                      
                      -$
                      155,687
                      
                      
                      $
                      16,165
 
 During
the year of 2008, the Group received a special one time subsidy from local
government amounting to $79,365 as a subsidy for its advance technology in
manufacturing precision steel mill flat-rolled products. This subsidy is not a
continuing nature, it depends on the local government's policy announced within
a valid period.  $71,605 was the waived miscellaneous balance of
receipts in advance and accounts payable. The balance was not refunded or paid
and was agreed by both parties.
 
 19.
              RELATED
      PARTY TRANSACTIONS
 
 In 2004,
the Company’s subsidiary entered into a rental agreement for land use right with
Zhengzhou No.2 Iron and Steel Company Limited, the former owner of the
subsidiary with the period from January 1, 2005 to December 31, 2027. Rental
paid to Zhengzhou No.2 Iron and Steel Company Limited for the years ended
December 31, 2008 and 2007 were $8,781 and $8,016 respectively.
 
 20.
              SIGNIFICANT
      CONCENTRATIONS
 
 Three
customers with sales amount over 5% for the year accounted for 20.79% of net
sales for the year ended December 31, 2008. These major customers with sales
amount over 5% for the year are different from the year 2007.
 
 All of
the Group's suppliers are located in the PRC. Four suppliers represented 86% and
64% of total purchase for the years ended December 31, 2008 and 2007
respectively.
  F-22
 
 GOLDEN
GREEN ENTERPRISES LIMITED
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
 (IN
US DOLLARS)
 
 21.
              OPERATING
      LEASE COMMITMENTS
 
 Rental
expense for obligations under operating leases was $23,200 (RMB160,900) for the
year ended December 31, 2008. The total future minimum lease payments under
non-cancellable operating leases in respect of premises as of December 31, 2008
are payable as follows:-
 
 Land use right
                        
                        
                        Reservoir rental
                        
                        
                        TotalUSD
                        
                        
                        USD
                        
                        
                        USDDecember
      312009
                        
                        $
                        8,781
                        
                        
                        $
                        14,419
                        
                        
                        $
                        23,2002010
                        
                        
                        9,660
                        
                        
                        
                        14,419
                        
                        
                        
                        24,0792011
                        
                        
                        10,626
                        
                        
                        
                        14,419
                        
                        
                        
                        25,0452012
                        
                        
                        11,688
                        
                        
                        
                        14,419
                        
                        
                        
                        26,1072013
                        
                        
                        12,857
                        
                        
                        
                        14,419
                        
                        
                        
                        27,276Over
      five years
                        
                        
                        395,637
                        
                        
                        
                        72,095
                        
                        
                        
                        467,732$
                        449,249
                        
                        
                        $
                        144,190
                        
                        
                        $
                        593,439
 
 Land use
right is granted by Zhengzhou No.2 Iron and Steel Company Limited, who sub-lets
a part of its land with 27,066 m2 to the
Group for use. The rental period is from January 1, 2005 to December 31,
2027.  Annual rental paid for the land use right was $8,781
(RMB60,900) for the period of January 1, 2005 to December 31, 2009. The rental
payment will increase by 10% annually from 2010 onwards.
 
 22.
              SUBSEQUENT
      EVENT
 
 On March
17, 2009, the Company consummated a merger with China Opportunity Acquisition
Corp. (“COAC”).  Under the terms of the merger agreement, the Company
is the surviving entity and registered its shares pursuant to a registration
statement filed with the U.S. Securities and Exchange
Commission.  Accordingly, after the merger, the former shareholders of
COAC own approximately 6.5% of the Company’s ordinary shares.
  F-23


HENAN
GREEN COMPLEX MATERIALS CO., LTD
 REPORT
AND FINANCIAL STATEMENTS
 FOR
THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006
 
 CONTENTSPagesReport
      of Independent Registered Public Accounting Firm
                    
                    F-25Balance
      Sheets
                    
                    F-26Statements
      of Income
                    
                    F-27Statements
      of Changes in Stockholder's Equity
                    
                    F-28Statements
      of Cash Flows
                    
                    F-29
      – F-30Notes
      to the Financial Statements
                    
                    F-31
      – F-45
  F-24
  REPORT
OF INDEPENDENT REGISTERED
 PUBLIC
ACCOUNTING FIRM
 
 TO
THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
 HENAN
GREEN COMPLEX  MATERIALS CO., LTD
 
 We have
audited the accompanying balance sheets of Henan Green Complex Materials Co.,
Ltd (the “Company”) as of December 31, 2008, 2007 and 2006, and the related
statements of income, stockholder’s equity, and cash flows for each of the years
in the three years ended. Henan Green Complex Materials Co., Ltd’s management is
responsible for these financial statements.  Our responsibility is to
express an opinion on these financial statements based on our
audits.
 
 We conducted our audits in accordance
with the auditing 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 misstatement. The Company is not required to have, nor are we
engaged to perform, an audit of its internal control over financial
reporting.Our audit 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 Henan Green Complex Materials Co.,
Ltd as of December 31, 2008, 2007 and 2006, and the results of its operations
and its cash flows for each of the years in the three years ended December 31,
2008, 2007 and 2006, in conformity with accounting principles generally accepted
in the United States of America.
 
 /s/ UHY
VOCATION HK CPA LIMITED
 
 Hong
Kong, the People’s Republic of China,
 July 13,
2009
  F-25
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 BALANCE
SHEETS
 (IN
US DOLLARS)
 
 December 31
                                              
                                              
                                              December 31
                                              
                                              
                                              December 312008
                                              
                                              
                                              2007
                                              
                                              
                                              2006AssetsCurrent
      assetsCash
                                              
                                              $
                                              42,622,404
                                              
                                              
                                              $
                                              218,351
                                              
                                              
                                              
                                              804,160Restricted
      cash
                                              
                                              
                                              24,712,349
                                              
                                              
                                              
                                              19,226,551
                                              
                                              
                                              
                                              27,562,435Accounts
      receivable
                                              
                                              
                                              10,304,724
                                              
                                              
                                              
                                              10,176,454
                                              
                                              
                                              
                                              5,738,889Inventories
                                              
                                              
                                              3,554,313
                                              
                                              
                                              
                                              8,660,623
                                              
                                              
                                              
                                              8,511,003Due
      from former owners
                                              
                                              
                                              -
                                              
                                              
                                              
                                              25,126,394
                                              
                                              
                                              
                                              17,922,725Prepayments
      and other deposits
                                              
                                              
                                              11,558,937
                                              
                                              
                                              
                                              10,609,492
                                              
                                              
                                              
                                              8,126,524Other
      receivables
                                              
                                              
                                              1,265,797
                                              
                                              
                                              
                                              635,418
                                              
                                              
                                              
                                              156,544Total
      current assets
                                              
                                              
                                              94,018,524
                                              
                                              
                                              
                                              74,653,283
                                              
                                              
                                              
                                              68,822,280Non-current
      assetsProperty,
      plant and equipment, net
                                              
                                              
                                              19,941,521
                                              
                                              
                                              
                                              15,816,962
                                              
                                              
                                              
                                              15,679,581Land
      use right, net
                                              
                                              
                                              1,416,220
                                              
                                              
                                              
                                              1,346,895
                                              
                                              
                                              
                                              1,280,562Total
      non-current assets
                                              
                                              
                                              21,357,741
                                              
                                              
                                              
                                              17,163,857
                                              
                                              
                                              
                                              16,960,143Total
      assets
                                              
                                              $
                                              115,376,265
                                              
                                              
                                              $
                                              91,817,140
                                              
                                              
                                              
                                              85,782,423Liabilities
      and stockholder’sh equityCurrent
      liabilitiesAccounts
      payable
                                              
                                              $
                                              5,339,350
                                              
                                              
                                              $
                                              5,886,523
                                              
                                              
                                              
                                              5,963,252Notes
      payable
                                              
                                              
                                              26,910,956
                                              
                                              
                                              
                                              20,480,903
                                              
                                              
                                              
                                              35,487,756Short
      term loans
                                              
                                              
                                              30,677,903
                                              
                                              
                                              
                                              17,355,303
                                              
                                              
                                              
                                              1,948,657Income
      tax payable
                                              
                                              
                                              2,188,677
                                              
                                              
                                              
                                              2,596,687
                                              
                                              
                                              
                                              5,302,748Customers
      deposits
                                              
                                              
                                              17,484,708
                                              
                                              
                                              
                                              8,448,965
                                              
                                              
                                              
                                              5,806,175Accrued
      liabilities and other payables
                                              
                                              
                                              6,294,406
                                              
                                              
                                              
                                              5,289,171
                                              
                                              
                                              
                                              122,371Dividend
      payable
                                              
                                              
                                              9,601,549
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Due
      to former owners
                                              
                                              
                                              -
                                              
                                              
                                              
                                              61,688
                                              
                                              
                                              
                                              8,149,562Total
      current liabilities
                                              
                                              
                                              98,497,549
                                              
                                              
                                              
                                              60,119,240
                                              
                                              
                                              
                                              62,780,521Non-current
      liabilitiesLand
      use right payable, net
                                              
                                              
                                              28,521
                                              
                                              
                                              
                                              154,125
                                              
                                              
                                              
                                              458,590Total
      non-current liabilities
                                              
                                              
                                              28,521
                                              
                                              
                                              
                                              154,125
                                              
                                              
                                              
                                              458,590Total
      liabilities
                                              
                                              
                                              98,526,070
                                              
                                              
                                              
                                              60,273,365
                                              
                                              
                                              
                                              63,239,111Stockholder's
      equityRegistered
      capital
                                              
                                              
                                              3,335,043
                                              
                                              
                                              
                                              3,335,043
                                              
                                              
                                              
                                              3,335,043Retained
      earnings
                                              
                                              
                                              9,935,041
                                              
                                              
                                              
                                              26,286,004
                                              
                                              
                                              
                                              18,770,315Accumulated
      other comprehensive income
                                              
                                              
                                              3,580,111
                                              
                                              
                                              
                                              1,922,728
                                              
                                              
                                              
                                              437,954Total
      stockholder's equity
                                              
                                              
                                              16,850,195
                                              
                                              
                                              
                                              31,543,775
                                              
                                              
                                              
                                              22,543,312Total
      liabilities and stockholder's equity
                                              
                                              $
                                              115,376,265
                                              
                                              
                                              $
                                              91,817,140
                                              
                                              
                                              $
                                              85,782,423
 
 See notes
to financial statements.
  F-26
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 STATEMENTS
OF INCOME
 (IN
US DOLLARS)
 
 For the year ended December 312008
                        
                        
                        2007
                        
                        
                        2006Revenue
                        
                        $
                        196,264,731
                        
                        
                        $
                        139,649,209
                        
                        
                        $
                        99,016,829Cost
      of revenue
                        
                        
                        (142,407,995
                        )
                        
                        
                        (100,577,079
                        )
                        
                        
                        (72,653,972
                        )Gross
      profit
                        
                        
                        53,856,736
                        
                        
                        
                        39,072,130
                        
                        
                        
                        26,362,857General
      and administrative expenses
                        
                        
                        (3,431,745
                        )
                        
                        
                        (2,766,623
                        )
                        
                        
                        (1,998,972
                        )Selling
      and marketing expenses
                        
                        
                        (831,108
                        )
                        
                        
                        (534,468
                        )
                        
                        
                        (470,706
                        )Total
      operating expenses
                        
                        
                        (4,262,853
                        )
                        
                        
                        (3,301,091
                        )
                        
                        
                        (2,469,678
                        )Operating
      income
                        
                        
                        49,593,883
                        
                        
                        
                        35,771,039
                        
                        
                        
                        23,893,179Other
      income and (expense)Interest
      income
                        
                        
                        1,395,121
                        
                        
                        
                        1,432,019
                        
                        
                        
                        1,068,434Interest
      expenses
                        
                        
                        (3,769,423
                        )
                        
                        
                        (2,147,451
                        )
                        
                        
                        (1,312,256
                        )Sundry
      income
                        
                        
                        155,687
                        
                        
                        
                        16,165
                        
                        
                        
                        12Income
      before income taxes
                        
                        
                        47,375,268
                        
                        
                        
                        35,071,772
                        
                        
                        
                        23,649,369Income
      tax expense
                        
                        
                        (11,869,735
                        )
                        
                        
                        (11,421,638
                        )
                        
                        
                        (7,770,317
                        )Net
      income
                        
                        $
                        35,505,533
                        
                        
                        $
                        23,650,134
                        
                        
                        $
                        15,879,052
  See notes
to financial statements.
  F-27
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 STATEMENTS
OF CHANGES IN STOCKHOLDER'S EQUITY
 (IN
US DOLLARS)
 
 Accumulated Other
                      
                      
                      
                      
                      
                      TotalRegistered
                      
                      
                      Comprehensive
                      
                      
                      Retained
                      
                      
                      Stockholder'sCapital
                      
                      
                      Income
                      
                      
                      Earnings
                      
                      
                      EquityBalance,
      December 31, 2005
                      
                      $
                      3,335,043
                      
                      
                      $
                      (46,683
                      )
                      
                      $
                      10,355,341
                      
                      
                      $
                      13,643,701Net
      income
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      15,879,052
                      
                      
                      
                      15,879,052Foreign
      currency translation
                      
                      
                      
                      
                      
                      
                      484,637
                      
                      
                      
                      
                      
                      
                      
                      484,637Dividend
      declared
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (7,464,078
                      )
                      
                      
                      (7,464,078
                      )Balance,
      December 31, 2006
                      
                      
                      3,335,043
                      
                      
                      
                      437,954
                      
                      
                      
                      18,770,315
                      
                      
                      
                      22,543,312Net
      income
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      23,650,134
                      
                      
                      
                      23,650,134Foreign
      currency translation
                      
                      
                      
                      
                      
                      
                      1,484,774
                      
                      
                      
                      
                      
                      
                      
                      1,484,774Dividend
      declared
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (16,134,445
                      )
                      
                      
                      (16,134,445
                      )Balance,
      December 31, 2007
                      
                      
                      3,335,043
                      
                      
                      
                      1,922,728
                      
                      
                      
                      26,286,004
                      
                      
                      
                      31,543,775Net
      income
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      35,505,533
                      
                      
                      
                      35,505,533Foreign
      currency translation
                      
                      
                      
                      
                      
                      
                      1,657,383
                      
                      
                      
                      
                      
                      
                      
                      1,657,383Dividend
      declared
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (51,856,496
                      )
                      
                      
                      (51,856,496
                      )Balance,
      December 31, 2008
                      
                      $
                      3,335,043
                      
                      
                      $
                      3,580,111
                      
                      
                      $
                      9,935,041
                      
                      
                      $
                      16,850,195
 
 See notes
to financial statements.
  F-28
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 STATEMENTS
OF CASH FLOWS
 (IN
US DOLLARS)
 
 For the year ended December 312008
                                                                  
                                                                  
                                                                  2007
                                                                  
                                                                  
                                                                  2006Cash
      flows from operating activities:Net
      income
                                                                  
                                                                  $
                                                                  35,505,533
                                                                  
                                                                  
                                                                  $
                                                                  23,650,134
                                                                  
                                                                  
                                                                  $
                                                                  15,879,052Adjustments to reconcile net
      income to net cash
      provided by/(used in) operating activities:Depreciation
      of property, plant and equipment
                                                                  
                                                                  
                                                                  2,447,626
                                                                  
                                                                  
                                                                  
                                                                  2,156,130
                                                                  
                                                                  
                                                                  
                                                                  1,815,676Amortization
      of land use right
                                                                  
                                                                  
                                                                  30,280
                                                                  
                                                                  
                                                                  
                                                                  27,641
                                                                  
                                                                  
                                                                  
                                                                  26,388Gain
      on disposal of property, plant and equipment
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  (16,133
                                                                  )
                                                                  
                                                                  
                                                                  -Changes
      in assets and liabilities:Accounts
      receivable
                                                                  
                                                                  
                                                                  (128,270
                                                                  )
                                                                  
                                                                  
                                                                  (4,400,574
                                                                  )
                                                                  
                                                                  
                                                                  (4,933,521
                                                                  )Inventories
                                                                  
                                                                  
                                                                  5,106,310
                                                                  
                                                                  
                                                                  
                                                                  (149,620
                                                                  )
                                                                  
                                                                  
                                                                  (2,228,217
                                                                  )Prepayments
      and other deposits
                                                                  
                                                                  
                                                                  (949,445
                                                                  )
                                                                  
                                                                  
                                                                  (2,482,968
                                                                  )
                                                                  
                                                                  
                                                                  (450,784
                                                                  )Other
      receivables
                                                                  
                                                                  
                                                                  (630,379
                                                                  )
                                                                  
                                                                  
                                                                  (478,874
                                                                  )
                                                                  
                                                                  
                                                                  129,314Accounts
      payable
                                                                  
                                                                  
                                                                  (547,173
                                                                  )
                                                                  
                                                                  
                                                                  (76,729
                                                                  )
                                                                  
                                                                  
                                                                  (673,911
                                                                  )Income
      tax payable
                                                                  
                                                                  
                                                                  (408,010
                                                                  )
                                                                  
                                                                  
                                                                  648,030
                                                                  
                                                                  
                                                                  
                                                                  979,876Customers
      deposit
                                                                  
                                                                  
                                                                  9,035,743
                                                                  
                                                                  
                                                                  
                                                                  3,146,217
                                                                  
                                                                  
                                                                  
                                                                  2,298,352Accrued
      liabilities and other payables
                                                                  
                                                                  
                                                                  1,005,235
                                                                  
                                                                  
                                                                  
                                                                  (517,004
                                                                  )
                                                                  
                                                                  
                                                                  4,562,754Net
      cash provided by operating activities
                                                                  
                                                                  
                                                                  50,467,450
                                                                  
                                                                  
                                                                  
                                                                  21,506,250
                                                                  
                                                                  
                                                                  
                                                                  17,404,979Cash
      flows from investing activities:Capital
      expenditures for addition of property, plant and equipment
                                                                  
                                                                  
                                                                  (6,572,185
                                                                  )
                                                                  
                                                                  
                                                                  (2,277,378
                                                                  )
                                                                  
                                                                  
                                                                  (4,083,230
                                                                  )Change
      in restricted cash
                                                                  
                                                                  
                                                                  (5,485,798
                                                                  )
                                                                  
                                                                  
                                                                  8,335,884
                                                                  
                                                                  
                                                                  
                                                                  21,260,491Proceeds
      from/(to) former owners
                                                                  
                                                                  
                                                                  25,126,394
                                                                  
                                                                  
                                                                  
                                                                  (7,203,669
                                                                  )
                                                                  
                                                                  
                                                                  (11,209,137
                                                                  )Net
      cash provided by (used in) investing activities
                                                                  
                                                                  
                                                                  13,068,411
                                                                  
                                                                  
                                                                  
                                                                  (1,145,163
                                                                  )
                                                                  
                                                                  
                                                                  5,968,124
  F-29
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 STATEMENTS
OF CASH FLOWS (.../Cont'd)
 (IN
US DOLLARS)
 
 For the year ended December 312008
                      
                      
                      2007
                      
                      
                      2006Cash
      flows from financing activities:Repayment
      of term loans
                      
                      
                      (26,662,742
                      )
                      
                      
                      (5,887,615
                      )
                      
                      
                      (4,404,828
                      )Proceeds
      from term loans
                      
                      
                      39,985,342
                      
                      
                      
                      15,093,356
                      
                      
                      
                      10,584,179Proceeds
      from notes payable
                      
                      
                      6,430,053
                      
                      
                      
                      (15,006,853
                      )
                      
                      
                      (22,009,057
                      )Dividend
      paid
                      
                      
                      (42,254,947
                      )
                      
                      
                      (16,134,445
                      )
                      
                      
                      (7,464,078
                      )Land
      use right payable
                      
                      
                      (125,604
                      )
                      
                      
                      (304,465
                      )
                      
                      
                      (59,226
                      )Due
      to former owners
                      
                      
                      (61,688
                      )
                      
                      
                      (60,683
                      )
                      
                      
                      (90,047
                      )Net
      cash provided by/(used in) financing activities
                      
                      
                      (22,689,586
                      )
                      
                      
                      (22,300,705
                      )
                      
                      
                      (23,443,057
                      )Net
      increase/(decrease) in cash
                      
                      
                      40,846,275
                      
                      
                      
                      (1,939,618
                      )
                      
                      
                      (69,954
                      )Effect
      on change of exchange rates
                      
                      
                      1,557,778
                      
                      
                      
                      1,353,809
                      
                      
                      
                      396,404Cash
      as of January 1
                      
                      
                      218,351
                      
                      
                      
                      804,160
                      
                      
                      
                      477,710Cash
      as of December 31
                      
                      $
                      42,622,404
                      
                      
                      $
                      218,351
                      
                      
                      $
                      804,160Supplemental
      disclosures of cashflow and non-cash information:Cash
      paid during the year:Interest
      paid
                      
                      $
                      3,769,423
                      
                      
                      $
                      2,147,451
                      
                      
                      $
                      1,312,256Income
      tax paid
                      
                      $
                      12,277,745
                      
                      
                      $
                      10,930,112
                      
                      
                      $
                      6,841,773Non
      - cash item:Transfer
      of prepayments and other deposits to property, plant and
      equipment
                      
                      $
                      2,288,337
                      
                      
                      $
                      -
                      
                      
                      $
                      -
 
 See notes
to financial statements.
  F-30
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
  1.
              DESCRIPTION
      OF BUSINESS AND ORGANIZATION
 
 Henan
Green Complex Materials Co., Ltd (the "Company") is a China-based company that
processes and sells steel mill flat-rolled products which are extensively used
in the manufacturing industry throughout mainland China.  The Company
conducts business directly with its customers in the People's Republic of China
(PRC).
 
 The
Company was incorporated on December 31, 2000 with total registered capital
Renminbi 26,000,000. Zhengzhou No.2 Iron and Steel Company Limited contributed
fixed assets of Renminbi 20,000,000 holding 76.93% of the total ownership. Other
owners, Lu Baiwang held 11.54%, Yue Tiansui held 3.85%, Bai Zhensheng held
1.92%, Ren Shouze held 1.92%, Jiao Dahong held 1.92% and Li Xinhong held
1.92%.
 
 In
February 2005, Jiao Dahong and Li Xinhong sold their ownership to Lu Yi and
Zhang Qihong. All other owner’s ownership remains unchanged.
 
 In
December 2006, Zhengzhou No.2 Iron and Steel Company Limited sold all of its
ownership, Lu Baiwang and Yue Tiansui sold part of their ownership. Lu Mingwang
became the principal owner holding 40% of the total ownership. Other owners, Ren
Shouze held 10%, Lu Baiwang held 9.53%, Liu Bingshen held 7.41%, Chen Zheyu held
7.26%, Zhang Shuiping held 6.95%, Lu Yi held 5.49%, Zhang Qihong held 3.57%, Bai
Zhensheng held 3.4%, Yue Tiansui held 3%, Miao Yanchao held 1.7%, Qu Liyong held
1.19% and Xu Maotong held 0.5%.
 
 On August
7, 2008, the Company changed from a joint stock company to a company with
limited liability.  Wealth Rainbow Development Limited ("Wealth
Rainbow") was formed on March 1, 2007 by Lu's family as the Company. On October
21, 2008, the Company became a wholly foreign owned enterprise. When all of the
shares of the Company were acquired by Wealth Rainbow pursuant to the transfer
agreement. Subsequent to the share transfer, Wealth Rainbow becomes the sole
shareholder of the Company. The principal activity of  Wealth Rainbow
is to hold its interest in Henan Green.
 
 Golden
Green Enterprises Limited ("Golden Green") was established in the British Virgin
Islands ("BVI") on March 11, 2008 as a limited liability company, the
shareholder is Ms. Lu Yuying.  Wealth Rainbow entered into an
agreement with Golden Green in which all of the shares of Wealth Rainbow were
transferred to Golden Green on November 28, 2008 in exchange for all the shares
of Golden Green.  The principal activity of Golden Green is investment
holding.  Golden Green owns 100% equity interests directly and
indirectly, in its subsidiaries, Wealth Rainbow and Henan Green Complex
Materials Co., Ltd.
 
 Golden
Green and its subsidiary, Wealth Rainbow, did not have any significant
operations during the period of 2008.  These financial statements only
reflected the operations of Henan Green Complex Materials Co., Ltd for the years
ended December 31, 2008, 2007 and 2006.
  F-31
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
  2.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES
 
 (a)
              Basis
      of presentation
 
 The
Company's financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America ("US GAAP")
..  The preparation of the financial statements in accordance with US
GAAP requires management of the Company to make a number of estimates and
assumptions relating to the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the years.
Significant items subject to such estimates and assumptions include the
recoverability of the carrying amount and the estimated useful lives of
long-lived assets; valuation allowances for receivables, realizable values for
inventories. Actual results could differ from those estimates.
 
 (b)
              Foreign
      currency translation
 
 Assets
and liabilities of foreign operation are translated at the rate of exchange in
effect on the balance sheet date; income and expenses are translated at the
average rate of exchange prevailing during the year. The year-end rates for
December 31, 2008, 2007 and 2006 of Renminbi to one US dollar were 6.8225,
7.2946 and 7.8041 respectively; average rates for the year-end December 31,
2008, 2007 and 2006 were 6.9351, 7.5973 and 7.9579 respectively. The related
translation adjustments are reflected in "Accumulated other comprehensive
income" in the stockholder's equity section of the balance sheet. As of December
31, 2008, 2007 and 2006, the accumulated foreign currency translation gain was
$3,580,111, $1,922,728 and $437,954 respectively. Foreign currency gains and
losses resulting from transactions are included in earnings.
 
 (c)
              Cash
 
 Cash
represents cash in bank and cash on hand.
 
 The
Company considers all highly liquid investments with original maturities of
three months or less to be cash.  The Company maintains bank accounts
in the PRC.
 
 (d)
              Accounts
      receivable
 
 Accounts
receivable are recorded at the invoiced amount, net of allowances for doubtful
accounts sales returns and trade discounts.  The allowance for
doubtful accounts is the Company's best estimate of the amount of probable
credit losses in the Company's existing accounts
receivable.  Management determines the allowance based on historical
write-off experience, customer specific facts and economic
conditions.  The Company has historically been able to collect all of
its receivable balances, and accordingly, 2% allowance has been provided for
doubtful accounts.
 
 Outstanding
account balances are reviewed individually for collectibles. Account balances
are charged off against the allowance after all means of collection have been
exhausted and the potential for recovery is considered remote. The Company does
not have any off-balance-sheet credit exposure to its
customers.
  F-32
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
  2.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES  (.../Cont'd)
 
 (e)
              Inventories
 
 Inventories
are stated at the lower of cost or market and consist primarily of flat rolled
steel.  Cost is determined using the weighted average cost
method.  In the case of work in process and finished goods comprise of
direct materials, direct labor and an appropriate proportion
of  overheads.
 
 (f)
              Property,
      plant and equipment
 
 Property,
plant and equipment are recorded at cost less accumulated
depreciation.  Expenditures for major additions and betterments are
capitalized.  Maintenance and repairs are charged to general and
administrative expenses as incurred. Depreciation of property, plant and
equipment is computed by the straight-line method over the assets estimated
useful lives ranging from five to fifty years. Building improvements, if any,
are amortized on a straight-line basis over the estimated useful
life.
 
 Upon sale
or retirement of property, plant and equipment, the related cost and accumulated
depreciation are removed from the accounts and any gain or loss is reflected in
operations.
 
 Construction
in progress represents the costs of property, plant and equipment under
construction or installation. Depreciation commences when the asset is placed in
service. The accumulated costs are reclassified as property, plant and equipment
when installation or construction is completed. Government subsidies received
reduce the cost of construction.
 
 The
estimated useful lives of the assets are as follows:
 
 YearsLand
      use right
                    
                    
                    50Leasehold
      land improvement
                    
                    
                    46.5Buildings
                    
                    
                    10
      - 20Machinery
      and equipment
                    
                    
                    5 -
      20Vehicles
                    
                    
                    5Furniture
      fixtures and office equipment
                    
                    
                    5
 
 Expenditures
for repairs and maintenance, which do not extend the useful life of the assets,
are expensed as incurred.
 
 (g)
              Land
      use right
 
 Land use
right is recorded at cost less accumulated amortization. Under Statement of
Financial Accounting Standards (SFAS) No. 142, " Goodwill and Other Intangible
Assets", land use right is classified as definite lived intangible asset and
amortized over its useful life.  According to the laws of the PRC, the
government owns all of the land in the PRC. Companies or individuals are
authorized to possess and use the land only through land use rights granted by
the PRC government.  Land use right is amortized using the
straight-line method over the lease term of 50 years.
  F-33
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
  2.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES  (.../Cont'd)
 
 (h)
              Impairment
      of long-lived assets
 
 Long-lived
assets, including property, plant and equipment are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to the estimated
undiscounted future cash flows expected to be generated by the asset. If the
carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of
the asset exceeds the fair value of the asset.
 
 Assets to
be disposed of are separately presented in the balance sheet and reported at the
lower of the carrying amount or fair value less costs to sell, and are no longer
depreciated. The assets and liabilities of a disposed group classified as held
for sale are presented separately in the appropriate asset and liability
sections of the balance sheet.
 
 No
impairment was recognized as at December 31, 2008, 2007 and 2006.
 
 (i)
              Fair
      Value Accounting
 
 Statement
of Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements",
defines fair value, establishes a framework for measuring fair value under
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS 157 emphasizes that fair value is a market-based
measurement, not an entity-specific measurement, and states that a fair value
measurement should be determined based on assumptions that market participants
would use in pricing an asset or a liability. In February 2008, the FASB issued
FASB Staff Position No. FAS 157-2 ("FSP 157-2") "Effective Date of FASB
Statement No. 157", which amended SFAS 157 to defer the effective date of SFAS
157 for non-financial assets and non-financial liabilities, except for items
that are recognized or disclosed at fair value in the financial statements on a
recurring basis, at least annually, including goodwill and trademarks. In
accordance with FSP 157-2, the Company will delay application of SFAS 157 for
non-financial assets and non-financial liabilities, until January 1, 2009. The
application of SFAS 157 in situations where that market for a financial asset is
not active was clarified by the issuance of Financial Accounting Standards Board
Staff Position 157-3. "Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active" ("FSP 157-3") in October 2008. FSP 157-3
became effective immediately and did not significantly impact the methods by
which the Company determines the fair values of its financial
assets.
 
 (j)
              Revenue
      recognition
 
 The
Company generates revenue primarily from sales of steel mill flat-rolled
products.
 
 Revenue
is recognized when products have been delivered to the buyer and title and risk
of ownership has passed to the buyer, the sales price is fixed and determinable
and collectibility is reasonably assured.
 
 In the
PRC, value added tax (“VAT”) of 17% on the invoice amount is collected in
respect of the sales of goods on behalf of tax authorities. The VAT collected is
not revenue of the Company; instead, the amount is recorded as a liability on
the balance sheet until such VAT is paid to the authorities.
  F-34
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
  2.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES  (.../Cont'd)
 
 (k)
              Income
      taxes
 
 The
Company accounts for income taxes under Financial Accounting Standards Board
(FASB) No. 109, "Accounting for Income Taxes". Deferred income tax assets and
liabilities are determined based upon differences between the financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be effective when the differences are
expected to reverse.
 
 Deferred
tax assets are reduced by a valuation allowance to the extent management
concludes it is more likely than not that the assets will not be
realized.  Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the statements of income in the period that
includes the enactment date.
 
 Management
has elected to defer the application of FASB Interpretation No. 48, Accounting
for Uncertainty in Income Taxes, in accordance with FASB Staff Position No.
48-3, "Effective Date of FASB Interpretation No. 48 for Certain Nonpublic
Companies". The Company will continue to evaluate uncertain tax positions in
accordance with FASB Statement No. 5 "Accounting for Contingencies". Under that
Statement, if it is probable that an uncertain tax position will result in a
material liability and the amount of the liability can be estimated, then the
estimated liability is accrued. As of December 31, 2008, 2007 and 2006, there
were no amounts that had been accrued with respect to uncertain tax
positions.
 
 (l)
              Comprehensive
      income
 
 The
Company has adopted Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income".  This statement establishes rules
for the reporting of comprehensive income and its
components.  Comprehensive income consists of net income and foreign
currency translation adjustments.
 
 Comprehensive
income consists of the following for the years ending December, 31:
 
 2008
                                
                                
                                2007
                                
                                
                                2006USD
                                
                                
                                USD
                                
                                
                                USDNet
      income
                                
                                $
                                35,505,533
                                
                                
                                $
                                23,650,134
                                
                                
                                $
                                15,879,052Other
      comprehensive income-
      Foreign currency translation adjustments
                                
                                
                                1,657,383
                                
                                
                                
                                1,484,774
                                
                                
                                
                                484,637Total
      comprehensive income
                                
                                $
                                37,162,916
                                
                                
                                $
                                25,134,908
                                
                                
                                $
                                16,363,689
  F-35
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
  2.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES  (.../Cont'd)
 
 (m)
              Commitments
      and contingencies
 
 In the
normal course of business, the Company is subject to contingencies, including
legal proceedings and claims arising out of the normal course of businesses that
relate to a wide range of matters, including among others, product liability.
The Company records accruals for such contingencies based upon the assessment of
the probability of occurrence and, where determinable, an estimate of the
liability. Management may consider many factors in making these assessments
including past history, scientific evidence and the specifics of each matter. As
management has not become aware of any product liability claims arising from any
incident over the year, the Company has not recognized a liability for product
liability claims.
 
 (n)
              Segment
      information
 
 Statement
of Financial Accounting Standards (SFAS) No. 131, "Disclosure About Segments of
an Enterprise and Related Information" establishes standards for reporting
information on operating segments in interim and annual financial
statements.  The Company has only one segment, all of the Company's
operations and customers are in the PRC and all income are derived from the
sales of steel mill flat-rolled products. Accordingly, no geographic information
is presented.
 
 (o)
              Recently
      issued accounting standards
 
 In April
2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position
No. 142-3  ("FSP 142-3") "Determination of the Useful Life of
Intangible Assets." FSP 142-3 amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under FAS 142, "Goodwill and Other Intangible
Assets," to include an entity's historical experience in renewing or extending
similar arrangements, adjusted for entity-specific factors, even when there is
likely to be "substantial cost or material modifications." FSP FAS 142-3 states
that in the absence of historical experience an entity should use assumptions
that market participants would make regarding renewals or extensions, adjusted
for entity-specific factors. The guidance for determining the useful life of
intangible assets included in this FSP will be applied prospectively to
intangible assets acquired after the effective date of January 1, 2009. The
Company does not expect FSP 142-3 to have a material impact on our financial
statements.
 
 In May
2008, the Financial Accounting Standards Board (FASB) issued Financial
Accounting Standard No. 162 ("FAS 162"), “The Hierarchy of Generally Accepted
Accounting Principles”. Under FAS 162, the GAAP hierarchy will now reside in the
accounting literature established by the Financial Accounting Standards Board.
FAS 162 identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements in
conformity with GAAP. FAS 162 is effective 60 days following the SEC’s approval
of the Public Company Accounting Oversight Board Auditing amendments to AU
Section 411, "The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles." FAS 162 will not impact the Company's financial
statements.
  F-36
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
  2.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES  (.../Cont'd)
 
 (o)
              Recently
      issued accounting standards
(.../Cont'd)
 
 In
December 2008, the Financial Accounting Standards Board (FASB) issued Financial
Staff Position  No. 132(R)-1 ("FSP No. 132(R)-1"), "Employers’
Disclosures about Postretirement Benefit Plan Assets,". FSP No. 132(R)-1 amends
the Financial Accounting Standards Board (FASB) No. 132 to provide guidance on
an employer’s disclosures about plan assets of a defined benefit pension or
other postretirement plan. The additional disclosures required focus on
disclosures of fair value by category of plan assets. This Financial Staff
Position is effective for fiscal years ending after December 15, 2009. The
Company does not expect a material impact on its financial statements when these
additional provisions are adopted.
 
 Management
does not believe that any recently issued, but not yet effective accounting
pronouncements, if adopted, would have a material effect on the accompanying
financial statements.
  3.
                CASH
 
 Cash
represents cash in bank and cash on hand.  Cash as of December 31,
2008, 2007 and 2006 consist of the following:
 
 2008
                      
                      
                      2007
                      
                      
                      2006USD
                      
                      
                      USD
                      
                      
                      USDBank
      balances and cash
                      
                      $
                      67,334,753
                      
                      
                      $
                      19,444,902
                      
                      
                      $
                      28,366,595Less:
      Restricted cash
                      
                      
                      (24,712,349
                      )
                      
                      
                      (19,226,551
                      )
                      
                      
                      (27,562,435
                      )$
                      42,622,404
                      
                      
                      $
                      218,351
                      
                      
                      $
                      804,160
 
 Renminbi
is not a freely convertible currency and the remittance of funds out of the PRC
is subject to the exchange restrictions imposed by the PRC
government.
 
 As at
December 31, 2008, 2007 and 2006, the Company's cash of approximately
$24,712,349, $19,226,551 and $27,562,435, were restricted  and
deposited in certain banks as guarantee deposits for the benefit of issuance of
notes payable granted by the banks.
 
 The
restricted cash guaranteed $26,910,956, $20,480,903 and $35,487,756 of notes
payable for the years ended December 31, 2008, 2007 and 2006,
respectively.  It can only be released at the expiration date of
corresponding notes payable.
  4.
              ACCOUNTS
      RECEIVABLE
 
 The
Company performs ongoing credit evaluations of its customers' financial
conditions. The Company generally encourages its customers to use its products
and settle the outstanding balance within credit terms. As of December 31 2008,
2007 and 2006, the provision on accumulated allowance for doubtful accounts was
$126,790, $86,384 and $44,733 respectively.
  F-37
   HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
 
 5.
              INVENTORIES
 
 Inventories as of  December
31, 2008, 2007 and 2006 consist of the following:
 
 2008
                          
                          
                          2007
                          
                          
                          2006USD
                          
                          
                          USD
                          
                          
                          USDRaw
      materials
                          
                          $
                          936,280
                          
                          
                          $
                          4,763,939
                          
                          
                          $
                          3,295,859Work-in-process
                          
                          
                          1,378,067
                          
                          
                          
                          1,310,691
                          
                          
                          
                          2,610,004Finished
      goods
                          
                          
                          1,239,966
                          
                          
                          
                          2,585,993
                          
                          
                          
                          2,605,140$
                          3,554,313
                          
                          
                          $
                          8,660,623
                          
                          
                          $
                          8,511,003
 
 6.
              DUE
      FROM/(TO) FORMER OWNERS
 
 Amounts
due from/(to) former owners are unsecured, non-interest bearing and with no
fixed repayment terms. As at December 31, 2008, the balance of due from/(to)
former owners  was zero as amounts were fully settled in the fourth
quarter of 2008.
 
 7.
              PREPAYMENTS
      AND OTHER DEPOSITS
 
 Prepayments and other deposits as of
December 31, 2008, 2007 and 2006 consist of the following:
 
 2008
                        
                        
                        2007
                        
                        
                        2006USD
                        
                        
                        USD
                        
                        
                        USDPrepaid
      purchases
                        
                        $
                        10,896,840
                        
                        
                        $
                        10,609,492
                        
                        
                        $
                        8,126,524Prepaid
      machinery deposit
                        
                        
                        637,882
                        
                        
                        
                        -
                        
                        
                        
                        -Prepaid
      general expenses
                        
                        
                        24,215
                        
                        
                        
                        -
                        
                        
                        
                        -$
                        11,558,937
                        
                        
                        $
                        10,609,492
                        
                        
                        $
                        8,126,524
 
 Prepaid purchases represent amounts
prepaid for the purchases of raw materials and accessories to
suppliers.
 
 8.
              OTHER
      RECEIVABLES
 
 Other receivables as of December 31,
2008, 2007 and 2006 consist of the following:
 
 2008
                        
                        
                        2007
                        
                        
                        2006USD
                        
                        
                        USD
                        
                        
                        USDOther
      receivables-
      Advances to staff
                        
                        $
                        381,224
                        
                        
                        $
                        156,404
                        
                        
                        $
                        95,706-
      Others
                        
                        
                        884,573
                        
                        
                        
                        479,014
                        
                        
                        
                        60,838$
                        1,265,797
                        
                        
                        $
                        635,418
                        
                        
                        $
                        156,544
 
 Other
receivables represent advances to staff and petty cash to department staff for
daily expenditures. These amounts are interest free and with no fixed repayment
terms.
  F-38
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
 
 9.
              PROPERTY,
      PLANT AND EQUIPMENT
 
 Property, plant and equipment as
of  December 31, 2008, 2007 and 2006 consist of the
following:
  2008
                        
                        
                        2007
                        
                        
                        2006USD
                        
                        
                        USD
                        
                        
                        USDBuildings
                        
                        $
                        5,000,219
                        
                        
                        $
                        2,525,743
                        
                        
                        $
                        2,360,847Leasehold
      land improvement
                        
                        
                        20,183
                        
                        
                        
                        18,877
                        
                        
                        
                        14,799Plant
      machinery and equipment
                        
                        
                        22,769,678
                        
                        
                        
                        20,232,099
                        
                        
                        
                        18,390,105Vehicles
                        
                        
                        1,615,780
                        
                        
                        
                        842,294
                        
                        
                        
                        852,076Office
      equipment
                        
                        
                        139,189
                        
                        
                        
                        223,123
                        
                        
                        
                        155,651Construction
      in progress
                        
                        
                        1,233,938
                        
                        
                        
                        364,666
                        
                        
                        
                        156,66930,778,987
                        
                        
                        
                        24,206,802
                        
                        
                        
                        21,930,147Accumulated
      depreciation
                        
                        
                        (10,837,466
                        )
                        
                        
                        (8,389,840
                        )
                        
                        
                        (6,250,566
                        )$
                        19,941,521
                        
                        
                        $
                        15,816,962
                        
                        
                        $
                        15,679,581
 
 Construction
in progress consists of the construction of a research and development centre
("R&D centre") and buildings of staff accommodation on 300 acres land. The
total construction in progress as at December 31, 2008 was $1,233,938. $474,703
was the cost incurred net of government subsidies of $230,710 of R&D centre
during the period from July 2008 to December 2008. The R&D centre is
estimated to be completed in 2009 with total estimated cost of
$2,198,608.
 
 Buildings
of staff accommodation consist of the constructions of drainage system and
related facilities, side pavement and building of stores and building management
centre. $494,790 was the cost incurred during the period from July 2008 to
December 2008.  These buildings of staff accommodation are estimated
to be completed in 2009 with total estimated cost of $879,443.
 
 $264,445
was the cost incurred to install a production line during the period from July
2008 to December 2008, the installation of production line is estimated to be
completed in 2009 with total estimated cost of $3,078,051.
 
 No
depreciation has been provided for construction in progress.
 
 10.
              LAND
      USE RIGHT
 
 Land use
right as of December 31, 2008, 2007 and 2006 consist of the
following:
 
 2008
                      
                      
                      2007
                      
                      
                      2006USD
                      
                      
                      USD
                      
                      
                      USDLand
      use right, net
                      
                      $
                      1,416,220
                      
                      
                      $
                      1,346,895
                      
                      
                      $
                      1,280,562
  F-39
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
 
 10.
              LAND
      USE RIGHT (.../Cont'd)
 
 Land use
right represents prepaid lease payments to the local government for land use
right held for a period of 50 years from July 9, 2004 to June 30, 2054 in
Zhengzhou, People's Republic of China. Land use right payable as
at  December 31, 2008 and 2007 were $28,521 and $154,125
respectively.
 
 Land use
right is amortized using the straight-line method over the lease term of 50
years.  The amortization expense for the years ended December 31,
2008, 2007 and 2006 were $30,280, $27,641 and $26,388 respectively.
 
 11.
              NOTES
      PAYABLE
 
 Notes payable as of December 31, 2008,
2007 and 2006 consist of the following:
 
 2008
                        
                        
                        2007
                        
                        
                        2006USD
                        
                        
                        USD
                        
                        
                        USDClassified
      by financial institutions: -China
      Citic Bank
                        
                        $
                        5,862,953
                        
                        
                        $
                        3,194,143
                        
                        
                        $
                        13,826,065Zhengzhou
      City Rural Credit Cooperative
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        2,562,755Commercial
      Bank of Zhengzhou
                        
                        
                        2,711,616
                        
                        
                        
                        411,263
                        
                        
                        
                        11,429,889Guangdong
      Development Bank
                        
                        
                        6,903,628
                        
                        
                        
                        2,330,491
                        
                        
                        
                        640,688Shanghai
      Pudong Development Bank
                        
                        
                        10,260,169
                        
                        
                        
                        8,842,157
                        
                        
                        
                        4,869,235China
      Merchants Bank
                        
                        
                        1,172,590
                        
                        
                        
                        5,702,849
                        
                        
                        
                        2,159,124$
                        26,910,956
                        
                        
                        $
                        20,480,903
                        
                        
                        $
                        35,487,756Additional
      information: -Maximum
      balance outstanding during the year
                        
                        $
                        44,902,894
                        
                        
                        $
                        55,568,497
                        
                        
                        $
                        59,457,304Finance
      cost
                        
                        $
                        1,333,746
                        
                        
                        $
                        1,133,708
                        
                        
                        $
                        888,520Finance
      charge per contract (basis points)
                        
                        5
      pt
                        
                        
                        5
      pt
                        
                        
                        5
      ptWeighted
      average interest rate
                        
                        
                        2.03
                        %
                        
                        
                        1.56
                        %
                        
                        
                        1.24
                        %
 
 All the
above notes payable are secured by either 50% or 100% corresponding restricted
cash.  As at December 31, 2008, 2007 and 2006, the Company's cash of
approximately $24,712,349, $19,226,551 and $27,562,435 were restricted on the
such purpose. All the notes payable have terms of six
months.  Commercial Bank of Zhenzhou had imposed covenant on the
Company that not more than 10% of the net profit could be distributed as
dividend. Shanghai Pudong Development Bank imposed covenant on the Company that
any transaction which is over 10% of the Company’s net assets must notify the
Bank.  For facilities obtained from both banks, 100% of corresponding
restricted cash had been pledged.  In the management’s point of view,
covenants of both banks do not apply to the Company.
  F-40
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
 
 12.
              TERM  LOANS
 
 In order
to provide working capital for operations, the Company entered into the
following short term loan agreements as of December 31, 2008, 2007 and
2006:
 
 2008
                        
                        
                        2007
                        
                        
                        2006USD
                        
                        
                        USD
                        
                        
                        USDClassified
      by financial institutions: -China
      Citic Bank
                        
                        $
                        3,664,345
                        
                        
                        $
                        2,056,315
                        
                        
                        $
                        -China
      Development Bank
                        
                        
                        4,397,216
                        
                        
                        
                        -
                        
                        
                        
                        -China
      Merchants Bank
                        
                        
                        4,397,216
                        
                        
                        
                        1,370,877
                        
                        
                        
                        1,281,378Commercial
      Bank of Zhengzhou
                        
                        
                        7,328,691
                        
                        
                        
                        6,854,385
                        
                        
                        
                        3,203,444Guangdong
      Development Bank
                        
                        
                        2,198,607
                        
                        
                        
                        1,782,140
                        
                        
                        
                        640,688Minsheng
      Bank of China Branch in Zhengzhou
                        
                        
                        1,465,739
                        
                        
                        
                        -
                        
                        
                        
                        -Shanghai
      Pudong Development Bank
                        
                        
                        5,862,953
                        
                        
                        
                        4,112,631
                        
                        
                        
                        1,922,067Zhengzhou
      City Rural Credit Cooperative
                        
                        
                        806,156
                        
                        
                        
                        1,178,955
                        
                        
                        
                        1,101,985Zhengzhou
      City Urban Credit Cooperative
                        
                        
                        556,980
                        
                        
                        
                        -
                        
                        
                        
                        -$
                        30,677,903
                        
                        
                        $
                        17,355,303
                        
                        
                        
                        8,149,562Additional
      information: -Maximum
      balance outstanding during the year
                        
                        $
                        31,117,626
                        
                        
                        $
                        17,355,303
                        
                        
                        $
                        8,149,562Interest
      paid during the year
                        
                        $
                        2,430,590
                        
                        
                        $
                        974,940
                        
                        
                        $
                        340,761Range
      of interest rate (basis points)
                        
                        48.67
      - 96.5pt
                        
                        
                        52.2
      - 96.0pt
                        
                        
                        52.2
      - 96.0ptWeighted
      average interest rate
                        
                        
                        4.04
                        %
                        
                        
                        4.14
                        %
                        
                        
                        2.67
                        %
 
 All of
the above short terms loans are fixed term loans with a period of 12 months or
less. These short terms loans are either guaranteed and secured by the Company's
fixed assets, including its machinery and land use right, or guaranteed and
secured by a related party, Zhengzhou No.2 Iron and Steel Company Limited's land
and plant properties, or guaranteed by the Company's former owners or other
third parties.
 
 13.
              ACCRUED
      LIABILITIES AND OTHER PAYABLES
  Accrued
liabilities and other payables as of December 31, 2008, 2007 and 2006 consist of
the following:
 
 2008
                        
                        
                        2007
                        
                        
                        2006USD
                        
                        
                        USD
                        
                        
                        USDAccrued
      expenses
                        
                        $
                        1,142,668
                        
                        
                        $
                        989,030
                        
                        
                        $
                        668,235Other
      payables
                        
                        
                        4,278,620
                        
                        
                        
                        4,140,392
                        
                        
                        
                        4,786,520Other
      tax payables
                        
                        
                        873,118
                        
                        
                        
                        159,749
                        
                        
                        
                        351,420$
                        6,294,406
                        
                        
                        $
                        5,289,171
                        
                        
                        $
                        5,806,175
 
 Other tax
payables represent payables other than income tax which consist of value added
tax and city maintenance and construction tax.
  F-41
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
  14.
              STOCKHOLDER'S
      EQUITY AND RETAINED EARNINGS
 
 (a)           Registered
capital
 
 The
Company was incorporated on December 31, 2000. The registered capital of the
Company is $3,335,043 originally contributed by thirteen natural
persons.
 
 (b)           Retained
earnings
 
 Retained earnings as of December 31,
2008, 2007 and 2006 consist of the following:
 
 2008
                        
                        
                        2007
                        
                        
                        2006USD
                        
                        
                        USD
                        
                        
                        USDRetained
      earnings
                        
                        $
                        8,352,139
                        
                        
                        $
                        24,703,102
                        
                        
                        $
                        17,187,413Statutory
      surplus reserves
                        
                        
                        1,582,902
                        
                        
                        
                        1,582,902
                        
                        
                        
                        1,582,902$
                        9,935,041
                        
                        
                        $
                        26,286,004
                        
                        
                        $
                        18,770,315
 
 In
accordance with PRC Company Law,  the Company is required to allocate
at least 10% profit to the statutory surplus reserve.  Appropriation
to the statutory surplus reserve by the Company is based on profit arrived at
under PRC accounting standards for business enterprises for each
year.
 
 The
profit arrived at must be set off against any accumulated losses sustained by
the Company in prior years, before allocation is made to the statutory surplus
reserve.  Appropriation to the statutory surplus reserve must be made
before distribution of dividends to shareholders.  The appropriation
is required until the statutory surplus reserve reaches 50% of the owners’
equity.  This statutory surplus reserve is not distributable in the
form of cash dividends.
 
 As the
statutory surplus reserve has reached 50% of the owners' equity in 2005, the
Company ceased to allocate.
 
 15.
              DIVIDEND
      DECLARED
 
 2008
                                
                                
                                2007
                                
                                
                                2006USD
                                
                                
                                USD
                                
                                
                                USDDividend
      in respect of the previousfinancial
      year declared
                                
                                $
                                24,501,225
                                
                                
                                $
                                16,134,445
                                
                                
                                $
                                7,464,078Interim
      dividend in respect of the currentfinancial
      year declared
                                
                                
                                17,680,106
                                
                                
                                
                                -
                                
                                
                                
                                -Final
      dividend in respect of the currentfinancial
      year declared
                                
                                
                                9,675,165
                                
                                
                                
                                -
                                
                                
                                
                                -$
                                51,856,496
                                
                                
                                $
                                16,134,445
                                
                                
                                $
                                7,464,078Dividend
      paid
                                
                                $
                                42,254,947
                                
                                
                                $
                                16,134,445
                                
                                
                                $
                                7,464,078
  F-42
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
 
 16.
              INCOME
      TAXES
 
 All of the Company's income is
generated in the PRC.
 
 2008
                      
                      
                      2007
                      
                      
                      2006USD
                      
                      
                      USD
                      
                      
                      USDCurrent
      income tax expense
                      
                      $
                      11,869,735
                      
                      
                      $
                      11,421,638
                      
                      
                      $
                      7,770,317
 
 The
Company's income tax provision in respect of operations in PRC is calculated at
the applicable tax rates on the estimated assessable profits for the year based
on existing legislation, interpretations and practices in respect thereof. The
standard tax rate applicable to the Company changed from 33% to 25%, effective
on January 1, 2008.
 
 A
reconciliation of the expected income tax expense to the actual income tax
expense for the years ended December 31, 2008, 2007 and 2006 are as
follows:
 
 2008
                        
                        
                        2007
                        
                        
                        2006USD
                        
                        
                        USD
                        
                        
                        USDIncome
      before tax
                        
                        $
                        47,375,268
                        
                        
                        $
                        35,071,772
                        
                        
                        $
                        23,649,369Expected
      PRC income tax expense at statutorytax
      rate of 25% (2007 & 2006: 33%)
                        
                        $
                        11,843,817
                        
                        
                        $
                        11,573,684
                        
                        
                        $
                        7,804,291Income
      not subject to tax
                        
                        
                        77,518
                        
                        
                        
                        -
                        
                        
                        
                        -Effect
      on exchange rate
                        
                        
                        (51,600
                        )
                        
                        
                        (152,046
                        )
                        
                        
                        (33,974
                        )Actual
      income tax expense
                        
                        $
                        11,869,735
                        
                        
                        $
                        11,421,638
                        
                        
                        $
                        7,770,317
 
 The PRC
tax system is subject to substantial uncertainties and has been subject to
recently enacted changes, the interpretation and enforcement of which are also
uncertain. There can be no assurance that changes in PRC tax laws or their
interpretation or their application will not subject the Company to substantial
PRC taxes in the future.
 
 No
deferred taxation has been provided as the effect of all temporary differences
is immaterial.
 
 17.
              SUNDRY
      INCOME
 
 Sundry income as of December 31, 2008,
2007 and 2006 consist of the following:
 
 2008
                            
                            
                            2007
                            
                            
                            2006USD
                            
                            
                            USD
                            
                            
                            USDLocal
      government subsidy
                            
                            $
                            79,365
                            
                            
                            $
                            -
                            
                            
                            $
                            -Transferred
      from receipts in advanceand
      accounts payable
                            
                            
                            71,605
                            
                            
                            
                            16,165
                            
                            
                            
                            -Others
                            
                            
                            4,717
                            
                            
                            
                            -
                            
                            
                            
                            12$
                            155,687
                            
                            
                            $
                            16,165
                            
                            
                            $
                            12
  F-43
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
 
 17.
              SUNDRY
      INCOME (.../Cont'd)
 
 During
the year of 2008, the Company received a special one time subsidy from local
government amounting to $79,365 as a subsidy for its advance technology in
manufacturing precision steel mill flat-rolled products. This subsidy is not a
continuing nature,  it depends on the local government's policy
announced within a valid period.  $71,605 was the waived miscellaneous
balance of  receipts in advance and accounts payable. The balance was
not refunded or paid and was agreed by both parties.
 
 18.
              RELATED
      PARTY TRANSACTIONS
 
 In 2004,
the Company entered into a rental agreement for land use right with Zhengzhou
No.2 Iron and Steel Company Limited, the previous owner of the Company with the
period from January 1, 2005 to December 31, 2027. Rental paid to Zhengzhou No.2
Iron and Steel Company Limited for the years ended December 31, 2008, 2007 and
2006 were $8,781, $8,016 and $7,653 respectively.
 
 19.
              SIGNIFICANT
      CONCENTRATIONS
 
 Three
customers with sales amount over 5% for the year accounted for 20.79% of net
sales for the year ended December 31, 2008. These major customers with sales
amount over 5% for the year are different from the year 2007.  There
are no other major customers with sales amount over 5% for the years ended
December 31, 2006.
 
 All of
the Company's suppliers locate in the PRC. Four suppliers represented 86%, 64%
and 47% of total purchase for the years ended December 31, 2008, 2007 and 2006
respectively.
  20.
              OPERATING
      LEASE COMMITMENTS
 
 Rental
expense for obligations under operating leases was $23,200 (RMB160,900) for the
year ended December 31, 2008. The total future minimum lease payments under
non-cancellable operating leases in respect of premises as of December 31, 2008
are payable as follows:
 
 December,
      31
                        
                        Land
      use
                          right
                        
                        
                        Reservoir
      rental
                        
                        
                        Total2009
                        
                        $
                        8,781
                        
                        
                        $
                        14,419
                        
                        
                        $
                        23,2002010
                        
                        
                        9,660
                        
                        
                        
                        14,419
                        
                        
                        
                        24,0792011
                        
                        
                        10,626
                        
                        
                        
                        14,419
                        
                        
                        
                        25,0452012
                        
                        
                        11,688
                        
                        
                        
                        14,419
                        
                        
                        
                        26,1072013
                        
                        
                        12,857
                        
                        
                        
                        14,419
                        
                        
                        
                        27,276Over
      five years
                        
                        
                        395,637
                        
                        
                        
                        72,095
                        
                        
                        
                        467,732$
                        449,249
                        
                        
                        $
                        144,190
                        
                        
                        $
                        593,439
 
 Land use
right is granted by Zhengzhou No.2 Iron and Steel Company Limited, who sub-lets
a part of its land with 27,066 m2 to the Company for use. The rental period is
from January 1, 2005 to December 31, 2027. Annual rental paid for the land use
right was $8,781 (RMB60,900) for the period of January 1, 2005 to December 31,
2009. The rental payment will  increase by 10% annually from 2010
onwards.
  F-44
  HENAN
GREEN COMPLEX MATERIALS CO., LTD
 NOTES
TO THE FINANCIAL STATEMENTS
 FOR
THE YEARAS ENDED DECEMBER 31, 2008 , 2007 AND 2006
 (IN
US DOLLARS)
 
 21.
              POST
      BALANCE SHEET EVENT
 
 On March
17, 2009, the ultimate shareholder of Golden Green Enterprises Limited (“BVICo”)
consummated a reverse merger with China Opportunity Acquisition Corp
(“COAC”).  Under the terms of the merger agreement, BVICo is the
surviving entity and registered its shares pursuant to a registration statement
filed with the U.S Securities and Exchange
Commission.   Accordingly, after the merger, the former
shareholders of COAC own approximately 6.5% of BVICo's ordinary
shares.
  F-45