UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM 10-Q/A





 ̈
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
      OF 1934For
      the quarter ended September 30,
2008





-OR-





 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
      OF 1934For
      the transition period
      from                 
      to





Commission
File Number 333-64804










ASIA
GLOBAL HOLDINGS CORP.


(Exact
Name of small business issuer as specified in Its charter)





NEVADA
              (State
      or other jurisdiction of
              incorporation
      or organization)
            
            75-3026459
              (I.R.S.
      Employer Identification No.)





Unit 601B, 6 th
      Floor, Tower
      1
              833
      Cheung Sha Wan Road
              Kowloon,
      Hong Kong
              (Address
      of principal executive offices)
            
            (Zip
      code)





Issuer’s
telephone number, including area code: (213)
243-1505





(Former
name, former address or former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.


Yes √
      No   ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.





Large
accelerated filer  ̈
     Accelerated filer  ̈
      Non-accelerated filer  ̈
      Smaller reporting company √





Indicate
by check mark whether the registrant is a shell company (as defined in Rue
12b-2of the Exchange Act).


Yes  ̈   No
√





The
number of shares outstanding of each of the Registrant’s classes of common
stock, as of November 17, 2008 was 133,262,000 shares, all of one class of
$0.001 par value Common Stock.











ASIA
GLOBAL HOLDINGS CORP.


FORM
10-Q


Quarter
Ended September 30, 2008


TABLE
OF CONTENTS





PagePART
      I— FINANCIAL INFORMATIONItem
      1
                                                    Financial
      Statements
                                                    
                                                    F-1Unaudited
      Consolidated Balance Sheets as of September 30, 2008 and December 31,
      2007
                                                    
                                                    F-2Unaudited
      Consolidated Statements of Operations for the Nine Months Ended September
      30, 2008 and 2007
                                                    
                                                    F-3Unaudited
      Consolidated Statements of Cash Flows for the Nine Months Ended September
      30, 2008 and 2007
                                                    
                                                    F-4Unaudited
      Consolidated Statements of Changes in Stockholder Equity Ended September
      30, 2008
                                                    
                                                    F-5Notes
      to Unaudited Condensed Consolidated Financial Statements Ended September
      30, 2008
                                                    
                                                    F-6 –
      F-20Item
      2
                                                    Managements
      Discussion and Analysis of Financial Condition and Results of
      Operation
                                                    
                                                    21Item
      3
                                                    Quantitative
      and Qualitative Disclosures About Market Risk
                                                    
                                                    30Item
      4T
                                                    Controls
      and Procedures
                                                    
                                                    31PART II—OTHER
      INFORMATIONItem
      1
                                                    Legal
      Proceedings
                                                    
                                                    31Item
      1A
                                                    Risk
      Factors
                                                    
                                                    31Item
      2
                                                    Unregistered
      Sales of Equity Securities and Use of Proceeds
                                                    
                                                    39Item
      3
                                                    Defaults
      Upon Senior Securities
                                                    
                                                    39Item
      4
                                                    Submission
      of Matters to a Vote of Security Holders
                                                    
                                                    39Item
      5
                                                    Other
      Information
                                                    
                                                    39Item
      6
                                                    Exhibits
                                                    
                                                    39SIGNATURES
                                                    
                                                    40











SPECIAL
NOTE ON FORWARD LOOKING STATEMENTS





This
Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in Item 2 of Part I of this
report include forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance, or
achievements expressed or implied by forward-looking statements.





In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "proposed," "intended," or "continue" or the negative
of these terms or other comparable terminology. You should read statements that
contain these words carefully, because they discuss our expectations about our
future operating results or our future financial condition or state other
"forward-looking" information. There may be events in the future that we are not
able to accurately predict or control. Before you invest in our securities, you
should be aware that the occurrence of any of the events described in this
Annual Report could substantially harm our business, results of operations and
financial condition, and that upon the occurrence of any of these events, the
trading price of our securities could decline and you could lose all or part of
your investment. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
growth rates, levels of activity, performance or achievements. We are under no
duty to update any of the forward-looking statements after the date of this
Quarterly Report to conform these statements to actual results.




EXPLANATORY
NOTE





This
amendment on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2008, originally filed with the United States Securities and
Exchange Commission (SEC) on November 17, 2008, is being filed to reflect the
restatement of its condensed consolidated financial statements, the notes
thereto, and related disclosures for the quarter ended September 30, 2008. The
restatements are to correct an error in applying accounting principles for
revenue recognition during the quarter.










PART 1.   FINANCIAL
INFORMATION





ITEM 1.   FINANCIAL
STATEMENTS





ASIA
GLOBAL HOLDINGS CORP.





INDEX
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED
AND RESTATED)





PageCondensed
      Consolidated Balance Sheets as
                of
      September 30, 2008 and December 31, 2007
              
              F-2Condensed
      Consolidated Statements of Operations And Comprehensive
Income
                (Loss)
      for the three and nine months ended September 30, 2008 and
      2007
              
              F-3Condensed
      Consolidated Statements of Cash Flows
                for
      the nine months ended September 30, 2008 and 2007
              
              F-4Condensed
      Consolidated Statement of Stockholders’ Equity
                for
      the nine months ended September 30, 2008
              
              F-5Notes
      to Condensed Consolidated Financial Statements
              
              F-6
      to F-20





F-1





ASIA
GLOBAL HOLDINGS CORP.


CONDENSED
CONSOLIDATED BALANCE SHEETS


AS
OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007


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




September 30, 2008
                                            
                                            
                                            December 31, 2007(Unaudited
      and Restated)
                                            
                                            
                                            (Audited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                                            
                                            $
                                            146,497
                                            
                                            
                                            $
                                            846,907Restricted
      cash
                                            
                                            
                                            543,409
                                            
                                            
                                            
                                            558,104Accounts
      receivable, trade
                                            
                                            
                                            586,380
                                            
                                            
                                            
                                            2,953,719Amounts
      due from a related party
                                            
                                            
                                            39,675
                                            
                                            
                                            
                                            530,706Income
      tax credit
                                            
                                            
                                            254,180
                                            
                                            
                                            
                                            -Prepayments
      and other current assets
                                            
                                            
                                            182,266
                                            
                                            
                                            
                                            87,115Total
      current assets
                                            
                                            
                                            1,752,407
                                            
                                            
                                            
                                            4,976,551Property,
      plant and equipment, net
                                            
                                            
                                            154,226
                                            
                                            
                                            
                                            161,034Intangible
      assets, net
                                            
                                            
                                            681,879
                                            
                                            
                                            
                                            210,674TOTAL
      ASSETS
                                            
                                            $
                                            2,588,512
                                            
                                            
                                            $
                                            5,348,259LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Bank
      overdraft, secured
                                            
                                            $
                                            213,411
                                            
                                            
                                            $
                                            163,056Secured
      bank loan - current portion
                                            
                                            
                                            181,698
                                            
                                            
                                            
                                            784,600Obligation
      under capital lease - current portion
                                            
                                            
                                            130,220
                                            
                                            
                                            
                                            146,416Letters
      of credit
                                            
                                            
                                            577,244
                                            
                                            
                                            
                                            484,006Accounts
      payable and accrued liabilities
                                            
                                            
                                            747,830
                                            
                                            
                                            
                                            838,239Income
      tax payable
                                            
                                            
                                            10,283
                                            
                                            
                                            
                                            435,768Amount
      due to a related party
                                            
                                            
                                            -
                                            
                                            
                                            
                                            106,208Total
      current liabilities
                                            
                                            
                                            1,860,686
                                            
                                            
                                            
                                            2,958,293Long-term
      liabilities:Secured
      bank loan
                                            
                                            
                                            -
                                            
                                            
                                            
                                            6,410Obligation
      under capital lease
                                            
                                            
                                            -
                                            
                                            
                                            
                                            92,262Deferred
      tax liabilities
                                            
                                            
                                            132,091
                                            
                                            
                                            
                                            132,091Total
      long-term liabilities
                                            
                                            
                                            132,091
                                            
                                            
                                            
                                            230,763Total
      liabilities
                                            
                                            
                                            1,992,777
                                            
                                            
                                            
                                            3,189,056Commitment
      and contingenciesStockholders’
      equity:Series
      A, convertible preferred stock, $0.001 par value; 500,000 shares
      authorized; 400,000 shares and 400,000 shares issued and outstanding
      shares as of September 30, 2008 and December 31, 2007
                                            
                                            
                                            400
                                            
                                            
                                            
                                            400Common
      stock, $0.001 par value; 300,000,000 shares authorized; 133,362,000 and
      129,862,000 shares issued and outstanding as of September 30, 2008 and
      December 31, 2007
                                            
                                            
                                            133,362
                                            
                                            
                                            
                                            129,862To
      be issued: 0 shares and 2,000,000 shares as of September 30, 2008 and
      December 31, 2007
                                            
                                            
                                            -
                                            
                                            
                                            
                                            414,000Additional
      paid-in capital
                                            
                                            
                                            17,941,022
                                            
                                            
                                            
                                            17,406,772Accumulated
      other comprehensive (loss) income
                                            
                                            
                                            (8,084
                                            )
                                            
                                            
                                            6,258Accumulated
      deficit
                                            
                                            
                                            (17,470,965
                                            )
                                            
                                            
                                            (15,798,089
                                            )Total
      stockholders’ equity
                                            
                                            
                                            595,735
                                            
                                            
                                            
                                            2,159,203TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                                            
                                            $
                                            2,588,512
                                            
                                            
                                            $
                                            5,348,259




See
accompanying notes to condensed consolidated financial statements.




F-2






ASIA
GLOBAL HOLDINGS CORP.


CONDENSED
CONSOLIDATED STATEMENTS OF


OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)


FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007


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


(Unaudited)




Three months ended September 30,
                                                
                                                
                                                Nine months ended September 30,2008
                                                
                                                
                                                2007
                                                
                                                
                                                2008
                                                
                                                
                                                2007(Restated)
                                                
                                                
                                                
                                                
                                                
                                                (Restated)Revenues,
      net
                                                
                                                $
                                                605,681
                                                
                                                
                                                $
                                                3,843,631
                                                
                                                
                                                $
                                                4,967,966
                                                
                                                
                                                $
                                                6,861,823Cost
      of revenue
                                                
                                                
                                                2,313,634
                                                
                                                
                                                
                                                1,107,095
                                                
                                                
                                                
                                                3,974,407
                                                
                                                
                                                
                                                2,131,005Gross
      (loss) profit
                                                
                                                
                                                (1,707,953
                                                )
                                                
                                                
                                                2,736,536
                                                
                                                
                                                
                                                993,559
                                                
                                                
                                                
                                                4,730,818OPERATING
      EXPENSES:Sales
      and marketing
                                                
                                                
                                                1,536,202
                                                
                                                
                                                
                                                379,838
                                                
                                                
                                                
                                                2,063,825
                                                
                                                
                                                
                                                737,660Consulting
      and professional fee
                                                
                                                
                                                23,249
                                                
                                                
                                                
                                                2,279,962
                                                
                                                
                                                
                                                138,028
                                                
                                                
                                                
                                                5,243,543Depreciation
      and amortization
                                                
                                                
                                                67,712
                                                
                                                
                                                
                                                47,141
                                                
                                                
                                                
                                                142,865
                                                
                                                
                                                
                                                121,288Stock
      based compensation to executive
                                                
                                                
                                                -
                                                
                                                
                                                
                                                56,713
                                                
                                                
                                                
                                                123,750
                                                
                                                
                                                
                                                260,877General
      and administrative
                                                
                                                
                                                200,055
                                                
                                                
                                                
                                                251,834
                                                
                                                
                                                
                                                542,810
                                                
                                                
                                                
                                                1,130,692Total
      operating expenses
                                                
                                                
                                                1,827,218
                                                
                                                
                                                
                                                3,015,488
                                                
                                                
                                                
                                                3,011,278
                                                
                                                
                                                
                                                7,494,060LOSS
      FROM OPERATIONS
                                                
                                                
                                                (3,535,171
                                                )
                                                
                                                
                                                (278,952
                                                )
                                                
                                                
                                                (2,017,719
                                                )
                                                
                                                
                                                (2,763,242
                                                )Other
      income (expense):Other
      income
                                                
                                                
                                                1,055
                                                
                                                
                                                
                                                5,249
                                                
                                                
                                                
                                                18,166
                                                
                                                
                                                
                                                12,607Interest
      expense
                                                
                                                
                                                (18,466
                                                )
                                                
                                                
                                                (22,875
                                                )
                                                
                                                
                                                (71,921
                                                )
                                                
                                                
                                                (51,501
                                                )(17,411
                                                )
                                                
                                                
                                                (17,626
                                                )
                                                
                                                
                                                (53,755
                                                )
                                                
                                                
                                                (38,894
                                                )LOSS
      BEFORE INCOME TAXES AND MINORITY INTEREST
                                                
                                                
                                                (3,552,582
                                                )
                                                
                                                
                                                (296,578
                                                )
                                                
                                                
                                                (2,071,474
                                                )
                                                
                                                
                                                (2,802,136
                                                )Income
      tax benefit (expenses)
                                                
                                                
                                                111,941
                                                
                                                
                                                
                                                (314,257
                                                )
                                                
                                                
                                                578,847
                                                
                                                
                                                
                                                (472,885
                                                )LOSS
      FROM CONTINUING OPERATIONS
                                                
                                                
                                                (3,440,641
                                                )
                                                
                                                
                                                (610,835
                                                )
                                                
                                                
                                                (1,492,627
                                                )
                                                
                                                
                                                (3,275,021
                                                )Loss
      from discontinued operations
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (347,408
                                                )
                                                
                                                
                                                (180,249
                                                )
                                                
                                                
                                                (703,346
                                                )Minority
      interest
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (9,206
                                                )
                                                
                                                
                                                -
                                                
                                                
                                                
                                                281,338NET
      LOSS
                                                
                                                $
                                                (3,440,641
                                                )
                                                
                                                $
                                                (967,449
                                                )
                                                
                                                $
                                                (1,672,876
                                                )
                                                
                                                $
                                                (3,697,029
                                                )Other
      comprehensive (loss) income:-
      Foreign currency translation (loss) gain
                                                
                                                
                                                (1,162
                                                )
                                                
                                                
                                                (196
                                                )
                                                
                                                
                                                (14,342
                                                )
                                                
                                                
                                                2,212COMPREHENSIVE
      LOSS
                                                
                                                $
                                                (3,441,803
                                                )
                                                
                                                $
                                                (967,645
                                                )
                                                
                                                $
                                                (1,687,218
                                                )
                                                
                                                $
                                                (3,694,817
                                                )Basic
      weighted average number of shares
                                                
                                                
                                                133,362,000
                                                
                                                
                                                
                                                93,584,222
                                                
                                                
                                                
                                                131,521,259
                                                
                                                
                                                
                                                82,909,222Per
      share information:From
      continuing operation– Basic and diluted
                                                
                                                $
                                                (0.03
                                                )
                                                
                                                $
                                                (0.01
                                                )
                                                
                                                $
                                                (0.01
                                                )
                                                
                                                $
                                                (0.04
                                                )From
      discontinued operation– Basic and diluted
                                                
                                                $
                                                0.00
                                                
                                                
                                                $
                                                (0.00
                                                )
                                                
                                                $
                                                (0.00
                                                )
                                                
                                                $
                                                (0.00
                                                )Net
      income (loss) per share – Basic and diluted
                                                
                                                $
                                                (0.03
                                                )
                                                
                                                $
                                                (0.01
                                                )
                                                
                                                $
                                                (0.01
                                                )
                                                
                                                $
                                                (0.04
                                                )




See
accompanying notes to condensed consolidated financial statements.





F-3





ASIA
GLOBAL HOLDINGS CORP.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007


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


(Unaudited)




Nine months ended September 30,2008
                                                    
                                                    
                                                    2007(Restated)Cash
      flows from operating activities:Loss
      from continuing operations
                                                    
                                                    $
                                                    (1,492,627
                                                    )
                                                    
                                                    $
                                                    (3,275,021
                                                    )Adjustments
      to reconcile loss from continuing operations to net cash (used in)
      provided by operating activities:Stock-based
      compensation to executives, non-cash
                                                    
                                                    
                                                    123,750
                                                    
                                                    
                                                    
                                                    260,877Common
      stock issued for services, non-cash
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    4,982,325Depreciation
      and amortization
                                                    
                                                    
                                                    142,865
                                                    
                                                    
                                                    
                                                    121,288Change
      in operating assets and liabilities:Accounts
      receivable, trade
                                                    
                                                    
                                                    2,367,339
                                                    
                                                    
                                                    
                                                    (1,173,596
                                                    )Inventories
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (910
                                                    )Prepayments
      and other current assets
                                                    
                                                    
                                                    (135,604
                                                    )
                                                    
                                                    
                                                    (79
                                                    )Accounts
      payables and accrued liabilities
                                                    
                                                    
                                                    (42,631
                                                    )
                                                    
                                                    
                                                    917,278Income
      tax credit
                                                    
                                                    
                                                    (254,180
                                                    )
                                                    
                                                    
                                                    -Income
      tax payable
                                                    
                                                    
                                                    (425,485
                                                    )
                                                    
                                                    
                                                    451,591Amount
      due to a related party
                                                    
                                                    
                                                    (106,208
                                                    )
                                                    
                                                    
                                                    74,291Net
      cash (used in) provided by operating activities
                                                    
                                                    
                                                    177,219
                                                    
                                                    
                                                    
                                                    2,358,044Net
      cash used in discontinued operations
                                                    
                                                    
                                                    (182,417
                                                    )
                                                    
                                                    
                                                    (1,560,622
                                                    )Cash
      flows from investing activities:Increase
      in restricted cash
                                                    
                                                    
                                                    14,695
                                                    
                                                    
                                                    
                                                    (266,497
                                                    )Expenditure
      on intangible assets
                                                    
                                                    
                                                    (585,077
                                                    )
                                                    
                                                    
                                                    -Purchase
      of property, plant and equipment
                                                    
                                                    
                                                    (26,433
                                                    )
                                                    
                                                    
                                                    (887,251
                                                    )Net
      cash used in investing activities
                                                    
                                                    
                                                    (596,815
                                                    )
                                                    
                                                    
                                                    (1,153,748
                                                    )Net
      cash used in discontinued operations
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (107,940
                                                    )Cash
      flows from financing activities:Repayment
      of (advance from) amount due from related parties
                                                    
                                                    
                                                    492,655
                                                    
                                                    
                                                    
                                                    (118,142
                                                    )Net
      increase (decrease) in bank overdraft
                                                    
                                                    
                                                    50,355
                                                    
                                                    
                                                    
                                                    91,967Advances
      (repayment) under letters of credit
                                                    
                                                    
                                                    93,238
                                                    
                                                    
                                                    
                                                    443,654Drawdown
      of bank loan
                                                    
                                                    
                                                    115,385
                                                    
                                                    
                                                    
                                                    134,704Repayment
      of bank loan
                                                    
                                                    
                                                    (724,697
                                                    )
                                                    
                                                    
                                                    (437,930
                                                    )Issue
      of promissory note
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    370,000Repayment
      of capital lease
                                                    
                                                    
                                                    (108,458
                                                    )
                                                    
                                                    
                                                    -Net
      cash provided by (used in) financing activities
                                                    
                                                    
                                                    (81,522
                                                    )
                                                    
                                                    
                                                    484,253Net
      cash used in discontinued operations
                                                    
                                                    
                                                    (1,624
                                                    )
                                                    
                                                    
                                                    17,237Effect
      of exchange rate change on cash and cash equivalents
                                                    
                                                    
                                                    (15,251
                                                    )
                                                    
                                                    
                                                    2,212NET CHANGE IN CASH AND CASH
      EQUIVALENTS
                                                    
                                                    
                                                    (700,410
                                                    )
                                                    
                                                    
                                                    39,436CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                                                    
                                                    
                                                    846,907
                                                    
                                                    
                                                    
                                                    22,514CASH
      AND CASH EQUIVALENTS, END OF PERIOD
                                                    
                                                    $
                                                    146,497
                                                    
                                                    
                                                    $
                                                    61,950SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid for income taxes
                                                    
                                                    $
                                                    100,818
                                                    
                                                    
                                                    $
                                                    21,294Cash
      paid for interest expenses
                                                    
                                                    $
                                                    71,921
                                                    
                                                    
                                                    $
                                                    51,540SUPPLEMENTAL DISCLOSURE OF
      NON-CASH TRANSACTIONS:Amounts
      due from minority shareholders in relation to unsettled investment cost of
      a subsidiary
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    820,000




See
accompanying notes to condensed consolidated financial statements.





F-4





ASIA
GLOBAL HOLDING CORP.


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2008


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


(Unaudited and Restated)




Series A, Convertible
                                      Preferred Stock
                                    
                                    
                                    Common stock
                                    
                                    
                                    Common stock to be issued
                                    
                                    
                                    Additional
                                      paid-in capital
                                    
                                    
                                    Accumulated
                                      other
                                      comprehensive
                                      (loss) income
                                    
                                    
                                    Accumulated
                                      deficit
                                    
                                    
                                    Total
                                      stockholders’
                                      equityNo. of shares
                                    
                                    
                                    Amount
                                    
                                    
                                    No. of shares
                                    
                                    
                                    Amount
                                    
                                    
                                    No. of shares
                                    
                                    
                                    AmountBalance
      as of January 1, 2008
                                    
                                    
                                    400,000
                                    
                                    
                                    $
                                    400
                                    
                                    
                                    
                                    129,862,000
                                    
                                    
                                    $
                                    129,862
                                    
                                    
                                    
                                    2,000,000
                                    
                                    
                                    $
                                    414,000
                                    
                                    
                                    $
                                    17,406,772
                                    
                                    
                                    $
                                    6,258
                                    
                                    
                                    $
                                    (15,798,089
                                    )
                                    
                                    $
                                    2,159,203Bonus
      shares issued to an executive, non-cash
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    2,000,000
                                    
                                    
                                    
                                    2,000
                                    
                                    
                                    
                                    (2,000,000
                                    )
                                    
                                    
                                    (414,000
                                    )
                                    
                                    
                                    412,000
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Stock
      based compensation to executives, non-cash
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    1,500,000
                                    
                                    
                                    
                                    1,500
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    122,250
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    123,750Net
      loss for the period
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (1,672,876
                                    )
                                    
                                    
                                    (1,672,876
                                    )Foreign
      currency translation adjustment
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (14,342
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (14,342
                                    )Balance
      as of September 30, 2008
                                    
                                    
                                    400,000
                                    
                                    
                                    $
                                    400
                                    
                                    
                                    
                                    133,362,000
                                    
                                    
                                    $
                                    133,362
                                    
                                    
                                    
                                    -
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    17,941,022
                                    
                                    
                                    $
                                    (8,084
                                    )
                                    
                                    $
                                    (17,470,965
                                    )
                                    
                                    $
                                    595,735




See
accompanying notes to condensed consolidated financial statements.





F-5





ASIA
GLOBAL HOLDINGS CORP.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2008


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


(Unaudited)





NOTE - 1   BASIS OF
PRESENTATION





The
accompanying unaudited condensed consolidated financial statements have been
prepared by management in accordance with both accounting principles generally
accepted in the United States (“GAAP”), and the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Certain information and note disclosures normally
included in audited financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to those
rules and regulations, although the Company believes that the disclosures made
are adequate to make the information not misleading.





In the
opinion of management, the consolidated balance sheet as of December 31, 2007
which has been derived from audited financial statements and these unaudited
condensed consolidated financial statements reflect all normal and recurring
adjustments considered necessary to state fairly the results for the periods
presented. The results for the period ended September 30, 2008 are not
necessarily indicative of the results to be expected for the entire fiscal year
ending December 31, 2008 or for any future period.





These
unaudited condensed consolidated financial statements and notes thereto should
be read in conjunction with the Management’s Discussion and the audited
financial statements and notes thereto included in the Annual Report on Form
10-K for the year ended December 31, 2007.




NOTE - 2 O RGANIZATION AND BUSINESS
BACKGROUND





Asia
Global Holdings Corp. (the “Company” or “AAGH”) was incorporated in the State of
Nevada on February 1, 2002 as Longbow Mining Inc. On May 12, 2004, Longbow
Mining Inc. changed its name to BonusAmerica Worldwide Corporation. On June 6,
2006, the Company changed its name to Asia Global Holdings Corp. AAGH is focused
on building businesses in the People’s Republic of China (“PRC”) and other
emerging regions and markets in Asia and worldwide. The Company has subsidiaries
participating in media and advertising, marketing services and internet
commerce. During 2007, AAGH entered the television entertainment market, where
we plan to sell advertising slots that air during the broadcast of “ Who Wants To Be A
Millionaire? ” TV show in the PRC. The head-quarters of AAGH are located
in Hong Kong and the Company also has offices in the United States of America
(“United States”) and the PRC.





In
February 2008, the Board of the Company decided to discontinue the production of
new episodes for “ Who Wants
To Be a Millionaire? ” TV show due to the poor performance of the sales
and distribution team.





In June
2008, the Company established a new branch office in Labuan, Malaysia for the
business expansion in Asia Pacific region.




F-6




Details
of the Company’s subsidiaries and affiliate are described below:





Name
                        
                        Place of incorporation
                          and kind of
                          legal entity
                        
                        Principal activities
                          and place of operation
                        
                        Particulars of issued/
                          registered share
                          capital
                        
                        Effective
                          interest
                          heldSino
      Trade-Intelligent Development Corp., Limited
                          (“Sino
      Trade”)
                        
                        Hong
      Kong, a limited liability company
                        
                        Publishing
      & information service and advertisement in Hong Kong
                        
                        5,000,000
      issued shares of HK$1 each
                        
                        100
                        %Idea
      Asia Limited
                          (“Idea
      Asia”)
                        
                        Hong
      Kong, a limited liability company
                        
                        Investment
      holding in Hong Kong
                        
                        10,000
      issued shares of HK$1 each
                        
                        100
                        %China
      Media Power Limited (“CMP”)
                        
                        Hong
      Kong, a limited liability company
                        
                        TV
      entertainment in the PRC
                        
                        16,000,000
      issued share of HK$1 each
                        
                        60
                        %Wah
      Mau Corporate Planning Development Co., Ltd (“Wah Mau”)
                        
                        The
      PRC, a limited liability company
                        
                        Development
      of corporate images and business promotion in the PRC
                        
                        RMB1,000,000
                        
                        100
                        %DYKN
      Corporation
                        
                        Malaysia,
      a limited liability company
                        
                        Publishing
      & information service and advertisement in Malaysia
                        
                        10,000
      issued shares of US$1 each
                        
                        100
                        %





Asia
Global Holdings Corp. and its subsidiaries and affiliate are hereinafter
referred to as (the “Company”).




NOTE - 3   SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





 ̈
            Use
      of estimates





In
preparing these condensed consolidated financial statements, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities in the balance sheets and revenues and expenses during the period
reported. Actual results may differ from these estimates.





 ̈
            Basis
      of consolidation





The
condensed consolidated financial statements include the financial statements of
AAGH, its wholly-owned and majority-owned subsidiaries including variable
interest entities ("VIEs") for which the Company is the primary beneficiary. All
significant inter-company balances and transactions within the Company have been
eliminated.





The
Company has adopted the Financial Accounting Standards Board ("FASB")
Interpretation No. 46R, “ Consolidation of Variable Interest
Entities” , an Interpretation of Accounting Research Bulletin No. 51
("FIN 46R"). FIN 46R requires a Variable Interest Entity (VIE) to be
consolidated by a company if that company is subject to a majority of the risk
of loss for the VIE or is entitled to receive a majority of the VIE’s residual
returns. VIEs are those entities in which the Company, through contractual
arrangements, bears the risks of, and enjoys the rewards normally associated
with ownership of the entities, and therefore the company is the primary
beneficiary of these entities. The results of variable interest entities
established during the year are included in the consolidated income statements
from the effective date.





F-7





 ̈
            Cash
      and cash equivalents





Cash and
cash equivalents are carried at cost and represent cash on hand, demand deposits
placed with banks or other financial institutions and all highly liquid
investments with an original maturity of three months or less as of the purchase
date of such investments.





 ̈
            Accounts
      receivable





Accounts
receivable, principally trade, are generally due 90 days and are stated at the
invoiced amount. The Company performs ongoing credit evaluations of its
customers and adjusts credit limits based upon payment history and the
customer’s current creditworthiness, as determined by a review of their current
credit information. The Company continuously monitors aging reports, collections
and payments from customers, and a provision for estimated credit losses is
maintained based upon the Company’s historical experience and any specific
customer collection issues that have been identified. The Company writes off
accounts receivable when they become uncollectible. As of September 30, 2008,
the Company has determined that no allowance for doubtful accounts is
required.





 ̈
            Property,
      plant and equipment, net





Property,
plant and equipment are stated at historical cost less accumulated depreciation
and accumulated impairment losses, if any. Depreciation is calculated on the
straight-line basis over the following expected useful lives from the date on
which they become fully operational, generally ranging from 3 to 7 years.
Expenditure for maintenance and repairs is expensed as incurred.





Depreciation
expense for the three months ended September 30, 2008 and 2007 were $11,984 and
$20,688 respectively. Depreciation expense for the nine months ended September
30, 2008 and 2007 were $34,151 and $41,867, respectively.





 ̈
            Intangible
      assets





Intangible
assets consist of costs paid to acquire personal customer information for use in
its advertising and database rental activities. For the period ended September
30, 2008, the Company has acquired the new customer database for operating use.
As of September 30, 2008, the gross carrying value was $1,736,755, accumulated
amortization was $1,054,876 and the net carrying value was $681,879. The Company
amortizes the cost of these assets over a period of three to five
years.





Amortization
expense totaled $55,728 and $26,473 for the three months ended September 30,
2008 and 2007. Amortization expense totaled $108,714 and $79,421 for the nine
months ended September 30, 2008 and 2007.





 ̈
            Impairment
      of long-lived assets





In
accordance with Statement of Financial Accounting Standard ("SFAS") No. 144,
“Accounting for the Impairment
or Disposal of Long-Lived Assets,” the Company reviews its long-lived
assets, including property, plant and equipment and intangible assets, for
impairment whenever events or changes in circumstances indicate that the
carrying amounts of the assets may not be fully recoverable. If the total of the
expected undiscounted future net cash flows is less than the carrying amount of
the asset, a loss is recognized for the difference between the fair value and
carrying amount of the asset. There has been no impairment as of September 30,
2008.





 ̈
            Revenue
      recognition





In
accordance with the SEC’s Staff Accounting Bulletin No. 104, “ Revenue Recognition” , the
Company recognizes revenue when persuasive evidence of an arrangement exists,
transfer of title has occurred or services have been rendered, the selling price
is fixed or determinable and collectibility is reasonably assured.





F-8





(a)
  Database rental





Revenues
from database rentals are recorded at the time the services are provided. The
Company entered into sale-through agreements with 9 (2007: 6) distributors
located in Hong Kong and China which in turn will be responsible to recruit new
members and take orders from the existing members of TradeDragon.com. The
members can enjoy the following services from the Company (a) advertising
placement on the business directories and trade publications that are produced
by Sino Trade, (b) internet direct marketing services by the means of
traditional mail and emails distribution, (c) membership to TradeDragon.com
webpage in which the members exhibit their products and services and search for
their buyers or suppliers through search engine marketing tool and international
trade portal.





According
to the sale-through agreement, each of the distributors is committed to a fixed
fee of $256,000 per quarter, and the distributor will sign separate contracts
with the members. Hence, the Company takes orders directly from the distributors
and will services are considered rendered to the distributors but not the
members.





(b)
  TV Broadcasting





Revenues
from TV broadcasting service are recognized in the period when television
episodes are aired by the TV station and collection is probable.





 ̈
            Income
      taxes





The
Company accounts for income tax using SFAS No. 109 “Accounting for Income Taxes”
, which requires the asset and liability approach for financial accounting and
reporting for income taxes. Under this approach, deferred income taxes are
provided for the estimated future tax effects attributable to temporary
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases, and for the expected future tax
benefits from loss carry-forwards and provisions, if any. Deferred tax assets
and liabilities are measured using the enacted tax rates expected in the years
of recovery or reversal and the effect from a change in tax rates is recognized
in the statements of operations in the period of enactment. A valuation
allowance is provided to reduce the amount of deferred tax assets if it is
considered more likely than not that some portion of, or all of the deferred tax
assets will not be realized.





The
Company also adopts the provisions of the Financial Accounting Standards
Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes” ( "FIN 48" ) . FIN 48 prescribes a
recognition threshold and measurement process for recording in the financial
statements uncertain tax positions taken or expected to be taken in a tax
return. FIN 48 also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosures and
transitions. The adoption of FIN 48 did not have a significant impact on the
Company’s consolidated financial statements.





In
connection with the adoption of FIN 48, the Company analyzed the filing
positions in all of the federal, state and foreign jurisdictions where the
Company and its subsidiaries are required to file income tax returns, as well as
all open tax years in these jurisdictions. The Company adopted the policy of
recognizing interest and penalties, if any, related to unrecognized tax
positions as income tax expense. The Company did not have any unrecognized tax
positions or benefits and there was no effect on the financial condition or
results of operations for the period ended September 30, 2008. The Company’s tax
returns remain open subject to examination by major tax
jurisdictions.





The
Company conducts its major businesses in Hong Kong and Malaysia and is subject
to tax jurisdiction in various countries. As a result of its business
activities, the Company files tax returns that are subject to examination by the
local and foreign tax authorities.





F-9





 ̈
            Net
      income (loss) per share





The
Company calculates net income (loss) per share in accordance with SFAS No. 128,
“Earnings per Share.”
Basic income (loss) per share is computed by dividing the net income (loss) by
the weighted-average number of common shares outstanding during the period.
Diluted income (loss) per share is computed similar to basic income (loss) per
share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
common stock equivalents had been issued and if the additional common shares
were dilutive.





 ̈
            Comprehensive
      income (loss)





SFAS No.
130, “Reporting Comprehensive
Income” , establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income as defined includes all changes in equity during a period from non-owner
sources. Accumulated comprehensive income consists of changes in unrealized
gains and losses on foreign currency translation. This comprehensive income is
not included in the computation of income tax expense or benefit.





 ̈
            Foreign
      currencies translation





Transactions
denominated in currencies other than the functional currency are translated into
the functional currency at the exchange rates prevailing at the dates of the
transaction. Monetary assets and liabilities denominated in currencies other
than the functional currency are translated into the functional currency using
the applicable exchange rates at the balance sheet dates. The resulting exchange
differences are recorded in the statement of operations.





The
reporting currency of the Company is United States dollar ("US$"). The
functional currency of the Company's subsidiary operating in Hong Kong is Hong
Kong Dollars ("HK$") and its financial records are maintained and its statutory
financial statements are prepared in HK$. The functional currency of the
Company's subsidiary established in the PRC is Renminbi Yuan ("RMB") and its
financial records are maintained and its financial statements are prepared in
RMB.





In
general, for consolidation purposes, assets and liabilities of its subsidiaries
whose functional currency is not US$ are translated into US$, in accordance with
SFAS No. 52, “ Foreign
Currency Translation” , using the exchange rate on the balance sheet
date. Revenues and expenses are translated at average rates prevailing during
the period. The gains and losses resulting from translation of financial
statements of foreign subsidiaries are recorded as a separate component of
accumulated other comprehensive income within the statement of stockholders’
equity.





 ̈
            Stock-based
      compensation





The
Company adopts SFAS No. 123 (revised 2004), “ Share-Based Payment “, using
the fair value method on January 1, 2006, which requires the measurement and
recognition of compensation expense for all share-based awards made to employees
and directors, including employee stock options and shares issued through its
employee stock purchase plan, based on estimated fair values.





 ̈
            Related
      parties





Parties,
which can be a corporation or individual, are considered to be related if the
Company has the ability, directly or indirectly, to control the other party or
exercise significant influence over the other party in making financial and
operating decisions. Companies are also considered to be related if they are
subject to common control or common significant influence.





 ̈
            Segment
      reporting





SFAS No.
131, “Disclosures about
Segments of an Enterprise and Related Information” establishes standards
for reporting information about operating segments on a basis consistent with
the Company’s internal organization structure as well as information about
geographical areas, business segments and major customers in the financial
statements.





F-10





In the
first quarter of 2008, the Company discontinued its operation in TV
entertainment business. Hence, the Company operates one reportable segment in
media and advertising business for the three and nine months ended September 30,
2008.





 ̈
            Fair
      value of financial instruments





The
Company values its financial instruments as required by SFAS No. 107, “Disclosures about Fair Value of
Financial Instruments” . The estimated fair value amounts have been
determined by the Company, using available market information and appropriate
valuation methodologies. The estimates presented herein are not necessarily
indicative of amounts that the Company could realize in a current market
exchange.





The
Company’s financial instruments primarily consist of cash and cash equivalents,
restricted cash, accounts receivable, prepayments and other current assets, bank
overdraft, secured bank loan, obligation under capital lease, letters of credit,
accounts payable and accrued liabilities, income tax payable and amounts due
from related parties.





As of the
balance sheet dates, the estimated fair values of the financial instruments were
not materially different from their carrying values as presented due to the
short term maturities of these instruments and that the interest rates on the
borrowings approximate those that would have been available for loans of similar
remaining maturity and risk profile at respective period ends.





 ̈
            Recently
      issued accounting standards





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





In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), "Business Combinations" (
"SFAS No. 141R"). SFAS No. 141R will change the accounting for business
combinations. Under SFAS No. 141R, an acquiring entity will be required to
recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS No. 141R will
change the accounting treatment and disclosure for certain specific items in a
business combination. SFAS No. 141R applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008.
Accordingly, any business combinations the Company engages in will be recorded
and disclosed following existing GAAP until January 1, 2009. The Company expects
SFAS No. 141R will have an impact on accounting for business combinations once
adopted but the effect is dependent upon acquisitions at that time. The Company
is still assessing the impact of this pronouncement.





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





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




F-11





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”). This statement identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements in conformity with
generally accepted accounting principles (GAAP) in the United States. This
statement is effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles” . The Company
does not expect the adoption of SFAS No. 162 to have a material effect on the
financial condition or results of operations of the Company.





In May
2008, the FASB issued SFAS No. 163, " Accounting for Financial Guarantee
Insurance Contracts—an interpretation of FASB Statement No. 60 " ("SFAS
No. 163"). SFAS No. 163 interprets Statement 60 and amends existing accounting
pronouncements to clarify their application to the financial guarantee insurance
contracts included within the scope of that Statement. SFAS No. 163 is effective
for financial statements issued for fiscal years beginning after December 15,
2008, and all interim periods within those fiscal years. As such, the Company is
required to adopt these provisions at the beginning of the fiscal year ended
December 31, 2009. The Company is currently evaluating the impact of SFAS No.
163 on its financial statements but does not expect it to have an effect on the
Company's financial position, results of operations or cash flows.





Also in
May 2008, the FASB issued FSP APB 14-1, " Accounting for Convertible Debt
Instruments that may be Settled in Cash upon Conversion (Including Partial Cash
Settlement)" ("FSP APB 14-1"). FSP APB 14-1 applies to convertible  
debt securities that, upon conversion, may be settled by the issuer fully or
partially in cash. FSP APB 14-1 specifies that issuers of such instruments
should separately account for the liability and equity components in a manner
that will reflect the entity's nonconvertible debt borrowing rate when interest
cost is recognized in subsequent periods. FSP APB 14-1 is effective for
financial statements issued for fiscal years after December 15, 2008, and must
be applied on a retrospective basis. Early adoption is not permitted. The
Company does not expect it to have an effect on the Company's financial
position, results of operations or cash flows.





In June
2008, the FASB issued FASB Staff Position ("FSP") EITF 03-6-1, "Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities"
("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the earnings allocation in computing
earnings per share under the two-class method as described in SFAS No. 128,
Earnings per Share. Under the guidance of FSP EITF 03-6-1, unvested share-based
payment awards that contain nonforfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and shall be
included in the computation of earnings-per-share pursuant to the two-class
method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal
years beginning after December 15, 2008 and all prior-period earnings per share
data presented shall be adjusted retrospectively. Early application is not
permitted. The Company does not expect it to have an effect on the Company's
financial position, results of operations or cash flows.





Also in
June 2008, the FASB ratified EITF No. 07-5, " Determining Whether an Instrument
(or an Embedded Feature) is Indexed to an Entity's Own Stock " ("EITF
07-5"). EITF 07-5 provides that an entity should use a two-step approach to
evaluate whether an equity-linked financial instrument (or embedded feature) is
indexed to its own stock, including evaluating the instrument's contingent
exercise and settlement provisions. EITF 07-5 is effective for financial
statements issued for fiscal years beginning after December 15, 2008. Early
application is not permitted. The Company is assessing the potential impact of
this EITF 07-5 on the financial condition and results of operations and does not
expect it to have an effect on the Company's financial position, results of
operations or cash flows.




NOTE - 4   DISCONTINUED
OPERATIONS





On
February 15, 2008, the Board of the Company decided to suspend the production of
new episodes for “ Who Wants
To Be a Millionaire? ” TV show due to the poor performance of the sales
and distribution team.





On
February 25, 2008, its subsidiary, China Media Power Limited (“CMP”) decided to
discontinue the “ Who Wants To
Be a Millionaire? ” TV show and will consummate the business
restructuring plan. The Company considered that no additional charges associated
with the business restructuring would be anticipated.





F-12




Loss from
discontinued operations was reported as $180,249 and $703,346 for the nine
months ended September 30, 2008 and 2007, respectively. Prior period financial
statements for the period ended September 30, 2007 have been restated to present
the operation in “ Who Wants
To Be a Millionaire? ” TV show as a discontinued operation.





In
conjunction with the discontinuance of operations, the Company recognized a loss
$180,249 for the nine months ended September 30, 2008 to write down the carrying
amounts of the related assets. The assets and liabilities of the discontinued
operations as of September 30, 2008 consisted of the following:





September 30, 2008
                
                
                December 31, 2007(Audited)Assets
      of discontinued operation:Cash
      and cash equivalents
                
                $
                287
                
                
                $
                4,378Accounts
      receivable
                
                
                78,137
                
                
                
                78,137Prepayments
      and other current assets
                
                
                6,401
                
                
                
                46,863Amount
      due from a related party
                
                
                39,677
                
                
                
                38,053Intangible
      assets, net
                
                
                5,157
                
                
                
                5,157Total
      assets
                
                $
                129,659
                
                
                $
                172,588Liabilities
      of discontinued operation:Accounts
      payable and accrued liabilities
                
                
                123,896
                
                
                
                171,675Amount
      due to a related party (including intercompany items)
                
                
                885,153
                
                
                
                705,203Total
      liabilities
                
                $
                1,009,049
                
                
                $
                876,878





NOTE - 5   VARIABLE INTEREST
ENTITY





Effective
June 2008, the Company established a branch office (the “Branch”) in Labuan,
Malaysia for the purpose of managing and liaison of the sales arrangements with
new customers in Asia Pacific to meet with the business expansion plan. A branch
office is registered as an offshore company under the Labuan Offshore Financial
Services Authority in Malaysia and is owned by Mr. Michael Mak, Chief Executive
Officer on behalf of the Company. Pursuant to FIN 46R, the Branch is considered
as a variable interest entity, of which the Company is the primary beneficiary.
Accordingly, the result of the Branch is included in the accompanying financial
statements.





NOTE - 6   AMOUNTS DUE FROM A RELATED
PARTY





As of
September 30, 2008, amounts due from a related party represented temporary
advances to an employee, a director of subsidiary of $39,675, which was
unsecured, interest free and repayable on demand.




NOTE - 7   PREPAYMENTS AND OTHER CURRENT
ASSETS





Prepayments
and other current assets consisted of the following:





September 30, 2008
                    
                    
                    December 31, 2007(Audited)Utility
      deposits
                    
                    $
                    26,856
                    
                    
                    $
                    47,333Prepaid
      expenses
                    
                    
                    123,200
                    
                    
                    
                    21,197Deposit
      for investment
                    
                    
                    16,983
                    
                    
                    
                    16,983Other
      prepayments and receivables
                    
                    
                    15,227
                    
                    
                    
                    1,602$
                    182,266
                    
                    
                    $
                    87,115


F-13





The
prepaid expenses relate to advertising and promotional costs, which are expected
to be expensed in the next twelve months.





NOTE - 8   INDEBTEDNESS





(a)
  Bank loans





The
Company’s subsidiary operating in Hong Kong is committed under certain secured
bank term loans bearing interest at the rates ranging from 4.5% per annum to
11.24% per annum, payable in monthly installments, due fully and no later than
February 2009. As of September 30, 2008, total amounts outstanding under bank
loans were $181,698.





(b)
  Letters of credit





The
Company’s subsidiary operating in Hong Kong is committed under certain letters
of credit and other trust receipt loans issued by DBS Bank (Hong Kong) Ltd and
the Hongkong and Shanghai Banking Corporation Limited, independent financial
institutions in Hong Kong, totaling $577,244 expiring through December 10,
2008.




NOTE - 9   OBLIGATION UNDER CAPITAL
LEASE





The
Company purchased part of its studio equipment and financed these equipment with
a capital lease arrangement with Dah Sing Bank Limited, an independent financial
institution in Hong Kong, with an interest rate of 9.83% per annum, due July 30,
2009 and repayable $13,615 principal and interest monthly.





The
obligation under the capital lease is as follows:





September 30, 2008
                                                  
                                                  
                                                  December 31, 2007(Audited)Capital
      lease
                                                  
                                                  $
                                                  130,220
                                                  
                                                  
                                                  $
                                                  238,678Less:
      current portion
                                                  
                                                  
                                                  (130,220
                                                  )
                                                  
                                                  
                                                  (146,416
                                                  )$
                                                  -
                                                  
                                                  
                                                  $
                                                  92,262





Future
payments as of September 30, 2008 on the equipment lease are as
follows:





Years
      ending September 30:2009
                
                $
                136,154Less:
      interest expense
                
                
                (5,934
                )Present
      value of net minimum obligation
                
                $
                130,220





The
Company’s studio equipment is held under capital lease and the related
depreciation is included in depreciation expense.


F-14


NOTE - 10   INCOME
TAXES





For the
period ended September 30, 2008 and 2007, the local (“the United States”) and
foreign components of income (loss) from continuing operations before income
taxes and minority interest were comprised of the following:





Nine months ended September 30,2008
                                                    
                                                    
                                                    2007Local
                                                    
                                                    $
                                                    (223,584
                                                    )
                                                    
                                                    $
                                                    (5,405,263
                                                    )Foreign
                                                    
                                                    
                                                    (1,847,890
                                                    )
                                                    
                                                    
                                                    2,603,127Loss
      before income taxes and minority interest
                                                    
                                                    $
                                                    (2,071,474
                                                    )
                                                    
                                                    $
                                                    (2,802,136
                                                    )





The
provision for (benefit from) income taxes from continuing operations consisted
of the following:





Nine months ended September 30,2008
                
                
                2007Current:Local
                
                $
                -
                
                
                $
                -Foreign
                
                
                (578,847
                )
                
                
                472,885Deferred:Local
                
                
                -
                
                
                
                -Foreign
                
                
                -
                
                
                
                -(Benefit
      from) provision for income taxes
                
                $
                (578,847
                )
                
                $
                472,885





The
effective tax rate in the periods presented is the result of the mix of income
earned in various tax jurisdictions that apply a broad range of income tax
rates. The Company has subsidiaries and branches that operate in various
countries: United States, Hong Kong, Malaysia and the PRC that are subject to
tax in the jurisdictions in which they operate, as follows:





The
United States





AAGH is
registered in the State of Nevada and is subjected to United States tax
law.





As of
September 30, 2008, the United States operation had $18,006,642 cumulative net
operating losses available for federal tax purposes, which are available to
offset future taxable income. The net operating loss carryforwards begin to
expire in 2029. The Company has provided for a full valuation allowance of
$6,122,258 for future tax benefits from net operating loss carryforwards as the
management believes it is more likely than not that these assets will not be
realized in the future.





Hong
Kong





As of
September 30, 2008 and December 31, 2007, the Hong Kong profits tax rate was
16.5% and 17.5%, respectively. For the nine months ended September 30, 2008, no
provision for Hong Kong profits tax has been made as the Company’s subsidiaries
operating in Hong Kong incurred an operating loss of $4,800,285. For the nine
months ended September 30, 2007, the Company provided $472,885 for the Hong Kong
profits tax based on its operating income.





During
the period ended September 30, 2008, the Company filed the 2007 tax return and
was cleared in July 2008. Accordingly, the Company recognized $512,225 of income
tax benefits from the over-provision in prior years.


F-15





Malaysia





AAGH’s
consolidated affiliate is registered under the Labuan Offshore Financial
Services Authority, Malaysia and subject to Malaysian Income Tax Law at a
preferential rate of 3% of net income or a fixed sum of $5,876 (equivalent to
Ringgit Malaysian 20,000). For the period ended September 30, 2008, the
affiliate generated $3,039,054 from continuing operation before income taxes and
provided for $4,407 of income tax expense.





The
PRC





AAGH’s
subsidiary operating in the PRC is subject to the Corporate Income Tax Law of
the PRC (the “New CIT Law”) at a statutory rate of 25% on the subsidiary's
assessable profits, based on existing PRC tax legislation, interpretations and
practices in respect thereof. The subsidiary was exempted from the Corporate
Income Law because it generated an operating loss for the nine months ended
September 30, 2008.





Deferred
tax assets and liabilities reflect the tax impact of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
and income tax purposes. Significant components of the net deferred tax assets
and liabilities as of September 30, 2008 were as follows:





Deferred
      tax assets:Net
      operating loss carryforwards from:U.S.
                
                $
                6,122,258Hong
      Kong
                
                
                775,002The
      PRC
                
                
                255,5617,152,821Deferred
      tax liabilities:Depreciation
                
                
                (132,091
                )Less:
      valuation allowance
                
                
                (7,152,821
                )Net
      deferred tax liabilities
                
                $
                (132,091
                )





As of
September 30, 2008, the aggregate cumulative tax losses of $24,407,369 are
available to be carried forward indefinitely to offset future taxable income, if
unutilized. The deferred tax assets consists mainly of tax losses from differing
tax regimes and for which a full valuation allowance has been provided, as the
management believes it is more likely than not that these assets will not be
realized in the future.





The
Company adopted the provisions of FIN 48 on January 1, 2007. This interpretation
prescribes a recognition threshold and measurement attribute for the tax
positions taken, or expected to be taken, on a tax return. The Company files tax
returns in the various tax jurisdictions in which its subsidiaries or branch
operates, principally the United States, Hong Kong and Malaysia, as
follows:





 ̈
              United
      States, its tax years 2005 to 2007 returns remain open by examination by
      IRS ̈
              Hong
      Kong, 2007 tax returns have been filed and cleared in the second quarter
      of 2008. The Company recognized $512,225 of income tax benefits from the
      over-provision in prior years. ̈
              Malaysia,
      2007 returns have been filed and are in the normal
  process.




NOTE - 11   NET INCOME (LOSS) PER
SHARE





Basic
income (loss) per share is computed by dividing net income (loss) by the
weighted average number of the common stock outstanding during the period.
Diluted income (loss) per share is computed by dividing net income (loss) by the
weighted average number of the common stock outstanding and dilutive potential
common stock outstanding during the period.


F-16




The
following is a reconciliation of the number of shares used in the calculation of
basic and diluted net income (loss) per share for the three and nine months
ended September 30, 2008 and 2007:





Three months ended September 30,
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  Nine months ended September 30,2008
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  2007
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  2008
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  2007(Restated)
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (Restated)Basis
      and diluted income (loss) per share
    calculationNumerator:Net
      loss in computing basic and diluted net income per share
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (3,440,641
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (967,449
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (1,672,876
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (3,697,029
                                                                                                                                  )Denominator:Weighted
      average ordinary shares outstanding – Basic and diluted
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  133,362,000
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  93,584,222
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  131,521,259
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  82,909,222Basic
      and diluted loss per share
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (0.03
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (0.01
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (0.01
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (0.04
                                                                                                                                  )





NOTE - 12   CAPITAL
TRANSACTION





On May
22, 2008, the Company issued 2,000,000 shares of its common stock to Mr. Michael
Mak, Chief Executive Director to compensate as signing bonus under the
employment agreement dated August 18, 2006. The fair value of the common stock
signing bonus totaled $414,000 and was recognized ratably over the one-year
service period through August 17, 2007, under the employment agreement. The fair
value was based on the quoted market value at $0.207 per share of the Company’s
common stock as of the date of the employment agreement. For the period ended
September 30, 2007, the Company recognized $260,877 of stock based compensation
expense to the statement of operation.





At the
same day of May 22, 2008, the Company approved and issued 1,000,000 shares and
500,000 shares of its common stock to Mr. John Leper, a director of the Company
and Mr. Ng Hing, a director of the subsidiary as remuneration compensation for
their services. The fair value of these stock issuances was determined using the
fair value of the Company’s common stock on the grant date, at a market quoted
price of $0.0825 per share. The Company recognized $123,750 to the statements of
operations for the nine months ended September 30, 2008.





As of
September 30, 2008, the number of authorized and outstanding shares of the
Company’s common stock was 300,000,000 shares and 133,362,000 shares,
respectively.





NOTE - 13   CONCENTRATIONS OF
RISK





The
Company is exposed to the followings concentrations of risk:





(a)
  Major customers





As of
September 30, 2008, the Company had six customers that each accounted for more
than 10% of trade receivables and the Company had seven customers each accounted
for more than 10% of revenues for the period ended September 30, 2008. If the
Company was unable to obtain other customers, the Company's business, operating
results and financial condition would be materially adversely
affected.


F-17





(b)
  Major vendors





As of
September 30, 2008, the Company had two vendors that each accounted for more
than 10% of trade payables. If these vendors were unavailable to provide
services in a timely manner and the Company was unable to find alternative
vendors, the Company's business, operating results and financial condition could
be materially adversely affected.





(c)
  Credit risk





Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and trade accounts receivable. The
Company performs ongoing credit evaluations of its customers’ financial
condition, but does not require collateral to support such
receivables.





(d)
  Interest rate risk





As the
Company has no significant interest-bearing assets, the Company’s income and
operating cash flows are substantially independent of changes in market interest
rates.





The
Company’s interest-rate risk arises from short-term and long-term borrowings.
Borrowings issued at variable rates expose the Company to cash flow
interest-rate risk. Borrowings issued at fixed rates expose the Company to fair
value interest-rate risk. Company policy is to maintain approximately all of its
borrowings in fixed rate instruments. As of September 30, 2008, all of
borrowings were at fixed rates.





(e)
  Exchange rate risk





The
reporting currency of the Company is US$, to date the majority of the revenues
and costs are denominated in RMB and a significant portion of the assets and
liabilities are denominated in RMB. As a result, the Company is exposed to
foreign exchange risk as its revenues and results of operations may be affected
by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates
against US$, the value of RMB revenues and assets as expressed in US$ financial
statements will decline. The Company does not hold any derivative or other
financial instruments that expose to substantial market risk.





NOTE - 14   COMMITMENT AND
CONTINGENCIES





(a)
  Litigation




The
Company is subject to a limited number of claims and actions that arise in the
ordinary course of business. The litigation process is inherently uncertain, and
it is possible that the resolution of the Company exists and future litigation
may adversely affect the Company. Management is unaware of any matters that may
have a material impact on the Company's financial position, results of
operations, or cash flows.





(b)
  Operating leases





The
subsidiaries operating in Hong Kong was committed under various non-cancelable
operating leases with a term of 2 years with fixed monthly rentals, due June 15,
2010. Total rent expenses for the nine months ended September 30, 2008 and 2007
was $68,217 and $52,452.





Future
minimum rental payments due under a non-cancelable operating lease are as
follows:





Year
      ending September 30:2009
                
                $
                87,4102010
                
                
                52,961Total
                
                $
                140,371





F-18





NOTE - 15   COMPARATIVE
FIGURES





Certain
amounts in the prior periods presented have been reclassified to conform to the
current period financial statement presentation.





NOTE - 16   RESTATEMENT OF FINANCIAL
STATEMENT





On April
14, 2009, the management and Board of Directors of Asia Global Holding
Corporation (the “Company”) concluded that the Company’s previously issued
financial statements as of and for the three months and nine months ended
September 30, 2008, as included in the Quarterly Report on Form 10-Q filed with
the Commission on November 19, 2008 (the “September 30, 2008 Form 10-Q”) should
no longer be relied upon because of errors in such financial
statements.  As a result of these errors, the Company will restate the
financial statements described above to correct its accounting for revenue
recognition (“the Restatements”).





During
the first three quarters of the year the Company saw a very strong growth in
Media and Advertising sales from the Company’s subsidiary, Sino
Trade.  However near the end of 2008 and beginning of 2009 Sino Trade
began feeling the effects of the global financial turndown. Sino Trade focuses
exclusively on selling business-to-business advertising to small manufactures in
China. The financial meltdown during the fourth quarter of 2008 harshly impacted
Sino Trade’s core client base of small and medium sized manufacturers located in
China who engage in manufacturing and exporting products to the United States.
This segment of manufacturers in China simultaneously experienced severe
cut-backs on bank facilities and a severe drop in export demand. The segment saw
numerous factory closings and cutbacks at the end of year 2008,
particularly in Southern China – the location of much of Sino Trade’s key client
base. The adverse financial effect on the core customer group was far worse than
Sino Trade originally anticipated. The full effect was not fully realized
until the first quarter of 2009 when it became more apparent to Sino Trade
management that many of its customers may not recover from the recent global
financial crisis soon if at all. As a result, this adverse impact on the
Sino Trade core customer base cast doubt on a considerable portion of sales the
Company recorded in the three-month period ended September 30, 2008 as
management cannot be certain of when or what portion of Sino Trade’s account
receivables can be fully collected.





The
following table presents the effects of the restatement adjustment on the
accompanying unaudited condensed consolidated financial statements as of and for
the quarter ended September 30, 2008:





As
      Previously
                        
                        
                        
                        
                        
                        NetReported
                        
                        
                        Restated
                        
                        
                        AdjustmentCondensed
      Consolidated Balance SheetAccounts
      receivable, trade
                        
                        $
                        4,852,879
                        
                        
                        $
                        586,380
                        
                        
                        $
                        (4,266,499
                        )Total
      current assets
                        
                        $
                        6,018,906
                        
                        
                        $
                        1,752,407
                        
                        
                        $
                        (4,266,499
                        )Accumulated
      deficit
                        
                        $
                        (13,204,466
                        )
                        
                        $
                        (17,470,965
                        )
                        
                        $
                        (4,266,499
                        )Total
      stockholders’ equity
                        
                        $
                        4,862,234
                        
                        
                        $
                        595,735
                        
                        
                        $
                        (4,266,499
                        )


F-19





Three
      months ended September 30, 2008As
      Previously
                            
                            
                            
                            
                            
                            NetReported
                            
                            
                            Restated
                            
                            
                            AdjustmentConsolidated
      Statement of Operations and Comprehensive lossRevenue,
      net
                            
                            $
                            4,872,180
                            
                            
                            $
                            605,681
                            
                            
                            $
                            (4,266,499
                            )Gross
      (loss) profit
                            
                            $
                            2,558,546
                            
                            
                            $
                            (1,707,953
                            )
                            
                            $
                            (4,266,499
                            )Loss
      from operations
                            
                            $
                            731,328
                            
                            
                            $
                            (3,535,171
                            )
                            
                            $
                            (4,266,499
                            )Loss
      before income taxes and minority interest
                            
                            $
                            713,917
                            
                            
                            $
                            (3,552,582
                            )
                            
                            $
                            (4,266,499
                            )Loss
      from continuing operations
                            
                            $
                            825,858
                            
                            
                            $
                            (3,440,641
                            )
                            
                            $
                            (4,266,499
                            )Net
      loss
                            
                            $
                            825,858
                            
                            
                            $
                            (3,440,641
                            )
                            
                            $
                            (4,266,499
                            )Comprehensive
      (loss) income
                            
                            $
                            824,696
                            
                            
                            $
                            (3,441,803
                            )
                            
                            $
                            (4,266,499
                            )Per
      share information:From
      continuing operation– Basic and diluted
                            
                            $
                            0.01
                            
                            
                            $
                            (0.03
                            )
                            
                            $
                            (0.04
                            )Net
      (loss) income per common share — basic and diluted
                            
                            $
                            0.01
                            
                            
                            $
                            (0.03
                            )
                            
                            $
                            (0.04
                            )





Nine
      months ended September 30, 2008As
      Previously
                        
                        
                        
                        
                        
                        NetReported
                        
                        
                        Restated
                        
                        
                        AdjustmentConsolidated
      Statement of Operations and Comprehensive lossRevenue,
      net
                        
                        $
                        9,234,465
                        
                        
                        $
                        4,967,966
                        
                        
                        $
                        (4,266,499
                        )Gross
      (loss) profit
                        
                        $
                        5,260,058
                        
                        
                        $
                        993,559
                        
                        
                        $
                        (4,266,499
                        )Loss
      from operations
                        
                        $
                        2,248,780
                        
                        
                        $
                        (2,017,719
                        )
                        
                        $
                        (4,266,499
                        )Loss
      before income taxes and minority interest
                        
                        $
                        2,195,025
                        
                        
                        $
                        (2,071,474
                        )
                        
                        $
                        (4,266,499
                        )Loss
      from continuing operations
                        
                        $
                        2,773,872
                        
                        
                        $
                        (1,492,627
                        )
                        
                        $
                        (4,266,499
                        )Net
      loss
                        
                        $
                        2,593,623
                        
                        
                        $
                        (1,672,876
                        )
                        
                        $
                        (4,266,499
                        )Comprehensive
      (loss) income
                        
                        $
                        2,579,281
                        
                        
                        $
                        (1,687,218
                        )
                        
                        $
                        (4,266,499
                        )Per
      share information:From
      continuing operation– Basic and diluted
                        
                        $
                        0.02
                        
                        
                        $
                        (0.01
                        )
                        
                        $
                        (0.03
                        )Net
      (loss) income per common share — basic and diluted
                        
                        $
                        0.02
                        
                        
                        $
                        (0.01
                        )
                        
                        $
                        (0.03
                        )





As
      Previously
                                        
                                        
                                        
                                        
                                        
                                        NetReported
                                        
                                        
                                        Restated
                                        
                                        
                                        AdjustmentCondensed
      Consolidated Statement of Cash FlowLoss
      from continuing operations
                                        
                                        $
                                        2,773,872
                                        
                                        
                                        $
                                        (1,492,627
                                        )
                                        
                                        $
                                        (4,266,499
                                        )Accounts
      receivable, trade
                                        
                                        $
                                        (1,899,160
                                        )
                                        
                                        $
                                        2,367,339
                                        
                                        
                                        $
                                        (4,266,499
                                        )





As
      Previously
                                          
                                          
                                          
                                          
                                          
                                          NetReported
                                          
                                          
                                          Restated
                                          
                                          
                                          AdjustmentCondensed
      Consolidated Statement of Stockholders’ EquityNet
      loss for the period
                                          
                                          $
                                          2,593,623
                                          
                                          
                                          $
                                          (1,672,876
                                          )
                                          
                                          $
                                          (4,266,499
                                          )Total
      stockholders’ equity
                                          
                                          $
                                          (13,204,466
                                          )
                                          
                                          $
                                          (17,470,965
                                          )
                                          
                                          $
                                          (4,266,499
                                          )


F-20





ITEM
      2.
            MANAGEMENTS
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATION





The
following review concerns the three and nine months ended September 30, 2008 and
2007, which should be read in conjunction with the audited consolidated
financial statements and notes thereto presented in the Form 10-K.





Forward
Looking Statements





The
information in this discussion contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These forward-looking
statements involve risks and uncertainties, including statements regarding our
capital needs, business strategy and expectations. Any statements contained
herein that are not statements of historical facts may be deemed to be
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expect", "plan",
"intend", "anticipate", "believe", "estimate", "predict", "potential" or
"continue", the negative of such terms or other comparable terminology. Actual
events or results may differ materially. We disclaim any obligation to publicly
update these statements, or disclose any difference between its actual results
and those reflected in these statements. The information constitutes
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.





Overview
and Future Plan of Operations





In the
first nine months of 2008 our year-on-year revenues were down 27.5% to
$4,967,966 with a net loss of $1,672,876. During the first part of the year the
Company saw a very strong growth in Media and Advertising sales from the
Company’s subsidiary, Sino Trade.  However near the end of 2008 and
beginning of 2009 Sino Trade began feeling the effects of the global financial
turndown. During the first half of the year we completely revamped our TV
Entertainment business strategy and greatly expanded our TV show catalogue to
include over 200 program formats for which we have the exclusive distribution
rights in China. Having expanded our programming catalog by mid year we were
able to open up a number of new negotiations with multinational brand
advertisers and PRC TV broadcasters. We expect to begin seeing our first round
of new sponsorship deals resulting from our new strategy and expanded
programming catalog. All business related to TV Entertainment is now conducted
through our Idea Asia subsidiary. We discontinued all operations of our China
Media Power (CMP) subsidiary in the previous quarter.





During
this quarter we opened a new office in Shanghai to meet sales and distribution
demand for our TV entertainment distribution businesses in China and to serve as
a new sales hub for our Media and Advertising business. Idea Asia and Sino Trade
will staff the new offices.





Also
during this quarter we made the decision to postpone the development and launch
of our planned online consumer coupon portal for consumers in China in order to
keep our resources and efforts focused on our operating businesses. Particularly
with our TV Entertainment business being so close to showing results we plan to
keep our resources focused.





In June
2008 we moved our headquarter offices in Hong Kong to Unit 601B, 6th Floor,
Tower 1, Cheung Sha Wan Plaza, 833 Cheung Sha Wan Road, Kowloon, Hong Kong. The
new location provides us with more office space to accommodate additional
personnel we anticipate will be required as a result of the growing demands on
our business in both our Media & Advertising and TV Entertainment
segments.





On March
1, 2008 Hing Ng was replaced as a director of our Sino Trade subsidiary by Hin
Lee Kwong who became a director on that same date.





In June
2008, the Company established a new branch office in Labuan, Malaysia for the
business expansion in Asia Pacific region.





On
October 29, 2008, the Company accepted the resignation of Michael Mak as the
Company's Chief Executive Officer, Chief Financial Officer and as a Director,
prior to the acceptance of Mr. Mak's resignation, the Board of Directors
appointed John Leper, Chairman of the Board of Directors, Chief Executive
Officer and Chief Financial Officer. The Board also appointed Hin Lee Kwong as
Secretary and as a Director.




Michael
Mak will continue as a Director of Sino Trade-Intelligent Development Corp Ltd.
(“Sino Trade”), a wholly-owned subsidiary of AAGH. Hin Lee Kwong will also
continue to serve as a Director of Sino Trade and retain his responsibility for
its overall strategy and administration.AAGH and Mr. Mak mutually agreed to
cancel 150,000 shares of the Company’s preferred stock currently held by Mr. Mak
even though he will continue as a Director of Sino Trade.





Updated
Idea Asia TV Show Format Catalog


Below is
a list of TV show formats and their Licensors included in the Idea Asia
portfolio. The show title is listed first followed by the format licensor —
Show
title/Licensor


21





Singing
Bee/Zeal Entertainment


In
February 2008 Idea Asia signed a contract with Zeal Entertainment for the
exclusive right of presenting the TV show "Singing Bee" in China. Zeal
Entertainment ( http://www.zealentertainment.co.uk ) is an independent formats
and events distributor and is a subsidiary of the Digital Rights Group, UK 's
largest independent TV distributor. Zeal licenses formats, programs and event
rights internationally and handles a range of successful properties, including
"Singing Bee", "Miss World", "This Is Your Life", "Under Construction", and "The
European Poker Tour." "Singing Bee" is a musical game show where contestants
have to "sing in" the blanks to song lyrics when the music stops, it has been
licensed to more than 30 territories worldwide, including the US, Australia,
Europe and South America.





Blackjack
Bowling/Sony Pictures Television International


In March
2008 Idea Asia entered into an option agreement with Sony Pictures Television
International (SPTI) giving Idea Asia the first opportunity to license the TV
game show format "Blackjack Bowling" from SPTI to adapt and produce a local
version of the format in China. "Blackjack Bowling" is the only show of its kind
that combines two of the world's favorite pastimes — blackjack and bowling —
just as the two simple elements of the roulette wheel and hangman were combined
to create Wheel of Fortune. "Blackjack Bowling's" format is flexible and can be
played in either a 30-minute or 60-minute format.





Silent
Library/2waytraffic


In
February 2008 signed a contract with 2waytraffic for the exclusive right of
presenting the TV show "Silent Library" in China. 2waytraffic is listed on the
AIM of the London Stock Exchange and is a leading international developer and
exploiter of interactive entertainment content for television, mobile and
digital platforms with an unrivaled catalog of over 200 high quality
entertainment formats including "Who Wants To Be A Millionaire?", "Brainiest",
"Mr & Mrs", "Take It Or Leave It", "You Are What You Eat", and "That's The
Question". "Silent Library" was created by Japanese comedian Hitoshi Matsumoto
in 2001 as part of NTV's, hugely popular variety show, "Downtown no Gaki no
Tsukai ya Arahende". "Silent Library" takes place in a library setting where a
team of players perform pranks and punishments on each other whilst having to
remain as silent as possible. No matter how unpleasant the challenge is, the
contestant isn't allowed to yelp or shout or make any noise no matter how funny
it is, his friends mustn't laugh.





You
Are What You Eat/2waytraffic


In
February 2008 Idea Asia signed a contract with 2waytraffic for the exclusive
right of presenting the TV show “You Are What You Eat” in China. “You Are What
You Eat” is the factual entertainment format which takes an uncompromising look
at the people whose eating habits are threatening to send them to an early
grave, and then shows them the way to change. Each week a renowned nutritionist
takes an up-close — and sometimes very personal — look at the contributor and
the effect their appalling diet is having on their body, before transforming the
way they eat and feel in just eight weeks. The contributor is put through a
series of sometimes shocking tests including tongue profiling, colonic
irrigation and blood, urine and stool analysis which, coupled with the
nutritionist's no-nonsense, 'tough love' approach make for graphic, but
fascinatingly entertaining, viewing!





Small
Talk/FremantleMedia


In
February of 2008 Idea Asia signed a contract with FremantleMedia to exclusively
represent the TV show “Small Talk in China”. FremantleMedia is one of the
largest international creators and producers of entertainment brands in the
world with leading prime time drama, serial drama, entertainment and factual
entertainment programming in over 40 countries worldwide. FremantleMedia is at
the forefront of developing cross- platform media experiences through its FMX
operation, which is successfully developing new entertainment brands and
concepts specifically for mobile, broadband, games consoles and Internet
Protocol Television (IPTV). FremantleMedia is a subsidiary of RTL Group, Europe
's largest television and radio broadcast company, which is 90% owned by
Bertelsmann AG, an integrated media and entertainment company that commands
leading positions in the world's media markets.





“Small
Talk” is a game show which is hugely successful around the world, starring
little people, played by big people and enjoyed by viewers of all ages. Children
aged between six and eight from various schools are taped prior to the studio
recording, giving their answers and opinions to questions about life in general;
the questions range from 'How long is a woman pregnant for before giving birth?'
to 'What is a toupee?'. The answers are, in turn, hilarious, charming and
bizarre! The studio centerpiece is a video wall of nine screens, with three
contestants trying to predict how the children will respond to the questions.
Aired in over 15 countries, “Small Talk” has garnered rating successes all
around the world.





50-50/2waytraffic


In
February 2008 Idea Asia signed a contract with 2waytraffic for the exclusive
right of presenting the TV show “50-50” in China . “50-50” is the ultimate quiz
show which extends the 50-50 Lifeline from “Who Wants To Be A Millionaire?” into
a new format. Everything is about making a straight choice between two
possibilities and contestants win the chance to fill in a blank check with the
amount they think they deserve to win. 50-50 can run weekly or daily, and is
versatile enough to play in any timeslot. Answering questions individually but
ultimately working as a team, contestants must select an answer from two
possible options before the question is passed over to their partner who must
decide whether they agree or disagree. If they agree, the original answer is
locked in, but if they disagree, they overrule their partner's answer and the
other option is locked in instead. After two nail-biting rounds throughout which
the stakes rise and the game-play gets trickier, the couple reaches the climax
of the game.


22





Battle
of the Choirs/Absolutely Independent


In July
2008 Idea Asia entered into an agreement with Netherlands based Absolutely
Independent for the exclusive right of presenting the TV show ‘Battle of the
Choirs’ in China. Sit back. Turn up the volume on your TV. Be engulfed by the
massive wave of singing: more than 30 voices, all battling for the title of the
nation's Best Choir. Let yourself be swept away by the wall of choirs, each with
its own story, in this enchanting TV show which will guarantee goose bumps from
the vocal power!





Challenge
Me/Absolutely Independent


In July
2008 Idea Asia entered into an agreement with Netherlands based Absolutely
Independent for the exclusive right of presenting the TV show ‘Challenge Me’ in
China. Challenges, record setting, and bets are timeless and always exciting to
watch. In the show ‘Challenge me’ people participate in challenges which they
believe to be unique. We all sometimes think: “I can do that, and maybe even
better.” That’s exactly what this show is about. Challenges and bets are won,
records are broken. Do you think that you can make a unique effort no one else
can make? If so, sign up and seize a place in the show! Watch the performances,
follow the people while they are preparing their act. Hear the expectations.
Share the challengers’ excitement or disappointment.





Crisis/Absolutely
Independent


In July
2008 Idea Asia entered into an agreement with Netherlands based Absolutely
Independent for the exclusive right of presenting the TV show ‘Crisis’ in China.
Crisis shows viewers how people in authority respond in times of crisis by
placing them in a fake reality crisis situation that evolves during the course
of the program. How do the contestants respond to a hostage situation
threatening to go out of hand, or an announced suicide attack in a public place?
Catastrophes like September 11, the crisis in the Middle East and various
natural disasters have made it very clear that the people in power who need to
respond to these situations are put under incredible pressure.





The
Singing Office/Absolutely Independent


In July
2008 Idea Asia entered into an agreement with Netherlands based Absolutely
Independent for the exclusive right of presenting the TV show ‘The Singing
Office’ in China. Every office has hidden talents! Two hosts visit two
companies. They surprise the employees, from the office assistant to the mail
room and the director, on a search for singing talent. Ten talents per company
are selected; two will be put in the spotlight. One company will compete against
the other singing, dancing and performing in many ways. Colleagues become fans,
hierarchy fades and team spirit grows while nerves get jumpy during the
repetitions and rehearsals building to the final grand finale show! Will they
hit the high note? Will they remember that dance step? Will the strong voice be
strong or hoarse on show night?




Beat The
Host!/SevenOne International


In
September 2008 Idea Asia entered into an agreement with Germany based SevenOne
International for the exclusive right of presenting the TV show ‘Beat The Host’
in China. The innovative show employs a stimulating competitive element - the
audience vs. the host. During the show, a selected contestant will duel the host
(who is often a well-known star) in various areas including skills, sports,
knowledge, daring and in some cases sheer luck. If the host wins, the prize
money goes into the jackpot. If the contestant wins, he/she will take the cash
home.





Complete
Catalog/ Sparks Network


In
October 2008 Idea Asia entered into an agreement with Sparks Network, a global
distribution, development and network company which holds one of the world's
strongest catalogues of TV formats. The Sparks Network members represent some of
the most skilled developers and producers in the world of television. Sparks
Network offers the broadcasters of the world a strong catalogue of proven
formats from producers with operations in some 50 countries. Through the Sparks
Network member in each territory, the world's broadcasters get a respected
production partner with a working relationship with the creator of the format.
Idea Asia is the exclusive Sparks Network member for China and Hong
Kong.





Going
Forward


Going
forward in theMedia and Advertising segment of our business will require
overcoming the challenges presented by the effect the global financial downturn
has had on our customer base. Also we plan to develop a new stream of revenue
from our TV entertainment business as the new distribution strategy began in
February of this year gains traction. We also plan to continue to seek new
opportunities in China TV entertainment. We expect to continue this course of
business through the remainder of 2008 and into 2009.





Media
& Advertising going forward. Sino Trade focuses exclusively on
selling business-to-business advertising to small manufactures in China. The
financial meltdown during the fourth quarter of 2008 harshly impacted Sino
Trade’s core client base of small and medium sized manufacturers located in
China who engage in manufacturing and exporting products to the United States.
This segment of manufacturers in China simultaneously experienced severe
cut-backs on bank facilities and a severe drop in export demand. The segment saw
numerous factory closings and cutbacks at the end of year 2008, particularly in
Southern China – the location of much of Sino Trade’s key client base. Going
forward we will need to over these challenges.





We now
have an office in Shanghai where we will expand our sales effort for our media
and advertising business. From this same office we will also expand our TV
entertainment sales and distribution efforts. We see the new Shanghai operation
as a start to what will become a very synergistic sales and distribution hub for
all of the AAGH businesses.





This
quarter we decided to postpone our plans to launch an online China-based
consumer coupon service. This allows us to keep our resources focused on our
existing businesses. We will revisit this decision in the future, most likely
after our TV entertainment business is generating revenue. When we decide to
move forward on this business we plan to build upon our past experience in the
online coupon business (in the US) with a number of enhancements to address the
unique and explosive consumer market in China. We believe an online business
segment can compliment the AAGH family of media, advertising and entertainment
businesses allowing for more channels of opportunity for our advertising clients
in the PRC.


23





TV
Entertainment going forward. We plan to proceed in a revenue conscious
manner to further development our TV entertainment business. With an industry
veteran now directing this segment, management believes the Company is on a good
course to capitalize on the emerging TV entertainment business in China. While
the Company plans to continue to identify and acquire successful TV
programs/formats from content providers, we have now built a large enough
catalog to met the needs of just about any advertiser or broadcaster in the
China market. Beginning this quarter we moved our focus from catalog building to
advertising sponsorship sales and distribution.





Having
established ourselves as a provider of top quality international program
formats, we have now opened negotiations with a number of multinational brand
advertisers and TV broadcasters in China. We are still very early into our new
strategy, having only begun in February, yet we are already seeing very
encouraging response that we believe will eventually generate the revenue and
profits we expect from the PRC market where the demand for quality programming
is far out running the supply. Our catalog of TV formats is growing rapidly
because the major international format owners know the China market is very
difficult to enter and even more difficult to maintain; they are wise enough to
know that expansion into China requires a long term commitment and on-the-ground
experience that only Idea Asia can offer.





Results
of Operations for the Three and Nine Months Ended September 30, 2008 and
September 30, 2007





During
the three and nine month periods ended September 30, 2008 we experienced a loss
of $3,440,641 on revenue of $605,681 and a loss of $1,672,876 on revenue of
$4,967,966 respectively. To improve our income position in the advertising sales
business in China we will need to overcome the challenges presented by the
effects the global downturn has had on our core customer base. We will look at
new alternatives to improvement in our TV entertainment business. During the
three and nine months periods ended September 30, 2008, we generated all of our
revenue from our Media & Advertising division.





The
following tables set forth our revenues by each operational division for the
three and nine month periods ended September 30, 2008 and 2007:





Jan
      - Sep
                                                
                                                2008
                                                
                                                
                                                2007
                                                
                                                
                                                Variance
                                                
                                                
                                                %Media
      & Advertising
                                                
                                                $
                                                4,967,966
                                                
                                                
                                                $
                                                6,861,759
                                                
                                                
                                                $
                                                (1,893,793
                                                )
                                                
                                                
                                                -27
                                                %TV
      Entertainment
                                                
                                                $
                                                0
                                                
                                                
                                                $
                                                0
                                                
                                                
                                                $
                                                0
                                                
                                                
                                                
                                                0Asia
      Global Corporate
                                                
                                                $
                                                0
                                                
                                                
                                                $
                                                64
                                                
                                                
                                                $
                                                (64
                                                )
                                                
                                                
                                                -100
                                                %July-SepMedia
      & Advertising
                                                
                                                $
                                                605,681
                                                
                                                
                                                $
                                                3,843,631
                                                
                                                
                                                $
                                                (3,237,950
                                                )
                                                
                                                
                                                -84
                                                %TV
      Entertainment
                                                
                                                $
                                                0
                                                
                                                
                                                $
                                                0
                                                
                                                
                                                $
                                                0
                                                
                                                
                                                
                                                0Asia
      Global Corporate
                                                
                                                $
                                                0
                                                
                                                
                                                $
                                                0
                                                
                                                
                                                $
                                                0
                                                
                                                
                                                
                                                0
                                                %




Revenue
– Media & Advertising





During
the three and nine month periods ended September 30, 2008, our revenues from the
Media & Advertising segment were 605,681and $4,967,966 respectively,
compared to the 2007 figures of $3,843,631 and $6,861,759. Hence we experienced
an decrease of revenue of 84% and 27.6% respectively from the comparable three
and nine month periods ended September 30, 2007. The decreases are primarily
attributable to the effects the global downturn and the effect it had on our
core customer base.





Revenue
– TV Entertainment





During
the three and nine months ended September 30, 2008, there was no revenue for the
TV Entertainment segment. In February 2008 we completely revamped our TV
entertainment segment strategy. Rather than relying on one TV show as a revenue
generator as was our original strategy, we have now built a large portfolio of
licensed TV shows which we will produced based on market demand. Since February
of this year we have built a portfolio of over two hundred TV shows. During this
quarter we opened up a number of sponsorship negotiations with multinational
brand advertisers and broadcasters. We expect to begin realizing revenue from
this segment as we close advertising and distribution deals and shows begin to
air. Revenue from this segment will be derived from distribution licensing fees,
revenue-sharing based on advertising fees collected for ads that air within the
shows, and show sponsorship fees.


24





Cost of Sales (from continuing
      operations)Jan
      - Sep 2008
                                  
                                  2008
                                  
                                  
                                  2007
                                  
                                  
                                  Variance
                                  
                                  
                                  %Media
      & Advertising
                                  
                                  $
                                  3,947,993
                                  
                                  
                                  $
                                  2,131,005
                                  
                                  
                                  $
                                  1,816,988
                                  
                                  
                                  
                                  85
                                  %TV
      Entertainment
                                  
                                  $
                                  26,414
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  26,414
                                  
                                  
                                  
                                  0
                                  %Asia
      Global Corporate
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  
                                  0
                                  %Discontinued
      operation
                                  
                                  $
                                  46,202
                                  
                                  
                                  $
                                  297,715
                                  
                                  
                                  $
                                  (251,513
                                  )
                                  
                                  
                                  -84
                                  %July-Sep
      2008Media
      & Advertising
                                  
                                  $
                                  2,313,634
                                  
                                  
                                  $
                                  1,107,095
                                  
                                  
                                  $
                                  1,206,539
                                  
                                  
                                  
                                  109
                                  %TV
      Entertainment
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  
                                  0
                                  %Asia
      Global Corporate
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  
                                  0
                                  %Discontinued
      operation
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  297,714
                                  
                                  
                                  $
                                  (-297,714
                                  )
                                  
                                  
                                  -100
                                  %




For the
three months ended September 30, 2008 cost of sales totaled $2,313,634
representing 382% of our total revenue of $605,681 as compared to $1,107,095,
29% of total revenue of $3,843,631 for the three months ended September 30,
2007. The increase in cost of sales as a percentage of sales for the three
months ended September 30, 2008 is attributable to a steep decline in sales and
increases in printing costs and costs of direct marketing in our Media and
Advertising segment.





For the
nine months ended September 30, 2008 cost of sales was $4,020,609 (including
discontinued operations), representing 81% of our total revenue of $4,967,966 as
compared to $2,428,720 (including discontinued operations), 35% of total revenue
of $6,861,759 for the nine months ended September 30, 2007. The increase in cost
of sales as a percentage of sales for the nine months ended September 30, 2008
is primarily attributable to steep decrease in revenues form our advertising
sales business combined with increases in printing costs and costs of direct
marketing in our Media and Advertising segment, and a licensing fee incurred by
our TV Entertainment segment.





Cost
of Sales – Media & Advertising





For the
three month period ended September 30, 2008 cost of sales for our Media &
Advertising segment was $2,313,634 representing 382% of our total segment
revenue of $ 605,681 as compared to $1,107,095, or 29% of our total segment
revenue of $3,843,631 for the three months ended September 30, 2007. The
increased cost of sales as a percentage of revenue is attributable to steep
decrease in sales increased printing costs related to the production of
directories and trade publications for this segment and increased costs related
to direct marketing.





For the
nine month period ended September 30, 2008 cost of sales for our Media &
Advertising segment was $3,947,993 representing 79% of our total segment revenue
of $4,967,966 as compared to $2,131,005 or 31% of our total segment revenue of
$6,861,759 for the nine months ended September 30, 2007. The increased cost of
sales as a percentage of revenue is attributable to steep decrease in sales
combined with increased printing costs related to the production of directories
and trade publications for this segment and increased costs related to direct
marketing.





Cost
of Sales – TV Entertainment





For the
three month and nine month periods ended September 30, 2008 cost of sales for
the TV Entertainment segment was $0. Since the revamping of our TV entertainment
business strategy in February of this year we have changed our production and
licensing policies to limit advance payments for licensing and production. While
we will still incur advance licensing fees and production costs from time to
time we now limit this type exposure greatly.





Cost
of Sales – Discontinued Operations





For the
three month and nine month periods ended September 30, 2008 cost of sales
attributable to the discontinued operations of CMP were $0 and $46,202
respectively and $297,715 for the three and nine month periods in 2007. All
abovementioned costs represent final TV production costs associated with
CMP.


25





Selling, General and
      Administrative Expenses (from continuing operations)Jan
      - Sep
                                    
                                    2008
                                    
                                    
                                    2007
                                    
                                    
                                    Variance
                                    
                                    
                                    %Media
      & Advertising
                                    
                                    $
                                    2,533,602
                                    
                                    
                                    $
                                    1,976,111
                                    
                                    
                                    $
                                    557,491
                                    
                                    
                                    
                                    28
                                    %TV
      Entertainment
                                    
                                    $
                                    112,240
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    112,240
                                    
                                    
                                    
                                    0
                                    %Asia
      Global Corporate
                                    
                                    $
                                    222,571
                                    
                                    
                                    $
                                    5,396,661
                                    
                                    
                                    $
                                    (5,174,090
                                    )
                                    
                                    
                                    -96
                                    %Discontinued
      operation
                                    
                                    $
                                    134,047
                                    
                                    
                                    $
                                    403,115
                                    
                                    
                                    $
                                    (269,068
                                    )
                                    
                                    
                                    -67
                                    %July-SepMedia
      & Advertising
                                    
                                    $
                                    1,666,556
                                    
                                    
                                    $
                                    636,825
                                    
                                    
                                    $
                                    1,029,731
                                    
                                    
                                    
                                    162
                                    %TV
      Entertainment
                                    
                                    $
                                    59,004
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    59,004
                                    
                                    
                                    
                                    0
                                    %Asia
      Global Corporate
                                    
                                    $
                                    33,946
                                    
                                    
                                    $
                                    2,331,522
                                    
                                    
                                    $
                                    (2,297,576
                                    )
                                    
                                    
                                    -99
                                    %Discontinued
      operation
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    47,961
                                    
                                    
                                    $
                                    (47,961
                                    )
                                    
                                    
                                    -100
                                    %




For the
three months ended September 30, 2008 selling, general and administrative
expenses decreased $1,256,802 or 42% to $1,759,506 (including discontinued
operations) from $3,016,308 (including discontinued operations) for the three
months ended September 30, 2007. The decrease in expenses during the three
months ended September 30, 2008 was primarily attributable to decrease in
non-cash consulting expenses related to expansion into the TV market in China in
our Asia Global Corporate segment with some offset from increased employment
costs in our TV Entertainment segment.





For the
nine months ended September 30, 2008 selling, general and administrative
expenses decreased $1,242,954 or 41% to $3,002,460 from $1,759,506 for the nine
months ended September 30, 2007. The overall decrease in expenses during the
nine months ended September 30, 2008 is primarily attributable to lowered costs
resulting from discontinuing operations of CMP and a decrease in non-cash
consulting expenses related to expansion into the TV market in China in our Asia
Global Corporate segment.





Selling,
General and Administrative Expenses – Media & Advertising





During
the three months ended September 30, 2008, our selling, general and
administrative expenses for our Media & Advertising segment totaled
$1,666,556. Compared to the 2007 figure of $636,825 for the three months ended
September 30, 2007 we experienced a 162% increase of $1,029,731 attributable to
increased advertising and promotion expenses some of the promotion expenses are
attributable to one-off events and therefore do not represent ongoing
expenses.





During
the nine months ended September 30, 2008, our selling, general and
administrative expenses for our Media & Advertising segment totaled
$2,533,602. Compared to the 2007 figure of $1,976,111 for the nine months ended
September 30, 2007 we experienced a 28% increase of $557,491 attributable to
increased promotion expenses primarily in the third quarter.





Selling,
General and Administrative Expenses – TV Entertainment





During
the three and nine month periods ended September 30, 2008, our selling, general
and administrative expenses for our TV Entertainment segment were $59,004 and
$112,240, compared to $0 for the same periods the previous year. Expenses and
the increase in this segment are attributable primarily to employment costs and
travel costs related to promotion.





Selling,
General and Administrative Expenses – Asia Global Corporate





During
the three months ended September 30, 2008 our selling, general and
administrative expenses related to our Asia Global Corporate segment were
$33,946. For the same period during 2007 our expenses for this segment totaled
$2,331,522 primarily attributed share-based compensation.




During
the nine months ended September 30, 2008, our selling, general and
administrative expenses for our Asia Global Corporate segment were $222,571 with
$123,750 attributable to share based compensation. For the same period during
2007 our expenses for this segment totaled $5,396,661. The higher expenses in
2007 were primarily attributable to non-cash stock-based professional fees
related to business expansion into China.





Selling,
General and Administrative Expenses – Discontinued Operations





During
the three and nine month periods ended September 30, 2008 our selling and
general administrative expenses for discontinued operations were $0 and $134,047
respectively compared to $47,961 and $403,115 respectively for same periods in
2007. Lowered expenses for both periods are attributable to the winding down of
production and marketing expenses related to CMP.


26





Depreciation,
      Amortization of Intangible Assets, and Impairment Loss of Property, Plant
      and Equipment2008
                
                
                2007Depreciation
                
                $
                34,151
                
                
                $
                41,867Amortization
      of intangible assets
                
                $
                108,714
                
                
                $
                79,421$
                142,865
                
                
                $
                121,288




During
the nine month periods ended September 30, 2008 and 2007 we experienced non-cash
expenditures of $142,865 and $121,288 respectively from depreciation of fixed
assets and amortization of intangible assets.




Other
Income (Expense)





Total
other income for both periods presented was immaterial and consisted of the
following:





2008
                
                
                2007Other
      incomeFixed
      asset rental income
                
                $
                0
                
                
                $
                0Interest
      income
                
                $
                5,345
                
                
                $
                12,607Miscellaneous
      other income
                
                $
                12,821
                
                
                $
                0$
                18,166
                
                
                $
                12,607Interest
      expense
                
                $
                71,921
                
                
                $
                51,501Total
      other expenses
                
                $
                -53,755
                
                
                $
                -38,894




Net Income/Loss





Jan
      - Sep
                                    
                                    2008
                                    
                                    
                                    2007
                                    
                                    
                                    Variance
                                    
                                    
                                    %Media
      & Advertising
                                    
                                    $
                                    (1,129,985
                                    )
                                    
                                    $
                                    2,130,242
                                    
                                    
                                    $
                                    (3,260,227
                                    )
                                    
                                    
                                    -153
                                    %TV
      Entertainment
                                    
                                    $
                                    (139,058
                                    )
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    (139,058
                                    )
                                    
                                    
                                    0
                                    %Asia
      Global Corporate
                                    
                                    $
                                    (223,584
                                    )
                                    
                                    $
                                    (5,405,263
                                    )
                                    
                                    $
                                    5,181,679
                                    
                                    
                                    
                                    96
                                    %Discontinued
      operation
                                    
                                    $
                                    (180,249
                                    )
                                    
                                    $
                                    (422,008
                                    )
                                    
                                    $
                                    241,759
                                    
                                    
                                    
                                    57
                                    %July-Sep
                                    
                                    2008
                                    
                                    
                                    2007
                                    
                                    
                                    Variance
                                    
                                    
                                    %Media
      & Advertising
                                    
                                    $
                                    (3,347,216
                                    )
                                    
                                    $
                                    1,722,894
                                    
                                    
                                    $
                                    (5,070,110
                                    )
                                    
                                    
                                    -294
                                    %TV
      Entertainment
                                    
                                    $
                                    (59,245
                                    )
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    (59,245
                                    )
                                    
                                    
                                    0
                                    %Asia
      Global Corporate
                                    
                                    $
                                    (34,180
                                    )
                                    
                                    $
                                    (2,333,729
                                    )
                                    
                                    $
                                    2,299,549
                                    
                                    
                                    
                                    99
                                    %Discontinued
      operation
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    (356,614
                                    )
                                    
                                    $
                                    356,614
                                    
                                    
                                    
                                    100
                                    %





For the
three months ended September 30, 2008 we experienced a loss of $3,440,641
compared to a net loss of $967,449 for the same period in 2007. The increased
losses primarily attributed to steep decrease in sales and profits from our
Media and Advertising segment.





For the
nine months ended September 30, 2008 we experienced a net loss of $1,672,876
compared to net loss of $3,677,029 for the same period in 2007. The decrease in
losses  is attributable to recognition of $578,847 of income tax
benefits due to over-provision in prior years and the reduction in non-cash
charges related to professional fees for business expansion into China which
during the same period of the previous year which totaled
$5,243,543.





Net
Income – Media & Advertising





During
the three and nine month periods ended September 30, 2008, we experienced losses
from the Media & Advertising segment of  $3,347,216 and $1,129,985
respectively, compared to the 2007 figures of $1,722,894 and $2,130,242. The
losses are attributable to steep drop in sales in both periods
and  increases in cost of sales and selling costs in the three month
period in this segment, some of which are attributable to one-off events and
therefore do not represent ongoing expenses.





Net
Loss – TV Entertainment





During
the three and nine month periods ended September 30, 2008 we experience losses
of $59,245 and $139,058 respectively. Under new management and strategy our TV
Entertainment division was completely revamped starting in February. The net
losses are attributable to basic operating expenses and TV show format options
acquired. We expect to profit from this segment when the TV shows for which
we’ve acquired PRC production and distribution rights begin airing and reach
distribution levels sufficient to generate revenues above our operating overhead
for the segment. Under our new strategy implemented in February 2008 our
operating costs will remain low relative to distribution potential. This is in
contrast to the strategy of our now discontinued CMP subsidiary wherein we
incurred very high upfront costs related to production, licensing and
promotion.


27





Net
Loss – Asia Global Corporate




During
the three months ended September 30, 2008 we experienced a net loss of $34,180
from our Asia Global Corporate operations, compared to a net loss
of $2,333,729 for the same period in 2007. Losses in this segment are
primarily attributable to non-cash stock-based compensation for professional
services rendered and basic operating expenses such as legal and accounting
fees.





During
the nine months ended September 30, 2008 we experienced a net loss of $223,584
from our Asia Global Corporate operations attributable to basic operations of
this segment, compared to a net loss of $5,405,263 for the same period in
2007 primarily attributable to non-cash stock-based compensation for
professional services rendered.





Net
Loss – Discontinued Operations





During
the three months ended September 30, 2008 we experienced no further net loss
from discontinued operations related to our discontinued CMP subsidiary,
compared to a net loss of $356,614 for the same period in 2007 also attributable
to discontinued CMP operations.





During
the nine months ended September 30, 2008 we experienced a net loss of $180,249
from discontinued operations primarily related to our discontinued CMP
subsidiary, compared to a net loss of $422,088 for the same period in 2007 also
attributable to discontinued CMP operations.





Trends,
Events, and Uncertainties





Demand
for our services and products will be dependent on, among other things, market
acceptance of our concept and general economic conditions, which are cyclical in
nature. Our business operations may be adversely affected by our competitors and
prolonged recessionary periods. We are in the process of seeking additional
financing to accelerate our business plan. There is no assurance additional
financing will be available, or if available, that it will be available on
reasonable terms. Even if we do obtain such financing, there is no assurance
that we will be able to generate profitable operations.





Liquidity and Capital Resources for
the Nine Months Ended September 30, 2008 and 2007





Cash
flows from operating activities





For the
nine months ended September 30, 2008 we experienced negative net cash flows
provided by continuing operations in the amount of $177,219. We had $1,492,627
loss from continuing operations plus non-cash stock-based compensation of
$123,750 and depreciation and amortization of $142,865 offset mainly by
adjustments and changes including accounts receivable of $2,367,339, an income
tax credit of $254,180 and income tax payable of $425,485.





For the
nine months ended September 30, 2007 we experienced positive net cash flows
provided by continuing operations in the amount of $2,358,044. We had net loss
of $3,275,021 from continuing operations plus common stock issued for services
of $4,982,325, non-cash stock-based compensation to executives of $260,877, a
decrease in accounts payable of $917,278 and a tax benefit of 451,591 offset by
an increase in accounts receivable of $1,173,596.





Cash
flows from investing activities




Net cash
used for investing activities from continuing operation for the nine months
ended September 30, 2008 was $596,815 primarily representing enhancements of IT
infrastructure and leasehold improvements of $611,510 offset by a $14,695
increase in restricted cash.





For the
nine month period ended September 30, 2007 net cash used in investing activities
was 1,153,748 including a decrease in restricted cash of 266,497 and property
and equipments purchases of $887,251.





Cash
flows from financing activities





Net cash
used in financing activities from continuing operation for the nine months ended
September 30, 2008 was $81,522 mainly representing repayments of $833,155 offset
by increases in advances from banks and repayments from related parties totaling
$751,633.





Net cash
provided by financing activities from continuing operation for the nine month
period ended September 30, 2007 was $484,253 mainly representing proceeds from
an issuance of promissory notes in the amount of $370,000, advances under letter
of credit of $443,654 and a drawn-down from banks of $134,704 offset by
repayments of $556,072.


28





Liquidity





Our
growth plans may require additional funding from outside sources. We intend to
pursue discussions with existing shareholders, third party financing sources and
potential lenders to ensure access to funds as required. Our future liquidity
will depend on our revenue growth and our ability to sell our products and
services at positive gross margins and control our operating expenses. Over the
coming twelve months, we expect to spend approximately $500,000 for operating
expenses assuming revenue growth and no significant change in marketing or
product development strategies. We expect to meet these capital needs from sales
revenues and, to the extent we do not have sufficient revenues, from our
existing cash reserves or other external sources of financing.


The
accompanying consolidated financial statements contemplate continuation of the
Company as a going concern. However, substantial doubt to continue as a going
concern is raised and realization of a major portion of the assets in the
accompanying consolidated balance sheet is dependent upon the continued
operations of the Company, which in turn is dependent upon the Company's ability
to meet its financing requirements and the success of its future
operations.





Management
believes the Company has the ability to continue as a going concern only if it
can meet its financing requirements through external sources of financing.
Management plans to continue reviewing all aspects of its business and make
adjustments as needed to those considered unprofitable. The Company must meet
its financing requirements through external sources of financing or the Company
cannot continue to operate as a going concern.





Management
took steps to reduce operating costs and moved a significant portion of its U.S.
operations to China during 2006 to benefit from lower overhead costs and further
capitalize on the growth potential and success. We still continued to enjoy
these benefits in and expect the same in for the rest of the year and during
2009. Management plans to continue reviewing all aspects of its business and
making adjustments as needed to those considered unprofitable. Therefore, for at
least the next twelve months, the Company can continue to operate as a going
concern. The consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
the amount and classification of liabilities or any other adjustment that might
be necessary should the Company be unable to continue as a going
concern.





On a
long-term basis, our liquidity will be dependent on establishing profitable
operations, receipt of revenues, additional infusions of capital and additional
financing. If necessary, we may raise capital through an equity or debt
offering. The funds raised from this offering will be used to develop and
execute our business plan. However, there can be no assurance that we will be
able to obtain additional equity or debt financing in the future, if at all. If
we are unable to raise additional capital, our growth potential will be
adversely affected.





Critical
Accounting Policies





The
financial statements are prepared in accordance with accounting principles
generally accepted in the U.S., which requires us to make estimates and
assumptions in certain circumstances that affect amounts reported in the
accompanying financial statements and related footnotes. In preparing these
financial statements, management has made its best estimates and judgments of
certain amounts included in the financial statements, giving due consideration
to materiality. We do not believe there is a great likelihood that materially
different amounts would be reported related to the accounting policies described
below. However, application of these accounting policies involves the exercise
of judgment and use of assumptions as to future uncertainties and, as a result,
actual results could differ from these estimates.





Accounts
receivable and provision for bad debts





Accounts
receivable, net of provision for bad debts, are presented at net realizable
value. The Company periodically records a provision for bad debts based on
management’s judgment resulting from an evaluation of the collectibility of
accounts receivable by assessing, among other factors, our customer’s
willingness or ability to pay, repayment history, general economic conditions,
and the ongoing relationship with our customers. The total amount of this
provision is determined by first identifying the receivables of customers that
are considered to be a higher credit risk based on their current overdue
accounts, difficulties in collecting from these customers in the past, and their
overall financial condition. For each of these customers, the Company estimates
the extent to which the customer will be able to meet its financial obligations
and records a provision that reduces our trade receivable for that customer to
the amount that is reasonably believed will be collected. Additional provisions
may be required in the future if the financial condition of our customers or
general economic conditions deteriorate, thereby reducing net
earnings.





Impairment
of long-lived assets





We review
property, plant and equipment and purchased intangible assets for impairment
whenever events or changes in circumstances indicate the carrying value of an
asset may not be recoverable. Our asset impairment review assesses the fair
value of the assets based on the future cash flows the assets are expected to
generate. An impairment loss is recognized when estimated undiscounted future
cash flows expected to result from the use of the asset plus net proceeds
expected from disposition of the asset (if any) are less than the carrying value
of the asset. When an impairment is identified, the carrying amount of the asset
is reduced to its estimated fair value. Deterioration of our business in a
geographic region or within a business segment in the future could also lead to
impairment adjustments as such issues are identified. The accounting effect of
an impairment loss would be a charge to earnings, thereby reducing our net
earnings.


29





Accounting
for stock-based compensation





The
Company adopted SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS
123(R)"), from January 1, 2006, which requires the measurement and recognition
of compensation expense for all share-based awards made to employees and
directors, including employee stock options and shares issued through its
employee stock purchase plan, based on estimated fair values..





Income
taxes





The
Company adopted the provisions of the Financial Accounting Standards
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”).
FIN 48 prescribes a recognition threshold and measurement process for recording
in the financial statements uncertain tax positions taken or expected to be
taken in a tax return. FIN 48 also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosures and transitions. The adoption of FIN 48 did not have a significant
impact on the Company’s consolidated financial statements.




Employees





As of
September 30, 2008, we had approximately 51 full-time employees employed in
Greater China. From time to time we employ independent contractors to support
our production, engineering, marketing, and sales departments





Website
Access to our SEC Reports





Our
Internet website address is www.asiaglobalholdings.com. Through our Internet
website, we will make available, free of charge, the following reports as soon
as reasonably practicable after electronically filing them with, or furnishing
them to, the SEC: our Annual Reports on Form 10-K; our Quarterly Reports on Form
10-Q; our Current Reports on Form 8-K; and amendments to those reports filed or
furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Our Proxy Statements for our Annual Stockholder
Meetings are also available through our Internet website. Our Internet website
and the information contained therein or connected thereto are not intended to
be incorporated into this Annual Report on Form 10-K.




You may
also obtain copies of our reports without charge by writing to:





Attn:
Investor Relations


Asia
Global Holdings Corp


Unit
601B, 6 th Floor,
Tower 1


833
Cheung Sha Wan Road, Kowloon, Hong Kong


Attn:
Investor Relations





The
public may also read and copy any materials filed with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or through
the SEC website at www.sec.gov. The Public Reference Room may be contact at
(800) SEC-0330. You may also access our other reports via that link to the SEC
website.





ITEM 3.
            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 are fixed for the terms of the loans, the
terms are typically twelve months and interest rates are subject to change upon
renewal. A hypothetical 1.0% increase in the annual interest rates for all of
our credit facilities at $791,423 would decrease net income before provision for
income taxes by approximately $5,935 for the nine months ended September 30,
2008. Management monitors the banks’ interest 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.





Foreign
Exchange Risk


While our
reporting currency is the U.S. Dollar, all of our consolidated revenues and
consolidated costs and expenses are denominated in Renminbi. 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. We
have not entered into any hedging transactions in an effort to reduce our
exposure to foreign exchange risk.





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.


30





ITEM 4T.
            CONTROLS
      AND PROCEDURES.





Evaluation of Disclosure
Controls and Procedures .





Based on
an evaluation under the supervision and with the participation of management,
our Chief Executive Officer and Chief Financial Officer have concluded that our
disclosure controls and procedures as defined in Section 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended ("Exchange Act") were
effective as of June 30, 2008 to ensure that information required to be
disclosed by us in reports that we file or submit under the Exchange Act is (i)
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission rules and forms and (ii) accumulated
and communicated to our management, including our Chief Executive Officer and
Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.





Changes in Internal Control
over Financial Reporting





There
were no changes in our internal control over financial reporting during the
quarter ended September 30, 2008, which were identified in connection with
management's evaluation required by paragraph (d) of rules 13a-15 and 15d-15
under the Exchange Act, that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.





PART
II - OTHER INFORMATION





ITEM 1.
            LEGAL
      PROCEEDINGS





We are
not involved in any material pending legal proceedings at this time, and
management is not aware of any contemplated proceeding by any governmental
authority.





ITEM 1A.
            RISK
      FACTORS





Risks
Related to the Company





You
should not place undue reliance on our financial guidance, nor should you rely
on our quarterly or annual operating results as an indication of our future
performance because our results of operations are subject to significant
fluctuations.





We may
experience significant fluctuations in our quarterly or annual operating results
due to a variety of factors, many of which are outside of our control.
Significant fluctuations in our operating results could be caused by any of the
factors identified in this section, including but not limited to our ability to
retain existing customers, attract new customers at a steady rate and maintain
user satisfaction; the announcement or introduction of new or enhanced services,
content and products by us or our competitors; significant news events that
increase traffic to our websites; technical difficulties, system downtime or
Internet failures; demand for advertising space from advertisers; seasonality of
the advertising market; the amount and timing of operating costs and capital
expenditures relating to expansion of our business, operations and
infrastructure; governmental regulation; seasonal trends in Internet use; a
shortfall in our revenues relative to our forecasts and a decline in our
operating results due to our inability to adjust our spending quickly; and
general economic conditions and economic conditions specific to the Internet,
electronic commerce and the Greater China market. As a result of these and other
factors, you should not place undue reliance on our financial guidance, nor
should you rely on quarter-to-quarter comparisons of our operating results as
indicators of likely future performance. Our quarterly revenue and earnings per
share guidance is our best estimate at the time we provide guidance. Our
operating results may be below our expectations or the expectations of public
market analysts and investors in one or more future quarters. If that occurs,
the price of our ordinary shares could decline and you could lose part or all of
your investment.





We
may not be able to successfully upgrade and integrate our existing products and
technology.





Our
ability to compete depends, in part, on our success at upgrading and integrating
our existing products and technology. From time to time we upgrade and issue new
releases of our existing technology to integrate new functionalities and respond
to industry developments. We may experience bugs, delays, difficulties or
increased costs that could hinder or prevent the successful design, integration,
development, introduction or marketing of new releases of our technology. In
addition, we must ensure that performance levels of our technology remain steady
when we release new versions to our customers. Any material delays in
introducing a new release or performance problems could cause us to lose
customers and cause our revenue to decline.





Our
international operations face legal and cultural challenges and subject us to
additional risks. We have operations in a number of international markets,
including Asia, United States, Europe and Canada, and we currently derive
approximately all of our revenue from non-U.S. markets. To date, we have limited
experience in marketing, selling and distributing our solutions internationally.
Our international operations are subject to other risks, including:





o changes
in regulatory requirements;


31





o reduced
protection for intellectual property rights in some countries;





o
potentially adverse tax consequences and restrictions on cash flow resulting
from, among other things:





o local
statutory liquidity requirements for businesses operating in certain foreign
countries;





o the
need to maintain cash balances to meet short-term capital
requirements;





o
operations in foreign countries with higher tax rates than the United
States;





o the
inability to utilize certain foreign tax credits; and





o the
inability to utilize some or all of our losses generated in one or more foreign
countries;





o general
import/export restrictions relating to encryption technology and/or privacy
matters;





o
difficulties and costs of staffing and managing foreign operations;





o local
law requirements governing employment contracts, which may impose, among other
things, minimum notice periods and minimum severance payments for involuntary
terminations;





o
political and economic instability;





o
fluctuations in currency exchange rates; and





o
seasonal reductions in business activity during the summer months in Europe and
certain other parts of the world.





Any or
all of these risks could affect our business outside of the United States and
negatively impact our results of operations.





Our
future revenues and results of operations may be difficult to forecast and
results in prior periods may not be indicative of future results.





At times
in the past and in certain segments, our revenues have fluctuated on a quarterly
and annual basis as well as grown significantly and has decreased significantly.
Accurate predictions of future revenues are difficult because of the rapid
changes in the markets in which we operate.





Our
results of operations have fluctuated and may continue to fluctuate
significantly in the future as a result of a variety of factors, many of which
are beyond our control. These factors include:





o the
addition of new clients or the loss of existing clients;





o changes
in fees paid by advertisers or other clients;





o changes
in the amount of royalties payable by us to owners of websites or the imposition
of new charges or fees by website owners;





o the
demand by advertisers and web-publishers for our advertising
solutions;





o the
introduction of new Internet marketing services by us or our
competitors;





o
variations in the levels of capital or operating expenditures and other costs
relating to the maintenance or expansion of our operations, including personnel
costs;





o
seasonality;





o changes
in results of operations brought about by newly acquired businesses or new joint
ventures, which may be exceedingly difficult to predict due to management's lack
of history with such businesses or joint ventures;





o changes
in governmental regulation of the Internet; and





o general
economic conditions.


32


Our
future revenues and results of operations may be difficult to forecast due to
the above factors and the time we may need to adequately respond to any changes
in them. Our profit margins may suffer if we are unable to pass some of the
costs on to our customers. In addition, our expense levels are based in large
part on our investment plans and estimates of future revenues. Any increased
expenses may precede or may not be followed by increased revenues, as we may be
unable to, or may elect not to, adjust spending in a timely manner to compensate
for any unexpected revenue shortfall. As a result, we believe that
period-to-period and year-to-year comparisons of our results of operations may
not be meaningful.





Changes
in general economic conditions could have a material impact on our
business.





Our
results of operations could be impacted by changes in overall economic
conditions that impact consumer spending within China and the United States.
Future economic conditions affecting disposable income such as employment
levels, consumer confidence, business conditions, stock market volatility,
weather conditions, acts of terrorism, threats of war, and interest and tax
rates could reduce consumer spending or cause consumers to shift their spending
away from our products. If the economic conditions and performance of the retail
and media environment worsen, we may experience material adverse impacts on our
business, operating results and financial condition.





Acquisitions
may harm our financial results.





Acquisitions
have been part of our growth and may continue to be part of our growth in the
future. Our acquisitions may be of entire companies, certain assets of
companies, controlling interests in companies or of minority interests in
companies where we intend to invest as part of a strategic alliance. If we are
not successful in integrating companies that we acquire or are not able to
generate adequate sales from the acquired entities, our business could be
materially and adversely affected.





Disputes
concerning media content and intellectual property may adversely affect
us.





Most of
our media content is subject to arrangements with third parties pursuant to
which we have licensed certain rights to use and distribute media content owned
by third parties or have licensed to third parties certain rights to use and
distribute media content that we own. In addition, we have a number of
agreements with third parties concerning the use of our media content and
intellectual property, including agreements regarding royalties, distribution,
duplication, etc. Allegations that we do not have rights to use media content
and other disputes arising from such arrangements can be costly and may have a
material adverse impact on our results.





Third
parties that are engaged by the Company may have legal action brought against
them which could adversely affect us or may result in legal action against the
Company.





We work
with several third parties in our TV Entertainment and Media & Advertising
segments. Such agreements could result in legal action being brought against a
third party which we have no control over and could result in the Company being
brought into such legal action. Such litigation may impose a heavy financial
burden on the Company.





Television
production budgets may increase, and television production spending may exceed
such budgets.




Our
future television budgets may continue to increase due to factors including, but
not limited to, (1) escalation in compensation rates of people required to
work on our current projects, (2) number of personnel required to work on
our current projects, (3) equipment needs, (4) the enhancement of
existing, or the development of new, proprietary technology and (5) the
expansion of our facilities to accommodate the growth of the television and
media segment. Under the Format Option Agreements for TV shows, we will finance
all or a portion of the budget for production and sale of the show. Due to
production exigencies, which are often difficult to predict, it is not uncommon
for television production spending to exceed television production budgets, and
our current projects may not be completed within the budgeted amounts. In
addition, when production of each film is completed, we may incur significant
carrying costs associated with transitioning personnel on creative and
development teams from one project to another. These carrying costs increase
overall production budgets and could have a material adverse effect on our
results of operations and financial condition.





We
have an obligation to finance production costs.




We
financed the production of Who
Wants to Be A Millionaire?, and we may partially finance or fully finance
other related products to be developed and produced. If our television and
related products do not generate proceeds sufficient to more than offset our
share of the production costs, our business, operating results and financial
condition will be materially adversely affected.





In
order for our television and related products to be successful, we must develop
appealing creative content.




The
success of each television production developed and produced by us depends in
large part upon our ability to develop and produce engaging content and formats
that will appeal to a broad audience. Traditionally, this process has been
extremely difficult. While we have enjoyed success with our television
productions, there can be no assurance that similar levels of success will be
achieved by our subsequent productions, including  the current and future
TV show formats included in our Idea Asia catalogue and our other future
projects.


33





Work
stoppages could adversely impact our operations.




Although
none of our employees are represented by a labor union, it is common for
television directors, producers, production staff and actors at television
production companies to belong to a union. There can be no assurance that our
employees will not join or form a labor union or that we, for certain purposes,
will not be required to become a union signatory. We may be directly or
indirectly dependent upon certain union members, and work stoppages or strikes
organized by such unions could have a material adverse impact on our business,
financial condition or results of operations. If a work stoppage occurs, it
could delay the completion of our television productions and have a material
adverse effect on our business operating results or financial
condition.





If
we lost any key personnel, our business will be adversely affected.




Our
success depends, to a significant extent, upon our senior management and key
sales and technical personnel, particularly our Chief Executive Officer, who is
also our interim Chief Financial Officer. The competition for experienced and
talented executives, senior managers and technical and sales personnel has
become intense in our industry. The loss of the services of one or more of these
persons, other similarly positioned members of management or other key personnel
could materially and adversely affect our ability to develop our
business.




In
order to continue to operate efficiently and to grow our business, we will need
to attract and retain qualified personnel and manage our costs, which we may be
unable to do.




Our
success depends on our ability to attract and retain qualified technical, sales
and marketing, customer support, financial and accounting, and managerial
personnel. We may expand our total workforce and will need to continue to
attract qualified personnel in order to grow our business successfully.
Additionally, as our business has escalated, we have increased our reliance on
contractors and outside firms for development. We may not be able to attract,
integrate and retain the numbers and types of candidates that we desire, and we
may not be able to retain our contractors and outside firms and may not be able
to replace them. Even if we are successful in attracting new staff, we may not
be able to increase revenue quickly enough to offset the costs of the additional
personnel. Any of these contingencies could cause our business to
suffer.




We have
experienced in the past, and may continue to experience in the future,
particular difficulty in hiring and retaining qualified staff. Competition for
staff is very high, and training is difficult because the required skill set is
complex and there is no industry standard. If we are unable to attract, train
and retain qualified search staff, we may not remain competitive and could lose
business and our customers, which could have an adverse effect on
revenue.





Our
operations are vulnerable to natural disasters and other events, including
terrorist attacks, because we have limited backup systems.




We have
limited backup systems and have experienced system failures and electrical
outages from time to time in the past, which have disrupted our operations. We
have a limited disaster recovery plan in the event of damage from fire, floods,
typhoons, earthquakes, power loss, telecommunications failures, break-ins and
similar events. Our operations are dependent on our ability to protect our
computer systems against these unexpected adverse events. If any of the
foregoing occurs, we may experience a complete system shutdown. Any business
interruption insurance that we carry is unlikely to be sufficient to compensate
us for loss of business in the event of a significant catastrophe.




In
addition, interruptions in our services could result from the failure of our
telecommunications providers to provide the necessary data communications
capacity in the time frame we require. Our TradeDragon technology resides on
computer systems located in our data centers housed by us in Hong Kong. These
systems' continuing and uninterrupted performance is critical to our success, as
a substantial portion of the revenue depend on the continuing availability of
these systems. Despite precautions that we have taken, unanticipated problems
affecting our systems have from time to time in the past caused, and in the
future could cause, interruptions in the delivery of our solutions. Our
business, results of operations and financial condition could be materially and
adversely affected by any damage or failure that interrupts or delays our
operations. To improve the performance and to prevent disruption of our
services, we may have to make substantial investments to deploy additional
servers or one or more copies of our Web sites to mirror our online resources.
Although we believe we carry property insurance with adequate coverage limits,
our coverage may not be adequate to compensate us for all losses, particularly
with respect to loss of business and reputation that may occur.




In
addition, terrorist acts or acts of war may cause damage to our employees,
facilities, clients, our clients' customers and vendors, which could
significantly impact our revenues, costs and expenses and financial position.
The potential for future terrorist attacks, the national and international
responses to terrorist attacks or perceived threats to national security, and
other acts of war or hostility have created many economic and political
uncertainties that could adversely affect our business and results of operations
in ways that cannot be presently predicted. We are predominantly uninsured for
losses and interruptions caused by terrorist acts and acts of
war.


34





Our
network operations may be vulnerable to hacking, viruses and other disruptions,
which may make our products and services less attractive and
reliable.




Internet
usage could decline if any well-publicized compromise of security occurs.
"Hacking" involves efforts to gain unauthorized access to information or systems
or to cause intentional malfunctions or loss or corruption of data, software,
hardware or other computer equipment. Hackers have made many attempts to breach
the security of our network operations, with minimal disruption to date. If
hackers are successful in the future, they could misappropriate proprietary
information, which could lead to litigation against us, or cause substantial
disruptions in our service. We may be required to expend capital and other
resources to protect our Web site against hackers. Any measures we may take may
not be effective. In addition, the inadvertent transmission of computer viruses
could expose us to a material risk of loss or litigation and possible liability,
as well as materially damage our reputation and decrease our user
traffic.





We
depend on proprietary rights and we face the risk of infringement.




Our
success and ability to compete are substantially dependent on our internally
developed technologies and trademarks, which we protect through a combination of
copyright, trade secret and trademark law. Patent applications and trademark
applications we submit may not be approved. Even if they are approved, such
patents or trademarks may be successfully challenged by others or invalidated.
If our trademark registrations are not approved because third parties own such
trademarks, our use of such trademarks will be restricted unless we enter into
arrangements with such third parties that may be unavailable on commercially
reasonable terms.




We
generally enter into confidentiality or license agreements with our employees,
consultants and corporate partners, and generally control access to and
distribution of our technologies, documentation and other proprietary
information. Despite our efforts to protect our proprietary rights from
unauthorized use or disclosure, parties may attempt to disclose, obtain or use
our solutions or technologies. The steps we have taken may not prevent
misappropriation of our solutions or technologies, particularly in many foreign
countries in which we operate, where laws or law enforcement practices may not
protect our proprietary rights as fully as in the United States.




We have,
from time to time, been, and may in the future be, subject to claims of alleged
infringement of the trademarks and other intellectual property rights of third
parties by us or by customers who employ our advertising solutions. We may be
required, or may elect, to indemnify these parties against such claims. Such
claims and any resultant litigation could subject us to significant liability
for damages and could result in the invalidation of our proprietary rights. In
addition, even if we prevail, such litigation could be time-consuming and
expensive to defend, and could result in the diversion of our time and
attention, any of which could materially and adversely affect our business,
results of operations and financial condition. Any claims or litigation from
third parties may also result in limitations on our ability to use the
trademarks and other intellectual property subject to such claims or litigation
unless we enter into arrangements with the third parties responsible for such
claims or litigation, which may be unavailable on commercially reasonable terms,
if at all.




Future
currency fluctuations and restrictions on currency exchange may adversely affect
our business, including limiting our ability to convert Chinese renminbi into
foreign currencies and, if Chinese renminbi were to decline in value, reducing
our revenues in U.S. dollar terms.




Our
reporting currency is the U.S. dollar and our operations in China and Hong Kong
use their respective local currencies as their functional currencies. The
majority of our revenues derived and expenses incurred are in currencies other
than the U.S. dollar. We are subject to the effects of exchange rate
fluctuations with respect to any of these currencies. We can offer no assurance
that these will be stable against the U.S. dollar or any other foreign
currency.




The
income statements of our international operations are translated into U.S.
dollars at the average exchange rates in each applicable period. To the extent
the U.S. dollar strengthens against foreign currencies, the translation of these
foreign currencies denominated transactions results in reduced revenues,
operating expenses and net income for our international operations. Similarly,
to the extent the U.S. dollar weakens against foreign currencies, the
translation of these foreign currency denominated transactions results in
increased revenues, operating expenses and net income for our international
operations. We are also exposed to foreign exchange rate fluctuations as we
convert the financial statements of our foreign subsidiaries into U.S. dollars
in consolidation. If there is a change in foreign currency exchange rates, the
conversion of the foreign subsidiaries' financial statements into U.S. dollars
will lead to a translation gain or loss which is recorded as a component of
other comprehensive income. In addition, we have certain assets and liabilities
that are denominated in currencies other than the relevant entity's functional
currency. Changes in the functional currency value of these assets and
liabilities create fluctuations that will lead to a transaction gain or loss. We
have not entered into agreements or purchased instruments to hedge our exchange
rate risks, although we may do so in the future. The availability and
effectiveness of any hedging transactions may be limited and we may not be able
to successfully hedge our exchange rate risks.




Changes
to existing accounting pronouncements, including SFAS 123R, or taxation rules or
practices may adversely affect our reported results of operations or how we
conduct our business.




A change
in accounting pronouncements or taxation rules or practices can have a
significant effect on our reported results and may even affect our reporting of
transactions completed before the change is effective. Pursuant to SEC rules, we
are required to implement the Statement of Financial Accounting Standards No.
123 (revised 2004), "Share-Based Payment" ("SFAS 123R") starting in the first
quarter of 2006. SFAS 123R requires us to measure compensation costs for all
share-based compensation (including stock options and our employee stock
purchase plan, as currently constructed) at fair value and take compensation
charges equal to that value. The method that we use to determine the fair value
of stock options is based upon, among other things, the volatility of our
ordinary shares. The price of our ordinary shares has historically been
volatile. Therefore, the requirement to measure compensation costs for all
share-based compensation under SFAS 123R could negatively affect our
profitability and the trading price of our ordinary shares. SFAS 123R and the
impact of expensing on our reported results could also limit our ability to
continue to use stock options as an incentive and retention tool, which could,
in turn, hurt our ability to recruit employees and retain existing employees.
Other new accounting pronouncements or taxation rules and varying
interpretations of accounting pronouncements or taxation practice have occurred
and may occur in the future. This change to existing rules, future changes, if
any, or the questioning of current practices may adversely affect our reported
financial results or the way we conduct our business.


35





While
we believe that we currently have adequate internal control procedures in place,
we are still exposed to potential risks from recent legislation requiring
companies to evaluate controls under Section 404 of the Sarbanes-Oxley Act of
2002.




While we
believe that we currently have adequate internal control procedures in place, we
are still exposed to potential risks from recent legislation requiring companies
to evaluate controls under Section 404 of the Sarbanes-Oxley Act of 2002. Under
the supervision and with the participation of our management, we have evaluated
our internal controls systems in order to allow management to report on our
internal controls, as required by Section 404 of the Sarbanes-Oxley Act. We have
performed the system and process evaluation and testing required in an effort to
comply with the management certification requirements of Section 404. As a
result, we have incurred additional expenses and a diversion of management's
time. If we are not able to continue to meet the requirements of Section 404 in
a timely manner or with adequate compliance, we might be subject to sanctions or
investigation by regulatory authorities, such as the SEC or the Nasdaq National
Market. Any such action could adversely affect our financial results and the
market price of our ordinary shares.




Our
stock price has been historically volatile and may continue to be volatile,
which may make it more difficult for you to resell shares when you want at
prices you find attractive.




The
trading price of our ordinary shares has been and may continue to be subject to
considerable daily fluctuations. During the twelve months ended December 31,
2007, the closing sale prices of our ordinary shares on the Over-the-Counter
Bulletin Board ranged from $0.335 to $0.04 per share and the closing sale price
on November 14, 2008 was $0.03 per share. Our stock price may fluctuate in
response to a number of events and factors, such as quarterly variations in
operating results, announcements of technological innovations or new products
and media properties by us or our competitors, changes in financial estimates
and recommendations by securities analysts, the operating and stock price
performance of other companies that investors may deem comparable, new
governmental restrictions or regulations and news reports relating to trends in
our markets. In addition, the stock market in general, and the market prices for
China-related and Internet-related companies in particular, have experienced
extreme volatility that often has been unrelated to the operating performance of
such companies. These broad market and industry fluctuations may adversely
affect the price of our ordinary shares, regardless of our operating
performance.




We
may be classified as a passive foreign investment company, which could result in
adverse U.S. tax consequences to U.S. investors.




Based
upon the nature of our income and assets, we may be classified as a passive
foreign investment company, or PFIC, by the United States Internal Revenue
Service for U.S. federal income tax purposes. This characterization could result
in adverse U.S. tax consequences to you. For example, if we are a PFIC, our U.S.
investors will become subject to increased tax liabilities under U.S. tax laws
and regulations and will become subject to more burdensome reporting
requirements. The determination of whether or not we are a PFIC is made on an
annual basis, and those determinations depend on the composition of our income
and assets, including goodwill, from time to time. Although in the past we have
operated our business and in the future we intend to operate our business so as
to minimize the risk of PFIC treatment, you should be aware that certain factors
that could affect our classification as PFIC are out of our control. For
example, the calculation of assets for purposes of the PFIC rules depends in
large part upon the amount of our goodwill, which in turn is based, in part, on
the then market value of our shares, which is subject to change. Similarly, the
composition of our income and assets is affected by the extent to which we spend
the cash we have raised on acquisitions and capital expenditures. In addition,
the relevant authorities in this area are not clear and so we operate with less
than clear guidance in our effort to minimize the risk of PFIC treatment.
Therefore, we cannot be sure whether we are not and will not be a PFIC for the
current or any future taxable year. In the event we are determined to be a PFIC,
our stock may become less attractive to U.S. investors, thus negatively
impacting the price of our stock.




We
have a single shareholder who can substantially influence the outcome of all
matters voted upon by our shareholders and whose interests may not be aligned
with yours.




Michael
Mak, our former Chief Executive Officer, beneficially holds the majority
shareholder vote. As a result, Mr. Mak is able to substantially influence all
matters requiring the approval of our shareholders, including the election of
directors and the approval of significant corporate transactions such as
acquisitions. This concentration of ownership could delay, defer or prevent a
change in control or otherwise impede a merger or other business combination
that the Board of Directors or other shareholders may view
favorably.


36





We
must rely on the Chinese government to develop China's Internet infrastructure
and, if it does not develop this infrastructure, our ability to grow our
business could be hindered.




The
Chinese government's interconnecting, national networks connect to the Internet
through government-owned international gateways, which are the only channels
through which a domestic Chinese user can connect to the international Internet
network. We rely on this backbone and China Telecom and China Netcom to provide
data communications capacity primarily through local telecommunications lines.
Although the Chinese government has announced plans to aggressively develop the
national information infrastructure, we cannot assure you that this
infrastructure will be developed. In addition, we have no guarantee that we will
have access to alternative networks and services in the event of any disruption
or failure. If the necessary infrastructure standards or protocols or
complementary products, services or facilities are not developed by the Chinese
government, the growth of our business could be hindered.




We
may be adversely affected by complexity, uncertainties and changes in PRC
regulation of Internet business and companies, including limitations on our
ability to own key assets such as our website.




The
Chinese government heavily regulates its Internet sector including the legality
of foreign investment in the Chinese Internet sector, the existence and
enforcement of content restrictions on the Internet and the licensing and permit
requirements for companies in the Internet industry. Because these laws,
regulations and legal requirements with regard to the Internet are relatively
new and evolving, their interpretation and enforcement involve significant
uncertainty. In addition, the Chinese legal system is a civil law system in
which decided legal cases may be cited for reference but have little
precedential value. As a result, in many cases it is difficult to determine what
actions or omissions may result in liability. Issues, risks and uncertainties
relating to China's government regulation of the Chinese Internet sector include
the following:




o We only
have contractual control over our website in China; we do not own it due to the
restriction of foreign investment in businesses providing value-added
telecommunication services, including computer information services, online
promotional advertising or electronic mail box services.




o In
addition, uncertainties relating to the regulation of the Internet business in
China, including evolving licensing practices, give rise to the risk that
permits, licenses or operations at some of our companies may be subject to
challenge, which may be disruptive to our business, or subject us to sanctions,
requirements to increase capital or other conditions or enforcement, or
compromise enforceability of related contractual arrangements, or have other
harmful effects on us.





o On
December 11, 2001, the day China formally joined the World Trade Organization,
the PRC State Council promulgated the FITE Regulations, which became effective
on January 1, 2002. The FITE Regulations stipulate that the foreign party to a
foreign-invested telecommunications enterprise can hold an equity share in such
foreign-invested telecommunications enterprise that provides basic telecom
services or value-added telecom services, ultimately not to exceed 49% or 50%,
respectively. The Administrative Measures for Telecommunications Business
Operating License were promulgated by the Chinese Ministry of Information
Industry (MII) on December 26, 2001 and came into effect on January 14, 2002 to
supplement the FITE Regulations. However, there are still uncertainties
regarding the interpretation and application of the FITE
Regulations.




o The
numerous and often vague restrictions on acceptable content in China subject us
to potential civil and criminal liability, temporary blockage of our website or
complete cessation of our website. For example, the State Secrecy Bureau, which
is directly responsible for the protection of state secrets of all Chinese
government and Chinese Communist Party organizations, is authorized to block any
website it deems to be leaking state secrets or failing to meet the relevant
regulations relating to the protection of state secrets in the distribution of
online information.




o Because
the definition and interpretation of prohibited content are in many cases vague
and subjective, it is not always possible to determine or predict what and how
content might be prohibited under existing restrictions or restrictions that
might be imposed in the future. For example, in January 2005, the Chinese State
Administration of Radio, Film & Television ("SARFT"), which regulates radio
and television stations in China, issued a notice prohibiting commercials for
value-added services related to "fortune-telling" from airing on radio and
television stations, effective in February 2005. This notice could also lead to
further actions by other Chinese government authorities to prohibit the sale of
such fortune-telling related value-added services, which could have a material
adverse effect on our financial position, results of operations, or cash flows.
SARFT or other Chinese government authorities may prohibit the marketing of
other advertising services via a channel we depend on to generate revenues,
which could also have a material adverse effect on our financial position,
results of operations or cash flows.




o Certain
Chinese governmental authorities have stated publicly that they are in the
process of preparing new laws and regulations that will govern Internet
activities. The areas of regulation currently include online advertising, online
news reporting, online publishing, and the provision of industry-specific (e.g.,
drug-related) information over the Internet. Other aspects of our online
operations may be subject to regulation in the future. Our operations may not be
consistent with these new regulations when they are put into effect and, as a
result, we could be subject to severe penalties as discussed above.




o The
governing body of China's mobile industry, from time to time issues policies
that regulate the business practices relating to advertising. We cannot predict
the timing or substance of such regulations. Such regulations may have a
negative impact on our business.


37





The
interpretation and application of existing Chinese laws, regulations and
policies, the stated positions of the MII and possible new laws, regulations or
policies have created substantial uncertainties regarding the legality of
existing and future foreign investments in, and the businesses and activities
of, Internet businesses in China, including our business.





We
may be exposed to infringement claims by third parties, which, if successful,
could cause us to pay significant damage awards.





Third
parties may initiate litigation against us alleging infringement of their
proprietary rights. In the event of a successful claim of infringement and our
failure or inability to develop non-infringing technology or license the
infringed or similar technology on a timely basis, our business could be harmed.
In addition, even if we are able to license the infringed or similar technology,
license fees could be substantial and may adversely affect our results of
operations.





Our
failure to compete successfully may hinder our growth.





The
markets for Internet advertising and related products and services are intensely
competitive and such competition is expected to increase. Our failure to compete
successfully may hinder our growth. We believe that our ability to compete
depends upon many factors both within and beyond our control,
including:






o the
development of new online advertising media and methods;o the timing and market
acceptance of new products and enhancements of existing services developed by us
and our competitors;




o the
ability to attract and retain qualified personnel;




o
changing demands regarding customer service and support;




o shifts
in sales and marketing efforts by us and our competitors; and




o the
ease of use, performance, price and reliability of our services and
products.




Some of
our competitors have longer operating histories, greater name recognition,
larger customer bases and significantly greater financial, technical and
marketing resources than ours. In addition, current and potential competitors
have established or may establish cooperative relationships among themselves or
with third parties to increase the ability of their products or services to
address the needs of our prospective clients. In addition, most online
advertising companies are seeking to broaden their business models, so that
companies that do not currently compete directly with us may decide to compete
more directly with us in the future. We may be unable to compete successfully
against current or future competitors.





Changes
in laws and standards relating to data collection and use practices and the
privacy of internet users, or related litigation, could harm our
business.





The U.S.
federal and various state governments have recently proposed limitations on the
collection and use of information regarding Internet users. In 2004 and 2005,
the U.S. Congress proposed several new pieces of legislation that would limit
the use of technologies deemed to be "spyware", which some bills have defined to
include cookies, Web beacons and javascript, which are required by our products
and services. The effectiveness of our advertising products and services could
be significantly limited by federal and state regulations limiting the
collection or use of information regarding Internet users. Since many of the
proposed federal and state laws or regulations are being developed, we cannot
yet determine the impact these regulations may have on our business. In
addition, growing public concern about privacy and the collection, distribution
and use of personal information has led to self-regulation of these practices by
the Internet advertising and direct marketing industry, and to increased federal
and state regulation. Lastly, a number of civil actions have been brought by
federal and state authorities against companies alleged to have distributed
"spyware" without the proper consent of users. The Network Advertising
Initiative has developed self-regulatory principles for online preference
marketing. We are also subject to various federal and state regulations
concerning the collection, distribution and use of personal information. These
laws include the Children's Online Privacy Protection Act and state laws that
limit or preclude the use of voter registration and drivers license information,
as well as other laws that govern the collection and use of consumer credit
information. While we monitor legislative initiatives, in the event that more
onerous federal or state laws or regulations are enacted or applied to us or to
our clients, our business, financial condition and results of operations could
be materially and adversely affected.





Privacy
concerns may prevent us from collecting user data.





Growing
concerns about the use of cookies and data collection may limit our ability to
develop user profiles. Web sites typically place small files of information,
commonly known as "cookies," on a user's hard drive, generally without the
user's knowledge or consent. Cookie information is passed to the Web site
through the Internet user's browser software. Our software technology enables
the use of cookies and other non-personally-identifying information to deliver
targeted advertising and to limit the frequency with which an advertisement is
shown to a user. Most currently available Internet browsers allow users to
modify their browser settings to prevent cookies from being stored on their hard
drive, and Microsoft Corporation changed the design and instrumentation of its
Web browser to give users the option to accept or reject third-party cookies. A
small minority of users are currently choosing to prevent certain cookies. Users
can also delete cookies from their hard drive or modify them at any time. Some
Internet commentators and privacy advocates have suggested limiting or
eliminating the use of cookies. Any reduction or limitation in the use of
cookies or increase in the number of users blocking cookies could limit the
effectiveness of our sales and marketing efforts and impair our profiling and
targeting capabilities. Such changes also could adversely affect our ability to
determine the reach of advertising campaigns sold and delivered by us and the
frequency with which users of sites see the same advertisement.


If the
use or effectiveness of cookies is limited, we would likely have to switch to
other technology that would allow us to gather demographic and behavioral
information. While such technology currently exists, it is substantially less
effective than cookies. Replacement of cookies could require significant
engineering time and resources, might not be completed in time to avoid negative
consequences to our business, financial condition or results of operations, and
might not be commercially feasible.


38





We
face risks associated with technological changes.





The
Internet and Internet advertising markets are characterized by rapidly changing
technologies, evolving industry standards, frequent new product and service
introductions and changing customer demands. Our future success will depend on
our ability to adapt to rapidly changing technologies and to enhance existing
solutions and develop and introduce a variety of new solutions to address our
customers' changing demands. We may experience difficulties that could delay or
prevent the successful design, development, introduction or marketing of our
services. In addition, our new services or enhancements must meet the
requirements of our current and prospective customers and must achieve
significant market acceptance. Material delays in introducing new services and
enhancements may cause customers to forego purchases of our services and
purchase those of our competitors.





In
addition, the development of commercial software and technology that blocks,
eliminates or otherwise screens out Internet advertising may reduce the value of
advertising inventory services and the benefits of our services to our
customers. We cannot guarantee that a new commercial software or technology, for
end-users or enterprises, will not be capable of eliminating a portion or all of
the advertisement formats, including email, banners, pop-ups, pop-unders and
other formats, that we utilize through the Internet or that we currently deliver
through our services. To the extent that our customers refuse to pay for
advertisements that are blocked, or if the use of blocking software exceeds our
expectations, our business, results of operations and financial condition may be
materially and adversely affected.





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





None.





ITEM 3.
            DEFAULTS
      UPON SENIOR SECURITIES





None.





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





None.





ITEM 5.
            OTHER
      INFORMATION





On
October 30, 2008, the Company filed with the Commission a Form 8-K stating that
Michal Mak had resigned as Chief Executive Officer, Chief Financial Officer and
as a member of the Board of Directors. Furthermore, the Board of Directors
appointing John Leper as Chief Executive Officer, Chief Financial Officer and
Chairman of the Board of Directors as well as appointed Hin Lee Kwong as a
member of the Board of Directors.





ITEM 6.
            EXHIBITS





INDEX
TO EXHIBITS


OF


ASIA
GLOBAL HOLDINGS CORP.





31.1
              
              Rule
      13a-14 (a)/15d-14 (a) Certification of Chief Executive
    Officer31.2
              
              Rule
      13a-14 (a)/15d-14 (a) Certification of Chief Financial
    Officer32.1
              
              Section
      1350 Certification of Chief Executive Officer32.2
              
              Section
      1350 Certification of Chief Financial
Officer


39





SIGNATURES




In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





ASIA
      GLOBAL HOLDINGS CORP./s/
      John LeperDated:
      April 23, 2009
                  John
      Leper, Chief Executive Officer
                    (Principal
      executive officer)/s/
      John LeperDated:
      April 23, 2009
                  John
      Leper, Chief Financial Officer
                    (Principal
      financial
officer)


40