**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-KSB**





(Mark
      One)




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




For
      the
      fiscal year ended: December
      31, 2007





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




For
      the
      transition period from ____________ to _____________





**Commission
      File No. 000-51792**





**OMNIALUO,
      INC.**


(Name
      of
      Small Business Issuer in Its Charter)





Delaware
            
            88-1581779(State
                or Other Jurisdiction of Incorporation or Organization)
            
            (I.R.S.
                Employer Identification No.)Room
                101, Building E6, Huaqiaocheng East Industrial Park,
              Nanshan
                District,
              Shenzhen
                518053, The People’s Republic of China
              (Address
                  of Principal Executive Offices) (Zip Code)


(+86)
      755-8245-1808


(Registrant’s
      Telephone Number, Including Area Code)





Securities
      registered under Section 12(b) of the Exchange Act **:
      NONE**




Securities
      registered under Section 12(g) of the Exchange Act: **Common
      stock, $0.01 par value**




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o




Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or 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 xNo o




Check
      if
      no disclosure of delinquent filers in response to Item 405 of Regulation S-B
      is
      contained in this form, and no disclosure will be contained, to the best of
      registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No
x




The
      issuer’s combined revenues for its most recent fiscal year are
      $7,875,757.




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the average bid and asked price of
      such
      common equity, as of March 24, 2008 is approximately $14,444,832. Shares
      of
      common stock held by each officer and director and by each person who owns
      10
      percent or more of the outstanding common stock have been excluded in that
      such
      persons may be deemed to be affiliates of the
      issuer. This determination of affiliate status is not necessarily a conclusive
      determination for other purposes.




The
      number of shares outstanding of the issuer's common stock as of March 24, 2008
      is 22,840,000.




Documents
      incorporated by reference: **NONE** .




Transitional
      Small Business Disclosure Format (Check One): Yes o; No x




1


**FORWARD-LOOKING
      STATEMENTS**




This
      Annual Report on Form 10-KSB, including the following “Management’s Discussion
      and Analysis of Financial Condition and Results of Operations,” contains
      forward-looking statements that are based on the beliefs of our management,
      and
      involve risks and uncertainties, as well as assumptions, that, if they ever
      materialize or prove incorrect, could cause actual results to differ materially
      from those expressed or implied by such forward-looking statements. The words
      “believe,” “expect,” “anticipate,” “project,” “targets,” “optimistic,” “intend,”
“aim,” “will” or similar expressions are intended to identify forward-looking
      statements. All statements, other than statements of historical fact, are
      statements that could be deemed forward-looking statements, including statements
      regarding new and existing products, technologies and opportunities; statements
      regarding market and industry segment growth and demand and acceptance of new
      and existing products; any projections of sales, earnings, revenue, margins
      or
      other financial items; any statements of the plans, strategies and objectives
      of
      management for future operations; any statements regarding future economic
      conditions or performance; uncertainties related to conducting business in
      China; any statements of belief or intention; any of the factors mentioned
      in
      the “Risk Factors” section of this Form 10-KSB, and any statements of
      assumptions underlying any of the foregoing. All forward-looking statements
      included in this report are based on information available to us on the date
      of
      this report. We assume no obligation and do not intend to update these
      forward-looking statements, except as required by law.




**USE
      OF CERTAIN DEFINED TERMS**




In
      this
      report, unless indicated otherwise, references to:




· “OmniaLuo”
      “the Company,” “we,” “us,” or “our” refer to the combined business of all of the
      entities that form our consolidated business enterprise;




·  “China,”
      “Chinese” and “PRC” refer to the People’s Republic of China;




·  “BVI”
      refer to the British Virgin Islands;




·  “SEC”
      refer to the United States Securities and Exchange Commission;




·  “Securities
      Act” refer to the Securities Act of 1933, as amended;




·  “Exchange
      Act” refer to the Securities Exchange Act of 1934, as amended;




·  “RMB”
      refer to Renminbi, the legal currency of China; and




·  “U.S.
      dollar,” “$” and “US$” refer to the legal currency of the United
      States.




**PART
      I**




**ITEM
      1. DESCRIPTION OF BUSINESS**




**General**




We
      design, market, distribute and sell women’s clothing, with an emphasis on
      fashionable business casual wear. All our apparel is marketed under the brand
      names of OMNIALO and OMNIALUO (collectively referred to herein as the “OMNIALUO
      Brands” or “OMNIALUO brand names”) through a network of over 180 retail stores
      across the People’s Republic of China (“China”). We offer a complete line of
      business casual women’s wear, including bottoms, tops, and outerwear, as well as
      accessories, under the OMNIALUO brand names.




Our
      network of retail stores across China consisted of 84 stores as of December
      31,
      2006, and 184 stores as of December 31, 2007, including 26 Company-owned stores,
      126 independent distributor stores, and 32 co-owned stores, located throughout
      China. There are three different types of retail stores that carry the OMNIALUO
      brands: (i) Company-owned stores, which stores are owned exclusively by the
      Company and carry only the OMNIALUO brands, (ii) independent distributor stores,
      which stores are owned exclusively by third parties and carry the OMNIALUO
      brands exclusively, and (iii) co-owned stores, which stores are owned jointly
      by
      the Company and a third party, and carry the OMNIALUO brands exclusively. All
      three types of stores are located throughout China. OMNIALO and OMNIALUO are
      both registered trademarks or subject to a pending application for
      registration.




2




Our
      current target customers are “white-collar” and “pink-collar” urban females
      between the ages of 25 to 35. In China, “white-collar” individuals are described
      as working professionals with after-tax annual income ranging from $2,500 to
      $7,500 and “pink- collar” individuals as working professionals with after-tax
      annual income ranging from $7,500 to $22,500.




Ms.
      Zheng
      Luo, a prominent designer in China, is our chief executive officer and chief
      designer and the originator of the OMNIALUO brands. Ms. Zheng Luo was also
      the
      founder and principal shareholder of Omnia BVI prior to our reverse acquisition
      with Omnia BVI described above. Ms Zheng Luo is currently our largest individual
      shareholder. The OMNIALUO brands benefit significantly from Ms. Zheng Luo’s
      professional reputation.




The
      OMNIALUO brand apparel has been awarded “China’s Best Women’s Wear Design” by
      China Fashion Designers Association (“CFDA”) every year from 2002-2006.




**Development
      of the OMNIALUO Brands and Formation of Omnia BVI and Oriental
      Fashion**




In
      1996,
      Ms. Zheng Luo created the OMNIALO brand and founded Shenzhen Green’s Apparel
      Co., Ltd. (“Green’s Apparel”) in Shenzhen, China, in which she owned a 95%
      equity interest. Green’s Apparel manufactured women’s clothing.




In
      1997
      the OMNIALO trademark was registered with the Chinese National Trademark Bureau
      in both Chinese and English. The registrant and initial owner of such trademark
      was Green’s Apparel.




In
      March
      2003, Shenzhen Oumeng Industrial Co., Ltd. (“Oumeng”) was established. Ms. Zheng
      Luo was the CEO and 50% equity and controlling owner of Oumeng. Also in March
      2003, Oumeng purchased inventory from Green’s Apparel, consisting of women’s
      apparel. Green’s Apparel has not conducted any business after the transfer of
      inventory to Oumeng in March 2003, and upon such transfer, Oumeng entered into
      all contracts with Green’s Apparel’s existing suppliers, manufacturers and
      distributors, and acquired the OMNIALO trademark in August 2003. In addition
      to
      marketing and selling products under the OMNIALUO name, Oumeng also engaged
      in
      various other businesses such as other apparel, electronics, kitchenware and
      other hardware. Oumeng also managed C-Luo Intuition, a luxury made-to-order
      evening dress brand, which brand was previous owned by Ms. Zheng Luo prior
      to
      the sale of such brand to an independent third party. By the end of August
      2006,
      OMNIALUO brand apparel, under the management of Oumeng, was being distributed
      through 100 retail stores in China.




Ms.
      Zheng
      Luo personally applied for the registration of the trademark OMNIALUO in March
      2005 and the applications are under review by the Trademark Office of State
      Administration for Industry and Commerce , and the registration is now
      anticipated to be approved and effective by the end of 2008.




In
      early
      2006, Ms. Zheng Luo determined that the growth and development of the OMNIALUO
      brands and its associated women’s apparel products could best be achieved by the
      formation of a new company which would focus on the design, marketing,
      distribution and sale of women’s business casual wear, without the potential
      distraction and costs of operating other businesses. Therefore: (i) in August
      2006, Ms. Zheng Luo, together with several other individual shareholders, formed
      Omnia BVI; and (ii) in September 2006, Shenzhen Oriental Fashion Co., Ltd.,
      a
      company organized under the laws of Shenzhen, China (“Oriental Fashion”), with
      ownership held 100% by Omnia BVI, all rights in the OMNIALO trademark were
      transferred from Oumeng to Ms. Zheng Luo, and Ms. Zheng Luo resigned from her
      CEO position at Oumeng to devote her full-time effort to Oriental Fashion and
      Omnia BVI. Subsequently, in April 2007, Ms. Zheng Luo and her sister Ms. Xiaoyin
      Luo transferred their ownership of Oumeng to their mother, Ms. Yuhua Sun, and
      to
      Ms. Yujuan Sun, an unrelated party.




We
      were
      originally incorporated in the State of Delaware on March 7, 2001 under the
      name
      Wentworth II, Inc. We were formed as a vehicle to pursue a business combination,
      which we effected through our recent reverse acquisition with Omnia BVI. Our
      corporate name changed to OmniaLuo, Inc. in November 2007, subsequent to the
      reverse acquisition.




3




In
      October 2006: (i) Ms. Zheng Luo licensed the trademark OMNIALO to Oriental
      Fashion at nominal cost and executed an agreement assigning the registered
      OMNIALO trademark to Oriental Fashion, and Ms. Zheng Luo and Oriental Fashion
      commenced procedures to have the OMNIALO trademark assignments accepted and
      officially recorded in the Trademark Office; and (ii)  Ms.
      Zheng
      Luo licensed the trademark OMNIALUO to Oriental Fashion at nominal cost and
      executed an agreement assigning the pending application to register the OMNIALUO
      trademark to Oriental Fashion, and Ms. Zheng Luo and Oriental Fashion commenced
      procedures to have the OMNIALUO trademark assignments accepted and officially
      recorded in the Chinese National Trademark Bureau once registration of the
      OMNIALUO trademarks is approved by the Trademark Office.




**Principal
      Products and Pricing Strategy**




Principal
      Products




We
      offer
      a complete line of business casual women’s wear including bottoms, tops and
      outerwear as well as accessories. All apparel is marketed under the OMNIA brands
      through a network of retail stores across China. Our main product line is
“fashionable business casual,” which is suitable for both business and casual
      environments. Fashionable business casual is clothing that can be worn to work
      as well as outside the office environment. In recent years, fashionable business
      casual has gained significant market share in the fashion industry. We also
      have
      a smaller “business casual” product line.




Apparel
      under the OMNIALUO brands is made of high quality materials, and many pieces
      contain intricate and delicate craftwork. The designs are made to accentuate
      a
      woman’s figure while providing a unique cut and stitching to the material which
      provide a slimming look. The majority of materials used are composed of tatting
      and knitwear. Tatting and knitwear are soft fabrics and allows women’s skin to
“breathe” thus providing comfort in addition to style.




OMNIALUO
      brand apparel and our chief designer have consistently won top fashion design
      awards in China since 2002.




With
      respect to accessories, we released our accessories products in the third
      quarter of 2007 and plan to release expanded new accessories products in the
      next several fiscal quarters. Accessories have been identified as an important
      product line for us and we have dedicated research and development efforts
      to
      the creation of accessories. We believe that customers in China are interested
      in purchasing a complete outfit, which includes clothing, accessories, and
      shoes. As such, the availability of accessories coordinated with the clothing
      line, can effectively increase a customer’s total spending.




In
      the
      fourth quarter of 2007, we started designing and developing “Omnialuo
      Collections” to target “golden collar” female professionals in China. The
      garments will be priced from US$250 to US$400. We plan to produce only 100
      to
      200 pieces per style, so as to create a sense of exclusivity. We initially
      introduced “Omnialuo Collections” to the market on a small scale in the fourth
      quarter of 2007, though we expect to fully launch the product line in the third
      quarter of 2008.




Pricing




Our
      design, marketing, and sales divisions are responsible for pricing our products.
      The design, marketing, and sales divisions make internal evaluations of apparel
      based on predicted market acceptance and then accordingly price the items.
      The
      final price also takes into consideration competitive apparel price
      levels.




*Current
      Pricing Strategy*




The
      retail price range of our products is between $40 to $300 per item, with the
      majority of items priced between $60 and $150. In China, this price range is
      considered the middle to upper-middle price range. The CGIR released by CFDA
      in
      2006 forecasts that this middle to upper-middle price range price range will
      be
      the fastest growing segment in the next five years, with an annual growth rate
      over 25%.




4




Our
      full
      retail price of apparel is typically five to six times our actual production
      cost. For example, if a shirt costs $15 in raw materials and manufacturing,
      full
      retail price will be $83, or 5.5 times production cost. However, only “new
      arrival” apparel sells at full retail price. The “new arrival” period usually
      lasts for two months. After such time, various discounts and promotions reduce
      the actual selling price to between 70% to 80% of the full retail price, which
      is equivalent to 3 to 4 times production cost.




In
      China,
      the average selling price for similar apparel after the new arrival period
      is
      60% to 70% of the full retail price. Our average is better than this average,
      as
      we do not discount our products as much as other manufacturers, in part to
      support our image as a premium brand. Our independent distributors do have
      some
      latitude to deviate from our discount policies, but our experience to date
      is
      that we provide greater discounts that our independent
      distributors.




*New
      Pricing Strategy*




Over
      the
      course of the next three years we will be implementing our new pricing strategy
      to increase full retail price to eight to ten times our production cost, and
      increase our average selling price to six to eight times our production cost.
      We
      do not expect the price increase to result in a net reduction in sales as we
      believe that (i) the price increase is in line with industry trends, and (ii)
      our enhanced advertisement campaign will raise brand recognition, thereby
      increasing sales. The current average gross profit margin across all ranges
      of
      our products is 50% and we expect to improve this gross profit margin to 55%
      within the next three years.




**Customers**




In
      China,
      professional women are generally divided into three categories, “white-collar”,
“pink-collar” and “golden-collar” (when accounting for purchasing-power parity,
      lifestyle with a household annual income of $12,500 in China is similar to
      a
      lifestyle of a household earning $40,000 annually in the United States).
      (Source: National Bureau of Statistics of China; McKinsey Global Institute
      Analysis 2006. Both the individual income and household income referred here
      are
      after-tax figures.)




Our
      current target customers are “white-collar” and “pink-collar” urban females
      between the ages of 25 to 35. In the China, “pink-collar” refers to women who
      typically earn $7,500 to $22,500 annually. “White-collar” refers to a group of
      women who typically earn $2,500 to $ 7,500 annually.




Pink-collar
      workers usually work in high-pay industries such as finance, consulting, legal
      service, or assume senior positions in government agencies. Our business casual
      collections as well as our fashionable business casual collection appeal to
      pink-collar women.




White
      collar workers usually work in junior or middle positions in an office
      environment. This includes positions such as secretaries, administrators,
      operators, IT staff, accounting staff and junior salespeople. Usually, there
      is
      no strict dress code for “white-collar” in office. “White-collar” can wear
“relaxed” business style apparel instead of business suits or business casual in
      an office environment. In this sense, our fashionable business casual can be
      worn by “white-collar” females both in and out of the work environment.




“Golden-collar”
      refers to the class with annual income over $22,500. They typically hold
      executive positions in corporations or operate their own businesses.
“Golden-collar” females usually like to wear luxury brands. Our brands will
      eventually target “golden-collar” females as well.




We
      plan
      to extend our target demographics to 35 to 45 year-old females by offering
      premium and mature style of apparel. Our designs in the 2007 spring/summer
      wear
      reflected these new styles. Tapping into the 35 to 45 year-old female market
      is
      also intended to develop a large group of loyal customers as well as increase
      revenues and profits. In China, the wealthiest consumers are the 25 to 45
      year-old group, much younger than the highest earning group (45-54 years old)
      in
      the United States (McKinsey & Company’s proprietary 2004
      personal-financial-services surveys in China). A study by Women’s Wear Daily (In
      the Crosshairs, an article written by Lisa Movius, published in Women’s Wear
      Daily on March 22, 2005) indicated that urban females aged between 25 to 35
      in
      China demonstrate the highest consumption needs in apparel, spending over 20%
      of
      their disposable income on clothing compared to the national average of 8%
      to
      10%. Our strategy of focusing on the 25 to 45 year-old urban female segment
      is
      intended to capitalize on this consumption pattern.




5




***Distribution
      Network and Methods***




Retail
      Stores




Our
      products are sold in the following types of retail stores: (i) Company-owned
      stores, (ii) independent distributor stores, and (iii) Co-owned stores, as
      shown
      in the chart below. We also run special limited-time outlet sales in major
      malls
      to sell excessive inventories at the end of each season. We currently do not
      have franchisees or franchised stores.




The
      table
      below summarizes the characteristics of our major distribution
      channels:


**Sales
                  Channel**
              
              **Sub
                  Channel**
              
              **Location**
              
              **Objective**
              
              **Characteristics**
              
              ***Store
                  Level Net Profit Margin****Company-owned**
              
              Flagship
                  Stores
              
              Major
                  shopping malls in Tier 1 cities
              
              Showcase
                  brand and attract customers and distributors
              
              Capital
                  outlay: High
                Inventory
                  risk: High
                Operating
                  expenses: medium
              
              Medium-low**Stores
                  (26)**
              
              Standard
                  Stores
              
              Key
                  shopping malls in highly competitive Tier 1 & Tier 2
                  cities
              
              Test
                  market to gauge customer interest and increase sales
              
              Capital
                  outlay: High
                Inventory
                  risk: Mediuim
                Operating
                  expenses: Medium
              
              Medium**Independent
                  Distributor Stores (126)**
              
              Independent
                  Distributor Stores
              
              Tier
                  1, Tier 2 & Tier 3 cities
              
              Maximize
                  sales and profit
              
              Capital
                  outlay: Low
                Inventory
                  risk: Low
                Operating
                  expenses: Low
              
              High**Co-owned
                  Stores (32)**
              
              Co-owned
                  Stores
              
              Tier
                  1 & Tier 2 cities
              
              Maximize
                  sales and profit
              
              Capital
                  outlay: Medium
                Inventory
                  risk: High
                Operating
                  expenses: Medium
              
              Medium-high





**
      In
      calculating the store level net profit margin, we take into consideration
      related store expenses billed to us, including decoration, rent, payroll, mall
      management fees, and utilities.*




*(i)*  *Company-Owned
      Stores* **




Company-owned
      stores are retail stores owned 100% by us that sell the OMNIALUO Brand
      exclusively. We manage the daily operations of these stores, and pay all
      operating expenses, including decoration, rent, payroll and utilities. All
      Company stores are located either within shopping malls or in independent stores
      located on the street. We are obligated to share revenues with the shopping
      malls in which our stores are located. In some instances there are minimum
      revenue payments to the landlord, or a threshold before revenue is split, or
      both. On average we must turn over 20% of the profits from each store to the
      shopping mall in which such store is located. Company-owned stores accounted
      for
      14.1% of our total sales in 2007 and are expected to account for approximately
      10% of our total sales in 2008.




6




Due
      to
      the revenue split and high operating cost, our Company-owned stores have the
      lowest profitability among all of our distribution channels. Nonetheless, we
      believe that shopping malls are the best location for our stores as according
      to
      the CGIR, in 2005, shopping malls and department stores represented over 55%
      of
      apparel sales in urban cities in China.




As
      of
      December 31, 2007, we operated 26 Company-owned stores in key shopping malls
      in
      the first-tier and second-tier cities (see below under *“Location
      of Retail Stores - Markets”* ).
      These
      stores are fashionably decorated and offer the most complete product lines.
      These stores serve to showcase and promote the OMNIALUO brands. In addition,
      the
      Company-owned stores are used to monitor market trends and our products’
performance.




There
      are
      two types of Company-owned stores, (1) flagship stores, and (2) standard stores.
      Flagship stores are high-profile stores, located in key shopping malls of the
      first-tier cities, such as Shanghai, Beijing, and Shenzhen, extravagantly
      decorated, displaying a number of luxurious items and offering the complete
      OMNIALUO Brand product line. The cost of opening and operating flagship stores
      is high, thus making them the least profitable among all store types. Standard
      stores, which are well decorated, however, less extravagantly than the flagship
      stores, are operated in major shopping malls of the first-tier and second-tier
      cities.




*(ii)*  *Independent
      Distributor Stores* *.*




Independent
      distributor stores are owned 100% by a third party and sell the OMNIALUO Brand
      exclusively. Our products are sold to independent distributor stores at 35-40%
      of the full retail price. We average approximately a 50-55% net profit margin
      on
      sales to the independent distributors. No items are sold on consignment. The
      independent distributor stores make a 30% down payment upon ordering and pay
      the
      balance before any shipment is sent. Hence, the independent distributor store
      model generates a high profit margin for us, with no upfront investment, minimal
      inventory risk and minimal cash flow shortage.




Independent
      distributor stores are the most important distribution channel for our sales.
      As
      of December 31, 2007, we had 126 independent distributor stores across China.
      The independent distributor stores represented 76.5% of our revenues in 2007,
      and are expected to represent 80% of our revenues in 2008. Our future success
      is
      to a large extent dependent on increasing the number of the independent
      distributor stores. We intend to increase the number of our independent
      distributor stores from a total of 126 as of December 31, 2007, to approximately
      200 by the end of 2008.




For
      each
      of the years ended December 31, 2006 and 2007, no single independent distributor
      represented more than 12% of our total sales for the period.




*(iii)*  *Co-owned
      Stores*




Co-owned
      stores are owned jointly by us and a third party and sell the OMNIALUO Brand
      exclusively. All co-owned stores are located in key shopping malls in first-tier
      and second-tier cities. The co-ownership partner receives 30% of the revenue
      from co-owned stores, after deducting the 20% due to the shopping mall.
      Operating expenses are split evenly between us and the co-ownership partner,
      however 70% of the upfront investment is made by us. We retain full ownership
      of
      the inventory delivered to the co-owned stores. We average approximately a
      40%
      to 50% net profit margin on sales from co-owned stores. Co-owned stores
      accounted for 9.4% of our total sales in 2007, and are expected to account
      for
      10% of our total sales in 2008.




Co-owned
      stores serve as good complements to Company-owned stores and independent
      distributor stores with a relatively high net profit margin of 40%-50%. We
      expect to increase our co-owned stores from 32 as of December 31, 2007, to
      over
      50 by the end of 2008.




*(iv)*  *Outlets
      & Special Sales Promotions* **




Periodically,
      we run outlet sales in major malls to dispose of excessive inventory at the
      end
      of each season. We are also in discussions with a nationwide outlet store chain
      to possibly move excessive inventory through 20 of that chain’s stores in
      outlying areas. We earn a small profit from the outlet channel.




7




Dedicated
      Support for Independent Distributors and Co-ownership Partners




We
      provide assistance to our independent distributors and co-ownership partners.
      By
      helping the independent distributors and co-ownership partners operate
      efficiently and profitably, and rewarding independent distributors and
      co-ownership partners that meet or exceed sales targets, we are able to
      encourage successful distributors and co-ownership partners to open more stores.
      Many of our top ten distributors have multiple independent or co-ownership
      stores.




We
      provide assistance to our independent distributors and co-ownership partners
      in
      the following areas of operations.




(i)  Setting
      up: retail site selection, construction, provision of our retail infrastructure,
      image conformity and organization of the operational systems.




(ii)  Training:
      continuing support on visual display, customer service and store
      administration.




(iv)  Advertisement
      and promotion: coordinating system-wide advertising and promotional activities
      to increase independent distributors’ and co-partners sales and profits. Beyond
      discounts, promotional activities consist of loyalty clubs and members’ only
      events, store and Company anniversary promotions, limited editions, gift items
      and sales promotions coordinated with other suppliers of
      accessories.




(v)  Inventory
      liquidation: helping independent distributors to move excess inventory by
      exchanging inventories among stores and selling through outlets.




(vii)  Financial
      analysis and support: Our finance department can analyze each store’s financial
      situation and recommend specific performance adjustments. It also administers
      incentive systems to reward successful independent distributors and maintain
      the
      highest standards of quality control.




Growth
      Plan for Distribution Channels




We
      plan
      to increase our total store numbers from 184 as of December 31, 2007, to over
      250 by the end of 2008, including approximately 44 Company-owned stores, 200
      independent distributor stores and 50 co-owned stores. We plan to establish
      one
      high-profile flagship store in each of the five geographic regions of China
      (included in the 44 planned Company-owned stores). Our business growth will
      be
      critically dependent on brand enhancement, new product development, and network
      expansion. We believe that network expansion can be achieved quickly and in
      the
      most cost-efficient manner by adding independent distributor stores and co-owned
      stores rather than Company-owned stores.




We
      believe our expansion plan for independent distributor stores and co-owned
      stores is feasible as (i) we have structured our independent distributor stores
      and co-owned stores to require low startup costs, and (ii) we launched
      advertising campaigns and market promotions of OmniaLuo in October 2007 that
      is
      continuing into 2008 to promote the OMNIALUO brands. The advertising features
      Ms. Zheng Luo and the OMNIALUO brands in major fashion magazines in China such
      as Vogue, Harper’s Bazaar and Cosmopolitan. We believe that the increased
      publicity will enhance our brand image and result in increased numbers of
      interest from independent distributors and co-partners.




Franchising




We
      will
      be eligible to enter into franchise arrangements one year after our application
      for a retail license is approved. However, we have no existing plans to enter
      into such arrangements.




8




**Location
      of Retail Stores - Markets**




Market
      Regions




There
      is
      significant regional disparity in China with respect to per capita GDP. China
      is
      divided into five regions, the Eastern, Southern, Western, Northern and Central
      regions. Eastern and Southern China are the richest regions and represent 36%
      of
      China’s population and 56% of China’s GDP.




In
      the
      Eastern and Southern regions, the population had an average per capita GDP
      of
      $2,400, above the national average of $1,000 in 2005 (National Bureau of
      Statistics of China, 2006). In the Northern region, the per capita GDP averaged
      $2,100, in the Central region, the per capita GDP averaged $1,100 and in the
      Western region the per capita GDP averaged $680.




Our
      OMNIALUO Brand apparel has been recognized quite well in the Southern region,
      and also has a certain level of market penetration in the Eastern and Central
      regions. We are currently making efforts to strengthen our foothold in existing
      markets, increase our sales in the Eastern and Southern regions, and develop
      a
      market in the Northern region.




Cities
      in China where Retail Stores are Located




Our
      products are marketed and sold in cities in China that have the highest levels
      of average disposable income. For marketing purposes, we classify cities into
      five groups as follows:




(i)
            First-tier
                cities are cosmopolitan cities located in the center of each of the
                five
                geographic regions. Shanghai and Hangzhou (Eastern China), Shenzhen
                and
                Guangzhou (Southern China), Xi’an, Cheng Du, and Chongqing (Western
                China), Beijing and Shenyang (Northern China), and Wuhan and Changsha
                (Central China) are first-tier cities.




(ii)
            Second-tier
                cities are typically provincial capitals excluding the cities in
                tier one.
                In China, there are approximately 25 second-tier cities.




(iii)
            Third-tier
                cities are major towns outside the provincial capitals. In China,
                there
                are over 265 third-tier cities, of which 50 have populations of over
                1
                million.




(iv)
            Fourth-tier
                cities are small cities distributed in hundreds of small counties.




(v)
            Fifth-tier
                cities are small cities in rural and remote areas.




The
      cities in the first three tiers account for less than 40% of the population
      in
      China but over 70% of the national disposable income.




Our
      products are currently sold in first-, second- and third-tier cities. The tables
      below provide geographical distribution of our sales channels as of December
      31,
      2007.




**Company-Owned
                Stores and Co-Owned Stores****Region**
            
            **City**
            
            **Number
                of Stores**Eastern
                China
            
            Shanghai
            
            4Southern
                China
            
            Shenzhen
            
            16Guangzhou
            
            8Fujian
            
            4Kunming
            
            4Central
                China
            
            Wuhan
            
            8Northern
                China
            
            Shenyang,
                Harbin, Beijing, Jinzhou, ShanDong
            
            14**Total**
            
            
            
            **58**




9


**Independent
                Distributor Stores****Region**
            
            **Number
                of Stores**
            
            **Number
                of Distributors**Eastern
                China
            
            12
            
            11Southern
                China
            
            42
            
            32Central
                China
            
            27
            
            21Western
                China
            
            12
            
            8Northern
                China
            
            33
            
            29**Total**
            
            **126**
            
            **101**


**Product
      Design, Research and Development**




Designers




One
      of
      our main strengths is our artistic design team, led by renowned chief designer
      Ms. Zheng Luo. Our design team consists of 14 designers, many of whom have
      been
      working with Ms. Zheng Luo for several years. Ms. Zheng Luo’s ability to retain
      her design team provides for consistent designs and greater brand loyalty.




Our
      chief
      designer, founder and chief executive officer, Ms. Zheng Luo, is a prominent
      designer in China’s fashion industry. Ms. Zheng Luo and the OMNIALUO brands have
      been featured frequently in various popular fashion magazines such as *Harper’s
      Bazaar* , *L’Official* , *Marie
      Claire* , *Vogue* , *Jessica* and *Cosmopolitan* .
      Ms.
      Zheng Luo has also been interviewed by many leading domestic and international
      media, including China Central Television (“CCTV”), the largest TV network in
      China, Hong Kong Phoenix TV, French Fashion TV, Italian Orbit TV, Vogue UK
      and
      Washington Daily.




Ms.
      Zheng
      Luo’s designs have been worn by several Chinese media celebrities. In 2006, the
      well-known Chinese movie star Ms. Ziyi Zhang, who starred in films such as
      the *Memoirs
      of a Geisha* , *House
      of Flying Daggers* ,
      and *Hero* ,
      wore
      one of her evening dresses while attending a celebrity charity banquet. Ms.
      Luo’s fashion show held in Beijing in November 2006 was attended by, among other
      notable attendees, Ms. Bingbing Fan, and ranked by Forbes as the 7 th most
      famous person in China. Ms Bingbing Fan wore Ms. Zheng Luo’s design to that
      Beijing show.




We
      conduct an active training program for our designers. Each of our designers
      attends on average over 10 training sessions ever year and visits the Hong
      Kong
      SAR and other major cities in China regularly to see the latest fashion trends
      and understand the local tastes. Training sessions take various forms. For
      example, in August 2006, all designers were invited and attended the Fashion
      Master Salon in the Hong Kong SAR hosted by Mr. Weiming Ma, the Vice Chair
      of
      the Hong Kong SAR Fashion Design Association. Also in 2006, Mr. Dazhi Deng,
      a
      well-known Hong Kong SAR fashion designer and Mr. Yutao Wang, a well-known
      Chinese designer, visited us and held a seminar for our designers. In November
      2006, all of our designers were invited and attended China Fashion Week in
      Beijing, the largest event of its kind in the Chinese fashion community.




10




The
      table
      below lists some of the awards Ms. Zheng Luo, her team members and the OMNIALUO
      brand have received.




**Awards
                to Ms. Zheng Luo**2007
            
            One
                of the Top 10 Outstanding Designers, awarded by CFDA2006
            
            Golden
                Peak Award in Beijing’s Fashion Show, awarded by*China
                Fashion Designers Association*(CFDA, the highest authority in China’s fashion industry)
              
              Golden
                Peak is viewed as the most prestigious award in the Chinese fashion
                industry. Each year this award is given by the CFDA to one single
                designer
                in recognition of his/her overall outstanding achievements in the
                fashion
                design industry. Only “The Best Women’s Wear Designer” recipients in the
                preceding years are qualified to be nominated for the Golden Peak
                Award.2005
            
            Lycra
                in Style Designer Award, awarded by*Harper’s
                Bazaar*2005
            
            The
                Best Women’s Wear Designer, awarded by CFDA
              
              This
                award, granted by CFDA, is regarded as second only to the Golden
                Peak
                Award. Ms. Zheng Luo winning the “Best Women’s Wear Designer” award in
                China is comparable to Calvin Klein’s chief designer, Francisco Costa’s
                winning the Women’s Wear Designer of the Year in 2006 in the United
                States.2005
            
            One
                of the Top 10 Young Designers in China, awarded by CFDA2004
            
            The
                Best Women’ Wear Designer, awarded by CFDA2004
            
            The
                Outstanding Designer in Asia, trophy awarded by Moet &
                Chandon2003
            
            The
                NAUTICA Originality Foundation Platinum Prize, awarded by
                Nautica
              
              Ms.
                Zheng Luo, selected from among over 1,000 other Chinese designers,
                won the
                Nautica prize, a prize awarded to the most talented Chinese designer
                in
                2003.2003
            
            Invited
                to Fashion China Seminar held in Paris Louvre Museum.
              
              Ms.
                Zheng Luo, together with five other talented Chinese designers, was
                invited to present a China-focused fashion show at the Louvre Museum.2002
            
            One
                of the Top Ten Fashion Designers in CHINA, awarded by
                CFDA2002
            
            #1
                among Top Ten Designers, awarded by CFDA**Awards
                to the OMNIALUO Brand**2006
            
            China
                Best Women’s Wear Design, awarded by CFDA2005
            
            China
                Best Women’s Wear Design, awarded by CFDA2004
            
            China
                Best Women’s Wear Design, awarded by CFDA2003
            
            China
                Best Women’s Wear Design, awarded by CFDA2002
            
            China
                Best Women’s Wear Design, awarded by CFDA**Awards
                to Other Company Design Professionals**2003
            
            Mr.
                Chao Li was designated the senior fashion designer by
                CFDA2006
            
            Ms.
                Yi Zhou was awarded one of the top ten designers in Guangdong Province
                by
                CFDA




11




Product
      Design Process




New
      collections in the Chinese fashion industry are usually introduced twice each
      year, one collection for Spring/Summer and one collection for Fall/Winter.




In
      order
      to stay on top of the latest fashion trends, starting in late 2006 we began
      introducing new collections at trade shows or fashion shows four times a year.
      Specifically, we now introduce our (i) spring collection in November, (ii)
      summer collection in March, (iii) fall collection in May, and (iv) winter
      collection in August.




We
      typically receive on average 80% of our orders during these trade events. This
      percentage is expected to be lower going forward due to our enhanced marketing
      efforts, as with strengthened marketing efforts more orders are expected to
      be
      obtained from other distributors who do not participate in the trade events.
      We
      completed the implementation of a new information management system for product
      order placements, to enhance our overall business process management, in
      Company-owned and co-owned stores in 2007. We have also selected 20 independent
      distributors for implementation of the system.




Our
      design team currently develops over 1,600 new products per year, but only
      releases about 550 new products after careful selection of what to release
      to
      the market. As we currently have more designers than in 2006, we have focused
      on
      improving the design and quality of the garmets we produce.




The
      design process for each season requires approximately fifty to sixty days from
      conceptualization to finalization, and can be roughly divided into three stages,
      planning, design and sample making. The design process of one season will start
      while that of the preceding season is still in progress.




(i)
            Planning.
                In the planning stage, Ms. Zheng Luo and her design team try to predict
                the upcoming seasons’ fashion trends for Chinese women apparel. The goal
                is to integrate the latest North American fashion trends with the
                Chinese
                woman’s aesthetic sense. The design teams then develop four themes per
                collection. After deciding on the main themes, the design team decides
                how
                many product lines to introduce under each theme. The planning stage
                lasts
                approximately 20 days.




(ii)
            Design.
                In the design stage, our designers collect original fabrics and
                accessories. The designers then prepare drawings for the individual
                items
                in each product line. The design process takes approximately 30 to
                40
                days.




(iii)
            Sample
                Making.
                Sample making is the last stage of the design process where pattern
                making, cutting, sewing, fitting and revision take place and usually
                lasts
                for approximately 2 days.




**Procurement,
      Suppliers, Manufacturing, and Quality Control**




Procurement




We
      have a
      purchasing department currently comprised of five employees. This department
      is
      engaged in all procurement activities, such as specification and sample testing,
      production capability verification, order placement, contract management, and
      price and quantity negotiations. Final pricing for all orders are approved
      by
      both our chief executive officer Ms. Zheng Luo and our vice
      president.




12




We
      do not
      use independent agents in our procurement activities. We believe that our
      in-house personnel are better equipped to focus on our interests, to respond
      to
      our needs and, are more likely to build long-term relationships with key
      vendors. We believe that these relationships will improve our access over the
      long-term to raw materials at favorable prices.




The
      entire process from searching for suppliers to reaching a procurement agreement
      usually takes one week. In most cases, it takes 20 to 30 days to receive the
      purchased raw materials. In case inventory is lower than required, we remedy
      shortfalls by purchasing from the same suppliers to ensure the consistency
      of
      quality. Manufacturers’ delivery dates are generally specified by contract to
      ensure that products will be available in our warehouses when we need them.
      We
      believe we have good relationships with our suppliers and there will be adequate
      sources to enable us to produce sufficient supply of apparel in a timely manner.
      Once we purchase the material, that material are delivered to independent
      manufacturers for further processing and/or decoration.




Suppliers




The
      raw
      materials required by us can be divided into two categories: (i) tatting and
      knitwear and (ii) woolen and leather-made garments. For tatting and knitwear
      made garments, we purchase raw materials which are delivered to independent
      manufacturers for further processing. For woolen and leather-made garments,
      we
      purchase ready-to-wear clothes which require further design work and are also
      delivered to independent manufactures for further processing and decoration.




We
      currently purchase a variety of materials from over fifty vendors. We believe
      that there is a sufficient number of suppliers for such materials in the market.
      Except as described below, no one supplier accounted for more than 5% of our
      total raw material and finished goods purchases in each of 2006 or 2007.




In
      the
      fourth quarter of 2006 and the first quarter of 2007, we could not directly
      contract with any manufacturers or suppliers because the procurement and
      manufacturing cycle commenced before Oriental Fashion, our PRC subsidiary,
      received its business license. As a temporary resolution, Oumeng, on behalf
      of
      Oriental Fashion, signed all procurement and manufacturing agreements with
      raw
      materials suppliers and manufacturers to produce the OMNIALUO Brand apparel.
      Oriental Fashion then purchased finished OMNIALUO Brand apparel from Oumeng.
      Therefore, in the fourth quarter of 2006, Oriental Fashion purchased $821,196
      of
      finished apparel from Oumeng, representing more than 90% of all of our purchases
      during 2006, and in 2007, Oriental Fashion purchased $1,451,699 and $1,185,895
      of finished apparel from Oumeng and Yin Hu Company (Yin Hu),
      respectively.




Outsourced
      Manufacturing




We
      do not
      operate any manufacturing facilities, and we do not currently have any plans
      to
      do so in the near future. Our apparel is produced by independent manufacturers
      that are selected, monitored and coordinated by our quality control department
      to assure conformity to our quality standards. We believe that the use of
      independent manufacturers increases our production flexibility, enables us
      to
      focus on higher margin business, and, at the same time substantially reduces
      capital expenditures and avoids the costs of maintaining a large production
      workforce. We maintain ownership of the raw materials and finished goods while
      such items are at our independent manufacturers.




We
      believe that our long-term, reliable and cooperative relationships with many
      of
      our manufacturers provide a competitive advantage over many of our competitors.
      Our merchandise is produced by approximately 15 independent manufacturers
      located in Guangdong Province, China with close proximity to our headquarters
      in
      Shenzhen, China.




Yin
      Hu, one of our contract manufacturers, currently produces approximately 40%
      of our annual manufactured garments in terms of dollar amount. The remaining
      60%
      of the Company’s products are produced by the other fourteen independent
      manufacturers.




Although
      there are no long-term agreements between us and any of our contractors or
      suppliers, we believe our relationships with our suppliers and contract
      manufacturers are excellent. In addition, we receive preferential treatment
      from
      Yin Hu as the products manufactured by Yin Hu for us usually account for
      over 90% of Yin Hu's production capacity. Further, Yin Hu was 80% owned by
      Ms.
      Zheng Luo, our founder and chief executive officer, until January 2007, at
      which
      time she transferred her entire interest in Yin Hu to unrelated third parties.




13




Quality
      Control




We
      monitor the quality of fabrics ordered and inspect samples of each product
      before production begins. We also perform random quality control checks during
      and after production before the garments leave our manufacturers. Our quality
      control personnel visit all independent manufacturers’ facilities at least three
      times a week. Final inspections occur when the garments are received in our
      warehouse. After that, we distribute finished garments to retail stores
      nation-wide. We employ two full-time quality control personnel, as well as
      additional three inspectors at our warehouse. Our quality control program is
      designed to ensure that our products meet our high quality standards and that
      we
      deliver high quality products to retail stores. As we further expand our stores
      and increase our sales, we plan to hire more quality control
      personnel.




**Information
      Management Systems**




Since
      January 2007, we have been implementing a new information management system.
      This system is intended to enable us to procure raw materials on an economic
      purchase order basis, keep track of raw materials stock on a real time basis
      and
      monitor the production process. This system is intended to improve production
      efficiency and reduce purchasing and storage costs. We have applied the
      distribution function of the new system to our Company-owned stores and some
      of
      our co-owned stores. By implementing the distribution function, we are able
      to
      check our apparel stock in different categories, different sizes and colors
      on a
      real time basis. For example, if one Company-owned store is in need of certain
      inventory, we are able to immediately communicate to the other Company-owned
      store with excess inventory in that category and ensure a prompt redistribution
      of inventory among both stores within one or two days. This new distribution
      function is expected to reduce lost sales arising from inventory shortage in
      particular stores and better allocate resources among different stores across
      different regions. Currently, we are satisfied with the implementation results
      of the new distribution function in the Company-owned stores and our co-owned
      stores. We have started to extend the application of the new system to selected
      independent distributor stores.




**Inventory**




We
      generally receive the bulk of our orders from retail stores in trade or fashion
      shows and usually fulfill these orders within three months. The orders are
      non-cancelable, requiring in the case of orders from independent distributors
      a
      30% down payment upon the order placement, with full payment due before delivery
      of the goods. Once orders are placed, retail stores are allowed to exchange
      10%
      of the merchandise ordered for the first time but no exchanges are allowed
      in
      subsequent orders for the same products.




**Backlog**




On
      December 31, 2007, our backlog of unfilled firm orders for delivery was
      approximately $1.5 million, compared with a backlog of unfilled firm orders
      for
      delivery of approximately $5.0 million as of September 30, 2007, approximately
      $4.5 million as of June 30, 2007 and approximately $1.0 million as of December
      31, 2006. We believe that our backlog at any specific point in time is not
      necessarily indicative of sales and business results in the near
      future.




**Employees**




All
      of
      our employees are employees of our wholly owned PRC operating subsidiary,
      Oriental Fashion. As of December 31, 2007, we had approximately 120 full-time
      employees. We consider our employee relationships to be satisfactory. We plan
      to
      increase the number and level of our skilled executive management executives.




14




**Intellectual
      Property**




The
      Company has two trademarks, Omnialo and OmniaLuo.




*Omnialo* .
      Oriental Fashion has acquired rights of use to the Chinese and English OMNIALO
      trademarks, which were assigned to it for nominal cost by Ms. Zheng Luo, until
      October 6, 2017. The transfer of ownership of the trademarks has been approved
      by the Trademark Office of State Administration for Industry and Commerce (the
      “Trademark Office”). Ms. Zheng Luo has licensed use of these trademarks to
      Oriental Fashion. These trademarks originally expired in September 2007 (for
      the
      Chinese trademark) and October 2007 (for the English trademark), and
      applications to extend their registration until 2013 were filed and were
      approved in September 2007, resulting in new expiration dates of September
      2017
      (for the Chinese trademark) and October 2017 (for the English trademark). Both
      Oumeng and Ms. Zheng Luo have entered into agreements with Oriental Fashion
      agreeing not to use the OMNIALO trademarks in the future.




*Omnialuo* .
      Oriental Fashion has licensed, at nominal cost, rights of use to the Chinese
      and
      English OMNIALUO trademarks, the registration of which Ms. Zheng Luo had
      initially applied for in March 2005. These applications are under review by
      the
      Trademark Office, and approval is now anticipated by the end of 2008. The
      approval process usually takes two to three years, but the trademark can be
      used
      during the application process. Ms. Zheng Luo has agreed to transfer the Chinese
      and English OMNIALUO trademarks to Oriental Fashion at nominal cost once
      registration of the OMNIALUO trademarks is approved by Trademark Office. Both
      Oumeng and Ms. Zheng Luo have entered into agreements with Oriental Fashion
      agreeing not to use the OMNIALUO trademarks in the future.




**Competition**




The
      women’s apparel market is highly fragmented in China. It is estimated by the
      China Garment Industry Report that in 2005, the top ten women’s wear brands,
      including international brands and domestic ones, totaled only 13.36% of the
      total market. The market is extremely sensitive to fashion swings and
      diversified consumer preferences.




Honoring
      commitments in WTO agreements, on December 11, 2004, the Chinese government
      lifted all restrictions imposed on foreign enterprises regarding their entry
      into China. Foreign retailers are allowed to establish wholly owned foreign
      enterprises in China with no restrictions on registered capital. Further,
      foreign retailers are allowed to open stores in any geographic areas in China.
      Therefore, in addition to domestic competition, the Company is subject to
      increasing competition from international brands.




Among
      our
      competitors are well established domestic brands such as Girdear and JNBY,
      and
      well established international brands such as Esprit, Etam, Ochirly and, more
      recently, Zara, H&M, Gap and others, most of which have the same demographic
      focus as us. Many of our domestic competitors, and most or all of our
      international competitors, are significantly larger and have substantially
      greater distribution and marketing capabilities, capital resources and brand
      recognition. We believe we can effectively compete with other brands based
      on
      our attention to Chinese customers’ aesthetic tastes, reflected through our
      design and use of materials, and the role in and commitment to the Company
      of
      our chief designer, founder and principal stockholder, Ms. Zheng
      Luo.




**Growth
      Strategy**




We
      plan
      to grow our sales and net profit margin based on the following
      strategies:




*Selectively
      Expand its Distribution Channels* .
      To take
      advantage of the minimal financial and human capital resources required to
      start
      independent distributor stores and the high profit margins associated with
      them,
      we plan to increase the number of independent distributor stores from 126 as
      of
      December 31, 2007, to over 200 stores by the end of 2008, and to increase
      co-owned stores from 32 as of December 31, 2007, to approximately 43 by the
      end
      of 2008. We plan to achieve this goal by encouraging existing distributors
      and
      co-ownership partners to open more stores and by attracting new independent
      distributors and co-ownership partners. Factors such as rising brand awareness,
      supported by Ms. Zheng Luo’s professional reputation, an intensive brand
      advertisement campaign, enhanced market development programs, expected improved
      independent distributor profitability as a result of implementation of a price
      markup policy, and our continued major support for independent distributors
      and
      co-ownership partners are expected to help us to achieve our goal of over 250
      total sales outlets (independent distributor, co-owned and Company-owned stores
      combined) by the end of 2008.




15




*Develop
      New Merchandise Categories* .
      Accessories have been identified as an important future product line for the
      OMNIALUO Brand. The new expanded accessories product line was released in Q3
      2007. In addition, in the fourth quarter of 2007, we started designing and
      developing “Omnialuo Collections” to target “golden collar” female professionals
      in China. The garmets will be priced from $250 to $400. Initially, our strategy
      is to produce only 100 to 200 limited pieces per style which is intended to
      create a sense of exclusivity while increasing revenues and profits. We
      initially introduced “Omnialuo Collections” to the market on a small scale in
      the fourth quarter of 2007, though we expect to fully launch the product line
      in
      the third quarter of 2008.




*Expand
      its Market Vertically and Horizontally* .
      We aim
      to continue to target the demographics of 25 to 35 aged females and vertically
      extend into the 35 to 45 age group by offering premium and mature styled
      apparel. The 35 to 45 age female group generally has higher brand loyalty and
      purchasing power, and penetrating this age group is intended to develop a large
      group of loyal customers and increase our profits. We will also seek to expand
      our market horizontally by increasing our visibility in northern China by
      offering apparel tailored to the local consumers’ dressing tastes. This is being
      implemented by our designers who have an understanding of local northern China
      preferences. These designs were included in our spring/summer 2007 product
      line
      that was released in December 2006.




**Regulatory
      Matters**




*Franchise
      Regulation* .
      We will
      be eligible to enter into franchise arrangements one year after our application
      for a retail license is approved. However, we have no existing plans to enter
      into such arrangements. Should we enter into such arrangements, we would be
      required to comply with certain legal requirements, including owning at least
      two Company-owned or co-owned stores in China for over one year, having the
      ability to provide long-term training services to the franchisee, having a
      goods
      supply system that is stable and that can guarantee quality, and having a good
      reputation in business operations, and we would be required to submit an
      application to the relevant Chinese authorities.




*Elimination
      of Restrictions on International Competitors in China* .
      Honoring commitments in WTO agreements, on December 11, 2004, the Chinese
      government lifted all restrictions imposed on foreign enterprises regarding
      their entry into the retail market in China. Foreign retailers are allowed
      to
      establish a wholly owned foreign enterprise in China with no restrictions on
      registered capital. Further, foreign retailers are allowed to open any number
      of
      stores in any geographic areas in China. This opens the door for substantial
      competition from a number of larger international apparel retailing brands
      and
      companies. See “Competition” above.




**Industry
      Overview**




*Economy
      in China* .
      According to the China Garment Industry Report, China has sustained over 9%
      GDP
      growth for the last 25 years and is likely to continue at 7% GDP growth in
      the
      next five years. In 2005 China achieved a GDP of $2,314 billion and total
      consumption of $852 billion. The report further revealed that Chinese people,
      in
      general, spend 8% to 10% of their disposable income on purchasing garments
      and
      the garment industry in China in 2005 saw overall sales of $87 billion. The
      report forecasted that the garment industry in China will continue at over
      20%
      annual growth rate for the next 5 years.




*Segments* .
      The
      garment industry in China can be divided into seven major categories, which
      are
      women’s outerwear, men’s outerwear, kids’ outerwear, knitwear,
      underwear/nightwear, accessories, and socks. Women’s outerwear is the biggest
      sector in the Chinese garment industry and accounted for 36% of garment industry
      sales by dollar amount in 2005. In contrast, men’s outerwear only represented
      22% of industry sales in the same period. Underwear/nightwear is also a
      significant sector in garment industry in China.




The
      below
      diagram illustrates the percentage of sales for each garment category in 2005
      in
      China. Overall garment industry sales in China in 2005 were $87 billion (Source:
      Chinese Garment Industry Report, 2005-2006).







16




*Concentration* .
      Rates
      of concentration differ from one garment sector to another. Men’s wear in China
      was the most concentrated sector, with the top 10 sellers (both international
      brands and Chinese domestic ones) occupying 50% of collective sales in men’s
      wear. Kids’ wear follows as the second most concentrated sector, with the top 10
      sellers representing 35% of overall sales of kids’ wear. Women’s wear is the
      most fragmented sector, with then top ten sellers only accounting for 13.36%
      of
      sales. The garment industry is not experiencing a major consolidation. Instead,
      it is undergoing a reshuffling with quality brands, existing or new, taking
      market share from low quality and non-branded products.




*Distribution
      Channels* .
      In
      China, urban dwellers do most of their shopping in shopping malls or department
      stores because they feel brands displayed in big stores are more trustworthy
      with high quality guarantees. CGIR indicated that, in 2005, 55% of garment
      purchases were made in shopping malls or department stores, 23% in specialty
      stores such as franchised stores, 13% in grocery stores, 6% in outlets and
      the
      remaining 3% in other channels.




The
      diagram below illustrated the percentage of Garment Sales in China by
      Distribution Channels in 2005. Overall garment industry sales in 2005 in China
      were $87 billion. (Source: Chinese Garment Industry Report,
      2005-2006.)









*Structural
      Changes* .
      The
      Chinese apparel industry has experienced three stages. Before 1990, apparel
      was
      purchased primarily for functional purpose and people were very price conscious
      when making purchase decisions. From 1990 to 1999, people were shifting their
      attention from being mainly price conscious to being more quality aware; they
      liked to purchase clothes which were comfortable and durable. Since 1999, people
      are increasingly brand aware and more inclined to purchase quality brand
      apparel. This is especially true for young and middle aged urban females who
      like to wear personalized and distinctive brands to appear unique.




17




**Market
      Analysis**




*Market
      Segments* .
      The
      Chinese women’s apparel market can be segmented into different categories by
      price, age, and style as indicated in the following tables.




Segments
      by Garment Price


**Price
                  Category**
              
              **Full
                  Retail Price Range**
              
              **Customer’s
                  Social Status**
              
              **Customers’
                  Annual Income**
              
              **Family’s
                  Social Class**
              
              **Family’s
                  Annual Household Income**Low
                  price
              
              
              <
                  $
                  37
              
              
              Blue-Collar
              
              
              <
                  $1,500
              
              
              Poor
              
              $
              <
                  $3,125Lower-middle
                  price
              
              $
              37-$75
              
              
              Blue-White
                  Collar
              
              $
              1,500-$2,500
              
              
              Lower-Middle
                  Class
              
              $
              3,125-$5,000Middle
                  price
              
              $
              75-$125
              
              
              White-collar
              
              $
              2,500
                  - $7,500
              
              
              Upper-middle
                  Class
              
              $
              5,000-$12,500Upper-middle
                  price
              
              $
              125-$188
              
              
              Pink-collar
              
              $
              7,500-$22,500
              
              
              Mass
                  Affluent
              
              $
              12,500-$25,000High
                  price
              
              $
              188-$375
              
              
              Golden-collar
                  I
              
              $
              22,500-$30,000
              
              
              Global
                  Affluent
              
              $
              25,000-$50,000Luxury
                  price
              
              
              > $375
              
              
              Golden-collar
                  II
              
              
              >$30,000
              
              
              Wealthy
              
              
              >
                  $50,000




*Note:
      all income figures are after tax.*




In
      2005,
      the upper-middle class and mass affluent class accounted for 9.4% and 0.5%
      of
      the total urban population respectively. However, they represent 24.2% and
      2.4%
      of total urban disposable income. With the growing economy in China, Chinese
      urban population is undertaking structural changes. The McKinsey report
      projected that by 2015, the percentage of upper-middle class could grow to
      21.2%
      from 12.6% in 2005 and the mass affluent class could grow to 5.6% from 0.5%
      in
      2005. The report also projected that the two groups collectively would occupy
      44.3% of urban disposable income, compared to 26% in 2005.




Segments
      by Consumer Age Group


**Age
                  Group**
              
              **Age
                  Range**
              
              **%
                  of Total Female**
              
              **Group
                  Size (‘000)**<15
              
              
              Kids
              
              
              18
              %
              
              111,42215-19
              
              
              Teenagers
              
              
              9
              %
              
              52,67619-25
              
              
              Youth
              
              
              7
              %
              
              40,44025-35
              
              
              Young
                  Adults
              
              
              17
              %
              
              103,90335-45
              
              
              Middle-age
                  Adults
              
              
              18
              %
              
              111,122>45
              
              
              Seniors
              
              
              32
              %
              
              196,333




*Source:
      National Bureau of Statistics of China, 2005*




The
      25 to
      45 years’ old female group is the most heavily populated group in China. By the
      end of 2004, this group had a population of 215 million, accounting for 35% of
      the total Chinese female population, which is the wealthiest group in China.
      The
      McKinsey report revealed that in China, the wealthiest consumers are the 25
      to
      45 years’ old group, much younger than the highest earners in the United States
      who are the 45 to 54 years’ old group. Furthermore, 25 to 35 years’ old females
      have the strongest purchasing desire for apparel. It is reported that 25 to
      35
      years’ old females spend over 20% of their disposable income on clothing, while
      average Chinese spend 8% to 10% (In the Crosshairs, an article written by Lisa
      Movius, published in Women’s Wear Daily on March 22, 2005).




18




*Market
      Size* .
      In
      China, women’s outerwear accounts for around 36% of total apparel consumption.
      In shopping malls and department stores, women’s wear occupies 2 to 4 floors,
      while men’s wear can hardly fill one floor. In 2005, the women’s apparel market
      in China was $25 billion. In 2005, branded women’s apparel accounted for 12% of
      all women apparel sales, or $3 billion in dollar terms, which is the market
      we
      are addressing. The size of the market in 2005 is described in the following
      chart.









*Source:
      Chinese Garment Industry Report 2005-2006*




19




*Market
        Growth* .
        China’s
        GDP growth is expected to be 7% in the next five years as China is emerging
        as a
        major economic power. The increasing urbanization rate and a substantial
        (6.1%)
        annual increase in per capita consumption is expected to fuel the growth
        in
        apparel market. The CGIR forecasts that the apparel industry will continue
        at a
        20% growth rate for the next 5 years and the women’s apparel market is expected
        to outpace the overall apparel industry with a growth rate of 24%, 25%, 27%
        and
        28% for 2007, 2008, 2009 and 2010, respectively. As consumption in the Chinese
        apparel industry is undertaking structural changes from quality focus to
        quality
        brand focus, the fastest growth segment will likely to take place in branded
        products like the OMNIALUO brands. The report anticipated a growth rate of
        25%,
        26%, 28% and 29% for 2007, 2008, 2009 and 2010, respectively for quality
        branded
        wear. The following chart summarizes different growth patterns.







*Source:
      Chinese Garment Industry report 2005-2006*




*Target
      Population and Their Income Growth* .
      The
      Company targets white-collar and pink-collar females in China in the
      upper-middle class and mass affluent class. As the economic growth continues,
      growth in both of these classes and their disposable income is expected.









*Source:
      National Bureau of Statistics of China; McKinsey Global Institute
      analysis*




20









*Source:
      National Bureau of Statistics of China; McKinsey Global Institute
      analysis*




The
      official estimate of the size of the Chinese domestic women’s wear market in
      2006 was $25 billion and it is expected to sustain a growth rate of over 20%
      per
      annum for the next five years.




21




**RISK
      FACTORS**




*Investing
      in our securities involves a material degree of risk. Before making an
      investment decision, you should carefully consider the risk factors set forth
      in
      this Annual Report, as well as other information we include in this Annual
      Report. Although every effort has been made to anticipate possible risks,
      unforeseen conditions and unexpected events may arise, and this list may not
      be
      all-inclusive.*




**Risks
      Related to Our Business**




***Our
      business is highly sensitive to economic conditions and consumer spending and
      an
      economic downturn could have a material adverse impact on us.***




The
      retail and apparel industries historically have been subject to substantial
      cyclical variation. A recession in the general economy or a decline in consumer
      spending in the apparel industry could have a material adverse effect on our
      financial performance. Purchases of apparel and related merchandise tend to
      decline during recessionary periods and may decline at other times. There can
      be
      no assurance that a prolonged economic downturn would not have a material
      adverse impact on us or that our customers could continue to make purchases
      during a recession.




***We
      are highly dependent on our chief executive officer, founder and principal
      stockholder and other key personnel and if we lose other key management or
      other
      personnel, our business will suffer.***




Our
      future success will depend in part on the continued service of certain key
      management and other personnel, particularly Ms. Zheng Luo, our president and
      chief executive officer and chief designer, who is also closely associated
      with
      our brand names. Although Ms. Zheng Luo is our principal shareholder, has
      escrowed a percentage of her shares under a “make-whole” provision related to
      future 2008 net income, and has entered into non-competition agreements with
      us
      and our Chinese operating subsidiary, none of these factors and arrangements
      ensure the continued availability of Ms. Zheng Luo’s services to us. We intend
      to obtain key-person life insurance with respect to Ms. Zheng Luo in the near
      future, but such insurance will only cover certain risks relating to our
      dependency on Ms. Zheng Luo, and the amount of such insurance may not be
      adequate to compensate for any loss of Ms. Zheng Luo’s services.




In
      addition, success will also depend on our ability to attract and retain
      qualified managers, design, sales and marketing personnel. Competition for
      these
      employees is intense. There is no assurance that we can retain our existing
      key
      personnel or attract and retain sufficient numbers of qualified employees in
      the
      future. The loss of key employees or the inability to hire or retain qualified
      personnel in the future would have a material adverse effect on the development
      of our business and our ability to develop, market and sell our products.




***If
      we are unable to anticipate fashion trends in a timely manner and respond to
      such trends, our reputation could be harmed and profitability could decrease.***




The
      women’s apparel industry has many characteristics including changing consumer
      preferences and shifting fashion trends. We believe that our success depends
      in
      substantial part on our ability to anticipate emerging fashion trends and design
      and customize our products to meet new trends and changing consumer demands
      in a
      timely manner. There can be no assurance that we will continue to be successful
      in this regard. Our failure to anticipate and respond to these changes could
      result in lower sales, excess inventories and lower margins, which would have
      a
      material adverse effect on our operations, business and financial condition.




***Our
      business is likely to be seasonal and if we fall significantly short of our
      anticipated earnings in one or more quarters, it will significantly decrease
      the
      working capital available to us in the following quarters, which may adversely
      affect our purchasing abilities.***




Our
      business is likely to be seasonal, with the highest proportion of sales and
      operating income likely being generated in the fourth quarter of each year,
      lesser proportions in the second and third quarter of each year, and the lowest
      proportion of sales and operating income being generated in the first quarter
      of
      each year. Our working capital requirements are likely to fluctuate during
      the
      year, increasing substantially during one or more quarters as a result of higher
      planned seasonal inventory levels and higher receivables. If we fall
      significantly short of our anticipated earnings in one or more quarters, it
      will
      significantly decrease the working capital available to us in the following
      quarters. Due to limitations on borrowing levels, a decrease in working capital
      may adversely affect our purchasing abilities which would have a material
      adverse effect on our revenues.




22




***Product
      branding is important to us and if our brands are misappropriated our reputation
      could be harmed, which could result in lower sales having a negative impact
      on
      our financial results.***




We
      rely
      upon a combination of trademark, licensing and contractual covenants to
      establish and protect the brand names of our products. We have registered one
      of
      our trademarks and applied for registration of a second of our trademarks in
      the
      Trademark Office of China. In our market segments, our reputation is closely
      related to our brand names. Monitoring unauthorized use of our brand names
      is
      difficult, and we cannot be certain that the steps we have taken will prevent
      their unauthorized use, particularly in foreign countries. Our brand names
      may
      be misappropriated or utilized without our consent and such actions may have
      a
      material adverse effect on our reputation and on the results of our operations.




The
      legal
      regime in China for the protection of intellectual property rights is still
      at
      its early stage of development. Intellectual property protection became an
      effort in China in 1979 when China began the registration of trademarks
      nationwide, and also adopted the Criminal Law on the protection of trademarks.
      Since then, China has adopted its Patent Law, Trademark Law and Copyright Law
      and promulgated related regulations such as Regulation on Computer Software
      Protection, Regulation on the Protection of Layout Designs of Integrated
      Circuits and Regulation on Internet Domain Names. China has also acceded to
      various international treaties and conventions in this area, such as the Paris
      Convention for the Protection of Industrial Property, Patent Cooperation Treaty,
      Madrid Agreement and its Protocol Concerning the International Registration
      of
      Marks. In addition, when China became a party to the World Trade Organization
      in
      2001, China amended many of its laws and regulations to comply with the
      Agreement on Trade-Related Aspects of Intellectual Property Rights. Despite
      many
      laws and regulations promulgated and other efforts made by China over the years
      with a view to tightening up its regulation and protection of intellectual
      property rights, private parties may not enjoy intellectual property rights
      in
      China to the same extent as they would in many Western countries, including
      the
      United States, and enforcement of such laws and regulations in China have not
      achieved the levels reached in those countries. Both the administrative agencies
      and the court system in China are not well-equipped to deal with violations
      or
      handle the nuances and complexities between compliant innovation and
      non-compliant infringement.




***Many
      of our competitors have substantially greater capabilities and resources and
      may
      be able to market products more effectively, which would limit our ability
      to
      generate revenue and cash flow.***




Competition
      in the women’s apparel industry is intense and we face increasing domestic and
      international competition from several companies. Many of our competitors are
      significantly larger and have substantially greater distribution and marketing
      capabilities, capital resources and brand recognition. There is no assurance
      that we will be able to compete successfully against present or future
      competitors. Such failure to compete would have a material adverse effect on
      our
      business and results of operations.




***We
      are uncertain as to our ability to effectively implement and manage our growth
      strategy.***




As
      part
      of our growth strategy, we seek to expand our distribution network and introduce
      new product lines like Omnia Collections and accessories. The success of our
      growth strategy will depend on brand management, competitive conditions, our
      ability to manage increased sales and distribution and, in the future, franchise
      store expansion, the availability of desirable locations and the negotiation
      of
      terms with distributor and franchise stores. There is no assurance that we
      will
      be able to obtain terms as favorable to us as those under which we now operate
      or that such terms will not adversely affect our ability to manage inventory
      risk. There is also no assurance that our growth strategy will be successful
      or
      that our sales or net income will increase as a result of the implementation
      of
      such strategy.




23




***Our
      management and internal systems might be inadequate to handle our potential
      growth.***




Successful
      implementation of our business strategy will require us to develop our
      operations and effectively manage growth. Any growth will place a significant
      strain on our systems and management, financial, product design, marketing,
      distribution and other resources, which would cause us to face operational
      difficulties. To manage future growth, our management must build operational
      and
      financial systems and expand, train, retain and manage our employee base. For
      instance, we will need to enhance our information systems and operations and
      attract and retain qualified personnel. Our management may not be able to manage
      our growth effectively if our systems, procedures, controls and resources are
      inadequate to support operations. In such case, our expansion would be halted
      or
      delayed and we may lose our opportunity to gain significant market share or
      the
      timing advantage with which we would otherwise gain significant market share.
      Any inability to manage growth effectively may harm our ability to implement
      and
      execute out current or any subsequent business plans.




***If
      we are unable to effectively implement our new information management system
      and
      data networks, our ability to mange our inventory would be
      disrupted.***




We
      are
      implementing a new information management system and data networks. The system
      has been fully operational in Company-owned stores and co-owned stores since
      the
      end of 2007, and we have selected 20 independent distributor stores for
      implementation of the system by the end of the first quarter of 2008. Delays
      or
      other difficulties in implementing this system could disrupt our ability to
      manage our inventory effectively. In addition, we plan to establish five
      regional centers to better monitor each region’s market dynamics, facilitate
      traffic flows, ensure rapid response and provide partner support and
      supervision. There is no assurance that this expansion will be completed on
      time
      or that it will be successful. Any failure to manage growth effectively could
      have a material adverse effect on our results of operations and financial
      condition.




***We
      depend on others to manufacture our products and any disruption in manufacturing
      could have a material adverse effect on our business.***




Our
      products are manufactured by approximately 15 independent manufacturers. We
      do
      not operate any production facilities. One manufacturer engaged by us, Yin
      Hu
      Company (“Yin Hu”), formerly a related party to us but unaffiliated with us
      since early 2007, accounted for approximately 46% (by dollar volume) of our
      total production for 2007 product sales. The inability of a manufacturer to
      ship
      orders of our products in a timely manner or to meet our quality standards
      could
      cause us to miss our customers’ delivery requirements for those items. As a
      result, cancellation of orders, refusal to accept deliveries or a reduction
      in
      purchase prices could have a material adverse effect on us.




We
      enter
      into purchase order commitments each season specifying a time frame for
      delivery, method of payment, design and quality specifications and other
      standard industry provisions. We do not have long-term contracts with any
      manufacturer. In addition, we compete with other companies for the production
      capacity of independent manufacturers and import quota capacity. Some of these
      competing companies have substantially greater brand recognition, financials,
      and other resources than we do and thus may have an advantage in the competition
      for production and import quota capacities. Although Yin Hu has recently
      committed 90% of its capacities to the production of OMNIALUO brand products,
      none of our manufacturers produces our products exclusively.




We
      require our independent manufacturers to operate in compliance with applicable
      laws and regulations. While we do not control our manufacturers or their labor
      practices, our internal and vendor operating guidelines promote compliance
      with
      laws and our sourcing personnel periodically visits and monitors the operations
      of our independent manufacturers. The violation of labor or other laws by one
      of
      our independent manufacturers, or the divergence of an independent
      manufacturer’s labor practices from those generally accepted as ethical, could
      result in adverse publicity for us and could have a material adverse effect
      on
      us.




***We
      may be unable to effectively manage our inventory.***




We
      place
      orders for our products with our manufacturers prior to the time we have
      received all of our customers’ orders and maintain an inventory of certain
      products that we anticipate will be in greater demand. There is no assurance,
      however, that we will be able to sell the products we have ordered from
      manufacturers or our existing inventory at a profit or at all. Inventory levels
      in excess of customer demand may result in inventory write-downs and the sale
      of
      excess inventory at discounted prices, which would have a material adverse
      effect on us and our results of operations.




24




***We
      depend to some extent on a high volume of mall traffic and the availability
      of
      suitable lease space.***




Many
      of
      our stores are located in shopping malls. Sales at these stores are derived,
      in
      part, from the volume of traffic in those malls. Our stores benefit from the
      ability of the mall’s “anchor” tenants, generally large department stores, and
      other area attractions to generate consumer traffic in the vicinity of our
      stores and the continuing popularity of malls as shopping destinations. Sales
      volume and mall traffic may be adversely affected by economic downturns in
      a
      particular area, competition from non-mall retailers and other malls where
      we do
      not have stores and the closing of anchor department stores. In addition, a
      decline in the desirability of the shopping environment in a particular mall,
      or
      a decline in the popularity of mall shopping among our target consumers, would
      adversely affect our business.




Part
      of
      our future growth is significantly dependent on our ability to operate stores
      in
      desirable locations with capital investment and lease costs that allow us to
      earn a reasonable return. We cannot be sure as to when or whether such desirable
      locations will become available at reasonable costs.




***We
      cannot be certain that we will be able to execute our plan to open additional
      stores or that such store openings will be successful.***




Successful
      implementation of our company’s growth strategy depends on a number of factors
      including, but not limited to, obtaining desirable store locations, negotiating
      acceptable leases, completing projects on budget, supplying proper levels of
      merchandise and the hiring and training of store managers and sales associates.
      The new stores may place increased demands on our company’s operational,
      managerial and administrative resources, which could cause our company to
      operate less effectively. Furthermore, there is a possibility that new stores
      that are opened in existing markets may have an adverse effect on future sales
      of previously existing stores in such markets. In addition, our failure to
      predict accurately the demographic or retail environment at any future store
      location could have a material adverse effect on our business, financial
      condition and results of operations.




***Our
      expansion into new markets could adversely affect our financial condition and
      results of operations.***




Some
      of
      our new stores will be opened in areas of China in which we currently have
      few
      or no stores. The expansion into new markets may present competitive,
      merchandising and administrative challenges that are different from those
      currently encountered in our existing markets. Any of these challenges could
      adversely affect our business, financial condition and results of operations.
      To
      the extent our new store openings are in existing markets, we may experience
      reduced net sales volumes in existing stores in those markets.




***We
      depend upon the success of our advertising and marketing programs.***




Our
      business depends on high customer traffic in our stores and effective marketing.
      We have many initiatives in this area, and we frequently change our advertising
      and marketing programs. There can be no assurance as to our continued ability
      to
      effectively execute our advertising and marketing programs, and any failure
      to
      do so could have a material adverse effect on our business and results of
      operations.




***We
      may face labor shortages or increased labor costs which could adversely affect
      our growth and operating results.***




Labor
      is
      a significant component in the cost of operating our stores. If we face labor
      shortages or increased labor costs because of increased competition for
      employees, higher employee turnover rates, increases in wages or increases
      in
      other employee benefits costs, our operating expenses could increase and our
      growth could be adversely affected. Our success depends in part upon our ability
      to attract, motivate and retain a sufficient number of qualified employees.




25




***We
      rely on third parties to distribute our merchandise. If these third parties
      do
      not adequately perform this function, our business would be
      disrupted.***




The
      efficient operation of our business depends on our ability to ship merchandise
      through third-party carriers directly to our stores. Due to our reliance on
      these parties for our shipments, interruptions in the ability of our vendors
      to
      ship our merchandise or the ability of carriers to fulfill the distribution
      of
      merchandise to our stores could adversely affect our business, financial
      condition and results of operations. The increase in fuel prices may also
      increase our shipping costs, which could adversely affect our business,
      financial condition and results of operations.




**Risks
      Related to Doing Business in China**




***Changes
      in China’s political or economic situation could harm us and our operational
      results.***




We
      conduct substantially all of our operations and generate all of our revenues
      in
      China. Accordingly, our business, financial condition, results of operations
      and
      prospects are affected significantly by economic, political and legal
      developments in China. Economic reforms adopted by the Chinese government have
      had a positive effect on the economic development of the country, but the
      government could change these economic reforms or any of the legal systems
      at
      any time. This could either benefit or damage our operations and profitability.
      Some of the things that could have this effect are:




·
            Level
                of government involvement in the
                economy;


·
            Control
                of foreign exchange;


·
            Methods
                of allocating resources;


·
            Changes
                in the development, or rate of development, of the market-oriented
                sector
                of the economy;


·
            Changes
                in the rapid growth rate of the overall
                economy;


·
            Balance
                of payments position;


·
            International
                trade restrictions; and


·
            International
                conflict.




The
      Chinese economy differs from the economies of most countries belonging to the
      Organization for Economic Cooperation and Development, or OECD, in many ways.
      As
      a result of these differences, we may not develop in the same way or at the
      same
      rate as might be expected if the Chinese economy were similar to those of the
      OECD member countries.




***Our
      business is largely subject to the uncertain legal environment in China and
      our
      investors’ legal protection could be limited.***




The
      Chinese legal system is a civil law system based on written statutes. Unlike
      common law systems, it is a system in which precedents set in earlier legal
      cases are not generally used. The overall effect of legislation enacted over
      the
      past 20 years has been to enhance the protections afforded to foreign invested
      enterprises in China. However, these laws, regulations and legal requirements
      are relatively recent and are evolving rapidly, and their interpretation and
      enforcement involve uncertainties. These uncertainties could limit the legal
      protections available to foreign investors, such as the right of foreign
      invested enterprises (of which we are one) to hold licenses and permits such
      as
      requisite business licenses. In addition, all of our executive officers and
      all
      of our directors are residents of China and not of the U.S., and substantially
      all the assets of these persons are located outside the U.S. As a result, it
      could be difficult for investors to effect service of process in the U.S.,
      or to
      enforce a judgment obtained in the U.S. against us or any of these
      persons.




***The
      Chinese government exerts substantial influence over the manner in which we
      must
      conduct our business activities.***




China
      only recently has permitted provincial and local economic autonomy and private
      economic activities. The Chinese government has exercised and continues to
      exercise substantial control over virtually every sector of the Chinese economy
      through regulation and state ownership. Our ability to operate in China may
      be
      harmed by changes in its laws and regulations, including those relating to
      taxation, import and export tariffs, environmental regulations, land use rights,
      property and other matters. We believe that our operations in China are in
      material compliance with all applicable legal and regulatory requirements.
      However, the central or local governments of these jurisdictions may impose
      new,
      stricter regulations or interpretations of existing regulations that would
      require additional expenditures and efforts on our part to ensure our compliance
      with such regulations or interpretations.




26




Accordingly,
      government actions in the future, including any decision not to continue to
      support recent economic reforms and to return to a more centrally planned
      economy or regional or local variations in the implementation of economic
      policies, could have a significant effect on economic conditions in China or
      particular regions thereof, and could require us to divest ourselves of any
      interest we then hold in Chinese properties or joint ventures.




***Future
      inflation in China may inhibit our ability to conduct business profitably in
      China.***




In
      recent
      years, the Chinese economy has experienced periods of rapid expansion and high
      rates of inflation. During the past ten years, the rate of inflation in China
      has been as high as 20.7% and as low as -2.2%. These factors have led to the
      adoption by the Chinese government, from time to time, of various corrective
      measures designed to restrict the availability of credit or regulate growth
      and
      contain inflation. High inflation may in the future cause the Chinese government
      to impose controls on credit and/or prices, or to take other action, which
      could
      inhibit economic activity in China, and thereby harm the market for our
      products.




***Any
      recurrence of severe acute respiratory syndrome, or SARS, or another widespread
      public health problem, could harm our operations.***




A
      renewed
      outbreak of SARS or another widespread public health problem in China, where
      our
      operations are conducted, could have a negative effect on our operations. Our
      operations may be impacted by a number of health-related factors, including
      the
      following:




·
            quarantines
                or closures of some of our offices which would severely disrupt our
                operations,




·
            the
                sickness or death of our key officers and employees,
                and




·
            a
                general slowdown in the Chinese
                economy.




Any
      of
      the foregoing events or other unforeseen consequences of public health problems
      could damage our operations.




***Restrictions
      on currency exchange may limit our ability to receive and use our revenues
      effectively.***




The
      majority of our revenues are and will be settled in RMB and U.S. Dollars, and
      any future restrictions on currency exchanges may limit our ability to use
      revenue generated in RMB to fund any future business activities outside China
      or
      to make dividend or other payments in U.S. dollars. Although the Chinese
      government introduced regulations in 1996 to allow greater convertibility of
      the
      RMB for current account transactions, significant restrictions still remain,
      including primarily the restriction that foreign-invested enterprises may only
      buy, sell or remit foreign currencies after providing valid commercial
      documents, at those banks in China authorized to conduct foreign exchange
      business. In addition, conversion of RMB for capital account items, including
      direct investment and loans, is subject to governmental approval in China,
      and
      companies are required to open and maintain separate foreign exchange accounts
      for capital account items. We cannot be certain that the Chinese regulatory
      authorities will not impose more stringent restrictions on the convertibility
      of
      the RMB.




***Failure
      to comply with PRC regulations relating to the establishment of offshore special
      purpose companies by PRC residents may subject our PRC resident stockholders
      to
      personal liability, limit our ability to acquire PRC companies or to inject
      capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to
      distribute profits to us or otherwise materially adversely affect us.***




In
      October 2005, the PRC State Administration of Foreign Exchange, or SAFE, issued
      the Notice on Relevant Issues in the Foreign Exchange Control over Financing
      and
      Return Investment Through Special Purpose Companies by Residents Inside China,
      generally referred to as Circular 75, which required PRC residents to register
      with the competent local SAFE branch before establishing or acquiring control
      over an offshore special purpose company, or SPV, for the purpose of engaging
      in
      an equity financing outside of China on the strength of domestic PRC assets
      originally held by those residents. Amendments to registrations made under
      Circular 75 are required in connection with any increase or decrease of capital,
      transfer of shares, mergers and acquisitions, equity investment or creation
      of
      any security interest in any assets located in China to guarantee offshore
      obligations. In the case of an SPV which was established, and which acquired
      a
      related domestic company or assets, before the implementation date of Circular
      75, a retroactive SAFE registration was required to have been completed before
      March 31, 2006. Failure to comply with the requirements of Circular 75, as
      applied by SAFE, may result in fines and other penalties under PRC laws for
      evasion of applicable foreign exchange restrictions. Any such failure could
      also
      result in the SPV’s affiliates being impeded or prevented from distributing
      their profits and the proceeds from any reduction in capital, share transfer
      or
      liquidation to the SPV, or from engaging in other transfers of funds into or
      out
      of China.




27




We
      believe our stockholders who are PRC residents as defined in Circular 75 have
      registered with the relevant branch of SAFE, as currently required, in
      connection with their equity interests in us and our acquisitions of equity
      interests in our PRC subsidiary. However, we cannot provide any assurances
      that
      their existing registrations have fully complied with, and they have made all
      necessary amendments to their registration to fully comply with, all applicable
      registrations or approvals required by Circular 75. Moreover, because of
      uncertainty over how Circular 75 will be interpreted and implemented, and how
      or
      whether SAFE will apply it to us, we cannot predict how it will affect our
      business operations or future strategies. For example, our present and
      prospective PRC subsidiaries’ ability to conduct foreign exchange activities,
      such as the remittance of dividends and foreign currency-denominated borrowings,
      may be subject to compliance with Circular 75 by our PRC resident beneficial
      holders. In addition, such PRC residents may not always be able to complete
      the
      necessary registration procedures required by Circular 75. We also have little
      control over either our present or prospective direct or indirect stockholders
      or the outcome of such registration procedures. A failure by our PRC resident
      beneficial holders or future PRC resident stockholders to comply with Circular
      75, if SAFE requires it, could subject these PRC resident beneficial holders
      to
      fines or legal sanctions, restrict our overseas or cross-border investment
      activities, limit our subsidiaries’ ability to make distributions or pay
      dividends or affect our ownership structure, which could adversely affect our
      business and prospects.




***If
      the China Securities Regulatory Commission, or CSRC, or another PRC regulatory
      agency, determines that CSRC approval was required in connection with our recent
      private placement, we may become subject to
      penalties.***




On
      August
      8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the
      Regulation on Mergers and Acquisitions of Domestic Companies by Foreign
      Investors, which became effective on September 8, 2006. This new regulation,
      among other things, has certain provisions that require SPVs formed for the
      purpose of acquiring PRC domestic companies and controlled by PRC individuals,
      to obtain the approval of the CSRC prior to publicly listing their securities
      on
      an overseas stock market. In our case, the formation in September 2006 by Omnia
      BVI of Oriental Fashion, and Oriental Fashion's subsequent, limited acquisition
      of discrete assets from Oumeng, should not be seen as an acquisition of a PRC
      domestic company as contemplated by the new regulation and we therefore have
      not
      applied to the CSRC for approval under this regulation. Nonetheless, if the
      CSRC
      or another PRC regulatory agency subsequently determines that the CSRC’s
      approval was required for our recent private placement or quotation on OTCBB,
      we
      may face sanctions by the CSRC or another PRC regulatory agency. If this
      happens, these regulatory agencies may impose fines and penalties on our
      operations in the PRC, limit our operating privileges in the PRC, delay or
      restrict the repatriation of the proceeds from that private placement into
      the
      PRC, restrict or prohibit payment or remittance of dividends to us or take
      other
      actions that could have a material adverse effect on our business, financial
      condition, results of operations, reputation and prospects, as well as the
      trading price of our shares.




***Recent
      Chinese merger and acquisition regulations may limit our ability as to acquire
      assets and equity interests of Chinese companies, which could hinder our ability
      to expand in China and adversely affect our long-term
      profitability.***




The
      new
      regulations which became effective on September 8, 2006 cover all acquisitions
      of assets and equity interests of Chinese companies by foreign investors,
      including overseas companies under the de facto control of Chinese persons
      or
      entities. Depending on the structure of the transaction, these regulations
      will
      require the target Chinese companies to make a series of applications to the
      aforementioned agencies, some of which must be made within strict time limits
      and depend on approvals from one or the other of the aforementioned agencies.
      If
      obtained, approvals will have expiration dates by which a transaction must
      be
      completed. It is expected that compliance with the regulations will be more
      time
      consuming than in the past, will be more costly and will permit the government
      much more extensive scrutiny and control over the terms of the transaction.
      Therefore acquisitions in China may not be able to be completed because the
      terms of the transaction may not satisfy aspects of the approval process and
      may
      not be completed, even if approved, if they are not consummated within the
      time
      permitted by the approvals granted. This may restrict our ability to implement
      any acquisition we may decide to pursue and adversely affect our business and
      prospects.




28




***New
      corporate income tax law could adversely affect our business and our net
      income.***




On
      March
      16, 2007, the National People's Congress passed a new corporate income tax
      law,
      which became effective on January 1, 2008. This new corporate income tax unifies
      the corporate income tax rate, cost deductions and tax incentive policies for
      both domestic and foreign-invested enterprises in China. According to the new
      corporate income tax law, the applicable corporate income tax rate of Oriental
      Fashion and any future other Chinese subsidiaries will incrementally increase
      to
      25% over a five-year period. According
      to the Circular on the Implementation of Preferential Policies concerning the
      EIT Transition issued by the State Council on December 26, 2007, the enterprise
      income tax rate for companies established in Shenzhen shall be 18% in 2008,
      20%
      in 2009, 22% in 2010, 24% in 2011 and 25% from 2012 onwards After
      the
      rules are enacted, we can better assess what the impact of the new unified
      tax
      law would be over this period. The discontinuation of any special or
      preferential tax treatment or other incentives could adversely affect our
      business and our net income.




***The
      value of our securities will be affected by the foreign exchange rate between
      U.S. dollars and RMB.***




The
      value
      of our common stock will be affected by the foreign exchange rate between U.S.
      dollars and RMB, and between those currencies and other currencies in which
      our
      sales may be denominated. For example, to the extent that we need to convert
      U.S. dollars into RMB for our operational needs and should the RMB appreciate
      against the U.S. dollar at that time, our financial position, the business
      of
      the company, and the price of our common stock may be harmed. Conversely, if
      we
      decide to convert our RMB into U.S. dollars for the purpose of declaring
      dividends on our common stock or for other business purposes and the U.S. dollar
      appreciates against the RMB, the U.S. dollar equivalent of our earnings from
      our
      subsidiaries in China would be reduced.




**Risks
      Related to Our Common Stock**




***The
      current market price of the common stock may not be indicative of future market
      prices.***




We
      anticipate that the market price of our shares will fluctuate significantly
      in
      response to numerous factors, many of which are beyond our control, including,
      without limitation:




·
            the
                announcement of new products or product enhancements by our
                competitors;


·
            quarterly
                variations in our and our competitors’ results of operations;


·
            changes
                in financial estimates or recommendations by securities
                analysts;


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


·
            expiration
                of lock-up agreements;


·
            general
                market conditions and other factors, including factors wholly unrelated
                to
                our own operations or performance.




***There
      is not now nor may there ever be an active liquid market for our common
      stock.***




We
      are
      providing no assurances of any kind or nature whatsoever that an active liquid
      market for our common stock will ever develop, on the OTCBB or elsewhere.
      Investors should understand that there may be no alternative exit strategy
      for
      them to recover or liquidate their investments in our common stock. Accordingly,
      investors must be prepared to bear the entire economic risk of an investment
      in
      the common stock for an indefinite period of time. If our revenues do not grow
      or grow more slowly than we anticipate, if operating or capital expenditures
      exceed our expectations and cannot be adjusted accordingly or if some other
      event adversely affects us, the market price of our common stock will
      decline.




29




***We
      are subject to the reporting requirements of the United States securities laws,
      which will require expenditure of capital and other
      resources.***




We
      are a
      public reporting company subject to the information and reporting requirements
      of the Securities Exchange Act of 1934 and other federal securities laws,
      including, without limitation, compliance with the Sarbanes-Oxley Act
      (“Sarbanes”). The costs of preparing and filing annual and quarterly reports,
      proxy statements and other information with the SEC and furnishing audited
      reports to stockholders will cause our expenses to be substantially higher
      than
      they would otherwise be if we were privately-held. It will be difficult, costly,
      and time-consuming for us to develop and implement internal controls and
      reporting procedures required by Sarbanes, and we will require additional staff
      and third-party assistance to develop and implement appropriate internal
      controls and procedures. If we fail to or are unable to comply with Sarbanes,
      we
      will not be able to obtain independent accountant certifications that the
      Sarbanes requires publicly-traded companies to obtain.




***Investor
      confidence and market price of our shares may be adversely impacted if we or
      our
      independent registered public accountants are unable to attest to the operating
      effectiveness of our internal controls as of December 31, 2007, as required
      by
      Section 404 of the U.S. Sarbanes-Oxley Act of 2002.***




The
      SEC,
      as directed by Section 404 of Sarbanes, adopted rules requiring public
      companies, including us, to include a report of management of their internal
      control structure and procedures for financial reporting in their annual reports
      on Form 10-K that contains an assessment by management of the effectiveness
      of
      their internal controls over financial reporting. We
      are
      subject to this requirement commencing with our fiscal year ended December
      31,
      2007 and a report of our management is included in this Annual Report on Form
      10-KSB. In
      addition, independent registered public accountants of these public companies
      must attest to and report on the operating effectiveness of their internal
      controls. However,
      this annual report does not include an attestation report because under current
      law, we will not be subject to these requirements until our annual report for
      the fiscal year ending December 31, 2008. Our
      management may conclude that our internal controls over financial reporting
      are
      not effective. Moreover, even if our management concludes otherwise, if our
      independent registered public accountants are not satisfied with our internal
      control structure and procedures, the level at which our internal controls
      are
      documented, designed, operated or reviewed, or if the independent registered
      public accountants interpret the requirements, rules or regulations differently
      from us, they may decline to attest to our management’s assessment or may issue
      a report that is qualified. Any of these possible outcomes could result in
      an
      adverse reaction in the financial marketplace due to a loss of investor
      confidence in the reliability of our financial statements, which could
      negatively impact the market price of our shares.




***We
      may not be able to attract the attention of major brokerage firms or securities
      analysts.***




Security
      analysts and major brokerage houses may not provide coverage of us, given that
      our OTC Bulletin Board status provides little or no incentive to recommend
      the
      purchase of our common stock. We may also not be able to attract any brokerage
      houses to conduct secondary offerings with respect to our
      securities.




***We
      are making no representations and are providing no assurances that our common
      stock will become listed on NASDAQ, the American Stock Exchange or any other
      securities exchange.***




We
      anticipate that we may seek to list our common stock on NASDAQ or the American
      Stock Exchange. We are making no representations nor providing any assurances
      that we will be able to meet the initial listing standards of either of those
      or
      any other stock exchange. Therefore, investors may find it difficult to dispose
      of shares or to obtain accurate quotations as to the market value of the common
      stock. In addition, we will be subject to an SEC rule (Rule 15c2-11) that
      imposes various requirements on broker-dealers who sell securities governed
      by
      the rule to persons other than established customers and accredited investors.
      The requirement that broker-dealers comply with this rule will deter
      broker-dealers from recommending or selling our Company’s common stock, thus
      further adversely affecting the liquidity and share price of the common stock,
      as well as our ability to raise additional capital.




30




***We
      have never paid dividends and have no plans to pay dividends at any time in
      the
      near or distant future.***




We
      have
      never paid dividends on our capital stock, and we do not anticipate paying
      any
      dividends for the foreseeable or distant future. Our present business plan
      does
      not include, for the foreseeable future and beyond, any payments of dividends
      to
      stockholders. Stockholders’ sole strategy for any return on their investments
      must therefore be the potential for the increase in the value of their stock
      and
      the possibility of liquidating their stock positions at a gain.




***You
      may experience immediate and substantial dilution if we obtain additional
      financing.***




If
      we
      obtain additional financing, that financing may have a dilutive effect on the
      holders of our securities.




We
      intend
      to adopt an employee incentive stock option plan under which our officers,
      directors, consultants, and employees will be eligible to receive, in relevant
      part, either securities or stock options exercisable for our securities at
      exercise prices that may be equal to or lower than the then-prevailing market
      price. We currently intend to reserve up to five million (5,000,000) shares
      of
      common stock for issuance under these plans. Stock and stock option grants
      under
      such plan will further dilute the value of our securities and the investors’
equity position in us.




***We
      will need to raise additional capital in order to achieve our long-term goals,
      but as yet have not identified any sources for such
      capital.***




We
      have
      not yet identified sources for additional financing, and we may be unable to
      raise sufficient funds on terms that are acceptable to us, or at all. If those
      funds are not raised, the development of our products would be delayed, and
      the
      scope of our operations would be substantially curtailed or completely
      eliminated.




***The
      existence of the Warrants may adversely affect the market price of our shares,
      and any future Warrant exercises may result in further
      dilution.***




We
      currently have issued and outstanding warrants to purchase up to 5,704,752
      shares of our common stock, of which (i) warrants for up to 5,412,000 shares
      may
      be exercised at $1.5625 per share at any time or from time to time until October
      9, 2012 , including warrants for 492,000 shares which may be exercised on a
      cashless exercise basis, and (ii) warrants for up to 292,752 shares may be
      exercised at $1.25 per share at any time or from time to time for a two-year
      period commencing December 17, 2007. The total number of shares issuable upon
      exercise of warrants is relatively high compared to the number of shares of
      our
      common stock issued and outstanding. Therefore, the existence of these warrants,
      and the continuing likelihood that they may exercised and the shares acquired
      upon exercise sold from time to time in the public trading market for our common
      stock, may have an adverse effect on the market price of our common
      stock.




***Any
      of the above-identified risks, even if borne out only partially and not fully,
      will adversely affect our business, our financial condition and our operating
      results. If any of the events we have identified occur, in whole or in part,
      the
      value of our common stock will likely decline, and an investor will lose all
      or
      part of the funds paid to acquire our common stock with no opportunity to regain
      any portion of those funds in return.***




**ITEM
      2. DESCRIPTION OF PROPERTY**




**Properties
      and Leases**




As
      of
      December 31, 2007, we have the following leased properties:




(1)  we
      operate our executive offices and showrooms in a leased location at No. E6
      101#
      Industrial District, Huaqiao City, Nanshan District, Shenzhen, China, with
      approximately 11,132 square feet of space, under a lease expiring in 2011.
      The
      expected payments under the lease are $7,893 per month from January 1, 2007
      to
      September 15, 2008, $8,287 per month from September 16, 2008 to September 15,
      2009, $8,701 per month from September 16, 2009 to September 15, 2010, and $9,137
      per month from September 16, 2010 to September 15, 2011.




31




(2)  we
      operate another office and showroom in another leased location at No.6 6101#,
      1718 Tianshan Road, Shishang Yuan, Shanghai, China, with approximately 2,960
      square feet of space, under a lease expiring on October 31, 2013. The payments
      under the lease are $30,377 per annum from 2005 to 2008. From 2009 to 2013,
      the
      payment for each following year will increase by 5% based on the rent for the
      immediately preceding year.




(3)  we
      operate our warehouse in a leased location at No. 525 306# Bagualing Industrial
      District, Bagua Er Road, Futian District, Shenzhen, China, with approximately
      6,458 square feet of space, under a lease expiring on December 31, 2007. The
      payments under the lease are $2,297 per month.




(4)
      we
      rent an area in the Helen Shopping Mall located on the 2 nd floor of
      sister building of No. 3 and No. 4 of Baolicheng Garden, Nanhai Avenue, Nanshan
      District, Shenzhen, China, with approximately 1,722 square feet of space, under
      a lease expiring on July 14, 2011. The payments under the lease are $4,958
      per
      month. From 2007 to 2011, and from 2009 to 2011, respectively, the payment
      for
      each following year will increase by 5% based on the rent for the immediately
      preceding year.




(5)
      we
      rent an area on the 1 st floor,
      106 block, Saige Technical Park, Zhenxing Road, Futian District, Shenzhen,
      China, with approximately 1,292 square feet of space. The rented area is
      comprised by two spaces of approximately equal size, each of which has a
      separate lease. One of the leases was transferred to Omnialuo on January 16,
      2007, which expires on April 7, 2009. The term of the other lease is April
      8,
      2006 to April 7, 2009. The combined payments under the leases are $8,534 per
      month from January 16, 2007 to April 7, 2007. The combined payments will
      increase to $8,960 per month from April 8, 2007 to April 7, 2008. The combined
      payments will increase to $9,408 per month from April 8, 2008 to April 7,
      2009.




(6)
      we
      rent a store in the Baoli Cultural Square located on the 26 th Floor,
      Baoli Building, Nanshan District, Shenzhen, China, with approximately 2,031
      square feet of space, under a lease expiring on December 30, 2010. The payments
      under the lease are $5,031 until the expiration of the lease.




Total
      rental expenses under operating leases of office and showroom space were $10,577
      for the period ended December 31, 2006, and $227,602 for the period ended
      December 31, 2007.




We
      also
      operate 26 Company-owned stores and (jointly with third parties) 32 co-owned
      stores in leased locations in various geographic areas in China.




We
      believe that our existing facilities are adequate for our current needs and
      that
      additional space will be available as needed.




We
      maintain reasonable and customary property and disaster insurance coverage
      for
      our properties.




**ITEM
      3. LEGAL PROCEEDINGS**




From
      time
      to time, we may become involved in various lawsuits and legal proceedings which
      arise in the ordinary course of business. However, litigation is subject to
      inherent uncertainties and an adverse result in these or other matters may
      arise
      from time to time that may harm our business. We are currently not aware of
      any
      such legal proceedings or claims that we believe will have a material adverse
      affect on our business, financial condition or operating results.




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




None.




32




**PART
      II**




**ITEM
                5.**
            **MARKET
                FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                ISSUER PURCHASES OF EQUITY
                SECURITIES.**




***Market
      Information***




Our
      common stock is quoted under the symbol “OLOU.OB” on the Electronic Bulletin
      Board maintained by the National Association of Securities Dealers, Inc., but
      has not been traded in the Over-The- Counter market except on a limited and
      sporadic basis. The CUSIP number is 68215N 107.




The
      following table sets forth, for the periods indicated, the high and low closing
      prices of our common stock. These prices reflect inter-dealer prices, without
      retail mark-up, mark-down or commission, and may not represent actual
      transactions.




**Closing
                Prices****(1)****High**
            
            **Low*****Year
                Ended December 31, 2008***1stQuarter (through March 24, 2008)
            
            $
            2.00
            
            $
            1.50





(1)
            The
                above table sets forth the range of high and low closing prices per
                share
                of our common stock as reported bywww.quotemedia.comfor the period indicated.




***Approximate
      Number of Holders of Our Common Stock***




On
      March
      24, 2008, there were approximately 97 stockholders of record of our common
      stock. The number of record holders does not include persons who held our common
      stock in nominee or “street name” accounts through brokers.




***Dividends***




The
      holders of shares of our common stock are entitled to dividends out of funds
      legally available when and as declared by our board of directors. We have never
      declared or paid cash dividends. Our board of directors does not anticipate
      declaring a dividend in the foreseeable future. Should we decide in the future
      to pay dividends, as a holding company, our ability to do so and meet other
      obligations depends upon the receipt of dividends or other payments from our
      operating subsidiaries and other holdings and investments. In addition, our
      operating subsidiary, Oriental Fashion, from time to time may be subject to
      restrictions on its ability to make distributions to us, including as a result
      of restrictive covenants in loan agreements, restrictions on the conversion
      of
      local currency into U.S. dollars or other hard currency and other regulatory
      restrictions. In the event of our liquidation, dissolution or winding up,
      holders of our common stock are entitled to receive, ratably, the net assets
      available to stockholders after payment of all creditors.




***Securities
      Authorized for Issuance under Equity Compensation
      Plans***




As
      of
      December 31, 2007, we did not have any equity compensation plans.




***Recent
      Sales of Unregistered Securities***




No
      securities were sold by the registrant during the year ended December 31, 2007
      that were not registered under the Securities Act, except as set forth
      below.




33




On
      May
      31, 2006, we issued 450,000 shares of common
      stock to five
      individuals as compensation for services to us . This
      issuance was valued at $0.05 per share.  We issued these
      shares of our common stock under the exemption from registration provided by
      Section 4(2) of the Securities Act and Regulation D promulgated
      thereunder.




On
      December 1, 2006, we commenced a private placement of shares of our common
      stock, on a best efforts basis with the assistance of a placement agent. On
      January 29, 2007, we sold an aggregate of 400,000 shares of common
      stock to
      accredited investors  at
      $0.50
      per share, for total gross proceeds of $200,000 . We
      incurred $17,050 in expenses associated with this offering . We
      sold
      these shares of our common stock under the exemption from registration provided
      by Section 4(2) of the Securities Act and Regulation D promulgated
      thereunder.




On
      September 28, 2007, we issued 180,000 shares of our common stock to certain
      individuals affiliated with Keating Investments, LLC or Keating Asia, Inc.
      for
      their services rendered in connection with the private placement described
      in
      the next paragraph. The securities were sold in reliance upon the exemption
      from
      registration under Rule 506 of Regulation D.




On
        October 9, 2007, we entered into a share exchange agreement with Omnia BVI,
        the
        shareholders of Omnia BVI and certain of our principal stockholders. Pursuant
        to
        the share exchange agreement, we agreed, among other things, to issue to
        the
        shareholders of Omnia BVI 16,800,000 shares of our common stock in exchange
        for
        all of the issued and outstanding shares of Omnia BVI, which became our
        wholly-owned subsidiary.


On
        October 9, 2007, we completed the reverse acquisition transaction with Omnia
        BVI
        by issuing to the shareholders of Omnia BVI 16,800,000 shares of our common
        stock in exchange for all of the issued and outstanding shares of Omnia BVI.
        As
        a result, Omnia BVI became our wholly-owned subsidiary and the former
        shareholders of Omnia BVI became our Company’s controlling stockholders. We
        amended our Certificate of Incorporation in November 2007 to change our name
        from Wentworth II, Inc. to OmniaLuo, Inc.


For
      accounting purposes, the share exchange transaction was treated as a reverse
      acquisition with Omnia BVI as the acquirer and the Company as the acquired
      party. When we refer in this report to business and financial information for
      periods prior to the consummation of the reverse acquisition, we are referring
      to the business and financial information of Omnia BVI on a consolidated basis
      unless the context suggests otherwise.


On
        October 9, 2007, concurrently with the consummation of the reverse acquisition,
        we sold a total of 4,920,000 shares of common stock and warrants to purchase
        an
        aggregate of 4,920,000 shares of the Company’s common stock for an aggregate
        purchase price of $6.15 million, to a total of 38 investors (of whom 29 were
        accredited investors and nine were non-US residents who purchased shares
        and
        warrants in off-shore transactions) in a private placement pursuant to
        Regulation D and a simultaneous off-shore offering pursuant to Regulation
        S. The
        shares were sold to individuals and institutional investors. The securities
        were
        sold in reliance upon the exemption from registration under Rule 506 of
        Regulation D or pursuant to Regulation S promulgated under the Securities
        Act of
        1933, as amended.


***Purchases
      of Our Equity Securities***




No
      repurchases of our common stock were made during the fourth quarter of our
      fiscal year of 2007.




34




**ITEM
              6.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION**




The
      following selected consolidated statement of income data for the years ended
      December 31, 2006 and 2007, and the consolidated balance sheet data as of
      December 31, 2006 and 2007 are derived from the audited consolidated financial
      statements of the Company included in this Annual Report. The data set forth
      below should be read in conjunction with “Management’s Discussion and Analysis
      of Financial Condition and Results of Operations” and our consolidated financial
      statements and related notes appearing elsewhere in this report. Our historical
      results are not necessarily indicative of our results for any future periods.




(All
      amounts, other than per share data, in U.S. dollars)




**Statement
                of Income****Year
                Ended December 2007**
            
            **Year
                Ended December 2006**Revenue
            
            $
            7,875,757
            
            $
            1,479,603Gross
                Profit
            
            
            4,251,271
            
            
            691,553Operating
                expenses
            
            
            3,033,036
            
            
            207,317Total
                segment profit (1)
            
            
            2,176,827
            
            
            484,797Income
                from operations (2)
            
            
            1,218,235
            
            
            484,236Income
                taxes
            
            
            —
            
            
            (78,114
            )Net
                (loss) income (3)
            
            
            (1,095,484
            )
            
            406,683Basic
                and Diluted Earnings Per Share (3)
            
            $
            (0.05
            )
            $
            0.02




(1)
              Before
                  deducting $970,320 of expenses of the October 2007 reverse acquisition,
                  the October 2007 PIPE and the related SEC resale registration (the
“RTO
                  Expenses”), included in general and administrative expenses.  The RTO
                  expenses consist of shell company related expenses, including certain
                  fees paid to the placement agent and investor relations agency
                  ($218,113),
                  auditing fees ($67,293), legal fees ($301,403), entertainment expenses
                  related to the reverse acquisition and the October 2007 PIPE ($5,123),
                  travel expenses ($63,380), consultancy fees, which include fees
                  paid for RTO and PIPE related market research and consulting services
                  ($233,763), exchange loss relating to the payment of RTO expenses
                  ($19,242) and other expenses ($62,003). See Note 19 to the Consolidated
                  Financial Statements included in this
                  Report.


(2)
            After deducting the RTO
                expenses.




(3)
            In addition to being net of the RTO Expenses
                of
                $970,320, also reflects a $2,299,893 non-cash expense representing
                the
                market value as of December 31, 2007 of escrowed shares released
                from
                escrow to the Company’s principal stockholder and chief executive officer
                (the “Escrow Release Expense”), which shares are being released as the
                contractual net income threshold for 2007 (calculated before RTO
                Expenses
                and any Escrow Release Expense) has been achieved. Net income for
                2007
                would have been $2,174,729, but for the RTO Expenses and the Escrow
                Release Expense.




(4)
              Adjusted
                  to reflect the recapitalization of the Company following the consummation
                  of the share exchange with Omnia BVI.


**BALANCE
        SHEET DATA**




**At**
              **December
                31,**
              **2007**
            
            
            **At**
              **December
                31,**
              **2006**Working
                capital
            
            $
            7,591,030
            
            $
            451,050Current
                assets
            
            
            9,255,241
            
            
            1,138,920Total
                assets
            
            
            9,979,922
            
            
            1,154,715Current
                liabilities
            
            
            1,664,211
            
            
            687,870Total
                liabilities
            
            
            1,664,211
            
            
            687,870Stockholders’
                equity
            
            
            8,315,711
            
            
            466,845




35




The
      following discussion of our financial condition and results of operations should
      be read in conjunction with our consolidated financial statements and the notes
      to those statements included elsewhere in this Annual Report. In addition to
      the
      historical consolidated financial information, the following discussion and
      analysis contains forward-looking statements that involve risks and
      uncertainties. Our actual results may differ materially from those anticipated
      in these forward-looking statements as a result of certain factors, including
      those set forth under “Risk Factors” and elsewhere in this Annual Report.




**Overview**




OmniaLuo,
      Inc., the name of which was changed from Wentworth II, Inc. on November 16,
      2007, is a holding company that conducts all of its business operations through
      its direct wholly-owned subsidiary, Omnia BVI, established in August 2006,
      and
      Omnia BVI’s Chinese subsidiary, Oriental Fashion, established in September 2006.
      Oriental Fashion designs, develops, markets and distributes women’s apparel
      under the brand names of OMNIALO and OMNIALUO through its network of retail
      stores across the People’s Republic of China (“PRC” or “China”), which consisted
      of 84 stores as of December 31, 2006, 103 stores as of March 31, 2007, 135
      stores as of June 30, 2007, 154 stores as of September 30, 2007, and 184 stores
      as of December 31, 2007 in 29 provinces throughout China. Until our acquisition
      of Omnia BVI on October 9, 2007, our operations were very limited.




**Our
      Background and History**




Our
      corporate name changed to OmniaLuo, Inc. in November 2007. We were originally
      incorporated in the State of Delaware on March 7, 2001 under the name Wentworth
      II, Inc. We were formed as a vehicle to pursue a business combination. For
      information regarding Wentworth II, Inc.’s corporate financing transactions
      prior to our recent reverse acquisition with Omnia BVI, see Part II of our
      registration statement on Form SB-2 filed with the Securities and Exchange
      Commission on December 17, 2007.




**Background
      and History of Omnia BVI and Oriental Fashion**




*Development
      of the OMNIALUO Brands*




In
      1996,
      Ms. Zheng Luo, our chief executive officer and chief designer, the founder
      and
      principal shareholder of Omnia BVI prior to our reverse acquisition with Omnia
      BVI, and currently our largest individual shareholder, created the OMNIALO
      brand
      and founded Shenzhen Green’s Apparel Co., Ltd. (“Green’s Apparel”) in Shenzhen,
      China, in which she owned a 95% equity interest. Green’s Apparel manufactured
      women’s clothing.




In
      1997
      the trademark OMNIALO trademark was registered with the Chinese National
      Trademark Bureau in both Chinese and English. The registrant and initial owner
      of such trademark was Green’s Apparel.




36




In
      March
      2003, Shenzhen Oumeng Industrial Co., Ltd. (“Oumeng”) was established. Ms. Zheng
      Luo was the CEO and 50% equity and controlling owner of Oumeng. Also in March
      2003, Oumeng purchased inventory from Green’s Apparel, consisting of women’s
      apparel. Green’s Apparel has not conducted any business after the transfer of
      inventory to Oumeng in March 2003, and upon such transfer, Oumeng entered into
      all contracts with Green’s Apparel’s existing suppliers, manufacturers and
      distributors, and acquired the OMNIALO trademark in August 2003. In addition
      to
      marketing and selling products under the OMNIALUO name, Oumeng also engaged
      in
      various other businesses such as other apparel, electronics, kitchenware and
      other hardware. Oumeng also managed C-Luo Intuition, a luxury made-to-order
      evening dress brand, which brand was previous owned by Ms. Zheng Luo prior
      to
      the sale of such brand to an independent third party. By the end of August
      2006,
      OMNIALUO brand apparel, under the management of Oumeng, was being distributed
      through 100 retail stores in China.




Ms.
      Zheng
      Luo personally applied for the registration of the trademark OMNIALUO in March
      2005 and the
      registration is expected to be effective by the end of
      2008.




*Formation
      of Omnia BVI and Oriental Fashion*




In
      early
      2006 Ms. Zheng Luo determined that the growth and development of the OMNIALUO
      brands and its associated women’s apparel products could best be achieved by the
      formation of a new company which would focus on the design, marketing,
      distribution and sale of women’s business casual wear market, without the
      potential distraction and costs of operating other businesses. Therefore: (i)
      in
      August 2006, Ms. Zheng Luo, together with several other individual shareholders,
      formed Omnia BVI; and (ii) in September 2006, Oriental Fashion was incorporated
      in Shenzhen, China, with ownership held 100% by Omnia BVI, all rights in the
      OMNIALO trademark were transferred from Oumeng to Ms. Zheng Luo, and Ms. Zheng
      Luo resigned from her CEO position at Oumeng to devote her full-time effort
      to
      Oriental Fashion and Omnia BVI. In April 2007 Ms. Zheng Luo and her sister
      Ms.
      Xiaoyin Luo transferred their ownership of Oumeng to their mother, Ms. Yuhua
      Sun, and to Ms. Yujuan Sun, an unrelated party.




In
      October 2006: (i) Ms. Zheng Luo licensed the trademark OMNIALO to Oriental
      Fashion at nominal cost and executed an agreement assigning the registered
      OMNIALO trademark to Oriental Fashion, and Ms. Zheng Luo and Oriental Fashion
      commenced procedures to have the OMNIALO trademark assignments accepted and
      officially recorded in the Trademark Office; and (ii)  Ms.
      Zheng
      Luo licensed the trademark OMNIALUO to Oriental Fashion at nominal cost and
      executed an agreement assigning the registered pending application to register
      the OMNIALO trademark to Oriental Fashion; and Ms. Zheng Luo and Oriental
      Fashion commenced procedures to have the OMNIALUO trademark assignments accepted
      and officially recorded in the Chinese National Trademark Bureau once
      registration of the OMNIALUO trademarks is approved by the Trademark
      Office.




*Financing
      of Omnia BVI*




Pursuant
      to preferred stock purchase and shareholders agreements dated as of December
      17,
      2006 and December 20, 2006, Omnia BVI had issued an aggregate of 2,147
      convertible preferred shares (the “BVI Preferred Shares”) and detachable
      warrants to purchase up to $365,940 in 1,074 ordinary shares, based on the
      offering price in the next financing of Omnia BVI (the “BVI Warrants”), to a
      private venture capital investment fund (the “Lead Investor”) and several
      individual investors for a total cash investment of $729,980.




Each
      BVI
      Preferred Share was convertible into Omnia BVI’s ordinary shares at any time,
      initially on a one-for-one basis, subject to “full-ratchet” adjustment for
      certain issuances of shares less than the applicable conversion price, and
      to
      adjustment for share splits, share dividends, subdivisions, or combinations.
      The
      conversion price of BVI Preferred Shares held by the Lead Investor was also
      subject to (i) weighted average adjustment for issuances reflecting a
      pre-financing Omnia BVI valuation of less than $28 million and to (ii)
      adjustment to yield an internal rate of return of 51% if the Qualified Listing
      and Qualified Offering (each as defined below) occurred more than 12 months
      after a “First Round Financing” and the then prevailing conversion price would
      not otherwise provide such internal rate of return.




Each
      BVI
      Preferred Share was to be automatically converted upon the later to occur of
      a
“Qualified Listing” and “Qualified Offering.” A “Qualified Listing” was defined
      as mean (a) a firmly committed underwritten public offering of Omnia BVI’s
      shares registered under the U.S. Securities Act or (b) a firm commitment of
      a
      registered market-maker who shall undertake responsibilities for the quotation
      of Omnia BVI’s shares on the OTC Bulletin Board in the U.S. and/or other
      comparable over-the-counter market overseas, in both cases, representing at
      least 10% of Omnia BVI (post-offering) at an implied pre-offering valuation
      of
      at least $28,000,000. A “Qualified Offering” was defined as a public or private
      offering of Omnia BVI raising at least $3,000,000 following the First Round
      Financing. “First Round Financing” meant the completion of issuance of up to
      4,413 BVI Preferred Shares pursuant to the agreements signed with investors
      not
      later than six weeks after the date of the December 2006 agreements based on
      a
      pre-money valuation of $17 million. The issuance of the BVI Preferred Shares
      constituted a First Round Financing., and the 2007 Private Placement constituted
      a Qualified Offering.




37




The
      BVI
      Preferred Shares had certain preferential rights upon liquidation of Omnia
      BVI
      and certain preferential rights to dividends. The BVI Preferred Shares held
      by
      the Lead Investor also had certain redemption rights.




Each
      of
      the BVI Warrants issued in connection with the issuance of BVI Preferred Shares
      was exercisable, at any time, commencing with the later to occur of a Qualified
      Listing and Qualified Offering, for a two-year period, in cash for the purchase
      of Omnia BVI’s ordinary shares, at a per share exercise price equal to the per
      share price paid pursuant to the next equity financing round of Omnia BVI
      following completion of the First Round Financing. The exercise price of the
      BVI
      Warrants was subject to adjustment for share subdivisions, share combinations
      or
      mergers or consolidations.




Omnia
      BVI
      reimbursed the Lead Investor for certain expenses incurred by them, in addition
      to its own costs in connection with this placement.




By
      agreements dated as of October 9, 2007 (a) among Omnia BVI, the Lead Investor,
      Ms. Zheng Luo and another of our shareholders, and (b) among Omnia BVI, Ms.
      Zheng Luo and each of the other holders of BVI Preferred Shares and Warrants,
      effective upon the closing of the reverse acquisition:




(i)
            each
                BVI Preferred Share was converted into a specified number of ordinary
                shares of Omnia BVI, with each such ordinary share of Omnia BVI then
                being
                exchanged for 319.8294 shares of our common stock;
                and




(ii)
            each
                BVI Warrant was exchanged for warrants to purchase our common stock,
                exercisable at any time during, for a two-year period, commencing
                on
                December 17, 2007, at a per share price of $1.25;




(iii)
            the
                former holders of BVI Preferred Shares and BVI Warrants were granted
                certain rights to liquidated damages payments from Omnia BVI, if
                Omnia BVI
                (or, following the reverse acquisition, we) failed to have a registration
                statement covering the resale of their shares of our common stock
                effective within 180 days of the closing of the reverse acquisition,
                or if
                Omnia BVI (or, following the reverse acquisition, we) failed to meet
                our
                reporting obligations under the federal securities laws and as a
                consequence thereof the holders were unable to utilize SEC Rule 144
                for
                resales of their shares;




(iv)
            the
                reverse acquisition of the Company with Omnia BVI and the 2007 Private
                Placement were collectively deemed to constitute both a Qualified
                Offering
                and a Qualified Listing, notwithstanding the absence of a public
                market
                price quotation for our common stock;
                and




(v)
            the
                Lead Investor, in consideration of its relinquishing certain rights,
                (a)
                retains certain put rights with respect to its shares as against
                Ms. Zheng
                Luo (but not as against us) if we do not obtain an OTCBB quotation
                or the
                Lead Investor’s shares are not registered for resale or otherwise eligible
                to be publicly resold by July 1, 2008, (b) received an additional
                149,884
                shares of our common stock from Ms. Zheng Luo and one or more other
                former
                Omnia BVI shareholders as part of the reverse acquisition, and (c)
                may be
                entitled to additional shares of our common stock if the make good
                or
                antidilution provisions applicable to investors in the 2007 Private
                Placement result in additional shares being transferred or issued
                to those
                investors.




38




The
      exercise price of the warrants issued in exchange for the BVI Warrants is
      subject to adjustment for share subdivisions, share combinations or mergers
      or
      consolidations.




*Reverse
      Acquisition with Omnia BVI and Related Equity Financing*




On
      October 9, 2007, we entered into a share exchange agreement with Omnia BVI,
      the
      shareholders of Omnia BVI and certain of our principal shareholders. Pursuant
      to
      the share exchange agreement, we agreed, among other things, to issue to the
      shareholders of Omnia BVI 16,800,000 shares of our common stock in exchange
      for
      all of the issued and outstanding shares of Omnia BVI, which became our
      wholly-owned subsidiary.




On
      October 9, 2007, we completed the reverse acquisition transaction with Omnia
      BVI
      by issuing to the shareholders of Omnia BVI 16,800,000 shares of our common
      stock in exchange for all of the issued and outstanding shares of Omnia BVI.
      As
      a result, Omnia BVI became our wholly-owned subsidiary and the former
      shareholders of Omnia BVI became our Company’s controlling stockholders. We
      amended our Certificate of Incorporation in November 2007 to change our name
      from Wentworth II, Inc. to OmniaLuo, Inc.




For
      accounting purposes, the share exchange transaction was treated as a reverse
      acquisition with Omnia BVI as the acquirer and the Company as the acquired
      party. When we refer in this report to business and financial information for
      periods prior to the consummation of the reverse acquisition, we are referring
      to the business and financial information of Omnia BVI on a consolidated basis
      unless the context suggests otherwise.




Concurrently
      with the consummation of the reverse acquisition, we issued 4,920,000 shares
      of
      the Company’s common stock and warrants to purchase an aggregate of 4,920,000
      shares of the Company’s common stock for an aggregate purchase price of $6.15
      million, to a total of 38 investors (of whom 29 were accredited investors and
      nine were non-US residents who purchased shares and warrants in off-shore
      transactions) in a private placement pursuant to Regulation D and a simultaneous
      off-shore offering pursuant to Regulation S (collectively, the “2007 Private
      Placement”). In connection with that private placement, we also issued warrants
      to purchase 492,000 shares of the Company’s common stock to Keating Securities,
      LLC (“Keating Securities”), as a financial advisory fee in partial consideration
      of their services in connection with the private placement. Prior to
      consummation of the reverse acquisition and 2007 Private Placement, we may
      be
      deemed to have been an affiliate of Keating Securities by reason of the
      ownership of shares of our common stock by principals and executives of Keating
      Securities.




***Factors
      Relevant to Evaluating Our Business and Financial
      Performance***




We
      design, develop, and market a diversified selection of women’s wear with focus
      on fashionable business casual style. We target moderate to premium priced
      categories of the women’s wear market. In evaluating our performance, management
      reviews certain key performance indicators, including:




*Gross
      margin* - Gross
      margin measures our ability to control direct costs associated with the
      manufacturing and selling of our products. Gross margin is the difference
      between the net sales and cost of sales, which is comprised of direct inventory
      costs for merchandise sold, including all costs to transport merchandise from
      third-party suppliers to our distribution center.




*Operating
      income* -
      Operating income is a measure of our earning power from ongoing operations
      and
      is measured as our earnings before interest and income taxes.




***Results
      of Operations for the Year Ended December 31, 2007***




Since
      our
      formation in the third quarter of 2006, we have focused on implementing our
      strategy of building a design and marketing workforce and an independent
      distributor and retail store sales network to design, develop, market and
      distribute “fashionable business casual,” our main product line. By the end of
      December 2007, we had hired and established a design team of 14 designers.
      By
      December 31, 2007 we operated or had distribution relationships with 184 stores,
      comprising 26 Company-owned stores, 32 co-owned stores, and 126 independent
      distributor stores, compared with 84 such stores as of December 31, 2006,
      following our recent formation in October 2006.




39




Sales
      revenue for the year ended December 31, 2007 was $7,875,757, compared with
      $1,479,603 for the partial year period in 2006. Revenue from sales to
      distributors for the year ended December 31, 2007 was $6,025,992, or 76.51%
      of
      total sales revenue. Revenue from retail sales for the year ended December
      31,
      2007, including from Company-owned and co-owned stores, was $1,849,765, or
      23.5%
      of total sales revenue.




Overall
      gross profit for the year ended December 31, 2007 was $4,251,271, which
      represented an overall gross profit margin of 53.98%, compared with a gross
      profit margin of 46.7% for the partial year period in 2006. Gross profit margins
      in 2007 on sales to distributors were 52.1%, while gross profit margins in
      2007
      on retail sales (including Company-owned and co-owned stores) were 60.0%.




General
      and administrative expenses, which include rental expense for headquarters,
      reverse acquisition and 2007 Private Placement expenses, salary expense for
      management and headquarters staff, and travel and entertainment expenses, were
      $1,923,899 for the year ended December 31, 2007 (24.5% of sales revenues).
      We
      expect that this percentage will decline as our total revenues increase for
      2008.




Selling
      and marketing expenses, which include all costs associated with sales, marketing
      and distribution functions, were $979,459 for the year ended December 31, 2007
      (12.4% of sales revenues). We expect this percentage to remain fairly stable
      in
      the near term, and possibly decline slightly over time as revenues
      increase.




Overall
      segment profit (before unallocated expenses relating to the reverse acquisition,
      the 2007 Private Placement and related SEC resale registration totaling $970,320
      (“RTO Expenses”), and other unallocated general and administrative expenses of
      $2,098 relating to corporate operations, not included in the segment
      information) for the year ended December 31, 2007 was $2,176,827, which
      represented an overall segment profit margin of 27.6%. Segment profit margins
      on
      sales to distributors were 33.9%, while segment profit margins on retail sales
      (including Company-owned and co-owned stores) were 7.4%.




Income
      from operations for the year ended December 31, 2007 was $1,218,235 (15.5%
      of
      total sales revenues), and after $2,299,893 in non-cash expenses (representing
      the market value as of December 31, 2007 of escrowed shares released from escrow
      to the Company’s principal stockholder and chief executive officer reflecting
      achievement of contractual net income thresholds) (“Escrow Release Expense”),
      interest income, other income and finance costs, the net loss for the year
      ended
      December 31, 2007 was $1,095,484. Before RTO Expenses and Escrow Release
      Expense, net income for the year ended December 31, 2007 would have been
      $2,174,729.




***Results
      of Operations for the Period from August 11, 2006 (date of inception) to
      December 31, 2006***




Revenue
      from sales to distributors for the partial year period was $1,479,603. We had
      no
      Company-owned or co-owned stores in 2006.




Gross
      profit for the partial year period was $691,553, representing a gross profit
      margin of 46.7%.




General
      and administrative expenses, which include rental expense for headquarters,
      salary expense for management and headquarters staff, and travel and
      entertainment expenses, were $113,760 for the period.




Selling
      and marketing expenses, which include all costs associated with sales, marketing
      and distribution functions, were $93,537 for the period.




Income
      from operations for the partial-year period were $484,236, and net income for
      the period was $406,683.




***Liquidity
      and Capital Resources***




As
      of
      December 31, 2007, the Company’s net cash position was $3,083,715, compared with
      $83,456 as of December 31, 2006, and its working capital was $7,591,030,
      compared with $451,050 as of December 31, 2006. The Company’s financing activity
      provided net cash of $6,230,389 for the year ended December 31, 2007, through
      the proceeds from the sale by Omnia BVI of convertible preferred shares and
      accompanying ordinary share purchase warrants, net of expenses ($729,980),
      and
      the sale by the Company in October 2007 of common stock and accompanying
      warrants to purchase common stock, net of expenses ($5,590,135), less repayment
      of shareholder loans ($89,726). The Company’s financing activities provided net
      cash of $154,229 for the period from August 11, 2006 to December 31, 2006,
      through issuance of ordinary shares and proceeds from loans from shareholders.




40




Net
      cash
      used in operating activities for the year ended December 31, 2007 was
      $2,522,574. Net cash used in operating activities for the period from August
      11,
      2006 to December 31, 2006 was $56,612.




The
      Company’s investing activities to date have consisted mainly of the purchase of
      property and equipment. For the year ended December 31, 2007, the net use of
      cash in investing activities was ($770,370). For the period from August 11,
      2006
      to December 31, 2006 the net cash used in investing activities was $15,484.




Based
      on
      our current operating plan and our available cash and cash equivalents, we
      expect that we will need to obtain additional financing in the future through
      the sale of equity securities, private placements, and loans to fund our cash
      needs and continue our presently planned operations. Additional financing,
      whether through public or private equity or debt financing, arrangements with
      stockholders or other sources to fund operations, may not be available, or
      if
      available, may be on terms unacceptable to us.




Our
      material capital expenditure requirements for 2008 are approximately $2.0
      million, which will be used for store expansions and upgrading information
      management systems. In addition, we expect that an additional $3.0 million
      of
      working capital will be needed to maintain our business operations in the next
      twelve months. We anticipate funding these requirements from the proceeds of
      the
      2007 Private Placement.




We
      believe that our currently available working capital should be adequate to
      sustain our operations at our current levels through at least the next twelve
      months. However, depending on our future needs and changes and trends in the
      capital markets affecting our shares and the Company, we may determine to seek
      additional equity or debt financing in the private or public markets. Additional
      financing, whether through public or private equity or debt financing,
      arrangements with stockholders or other sources to fund operations, may not
      be
      available, or if available, may be on terms unacceptable to us.




***Obligations
      Under Material Contracts***




The
      following table summarizes our outstanding contractual obligations as of
      December 31, 2007:




Payments
                due by period in thousands of U.S. dollarsTotal
            
            Less
                than 1 year
            
            1-3
                years
            
            3-5
                years
            
            More
                than 5 yearsLong-term
                debt obligations
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —Capital
                lease obligations
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —Operating
                lease obligations
            
            $
            1,112,411
            
            $
            357,326
            
            $
            539,152
            
            $
            183,603
            
            $
            32,330Purchase
                obligations
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —Other
                long term obligations
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —





***Critical
      Accounting Policies***




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires our management to make
      assumptions, estimates and judgments that affect the amounts reported in the
      financial statements, including the notes thereto, and related disclosures
      of
      commitments and contingencies, if any. We consider our critical accounting
      policies to be those that require the more significant judgments and estimates
      in the preparation of financial statements, including the
      following:




*Use
      of estimates.*  In
      preparing financial statements in conformity with accounting principles
      generally accepted in the United States of America, management makes estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosures of contingent assets and liabilities at the dates of the financial
      statements, as well as the reported amounts of revenues and expenses during
      the
      reporting periods. These accounts and estimates include, but are not limited
      to,
      the valuation of accounts receivable, inventories, deferred income taxes,
      provision for warranty and the estimation on useful lives of property, plant
      and
      equipment. Management makes these estimates using the best information available
      at the time the estimates are made; however, actual results could differ
      materially from those estimates.




41




*Concentrations
      of credit risk* .
      Financial instruments that potentially subject the Company to significant
      concentrations of credit risk consist principally of cash and cash equivalents
      and trade receivables. As of December 31, 2007, substantially all of the
      Company’s cash and cash equivalents were held by major financial institutions
      located in the PRC, Hong Kong and the United States, which management believes
      are of high credit quality. With respect to trade receivables, the Company
      extends credit based on an evaluation of the customer’s financial condition. The
      Company generally does not require collateral for trade receivables and
      maintains an allowance for doubtful accounts of trade receivables.




*Allowance
      of doubtful accounts* .
      The
      Company establishes an allowance for doubtful accounts based on management’s
      assessment of the collectibility of trade receivables. A considerable amount
      of
      judgment is required in assessing the amount of the allowance and the Company
      considers the historical level of credit losses and applies percentages to
      aged
      receivable categories. The Company makes judgments about the creditworthiness
      of
      each customer based on ongoing credit evaluations, and monitors current economic
      trends that might impact the level of credit losses in the future. If the
      financial condition of the customers is to deteriorate, resulting in their
      inability to make payments, a larger allowance may be required. Based on the
      above assessment, during the reporting period, the management establishes the
      general provisioning policy to make allowance equivalent to the aging of trade
      receivables as set forth in the financial statements. Bad debts are written
      off
      when identified.




*Inventories* .
      Inventories are stated at the lower of cost or market. Cost is determined on
      a
      FIFO basis and includes all expenditures incurred in bringing the goods to
      the
      point of sale and putting them in a saleable condition.




*Revenue
      recognition* .
      Revenue
      is recognized when it is probable that the economic benefits will flow to the
      Company and when the revenue can be measured reliably, on the following
      basis:




(i)
            revenue
                from sales of the Company’s products is recognized when the significant
                risks and rewards of ownership have been transferred to the buyer
                at the
                time of delivery and the sales price is fixed or determinable and
                collection is reasonably assured;
                and




(ii)
            interest
                income is recognized on an accrual
                basis.




*Property
      and Equipment* .
      Property and equipment are stated at cost less accumulated depreciation. Cost
      represents the purchase price of the asset and other costs incurred to bring
      the
      asset into its exiting use. Depreciation is provided on a straight-line basis
      over the assets’ estimated useful lives. The principal depreciation rates are as
      follows:




Annual
                RateLeasehold
                improvement
            
            
            20
            %Office
                equipment and computers
            
            
            20
            %Machinery
            
            
            20
            %Motor
                vehicles
            
            
            20
            %




Maintenance
      or repairs are charged to expense as incurred. Upon sale or disposition, the
      applicable amounts of asset cost and accumulated depreciation are removed from
      the accounts and the net amount less proceeds from disposal is charged or
      credited to income.




42




*Income
      Taxes* .
      The
      Company uses the asset and liability method of accounting for income taxes
      pursuant to SFAS No. 109 “Accounting for Income Taxes”. Under the asset and
      liability method of SFAS 109, deferred tax assets and liabilities are recognized
      for the future tax consequences attributable to temporary differences between
      the financial statements carrying amounts of existing assets and liabilities
      and
      loss carry forwards and their respective tax bases. Deferred tax assets and
      liabilities are measured using enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled.




*Comprehensive
      income* .
      The
      Company has adopted SFAS 130, “Reporting Comprehensive Income”, which
      establishes standards for reporting and display of comprehensive income, its
      components and accumulated balances. Components of comprehensive income include
      net (loss) income and foreign currency translation adjustments.




*Foreign
      currency translation* .
      The
      functional currency of the Company is USD while those of its subsidiaries are
      HKD and RMB. The Company maintains its financial statements in the functional
      currency. Monetary assets and liabilities denominated in currencies other than
      the functional currency are translated into the functional currency at rates
      of
      exchange prevailing at the balance sheet date. Transactions denominated in
      currencies other than the functional currency are translated into the functional
      currency at the exchanges rates prevailing at the dates of the transaction.
      Exchange gains or losses arising from foreign currency transactions are included
      in the determination of net income for the respective periods.




For
      financial reporting purposes, the financial statements of the subsidiaries
      which
      are prepared using the functional currency have been translated into United
      States dollars. Assets and liabilities are translated at the exchange rates
      at
      the balance sheet dates and revenue and expenses are translated at the average
      exchange rates and shareholders’ equity is translated at historical exchange
      rates. Any translation adjustments resulting are not included in determining
      net
      (loss) income but are included in foreign exchange adjustment to other
      comprehensive income, a component of shareholders’ equity. The exchange rates
      were RMB1 for $0.1371 and HKD1 for $0.1282 as of December 31, 2007, and RMB1
      for
      $0.1283 and HKD1 for $0.1286 as of December 31, 2006. The average exchange
      rates
      for the period ended December 31, 2007 were RMB1 for $0.1317 and HKD1 for
      $0.1282 and for the period ended December 31, 2006 were RMB1 for $0.1256 and
      HKD1 for $0.1287. There is no significant fluctuation in exchange rate for
      the
      conversion of RMB and HKD to United State dollars after the balance sheet
      date.




***Seasonality***




Our
      business is likely to be seasonal, with the highest proportion of sales and
      operating income likely being generated in the fourth quarter of each year,
      lesser proportions in the second and third quarter of each year, and the lowest
      proportion of sales and operating income being generated in the first quarter
      of
      each year. Our working capital requirements are likely to fluctuate during
      the
      year, increasing substantially during one or more quarters as a result of higher
      planned seasonal inventory levels and higher receivables. If we fall
      significantly short of our anticipated earnings in one or more quarters, it
      will
      significantly decrease the working capital available to us in the following
      quarters. Due to limitations on borrowing levels, a decrease in working capital
      may adversely affect our purchasing abilities which would have a material
      adverse effect on our revenues.




***Off-Balance
      Sheet Arrangements***




We
      do not
      have any off-balance sheet arrangements.




**ITEM
      7. FINANCIAL STATEMENTS**




See
      the
      index to our financial statements and our financial statements following the
      Signature Page at the end of this Annual Report on Form 10-KSB.




**ITEM
                  8.**
                **CHANGES
                    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                    DISCLOSURE**




None.




43




**ITEM
      8A (T). CONTROLS AND PROCEDURES**




**Disclosure
      Controls and Procedures**




Our
      management, with the participation of our chief executive officer and chief
      financial officer, Ms. Zheng Luo and Ms. Xiaomei Liu, respectively, evaluated
      the effectiveness of our disclosure controls and procedures. The term
“disclosure controls and procedures,” as defined in Rules 13a-15(e) and
      15d-15(e) under the Exchange Act, means controls and other procedures of a
      company that are designed to ensure that information required to be disclosed
      by
      a company in the reports, such as this report, that it files or submits under
      the Exchange Act is recorded, processed, summarized and reported, within the
      time periods specified in the SEC’s rules and forms. Disclosure controls and
      procedures include, without limitation, controls and procedures designed to
      ensure that information required to be disclosed by a company in the reports
      that it files or submits under the Exchange Act is accumulated and communicated
      to the company’s management, including its principal executive and principal
      financial officers, as appropriate to allow timely decisions regarding required
      disclosure. Management recognizes that any controls and procedures, no matter
      how well designed and operated, can provide only reasonable assurance of
      achieving their objectives and management necessarily applies its judgment
      in
      evaluating the cost-benefit relationship of possible controls and procedures.
      Based on that evaluation, Ms. Luo and Ms. Liu concluded that as of December
      31,
      2007, and as of the date that the evaluation of the effectiveness of our
      disclosure controls and procedures was completed, our disclosure controls and
      procedures were effective to satisfy the objectives for which they are intended.




**Internal
      Controls Over Financial Reporting**




*Management’s
      Annual Report on Internal Control over Financial Reporting.*




Section
      404 of the Sarbanes-Oxley Act of 2002 requires that management document and
      test
      the Company’s internal control over financial reporting and include in this
      Annual Report on Form 10-KSB a report on management’s assessment of the
      effectiveness of our internal control over financial reporting.




The
      management of the Company is responsible for establishing and maintaining
      adequate internal control over financial reporting as defined in
      Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.
      The Securities and Exchange Act of 1934 defines internal control over financial
      reporting as a process designed by, or under the supervision of, the Company’s
      principal executive and principal financial officers and effected by the
      Company’s board of directors, management and other personnel, to provide
      reasonable assurance regarding the reliability of financial reporting and the
      preparation of financial statements for external purposes in accordance with
      accounting principles generally accepted in the United States of America and
      includes those policies and procedures that:




·
            
            Pertain
                to the maintenance of records that in reasonable detail accurately
                and
                fairly reflect the transactions and dispositions of the assets of
                the
                Company;·
            
            Provide
                reasonable assurance that transactions are recorded as necessary
                to permit
                preparation of financial statements in accordance with accounting
                principles generally accepted in the United States of America, and
                that
                receipts and expenditures of the Company are being made only in accordance
                with authorizations of management and directors of the Company;
                and·
            
            Provide
                reasonable assurance regarding prevention or timely detection of
                unauthorized acquisition, use or disposition of the Company’s assets that
                could have a material effect on the financial
                statements.





All
      internal control systems, no matter how well designed, have inherent
      limitations. Therefore, even those systems determined to be effective can
      provide only reasonable assurance with respect to financial statement
      preparation and presentation. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.





Under
      the
      supervision and with the participation of our management, including Ms. Zheng
      Luo and Ms. Xiaomei Liu, our chief executive officer and chief financial
      officer, we conducted an evaluation of the effectiveness of our internal control
      over financial reporting based upon the framework in Internal Control—Integrated
      Framework issued by the Committee of Sponsoring Organizations of the Treadway
      Commission (COSO). Based on that evaluation, our management concluded that
      our
      internal control over financial reporting is effective, as of December 31,
      2007.




44




This
      annual report does not include an attestation report of our registered public
      accounting firm regarding internal control over financial reporting.
      Management’s report was not subject to attestation by our registered public
      accounting firm pursuant to temporary rules of the Securities and Exchange
      Commission that permit us to provide only management’s report in this annual
      report.




*Changes
      in Internal Controls over Financial Reporting.*




During
      the fiscal year ended December 31, 2007, there were no changes in our internal
      control over financial reporting identified in connection with the evaluation
      performed during the fiscal year covered by this report that has materially
      affected, or is reasonably likely to materially affect, our internal control
      over financial reporting.




**ITEM
      8B. OTHER INFORMATION.**




None.




**PART
      III**




**ITEM
                  9.**
                **DIRECTORS,
                    EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
                    GOVERNANCE;
                    COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
                    ACT**




***Directors
      and Executive Officers***




Set
      forth
      below is information regarding our current directors and current executive
      officers. Except as set forth below, there are no family relationships between
      any of our directors or executive officers. Executive officers are elected
      annually by our Board of Directors. Each executive offer holds his office until
      he resigns or is removed by the Board or his successor is elected and qualified.
      Directors are elected each year by our stockholders at the annual meeting.
      Each
      director holds his office until his successor is elected and qualified or until
      resignation or removal.




Name
            
            Age
            
            TitleZheng
                Luo
            
            37
            
            Chairwoman
                and Chief Executive OfficerJunneng
                Yang
            
            41
            
            Chief
                Operating OfficerXiaomei
                Liu
            
            39
            
            Chief
                Financial OfficerXiaoyin
                Luo
            
            43
            
            DirectorQing
                Huang
            
            42
            
            DirectorFei
                Lou
            
            41
            
            DirectorTianhong
                Yu
            
            41
            
            DirectorCharles
                C. Mo
            
            56
            
            DirectorWenbin
                Fang
            
            40
            
            Director




***Ms.
      Zheng Luo, Chairwoman and CEO***




Ms.
      Zheng
      Luo is our founder, Chairwoman and chief executive officer, and chief executive
      officer and chief designer of Oriental Fashion. Before founding Oriental
      Fashion, Ms. Zheng Luo was chairwoman and chief executive officer of Oumeng
      (2003 - 2007) and chairwoman and chief executive officer of Green’s Apparel
      (1996 - 2003). Ms. Zheng Luo has been active in the fashion design and retail
      business for over 10 years. She created the OMNIALUO brand in 1996. Ms. Zheng
      Luo is a renowned designer in the fashion industry who has won various
      prestigious honors nationally and internationally and received broad media
      coverage in China, Hong Kong, Paris and Italy. Ms. Zheng Luo earned a Bachelor
      of Arts degree in International Finance from Shenzhen University in
      1991.




45




***Mr.
      Junneng Yang, Chief Operating Officer***




Mr.
      Junneng Yang is our chief operating officer. He began his fashion career in
      1990. He joined Green’s Apparel as a vice president in 1997. From 1997 to 2003,
      he built up the OMNIALUO distribution network from 2 shops in Shenzhen to over
      150 shops nationally. From 2003 to 2006, Mr. Yang served as a professional
      consultant for over 20 fashion brands. From 2005 to 2006, he also served as
      the
      chief executive officer of a Down Jacket Fashion Corp based in Shenzhen. In
      January 2007, Mr. Yang rejoined Oriental Fashion as its chief operating officer
      and brings his over 15 years of experience in marketing and brand management
      in
      the fashion industry. Mr. Yang has no higher education degree.




***Ms.
      Xiaomei Liu, Chief Financial Officer***




Ms.
      Xiaomei Liu is our chief financial officer. She has been working as a financial
      advisor to companies and institutions in China for the past eight years. Before
      moving back to China, she worked at the Investment Banking Division of Lehman
      Brothers in New York and Hong Kong. Her experience includes a variety of equity,
      debt, and merger and acquisition transactions. Ms. Liu has an MBA from Wharton
      Business School of the University of Pennsylvania and a BA from Finance
      Institute of China.




***Ms.
      Xiaoyin Luo, Director***




Ms.
      Luo
      Xiaoyin Luo was appointed as a director in January 2008. Ms. Luo serves as
      Director & General Manager of Hutchison Harbour Ring China, a subsidiary of
      Hutchison Whampoa Limited (HWL). Ms. Xiaoyin Luo has over 14 years of service
      to
      HWL. Her main responsibilities are commercial property investment, development,
      operation, and management. Some of her projects include The Center, Westgate
      Mall, Harbour Ring Plaza and Huangpu Center in Shanghai, Metropolitan Plaza
      in
      Chongqing, and Pacific Plaza in Qingdao. Since Hutchison Harbor is the exclusive
      licensing agent of Warner Brothers Consumer Product Division (WBCP) in China,
      Ms. Xiaoyin Luo is in charge of the product license and retail license business
      development for Warner Bros. Studio Store Shanghai Flagship operation
      management, retail network and distribution channel construction, and
      sub-licensee development. Ms. Xiaoyin Luo holds the degree of Master of
      Economics and holds an EMBA from China Europe International Business
      School.




***Mr.
      Qing Huang, Director***




Mr.
      Qing
      Huang was appointed as a director in January 2008. Mr. Huang is engaged in
      private equity financing activities in China as an investor and advisor. He
      is
      currently a general partner of Mingly China Growth Fund, L.P. a private equity
      fund focused on investing in growth companies in China. Mr. Huang has
      participated in a large number of international financing transactions by
      Chinese and non-Chinese companies, including private placement and public
      offerings of corporate equity and debt. Mr. Huang worked as a lawyer and adviser
      in the United States, Hong Kong and Shanghai and was associated with
      international law firms Shearman & Sterling and Linklaters in Hong Kong and
      Brown & Wood LLP in New York. Mr. Huang graduated from Columbia University
      School of Law with a J.D. degree, from University of Chicago with a Master’s
      degree in political science and from Beijing University with a Bachelors’ degree
      in English and American literatures. He is a member of the New York State Bar
      Association.




***Mr.
      Fei Luo, Director***




Mr.
      Fei
      Luo was appointed as a director in January 2008. He has served as a director
      of
      IER Venture Capital Co., Ltd., a venture capital firm in China, since 2000.
      He
      founded Beida Zongheng Financial Consulting Co., Ltd. in 1999 and serves as
      the
      president and chairman of the board of Beida Zongheng. From 1997 to 1999, he
      served as the managing director of Shenzhen Yanning Development Co., Ltd.,
      in
      charge of investment. From 1993 to 1996, he served as the vice chairman of
      Shenzhen Anxing Financial Consulting Co., Ltd and vice chairman of Shenzhen
      Anxing investing Co., Ltd. Mr. Fei Luo received his Master degree in Economics
      from Peking University in 1999 and his BA in Economics from Peking University
      in
      1988.




46




***Mr.
      Tianhong Yu, Director***




Mr.
      Tianhong Yu was appointed as a director in January 2008. Mr. Yu has served
      as a
      vice president and managing director of Huayi Brothers & Taihe Film
      Investment Co., Ltd., a leading motion picture and television production and
      distribution company in China, since 2005. From 2003 to 2005, he had planned
      and
      supervised a number of movie and TV series. Prior to that, he was the senior
      manager of TOM Online Inc., a leading wireless internet company in China. Mr.
      Yu
      also founded Beijing Modern Art Center and CHINALAW DATABASE, the first law
      database in China. Mr. Yu received his Bachelor Degree in Economic Law from
      Peking University in 1988.




***Mr.
      Charles Mo, Director***




Mr.
      Charles Mo was appointed as a director in January 2008. Mr. Mo is a Certified
      Public Accountant with twenty seven years of experience in public and corporate
      accounting and finance. Mr. Mo has held his CPA license since 1980. Mr. Mo
      has
      served in his current position as the General Manager of Charles Mo & Co.
      since June of 2005, focusing on general management duties. From October 1999
      to
      May 2005, Mr. Mo served as chief operating officer and chief financial officer
      of Coca-Cola Shanghai. His duties included finance, logistics, production,
      and
      general management. From December 1998 to September 1999, Mr. Mo served as
      Finance Director of Fisher Rosemount Shanghai. From August 1996 to September
      1999, he also served as chief financial officer of Nike China, and his
      responsibilities included overseeing finance, human resources, and logistics.
      From January 1995 to August 1996, Mr. Mo served as controller for Polaroid
      China. From August 1982 to December 1994, Mr. Mo served as finance and audit
      manager for Wang Laboratories. From 1978 to 1982, Mr. Mo served as an accountant
      and auditor for Ernst & Young and Thomas Allen, CPA. Mr. Mo received a
      Bachelor of Arts degree with a Business Administration major in 1974 from HK
      Baptist College. Mr. Mo received an MBA in accounting in 1976 from California
      State University-Fullerton. Mr. Mo has been the Vice Chairman of AMCHAM Shanghai
      since 2006, and was re-elected in November 2007. Mr. Mo has served on the Board
      of Governors of AMCHAM Shanghai since 2005 and will continue to do so during
      2008. Mr. Mo was the Treasurer for AMCHAM Shanghai in 2005. He is a director
      of
      Benda Pharmaceutical, Inc. (OTC BB: BPMA).




***Mr.
      Wenbin Fang, Director***




Mr.
      Wenbin Fang was appointed as a director in January 2008. Mr. Fang has served
      as
      general manager in Shen Zhen Meng Sa Di Ka Trading Company since 2003. From
      2000
      to 2002, Mr. Fang worked for ARTLEVA, an Italian company, where he was focused
      on exportation of household goods and clothing products from China (including
      Taiwan) to Italy, France and Germany. From 1998 to 2000, he worked for MAX,
      where he was focused on exportation of household goods and clothing products
      from China (including Hong Kong) to Italy and France. From 1993 to 1997, he
      served as business manager for east Asia area (including China) of R.P.R.
      Clothing Machine Manufactory, an Italian Company. He earned his bachelor’s
      degree in Industrial Design in Shangdong Design and Art College. He then spent
      a
      year (1992-1993) in the Department of Industrial Design of Italy National Design
      and Act College.




***Family
      Relationships***




Ms.
      Xiaoyin Luo is the elder sister of Ms. Zheng Luo and the sister-in-law of Mr.
      Wenbin Fang. Mr. Wenbin Fang is the husband of Ms. Zheng Luo. There are no
      other
      family relationships between any of our directors and executives.




***Board
      Composition and Committees***




The
      board
      of directors is currently composed of seven members. All Board action requires
      the approval of a majority of the directors in attendance at a meeting at which
      a quorum is present.




47




Each
      of
      Qing Huang, Fei Luo, Charles C. Mo and Tianhong Yu (collectively, the
“Independent Directors”) were elected to serve on the Board of Directors as an
“independent director” as defined by Rule 4200(a)(15) of the Marketplace Rules
      of The Nasdaq Stock Market, Inc. (the “Nasdaq Marketplace Rules”), and the Board
      of Directors has confirmed the “independent director” status under the Nasdaq
      Marketplace Rules of each of the Independent Directors.




On
      January 28, 2008, the full Board of Directors, including the Independent
      Directors:




(1)
            approved
                the establishment of the Audit Committee, Compensation Committee,
                and
                Governance and Nominating Committee of the Board of Directors;
                and


(2)
            appointed
                three of the Independent Directors to each of the Audit Committee,
                Compensation Committee, and Governance and Nominating Committee and
                appointed Mr. Mo as the Chair of the Audit Committee, Mr. Huang as
                the
                Chair of the Compensation Committee and Mr. Yu as the Chair of the
                Governance and Nominating Committee.




Our
      Audit
      Committee is primarily responsible for reviewing the services performed by
      our
      independent auditors and evaluating our accounting policies and our system
      of
      internal controls. The Nominating Committee is primarily responsible for
      nominating directors and setting policies and procedures for the nomination
      of
      directors. The Nominating Committee will also be responsible for overseeing
      the
      creation and implementation of our corporate governance policies and procedures.
      The Compensation Committee is primarily responsible for reviewing and approving
      our salary and benefit policies (including stock options), including
      compensation of executive officers.




***Director
      Compensation***




We
      have
      not paid our directors fees in the past for attending scheduled and special
      meetings of our board of directors.




On
      January 28, **** 2008 ,
      the
      full Board approved a form of Non-Officer Director’s Contract, which includes
      indemnification provisions, for each of the Independent Directors, Wenbin Fang
      and Xiaoyin Luo. Under the terms of the Non-Officer Director’s Contracts, the
      Company agreed to pay the
      Independent Directors **** an
      annual
      fee of $ 12,000
      each, **** as
      compensation for the services to be provided by them as directors and as
      chairpersons of various board committees, as applicable. We
      also
      reimburse each director for reasonable travel expenses related to such
      director’s attendance at board of directors and committee meetings.





Under
      the
      terms of the Non-Officer
      Director’s Contracts ,
      t he
      Company agreed to indemnify the Independent Directors, Wenbin Fang and Xiaoyin
      Luo, against expenses, judgments, fines, penalties or other amounts actually
      and
      reasonably incurred by the directors in connection with any proceeding if such
      director acted in good faith and in the best interests of the Company. This
      brief description of the terms of the Non-Officer
      Director’s Contracts is
      qualified by reference to the provisions of the form of agreement incorporated
      by reference as an exhibit to Annual Report. We believe the terms of these
      agreements are reasonable and customary and comparable to those entered into
      by
      other publicly-traded companies in the United States.




***Involvement
      in Certain Legal Proceedings***




To
      the
      best of our knowledge, none of our directors or executive officers has been
      convicted in a criminal proceeding, excluding traffic violations or similar
      misdemeanors, or has been a party to any judicial or administrative proceeding
      during the past five years that resulted in a judgment, decree or final order
      enjoining the person from future violations of, or prohibiting activities
      subject to, federal or state securities laws, or a finding of any violation
      of
      federal or state securities laws, except for matters that were dismissed without
      sanction or settlement. Except as set forth in our discussion below in “Certain
      Relationships and Related Transactions,” none of our directors, director
      nominees or executive officers has been involved in any transactions with us
      or
      any of our directors, executive officers, affiliates or associates which are
      required to be disclosed pursuant to the rules and regulations of the
      SEC.




48




***Section
      16(a) Beneficial Ownership Reporting Compliance***




Section
      16(a) of the Exchange Act required our executive officers and directors, and
      person who beneficially own more than ten percent of our equity securities,
      to
      file reports of ownership and changes in ownership with the Securities and
      Exchange Commission. Officers, directors and greater than ten percent
      shareholders are required by SEC regulation to furnish us with copies of all
      Section 16(a) forms they file. Based on our review of the copies of such forms
      received by us all such filing requirements applicable to our officers and
      directors were complied with during the fiscal year ended December 31, 2007.




***Code
      of Ethics***




On
      January 28, 2008, our board of directors adopted a code of ethics that applies
      to all of our directors, officers and employees, including our principal
      executive officer, principal financial officer and principal accounting officer.
      The code of ethics addresses, among other things, honesty and ethical conduct,
      conflicts of interest, compliance with laws, regulations and policies, including
      disclosure requirements under the federal securities laws, confidentiality,
      trading on inside information, and reporting of violations of the code. A copy
      of the code of ethics has been filed as Exhibit 14.1 to our current report
      on
      Form 8-K filed on February 1, 2008. We are in the process of making our code
      of
      ethics available on our website, which is located at www.omnialuo.com.cn. Once
      it is available on our website, any amendments or waivers to the code of ethics
      will be posted on our website within four business days of such amendment or
      waiver. Until such time, however, any amendments or waivers to our code of
      ethics will be filed with the SEC in a Current Report on Form 8-K.




***Audit
      Committee and Audit Committee Financial Expert***




The
      Board
      of Directors has determined that Mr. Mo, an “independent director” as defined by
      Rule 4200(a)(15) of the Nasdaq Marketplace Rules, possesses accounting or
      related financial management experience that qualifies
      him as financially sophisticated within the meaning of Rule 4350(d)(2)(A) of
      the
      Nasdaq Marketplace Rules and that he is an “audit committee financial expert” as
      defined by the rules and regulations of the Securities and Exchange Commission.
      Mr. Mo is the Chairman of our Audit Committee.




**ITEM
      10. EXECUTIVE COMPENSATION**




***Summary
      Compensation Table - 2006 and 2007***




The
      following table sets forth information concerning all compensation awarded
      to,
      earned by or paid to each person serving as a principal executive officer for
      services rendered in all capacities during fiscal years 2006 and 2007. No other
      executive officers received compensation in excess of $100,000 in either fiscal
      year.




**Name
                And Principal****Position**
            
            **Year**
            
            **Annual**
                **Compensation**
                **Salary
                  ($)**
            
            **Bonus****($)**
            
            **Non-qualified
                Deferred Compensation on Earnings**
            
            **All
                Other Compensation**
              **($)**
            
            **Total****($)**Zheng
                Luo,
            
            
            2007
            
            
            75,000
            
            
            -
            
            
            1,600-
            
            
            -
            
            
            76,600CEO
                and President
            
            
            2006
            
            
            75,000
            
            
            -
            
            
            -
            
            
            -
            
            
            75,000Junneng
                Yang
            
            
            2007
            
            
            30,000
            
            
            -
            
            
            1,200
            
            
            -
            
            
            31,200Chief
                Operating Officer
            
            
            2006
            
            
            **-**
            
            
            -
            
            
            **-**
            
            
            -
            
            
            **-**Xiaomei
                Liu
            
            
            2007
            
            
            20,000
            
            
            -
            
            
            -
            
            
            -
            
            
            20,000Chief
                Financial Officer
            
            
            2006
            
            
            **-**
            
            
            -
            
            
            **-**
            
            
            -
            
            
            **-**







*
      Calculated on the basis that $1 = RMB 7.7.




49




***Employment
      Agreements***




Each
      of
      the executive officers and other individuals named above has entered into a
      standard PRC form of employment contract with our operating subsidiary, Oriental
      Fashion.




The
      terms
      of Ms. Luo’s contract provide for a two year employment term, from January 1,
      2007 through December 31, 2008, with an annual salary of $75,000 and monthly
      deferred compensation payments totaling $4,800 annually.




The
      terms
      of Mr. Yang’s contract provide for a two year employment term, from February 9,
      2007 through February 8, 2009, with an annual salary of $30,000 and monthly
      deferred compensation payments totaling $1,200 annually.




***Director
      Compensation***




Historically,
      we have not compensated our directors for their services as directors and we
      did
      not compensate our directors during 2006 or 2007.




On
      January 28, **** 2008 ,
      the
      full Board approved a form of Non-Officer Director’s Contract, which includes
      indemnification provisions, for each of the Independent Directors, Wenbin Fang
      and Xiaoyin Luo. Under the terms of the Non-Officer Director’s Contracts, the
      Company agreed to pay the
      Independent Directors **** an
      annual
      fee of $ 12,000
      each, **** as
      compensation for the services to be provided by them as directors and as
      chairpersons of various board committees, as applicable. We
      also
      reimburse each director for reasonable travel expenses related to such
      director’s attendance at board of directors and committee
      meetings.




***Outstanding
      Equity Awards at Fiscal Year End***




None
      of
      our executive officers received any equity awards, including, options,
      restricted stock or other equity incentives, during the fiscal year ended
      December 31, 2007.




**ITEM
              11.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER
                MATTERS.**


The
      following table sets forth information regarding beneficial ownership of our
      common stock as of December 31, 2007 (i) by each person who is known by us
      to
      beneficially own more than 5% of our common stock or who may otherwise be deemed
      to be “control persons” and affiliates of us; (ii) by each of our current
      officers and current and proposed directors; and (iii) by all of our current
      officers and current and proposed directors as a group. Unless otherwise
      specified, the address of each of the persons set forth below is in care of
      the
      Company, Room 101, Building E6, Huaqiaocheng, East Industrial Park, Nanshan
      District, Shenzhen, 518053, The People’s Republic of China.




Name
                and Addressof
                Beneficial Owner
            
            Director
                or Officer
            
            Amount
                and Nature of
              Beneficial
                Ownership (1)
            
            Percentage
              (2)Zheng
                Luo (3) (4)
            
            
            Director
                and Officer
            
            
            7,525,420
            (5)(6)
            
            32.95
            %Xiaoyin
                Luo (3)(4)
            
            
            Director
            
            
            5,411,514
            
            
            23.69
            %Wenbin
                Fang (3)(4)
            
            
            Director
            
            
            1,141,791
            (5)
            
            5.00
            %Qing
                Huang (4)
            
            
            Director
            
            
            -0-
            
            
            -0-Fei
                Lou (4)
            
            
            Director
            
            
            -0-
            
            
            -0-Tianhong
                Yu (4)
            
            
            Director
            
            
            -0-
            
            
            -0-Charles
                Mo (4)
            
            
            Director
            
            
            -0-
            
            
            -0-Junneng
                Yang (4)
            
            
            Officer
            
            
            -0-
            
            
            -0-Xiaomei
                Liu (4)
            
            
            Officer
            
            
            -0-
            
            
            -0-


50
 Name
                    and Addressof
                    Beneficial Owner
                
                Director
                    or Officer
                
                Amount
                    and Nature of
                  Beneficial
                    Ownership (1)
                
                Percentage
                  (2)JAIC-CROSBY
                    Greater China
                  Investment
                    Fund Limited (8)
                  P.O.
                    Box 2081GT, Century
                  Yard,
                    Cricket Square, Hutchins
                  Drive,
                    George Town, Grand
                  Cayman,
                    Cayman Islands
                
                
                
                
                
                942,208
                (6)(7)
                
                4.09
                %All
                    current and proposed directors and current officers as a group
                    (eight in
                    the group)
                
                
                
                
                
                14,078,725
                    shares
                
                
                61.64
                %


*
                Less than 1%.1Beneficial
                ownership is determined in accordance with the rules of the SEC and
                generally includes voting or investment power with respect to securities.
                Each of the beneficial owners listed above has direct ownership of
                and
                sole voting power and investment power with respect to the shares
                of our
                common stock.




2A
                total of 22,840,000 shares of our common stock are considered to
                be
                outstanding pursuant to SEC Rule 13d-3(d)(1). For each Beneficial
                Owner
                above, any options exercisable within 60 days have been included
                in the
                denominator.3Ms.
                Xiaoyin Luo is the elder sister of Ms. Zheng Luo and sister-in-law
                of Mr.
                Wenbin Fang. Mr. Wenbin Fang is the husband of Ms. Zheng Luo. Each
                disclaims beneficial ownership of the shares held by the
                other.4The address for each of the individuals shown is c/o Oriental
                Fashion.5Share
                amounts shown do not include shares held by the individual’s spouse, as to
                which the individual disclaims beneficial ownership.6Reflects
                the transfer by Ms. Zheng Luo, as part of the reverse acquisition,
                of
                140,891 shares of common stock to JAIC-CROSBY Greater China Investment
                Fund Limited.7Includes warrants to purchase 200,000 shares of our common stock,
                which
                may by their terms become exercisable within 60 days of the date
                of this
                report.8JAIC-CROSBY Greater China Investment Fund Limited was a “control person”
                and affiliate of Omnia prior to the reverse acquisition and 2007
                Private
                Placement by reason of the existence and its exercise of its contractual
                rights under its preferred investment documentation, and may now
                be deemed
                to be a “control person” and affiliate of the
                Company.




**Make-Good
      Provision**




In
      connection with the 2007 Private Placement, Zheng (Cindy) Luo (the principal
      stockholder and chief executive officer of the Company), and another stockholder
      agreed to place 41.11% of the shares of Common Stock they collectively own
      (including 40% of the shares owned by Ms. Luo) in escrow (the “Escrow Shares”).
      The Escrow Shares represented approximately 19.79% of the Company’s total
      post-reverse acquisition and pre-2007 Private Placement issued and outstanding
      shares. If the Company failed to report net income of at least $2.0 million
      under U.S. GAAP (before adjustments for non-cash and cash charges related to
      the
      reverse acquisition and 2007 Private Placement, including any liquidated damages
      payments under the registration rights agreement with the 2007 Private Placement
      investors (the “Registration Rights Agreement”) and any expense relating to any
      issuance of shares by us prior to the reverse acquisition and 2007 Private
      Placement, and for any charges related to the release of the Escrow Shares,
      and
      before accounting for the impact on net income of any equity incentive options
      or shares granted) for the fiscal year 2007, the escrow agent was to transfer
      to
      the investors in the 2007 Private Placement the number of Escrow Shares based
      on
      the following formula: (($2.0 million - 2007 adjusted reported net income)/$2.0
      million) multiplied by the Escrow Shares, subject to a maximum number of 50%
      of
      the Escrow Shares.




51




As
      the
      Company’s reported net income under U.S. GAAP (before adjustments for non-cash
      and cash charges, which include the RTO expenses described
      below, related to the reverse acquisition and 2007 Private Placement,
      including any liquidated damages payments under the registration rights
      agreement with the 2007 Private Placement investors (the “Registration Rights
      Agreement”) and any expense relating to any issuance of shares by us prior to
      the reverse acquisition and 2007 Private Placement, and for any charges related
      to the release of the Escrow Shares, and before accounting for the impact on
      net
      income of any equity incentive options or shares granted) for the fiscal year
      2007 exceeded $2.0 million, 50% of the Escrow Shares are being returned by
      the
      escrow agent to Ms. Luo and the other stockholder. The
“RTO
      Expenses,” which are general and administrative expenses for accounting
      purposes, totaled $970,320 and were incurred in conjunction with the October
      2007 reverse acquisition, the October 2007 PIPE and the related SEC resale
      registration (the “RTO Expenses”). The RTO expenses consist of shell company
      related expenses,
      including certain fees paid to theplacement agent and investor relations agency($218,113), auditing fees ($67,293), legal fees ($301,403), entertainment
      expenses related to the reverse acquisition and the October 2007 PIPE ($5,123),
      travel expenses ($63,380), consultancy fees, which include fees paid for
      RTO and PIPE related market research and consulting services ($233,763),
      exchange loss relating to the payment of RTO expenses ($19,242) and other
      expenses ($62,003).




If
      th
      Company fails to report net income of at least $4.3 million under U.S. GAAP
      (before adjustments for non-cash and cash charges related to the reverse
      acquisition and 2007 Private Placement, including any liquidated damages
      payments under the Registration Rights Agreement and any expense relating to
      any
      issuance of shares by us prior to the reverse acquisition and 2007 Private
      Placement, and for any charges related to the release of Escrow Shares, and
      before accounting for the impact on net income of any equity incentive options
      or shares granted) for the fiscal year 2008, the escrow agent shall transfer
      to
      the investors in the 2007 Private Placement the lesser of: (1) the number of
      Escrow Shares based on the following formula: ($4.3 million - 2008 adjusted
      reported net income/$4.3 million) multiplied by the Escrow Shares; or (2) the
      number of Escrow Shares still in escrow.




***Changes
      in Control***




We
      do not
      currently have any arrangements which if consummated may result in a change
      of
      control of our Company.




***Securities
      Authorized for Issuance under Equity Compensation
      Plans***




The
      Company adopted in the first quarter of 2008 an employee equity incentive plan
      under which the Company’s officers, directors, consultants, and employees will
      be eligible to receive, in relevant part, either securities or stock options
      exercisable for the Company’s securities at exercise prices that must generally
      be no less than the then prevailing fair market value of the Company’s common
      stock on the date of grant. The Company has reserved five million (5,000,000)
      shares of common stock for issuance under this plan.




**ITEM
              12.**
            **CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                INDEPENDENCE**




***Transactions
      with Related Persons***




The
      following includes a summary of transactions since the beginning of the 2007
      fiscal year, or any currently proposed transaction, in which we were or are
      to
      be a participant and the amount involved exceeded or exceeds $120,000, and
      in
      which any related person had or will have a direct or indirect material interest
      (other than compensation described under “Executive Compensation”). We believe
      the terms obtained or consideration that we paid or received, as applicable,
      in
      connection with the transactions described below were comparable to terms
      available or the amounts that would be paid or received, as applicable, in
      arm’s-length transactions.




On
      October 9, 2007, we completed a reverse acquisition transaction with Omnia
      BVI
      in which we issued to the shareholders of Omnia BVI 16,800,000 shares of our
      common stock in exchange for all of the issued and outstanding shares of Omnia
      BVI. As a result, Omnia BVI became our wholly-owned subsidiary and the former
      shareholders of Omnia BVI became our controlling shareholders.




The
      Company’s operating subsidiary, Oriental Fashion, purchased finished goods for
      $821,196 from Oumeng during 2006. A substantial percentage of these purchases
      resulted from Oumeng acting as temporary procurement agents and contracting
      parties with third-party manufacturers and suppliers during the period before
      Oriental Fashion received its business license. Certain of the Company’s
      principal shareholders were also principal shareholders of Oumeng throughout
      2006 and early 2007 and a director of Oriental Fashion, who is also the spouse
      of a principal Company’s shareholder and director of Oriental Fashion, managed
      part of the business of Oumeng during the same period. Therefore, Oumeng is
      deemed to have been under common control with the Company during the time these
      purchases occurred.




52




The
      Company’s operating subsidiary, Oriental Fashion, entered into an agreement in
      2006 for the purchase of finished goods for $1,337,875 from Yin Hu, an affiliate
      of the Company at that time, for delivery originally during the quarter ended
      March 31, 2007. A portion of the payments due and of the deliveries to be made
      were deferred into the second quarter of 2007, and the remaining undelivered
      goods are to be delivered in August 2007. A principal shareholder of the Company
      was also a principal shareholder of Oriental Fashion throughout 2006 and part
      of
      the first quarter of 2007. Therefore, Yin Hu is deemed to have been under common
      control with the Company during the time these purchases occurred.




The
      Company believes the terms obtained and consideration paid in connection with
      the transactions described above were no less favorable than those that would
      have been obtained by the Company’s subsidiary in arm’s-length transactions with
      an unrelated party.




Under
      Ms.
      Zheng Luo’s employment contract with our operating subsidiary, Oriental Fashion,
      she may not compete with Oriental Fashion while employed and, if she terminates
      employment, Oriental Fashion may thereafter restrict her from competing with
      its
      business for up to three years, provided it pays her a total of RMB 1,800,000
      in
      consideration of her performance of the three-year non-compete
      provision.




In
      connection with the 2007 Private Placement, we (a) paid commissions and a
      non-accountable expense allowance totaling $568,875, and (b) issued warrants
      to
      purchase 492,000 shares of the Company’s common stock, to Keating Securities, as
      a financial advisory fee in partial consideration of their services in
      connection with the 2007 Private Placement, pursuant to a previously reported
      placement agreement entered into with Keating Securities on September 14, 2007.
      Prior to consummation of the reverse acquisition and 2007 Private Placement,
      we
      may be deemed to have been an affiliate of Keating Securities by reason of
      the
      ownership of shares of our common stock by principals and executives of Keating
      Securities.




The
      Company believes the terms obtained and consideration paid in connection with
      the transactions described above were no less favorable than those that would
      have been obtained by the Company (or its operating subsidiary in the case
      of
      those transactions with Oriental Fashion) in arm’s-length transactions with an
      unrelated party.




In
      connection with the reverse acquisition, JAIC-CROSBY Greater China Investment
      Fund Limited (the “Lead Investor”), which was a “control person” and affiliate
      of Omnia BVI prior to the reverse acquisition and 2007 Private Placement by
      reason of the existence and its use of its contractual rights under its
      preferred investment documentation, and which may now be deemed to be a “control
      person” and affiliate of the Company, in consideration of its relinquishing
      certain rights, (a) retains certain put rights with respect to its shares as
      against Ms. Zheng Luo (but not as against us) if we do not obtain an OTCBB
      quotation or the Lead Investor’s shares are not registered for resale or
      otherwise eligible to be publicly resold by July 1, 2008, (b) received an
      additional 149,884 shares of our common stock from Ms. Zheng Luo and another
      former Omnia BVI shareholder as part of the reverse acquisition, and (c) may
      be
      entitled to additional shares of our common stock if the make good or
      antidilution provisions applicable to investors in the 2007 Private Placement
      result in additional shares being transferred or issued to those
      investors.




Except
      as
      set forth in our discussion above, none of our directors, director nominees
      or
      executive officers has been involved in any transactions with us or any of
      our
      directors, executive officers, affiliates or associates which are required
      to be
      disclosed pursuant to the rules and regulations of the SEC.




53




***Director
      Independence***




Each
      of
      Qing Huang, Fei Luo, Charles C. Mo and Tianhong Yu (collectively, the
“Independent Directors”) were elected to serve on the Board of Directors as an
“independent director” as defined by Rule 4200(a)(15) of the Marketplace Rules
      of The Nasdaq Stock Market, Inc. (the “Nasdaq Marketplace Rules”), and the Board
      of Directors has confirmed the “independent director” status under the Nasdaq
      Marketplace Rules of each of the Independent Directors.




**ITEM
      13. EXHIBITS**




The
      following exhibits are filed as part of this report or incorporated by
      reference:




**Exhibit**
              **No.**
            
            **Description**2.1
            
            Share
                Exchange Agreement, dated October 9, 2007, among the registrant,
                certain
                stockholders of the registrant signatory thereto, Omnia Luo Group
                Limited,
                and the shareholders of Omnia Luo Group Limited (filed as an exhibit
                to
                the Current Report of Wentworth II, Inc. on Form 8-K, as filed with
                the
                SEC on October 15, 2007, and incorporated herein by
                reference).*3.1
            
            Certificate
                of Incorporation of Wentworth II, Inc. as filed with the Secretary
                of
                State of Delaware (filed as an exhibit to the registration statement
                of
                Wentworth II, Inc. on Form SB-2, as filed with the SEC on December
                12,
                2001, and incorporated herein by reference).*3.2
            
            Bylaws
                of Wentworth II, Inc. (filed as an exhibit to the registration statement
                of Wentworth II, Inc. on Form SB-2, as filed with the SEC on December
                12,
                2001, and incorporated herein by reference).*4.1
            
            Form
                of Warrant to Purchase Common Stock issued by the registrant to certain
                investors, dated October 9, 2007 (filed as an exhibit to the Current
                Report of Wentworth II, Inc. on Form 8-K, as filed with the SEC on
                October
                15, 2007, and incorporated herein by reference).*4.2
            
            Form
                of Warrant to Purchase Common Stock issued by the registrant to certain
                of
                the former shareholders of Omnia Luo Group Limited in exchange for
                their
                warrants to purchase ordinary shares of Omnia Luo Group Limited,
                dated
                October 9, 2007 (filed as an exhibit to the Current Report of Wentworth
                II, Inc. on Form 8-K, as filed with the SEC on October 15, 2007,
                and
                incorporated herein by reference).*4.3
            
            Form
                of Common Stock Placement Agent Warrant issued by the registrant
                to
                Keating Securities, LLC, dated October 9, 2007 (filed as an exhibit
                to the
                Current Report of Wentworth II, Inc. on Form 8-K, as filed with the
                SEC on
                October 15, 2007, and incorporated herein by reference).*4.4
            
            Form
                of Registration Rights Agreement by and among the registrant , investors
                and other stockholders signatory thereto, dated October 9, 2007 (filed
                as
                an exhibit to the Current Report of Wentworth II, Inc. on Form 8-K,
                as
                filed with the SEC on October 15, 2007, and incorporated herein by
                reference).*4.5
            
            Form
                of Lock-up Agreement among the registrant and certain stockholders,
                dated
                October 9, 2007 (filed as an exhibit to the Current Report of Wentworth
                II, Inc. on Form 8-K, as filed with the SEC on October 15, 2007,
                and
                incorporated herein by reference).*10.1
            
            Form
                of Securities Purchase Agreement by and among the registrant, and
                certain
                investors, dated October 9, 2007 (filed as an exhibit to the Current
                Report of Wentworth II, Inc. on Form 8-K, as filed with the SEC on
                October
                15, 2007, and incorporated herein by reference).*




54




10.2
            
            Form
                of Make Good Escrow Agreement by and among the registrant, Zheng
                Luo, Kong
                Amy Wai Man Ng, Keating Securities, LLC, as agent and Corporate Stock
                Transfer, Inc., as escrow agent, dated October 9, 2007 (filed as
                an
                exhibit to the Current Report of Wentworth II, Inc. on Form 8-K,
                as filed
                with the SEC on October 15, 2007, and incorporated herein by reference).*10.3
            
            First
                Amendment Agreement by and among the registrant, Omnia Luo Group
                Limited,
                Zheng Luo and JAIC-CROSBY Greater China Investment Fund Limited,
                dated as
                of October 4, 2007 (filed as an exhibit to the Current Report of
                Wentworth
                II, Inc. on Form 8-K, as filed with the SEC on October 15, 2007,
                and
                incorporated herein by reference).*10.4
            
            First
                Amendment Agreement by and among the registrant, Omnia Luo Group
                Limited,
                Zheng Luo and certain holders of Omnia Luo Group Limited preferred
                shares,
                dated as of October 4, 2007 (filed as an exhibit to the Current Report
                of
                Wentworth II, Inc. on Form 8-K, as filed with the SEC on October
                15, 2007,
                and incorporated herein by reference).*10.5
            
            Agreement
                with Principal Shareholder, Chief Executive Officer and Director
                by and
                between the registrant and Zheng Luo, dated October 9, 2007 (filed
                as an
                exhibit to the Current Report of Wentworth II, Inc. on Form 8-K,
                as filed
                with the SEC on October 15, 2007, and incorporated herein by reference).*10.6
            
            Assignment
                and Assumption Agreement by and between Omnia Luo Group Limited and
                the
                registrant, dated October 9, 2007 (filed as an exhibit to the Current
                Report of Wentworth II, Inc. on Form 8-K, as filed with the SEC on
                October
                15, 2007, and incorporated herein by reference).*14.1
            
            Business
                Ethics Policy and Code of Conduct (Incorporated by reference to Exhibit
                14.1 to the registrant’s Current Report on
              Form
                8-K filed on February 1, 2008).*21
            
            Subsidiaries
                of the registrant (Incorporated by reference to Exhibit 21 to the
                registrant’s Current Report on Form 8-K filed on October 15,
                2007).*31.1
            
            Certification
                of Principal Executive Officer filed pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.**31.2
            
            Certification
                of Principal Financial Officer filed pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.**32.1
            
            Certification
                of Principal Executive Officer furnished pursuant to 18 U.S.C. Section
                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002.**32.2
            
            Certification
                of Principal Financial Officer furnished pursuant to 18 U.S.C. Section
                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002.**




*
      Incorporated by reference.





**
      Filed
      herewith.





**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**




***Audit
      Fees***




The
      aggregate fees billed for each of the fiscal years ended December 31, 2006
      and
      2007 for professional services rendered by the principal accountant for the
      audit of our annual financial statements and review of the financial statements
      included in our Form 10-QSB or services that are normally provided by the
      accountant in connection with statutory and regulatory filings or engagements
      for the fiscal years ended December 31, 2006 and 2007 were $35,000 and $78,000,
      respectively.




55




***Audit-Related
      Fees***




The
      aggregate fees billed in each of the fiscal years ended December 31, 2007 and
      2006 for assurance and related services by the principal accountant that are
      reasonably related to the performance of the audit or review of the registrant’s
      financial statements and are not reported under the paragraph captioned “Audit
      Fees” above are $20,000 and $0, respectively. The services provided by our
      accountants within this category consisted of advice relating to the Form SB-2
      filed by the Company on November 7, 2007.




***Tax
      Fees***




The
      aggregate fees billed in each of the fiscal years ended December 31, 2007 and
      2006 for professional services rendered by the principal accountant for tax
      compliance, tax advice, and tax planning were $0 and $0, respectively.




***All
      Other Fees***




The
      aggregate fees billed in each of the fiscal years ended December 31, 2007 and
      2006 for products and services provided by the principal accountant, other
      than
      the services reported above under other captions of this Item 14 are $0 and
      $0,
      respectively.




***Pre-Approval
      Policies and Procedures***




Under
      the
      Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our
      auditors must be approved in advance by our Board to assure that such services
      do not impair the auditors’ independence from us. In accordance with its
      policies and procedures, our Board pre-approved the audit and non-audit service
      performed by our auditor for our consolidated financial statements as of and
      for
      the year ended December 31, 2007.




56


**SIGNATURES**




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


**OMNIALUO,
                INC.**Dated:
                March 31**,**2008
            By:
            /s/
                Zheng LuoZheng
                Luo, CEO and President




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.




Each
      person whose signature appears below hereby authorizes Zheng Luo or Xiaomei
      Luo
      as attorneys-in-fact to sign on his or her behalf, individually, and in each
      capacity stated below, and to file all amendments and/or supplements to this
      annual report on Form 10-KSB.




**Signature**
            
            **Title**/s/
                Zheng Luo
            
            Chief
                Executive Officer and
            
            March
                31**,**2008Zheng
                Luo
            
            Chairwoman
              (Principal
              Executive Officer)/s/
                Xiaomei Liu
            
            Chief
                Financial Officer (Principal
            
            March
                31**,**2008Xiaomei
                Liu
            
            Financial
              and
              Accounting Officer)/s/
                Wenbin Fang
            
            Director
            
            March
                31**,**2008Wenbin
                Fang/s/
                Qing Huang
            
            Director
            
            March
                31**,**2008Qing
                Huang/s/
                Fei Luo
            
            Director
            
            March
                31**,**2008Fei
                Luo/s/
                Xiaoyin Luo
            
            Director
            
            March
                31**,**2008Xiaoyin
                Luo/s/
                Charles C. Mo
            
            Director
            
            March
                31,****2008Charles
                C. Mo/s/
                Tianhong Yu
            
            Director
            
            March
                31,****2008Tianhong
                Yu





57




**OmniaLuo** **,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**





Consolidated
      Financial Statements





For
      the
      year ended December 31, 2007


(Stated
      in US dollars)







**OMNIALUO,
        INC.**
 (Formerly
        Wentworth II,
        Inc.)
  **INDEX
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **FOR
        THE**
  **YEAR
        ENDED DECEMBER 31, 2007**
  PAGEINDEX
                  TO CONSOLIDATED FINANCIAL STATEMENTSREPORT
                  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              
              
              F-1CONSOLIDATED
                  STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
              
              
              F-2CONSOLIDATED
                  BALANCE SHEET
              
              
              F-3CONSOLIDATED
                  STATEMENTS OF STOCKHOLDERS’ EQUITY
              
              
              F-4CONSOLIDATED
                  STATEMENTS OF CASH FLOWS
              
              
              F-5NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS
              
              
              F-6
                  - F-20








**Report
      of Independent Registered Public Accounting Firm**





To
      the
      Directors and Stockholders of


OmniaLuo,
      Inc.


(Formerly
      Wentworth II, Inc.)





We
      have
      audited the accompanying consolidated balance sheet of OmniaLuo, Inc. (Formerly
      Wentworth II, Inc.) (the “Company”) and its subsidiaries as of December 31,
      2007, and the related consolidated statements of operations and comprehensive
      income, stockholders’ equity and cash flows for each of the two years in the
      period ended December 31, 2007. These financial statements are the
      responsibility of the Company’s management. Our responsibility is to express an
      opinion on these financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the consolidated financial position of the Company and its
      subsidiaries as of December 31, 2007, and the consolidated results of their
      operations and their cash flows for each of the two years in the period ended
      December 31, 2007 in conformity with accounting principles generally accepted
      in
      the United States of America.




PKF


Certified
      Public Accountants


Hong
      Kong, China


March 27,
      2008




F-1


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Consolidated
      Statements of Operations and Comprehensive Income**


**(Stated
      in US Dollars)**





Year
                ended December 31,2007
            
            2006Revenues
                - Note 3
            
            $
            7,875,757
            
            $
            1,479,603Cost
                of revenues
            
            
            (3,624,486
            )
            
            (788,050
            )Gross
                profit
            
            
            4,251,271
            
            
            691,553ExpensesGeneral
                and administrative expenses
            
            
            1,923,899
            
            
            113,760Depreciation
            
            
            129,678
            
            
            20Selling
                and marketing expenses
            
            
            979,459
            
            
            93,5373,033,036
            
            
            207,317Income
                from operations
            
            
            1,218,235
            
            
            484,236Interest
                income
            
            
            5,647
            
            
            900Other
                income
            
            
            19,329
            
            
            -Finance
                costs - Note 4
            
            
            (38,802
            )
            
            (339
            )Make
                good provision - Note 14
            
            
            (2,299,893
            )
            
            -(Loss)
                income before income taxes
            
            
            (1,095,484
            )
            
            484,797Income
                taxes - Note 5
            
            
            -
            
            
            (78,114
            )Net
                (loss) income
            
            $
            (1,095,484
            )
            $
            406,683Other
                comprehensive incomeForeign
                currency translation adjustments
            
            
            286,560
            
            
            10,162Comprehensive
                (loss) income
            
            $
            (808,924
            )
            $
            416,845(Loss)
                earnings per share - Note 6Basic
                and diluted
            
            $
            (0.05
            )
            $
            0.02Weighted
                average number of shares outstandingBasic
                and diluted
            
            
            21,993,753
            
            
            16,800,000




See
      Notes
      to Consolidated Financial Statements




F-2


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Consolidated
      Balance Sheet**


**(Stated
      in US Dollars)**





December
                31,2007**ASSETS**Current
                assetsCash
                and cash equivalents
            
            $
            3,083,715Trade
                receivables (net of allowance of doubtful accounts of $8,313) - Note
                7
            
            
            1,573,644Inventories
                - Note 8
            
            
            2,602,653Deposits
                - Note 9
            
            
            1,995,229Total
                current assets
            
            
            9,255,241Property
                and equipment, net - Note 10
            
            
            724,681**TOTAL
                ASSETS**
            
            $
            9,979,922**LIABILITIES
                AND STOCKHOLDERS’ EQUITY****LIABILITIES**Current
                liabilitiesTrade
                payables
            
            $
            281,027Loans
                from stockholders - Note 12
            
            
            14,294Other
                payables, deposits received and accrued expenses - Note 13
            
            
            1,368,890Total
                current liabilities
            
            
            1,664,211**TOTAL
                LIABILITIES**
            
            
            1,664,211**COMMITMENTS
                - Note 15****STOCKHOLDERS’
                EQUITY**Common
                stock: par value $0.01 per shareAuthorized
                40,000,000 shares; issued and outstanding 22,840,000
                shares
            
            
            228,400Preferred
                stock: par value $0.01 per shareAuthorized
                10,000,000 shares; none issued and outstanding
            
            
            -Additional
                paid-in capital
            
            
            8,479,390Statutory
                reserve - Note 16
            
            
            261,948Accumulated
                other comprehensive income
            
            
            296,722Accumulated
                deficit
            
            
            (950,749
            )**TOTAL
                STOCKHOLDERS’ EQUITY**
            
            
            8,315,711**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY**
            
            $
            9,979,922




See
      Notes
      to Consolidated Financial Statements




F-3


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Consolidated
      Statements of Stockholders’ Equity**


**(Stated
      in US Dollars)**





*Accumulated*
            
            *Retained**Common
                stock*
            
            *Additional*
            
            
            
            *other*
            
            *earnings**No.
                of*
              *shares*
            
            *Amount*
            
            *paid-in*
                capital
            
            *Statutory*
                *reserve*
            
            *comprehensive*
                *income*
            
            *(accumulated*
                  deficit)
            
            *Total*Balance,
                January 1, 2006
            
            
            16,800,000
            
            $
            168,000
            
            $
            (118,000
            )
            $
            -
            
            $
            -
            
            $
            -
            
            $
            50,000Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            406,683
            
            
            406,683Foreign
                currency translation adjustments
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            10,162
            
            
            -
            
            
            10,162Appropriation
                to reserve
            
            
            -
            
            
            -
            
            
            -
            
            
            44,265
            
            
            -
            
            
            (44,265
            )
            
            -Balance,
                December 31, 2006
            
            
            16,800,000
            
            
            168,000
            
            
            (118,000
            )
            
            44,265
            
            
            10,162
            
            
            362,418
            
            
            466,845Issuance
                of non-redeemable BVI Preferred Shares
            
            
            -
            
            
            -
            
            
            229,840
            
            
            -
            
            
            -
            
            
            -
            
            
            229,840Conversion
                of redeemable BVI Preferred Shares
            
            
            -
            
            
            -
            
            
            500,140
            
            
            -
            
            
            -
            
            
            -
            
            
            500,140Recapitalization
            
            
            1,120,000
            
            
            11,200
            
            
            26,582
            
            
            -
            
            
            -
            
            
            -
            
            
            37,782Common
                stock and warrants issued for the 2007 Private Placement, net of
                expenses
            
            
            4,920,000
            
            
            49,200
            
            
            5,540,935
            
            
            -
            
            
            -
            
            
            -
            
            
            5,590,135Make
                good escrow arrangement
            
            
            -
            
            
            -
            
            
            2,299,893
            
            
            
            
            
            
            
            
            
            
            
            2,299,893Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,095,484
            )
            
            (1,095,484
            )Foreign
                currency translation adjustments
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            286,560
            
            
            -
            
            
            286,560Appropriation
                to reserve
            
            
            -
            
            
            -
            
            
            -
            
            
            217,683
            
            
            -
            
            
            (217,683
            )
            
            -Balance,
                December 31, 2007
            
            
            22,840,000
            
            $
            228,400
            
            $
            8,479,390
            
            $
            261,948
            
            $
            296,722
            
            $
            (950,749
            )
            $
            8,315,711




See
      Notes
      to Consolidated Financial Statements




F-4


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Consolidated
      Statement of Cash Flows**


**(Stated
      in US Dollars)**




Year
                ended December 31,2007
            
            2006**Cash
                flows from operating activities**Net
                (loss) income
            
            $
            (1,095,484
            )
            $
            406,683Adjustment
                to reconcile net (loss) income to netcash
                used in operating activities:Depreciation
            
            
            129,678
            
            
            20Allowance
                of doubtful accounts
            
            
            8,313
            
            
            -Allowance
                of obsolete inventories
            
            
            77,676
            
            
            -Make
                good provision
            
            
            2,299,893
            
            
            -Changes
                in operating assets and liabilities:Trade
                receivables
            
            
            (1,442,936
            )
            
            (73,142
            )Inventories
            
            
            (2,542,493
            )
            
            (33,145
            )Deposits
            
            
            (940,297
            )
            
            (927,120
            )Trade
                payables
            
            
            269,668
            
            
            491,632Other
                payables, deposits received and accrued expenses
            
            
            787,347
            
            
            78,460Income
                tax payable
            
            
            (73,939
            )
            
            -Net
                cash flows used in operating activities
            
            
            (2,522,574
            )
            
            (56,612
            )**Cash
                flows from investing activities**Acquisition
                of property and equipment
            
            
            (809,442
            )
            
            (15,484
            )Cash
                acquired from the RTO
            
            
            39,072
            
            
            -Net
                cash flows used in investing activities
            
            
            (770,370
            )
            
            (15,484
            )**Cash
                flows from financing activities**Proceeds
                from issuance of BVI Preferred Shares, net of expenses
            
            
            729,980
            
            
            -Proceeds
                from issuance of common stock, net of expenses
            
            
            5,590,135
            
            
            50,000(Repayment
                of) proceeds from loans from stockholders
            
            
            (89,726
            )
            
            104,229Net
                cash flows provided by financing activities
            
            
            6,230,389
            
            
            154,229Effect
                of foreign currency translation on cash and cash
                equivalents
            
            
            62,814
            
            
            1,323Net
                increase in cash and cash equivalents
            
            
            3,000,259
            
            
            83,456Cash
                and cash equivalents - beginning of year
            
            
            83,456
            
            
            -Cash
                and cash equivalents - end of year
            
            $
            3,083,715
            
            $
            83,456**Supplemental
                disclosure for cash flow information**Interest
                paid
            
            $
            2,532
            
            $
            38Income
                taxes paid
            
            $
            73,939
            
            $
            -




See
      Notes
      to Consolidated Financial Statements




F-5


**OmniaLuo,
      Inc**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**





**1.**  **Corporate
      information**





(a)
            OmniaLuo,
                Inc. (the “Company”) was incorporated in the State of Delaware on March 7,
                2001 under the name of Wentworth II, Inc. for the purpose of pursuing
                a
                business combination. On November 16, 2007, the Company changed its
                name
                to OmniaLuo, Inc..




The
      Company’s common stock began trading on the Over-the-Counter Bulletin Board
      under the ticker symbol “OLOU” on January 10, 2008.





(b)
            On
                October 9, 2007, the Company entered into a share exchange agreement
                with
                Omnia Luo Group Limited (“Omnia BVI”), the shareholders of Omnia BVI and
                certain of the then Company’s principal stockholders. Pursuant to the
                share exchange agreement, the Company agreed to issue to the shareholders
                of Omnia BVI 16,800,000 shares of the Company’s common stock in exchange
                for all of the then issued and outstanding shares of Omnia
                BVI.




The
      aforesaid share exchange transaction was completed on October 9, 2007 and
      thereafter Omnia BVI became a wholly owned subsidiary of the Company and the
      former shareholders of Omnia BVI became the majority stockholders of the
      Company. This transaction constituted a reverse takeover transaction (the
“RTO”).




Concurrently
      with the consummation of the RTO, the Company issued 4,920,000 shares of its
      common stock and five-year warrants to purchase an aggregate of 4,920,000 shares
      of the Company’s common stock at $1.5625 per share for an aggregate purchase
      price of $6.15 million, to a total of 38 investors in a private placement (the
      “2007 Private Placement”). In connection with this private placement, the
      Company issued five-year warrants to purchase 492,000 shares of the Company’s
      common stock at $1.5625 per share to Keating Securities, LLC (“Keating
      Securities”), as a financial advisory fee in partial consideration of their
      services in connection with the private placement. Prior to the consummation
      of
      the RTO and the 2007 Private Placement, the Company was deemed to have been
      an
      affiliate of Keating Securities by reason of the ownership of shares of the
      Company’s common stock by principals and executives of Keating Securities. The
      warrants issued to the investors are to purchase and Keating Securities have
      been classified in equity and were outstanding as of December 31,
      2007.





Omnia
      BVI
      is a business company organized under the laws of the British Virgin Islands
      on
      August 11, 2006. It has conducted no business and is a holding company whose
      only asset is a 100% equity interest in Shenzhen Oriental Fashion Co., Ltd.
      (“Oriental Fashion”). Oriental Fashion was established on September 19, 2006 in
      the People’s Republic of China (the “PRC”).




F-6


**OmniaLuo,
      Inc**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**





**1.**  **Corporate
      information (Cont’d)**





(c)
            Pursuant
                to preferred stock purchase and shareholders agreements dated as
                of
                December 15, 2006 and December 20, 2006, Omnia BVI had issued an
                aggregate
                of 2,147 convertible preferred shares (the “BVI Preferred Shares”) and
                detachable warrants to purchase up to $365,940 in ordinary shares,
                based
                on the offering price in the next financing of Omnia BVI (the “BVI
                Warrants”), to a private venture capital investment fund (the “Lead
                Investor”) and several individual investors for a total cash investment of
                $729,980.





By
                agreements dated as of October 9, 2007: (i) among Omnia BVI, the
                Lead
                Investor, Ms. Zheng Luo (the principal stockholder and chief executive
                officer of the Company) and another of the Company’s stockholders, and
                (ii) among Omnia BVI, Ms. Zheng Luo and each of the other holders
                of BVI
                Preferred Shares and Warrants, effective upon the closing of the
                RTO, each
                BVI Preferred Shares was converted into a specified number of ordinary
                shares of Omnia BVI, with each such ordinary share of Omnia BVI then
                being
                exchanged for 319.8294 shares of the Company’s common stock and each BVI
                Warrant was exchanged for warrants to purchase the Company’s common stock,
                exercisable at any time during a two-year period commencing on December
                17, 2007, at a per share price of
                $1.25.





292,752
      warrants were issued in exchange for the BVI Warrants. Their exercise price
      is
      subject to adjustment for share subdivisions, share combinations, mergers or
      consolidation. These warrants have been classified in equity and were
      outstanding as of December 31, 2007.





The
                Company’s common stock issuable under the aforementioned agreements were
                included in the 16,800,000 shares of the Company’s common stock issued in
                relation to the RTO as detailed in note 1(b) to the financial
                statements.




**2.**  **Description
      of business**





Following
      the RTO, the Company commenced to be engaged in the design, marketing,
      distribution and sales of women’s apparel under the brand names of “OMNIALUO”
and “OMNIALO” (collectively referred to herein as the “OMNIALUO Brands”) through
      a network of over 180 retail stores across the PRC. The Company offers a
      complete line of business casual women’s wear, including bottoms, tops, and
      outerwear, as well as accessories.





There
      are
      currently three different types of retail stores that carry the OMNIALUO Brands:
      (i) Company-owned stores, which stores are owned exclusively by the Company
      and
      carry only the OMNIALUO Brands, (ii) co-owned stores, which stores are owned
      jointly by the Company and a third party, and carry the OMNIALUO Brands
      exclusively, and (iii) independent distributor stores, which stores are owned
      exclusively by third parties and carry the OMNIALUO Brands
      exclusively .




F-7


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**3.**  **Summary
      of significant accounting policies**





Basis
      of presentation





The
      RTO
      has been accounted for as a recapitalization of the Company whereby the
      historical financial statements and operations of Omnia BVI become the
      historical financial statements of the Company, with no adjustments to the
      carrying value of the assets and liabilities. The 1,120,000 shares of the
      Company outstanding prior to the RTO are accounted for at the net book value
      at
      the time of the RTO. The accompanying consolidated financial statements reflect
      the recapitalization of the stockholders’ equity as if the transaction occurred
      as of the beginning of the first period presented.




Omnia
      BVI
      was incorporated on August 11, 2006. As such, the comparative information of
      the
      consolidated statements of operations and comprehensive income, cash flows
      and
      stockholders’ equity cover the
      period from August 11, 2006 to December 31, 2006 for Omnia BVI and Oriental
      Fashion.




Principles
      of consolidation





The
      accompanying consolidated financial statements of the Company have been prepared
      in accordance with generally accepted accounting principles in the United States
      of America (“U.S. GAAP”).





The
      consolidated financial statements include the accounts of the Company and its
      subsidiaries. All significant inter-company accounts and transactions have
      been
      eliminated in consolidation.





Use
      of
      estimates





In
      preparing financial statements in conformity with accounting principles
      generally accepted in the United States of America, management makes estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosures of contingent assets and liabilities at the dates of the financial
      statements, as well as the reported amounts of revenues and expenses during
      the
      reporting periods. These accounts and estimates include, but are not limited
      to,
      the valuation of accounts receivable, inventories, deferred income taxes,
      provision for warranty and the estimation on useful lives of property, plant
      and
      equipment. Management makes these estimates using the best information available
      at the time the estimates are made; however, actual results could differ
      materially from those estimates.





Concentrations
      of credit risk





Financial
      instruments that potentially subject the Company to significant concentrations
      of credit risk consist principally of cash and cash equivalents and trade
      receivables. As of December 31, 2007, the Company’s cash and cash equivalents
      were held by major financial institutions located in the PRC, Hong Kong and
      the
      United States, which management believes are of high credit quality. With
      respect to trade receivables, the Company extends credit based on an evaluation
      of the customer’s financial condition. The Company generally does not require
      collateral for trade receivables and maintains an allowance for doubtful
      accounts of trade receivables.





During
      2007, there was one customer
      that contributed 10% or more to the Company’s consolidated revenue: Hubei
      Province Tian Men Fashion Factory ($980,025). N o
      customer contributed 10% or more to the Company’s consolidated revenue in
      2006.




F-8


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**3.**  **Summary
      of significant accounting policies (Cont’d)**





Cash
      and cash equivalents





Cash
      and
      cash equivalents include all cash, deposits in banks and other highly liquid
      investments with initial maturities of three months. As of December 31, 2007,
      64% of the cash and cash equivalents were denominated in Renminbi (“RMB”) and
      were placed with banks in the PRC. They are not freely convertible into foreign
      currencies and the remittance of these funds out of the PRC is subject to
      exchange control restrictions imposed by the PRC government. The remaining
      balances of cash and cash equivalents denominated in United States and Hong
      Kong
      dollars were 16% and 20% respectively.





Allowance
      of doubtful accounts





The
      Company establishes an allowance for doubtful accounts based on management’s
      assessment of the collectibility of trade receivables. A considerable amount
      of
      judgment is required in assessing the amount of the allowance and the Company
      considers the historical level of credit losses and applies percentages to
      aged
      receivable categories. The Company makes judgments about the creditworthiness
      of
      each customer based on ongoing credit evaluations, and monitors current economic
      trends that might impact the level of credit losses in the future. If the
      financial condition of the customers is to deteriorate, resulting in their
      inability to make payments, a larger allowance may be required.





Based
      on
      the above assessment, during the reporting periods, the management establishes
      the general provisioning policy to make allowance equivalent to the aging of
      trade receivables as follows:





%
                of generalprovisionTrade
                receivables due:Within
                one year
            
            
            0.3After
                one year but within two years
            
            
            20After
                two years but within three years
            
            
            50Over
                three years
            
            
            100





Bad
      debts
      are written off when identified. The Company extends unsecured credit to
      customers ranging from 30 to 45 days in the normal course of business. The
      Company does not accrue interest on trade receivables.





Based
      upon the aforementioned criteria, the management has determined that allowance
      of doubtful accounts amounting to $8,313 was required as of December 31, 2007.
      No such allowance was made in 2006.




F-9


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**3.**  **Summary
      of significant accounting policies (Cont’d)**





Inventories





Inventories
      are stated at the lower of cost or market. Cost is determined on a FIFO basis
      and includes all expenditures incurred in bringing the goods to the point of
      sale and putting them in a saleable condition.





The
      Company estimates net realizable value of inventories based on intended use,
      current market value and inventory ageing analyses. The Company writes down
      the
      inventories for estimated obsolescence or unmarketable inventory equal to the
      difference between the cost of inventories and the estimated market value based
      upon assumptions about future demand and market conditions.





The
      Company provided an allowance of obsolete inventories of $77,676 in 2007. No
      such allowance was made in 2006.




Property
      and equipment





Property
      and equipment are stated at cost less accumulated depreciation. Cost represents
      the purchase price of the asset and other costs incurred to bring the asset
      into
      its existing use.





Depreciation
      is provided on a straight-line basis over the assets’ estimated useful lives.
      The principal depreciation rates are as follows :-





Annual
                rateOffice
                equipment and computers
            
            
            20
            %Machinery
            
            
            20
            %Leasehold
                improvements
            
            
            20
            %Motor
                vehicles
            
            
            20
            %





Maintenance
      or repairs are charged to expense as incurred. Upon sale or disposition, the
      applicable amounts of asset cost and accumulated depreciation are removed from
      the accounts and the net amount less proceeds from disposal is charged or
      credited to income.





Impairment
      of long-lived assets





Long-lived
      assets are tested for impairment whenever events or changes in circumstances
      indicate that the carrying amount of the assets may not be recoverable. The
      Company recognizes impairment of long-lived assets in the event that the net
      book values of such assets exceed the future undiscounted cashflows attributable
      to such assets. During the reporting periods, the Company has not identified
      any
      indicators that would require testing for impairment.




F-10


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**3.**  **Summary
      of significant accounting policies (Cont’d)**





Revenue
      recognition





Revenue
      is recognized when it is probable that the economic benefits will flow to the
      Company and when the revenue can be measured reliably, on the following basis
      :-





(i)
            revenue
                from sales of the Company’s products is recognized when the significant
                risks and rewards of ownership have been transferred to the buyer
                at the
                time of delivery and the sales price is fixed or determinable and
                collection is reasonably assured;
                and





(ii)
            interest
                income is recognized on an accrual
                basis





Advertising
      and transportation expenses





Advertising
      and transportation expenses are charged to expense as incurred.





Advertising
      expenses amounting to $17,448 and $11,301 for the years ended December 31,
      2007
      and 2006 respectively were included in selling and marketing
      expenses.





Transportation
      expenses amounting to $26,999 and $1,395 for the years ended December 31, 2007
      and 2006 respectively were included in selling and marketing
      expenses.





Warranty





The
      Company maintains a policy of providing after sales services for all products
      by
      way of a warranty program. The Company did not maintain a warranty reserve
      as
      there was no record for any goods returned from customers during the reporting
      periods. However, the Company will periodically assess the estimation of its
      warranty liability and recognize the reserve when necessary based on the actual
      experience.





Stock-based
      compensation





The
      Company adopted SFAS No. 123R “Share-Based Payment” to recognize the stock-based
      compensation. Under SFAS 123R, equity instruments issued to service providers
      for their services are measured at the grant-date fair value and recognized
      in
      the statement of operations over the vesting period.





Income
      taxes





The
      Company uses the asset and liability method of accounting for income taxes
      pursuant to SFAS No. 109 “Accounting for Income Taxes”. Under the asset and
      liability method of SFAS 109, deferred tax assets and liabilities are recognized
      for the future tax consequences attributable to temporary differences between
      the financial statements carrying amounts of existing assets and liabilities
      and
      loss carry forwards and their respective tax bases. Deferred tax assets and
      liabilities are measured using enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled.





Off-balance
      sheet arrangements





The
      Company does not have any off-balance sheet arrangements.




F-11


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**3.**  **Summary
      of significant accounting policies (Cont’d)**





Comprehensive
      income





The
      Company has adopted SFAS 130, “Reporting Comprehensive Income”, which
      establishes standards for reporting and display of comprehensive income, its
      components and accumulated balances. Components of comprehensive income include
      net (loss) income and foreign currency translation adjustments.





Foreign
      currency translation





The
      functional currency of the Company is United States dollars (“US$”) while that
      of its subsidiaries are Hong Kong dollars (“HK$”) and Renminbi (“RMB”). The
      Company maintains its financial statements in the functional currency. Monetary
      assets and liabilities denominated in currencies other than the functional
      currency are translated into the functional currency at rates of exchange
      prevailing at the balance sheet date. Transactions denominated in currencies
      other than the functional currency are translated into the functional currency
      at the exchanges rates prevailing at the dates of the transaction. Exchange
      gains or losses arising from foreign currency transactions are included in
      the
      determination of net income for the respective periods.





For
      financial reporting purposes, the financial statements of the subsidiaries
      which
      are prepared using the functional currency have been translated into US$. Assets
      and liabilities are translated at the exchange rates at the balance sheet date
      and revenue and expenses are translated at the average exchange rates and
      stockholders’ equity is translated at historical exchange rates. Any translation
      adjustments resulting are not included in determining net (loss) income but
      are
      included in foreign currency translation adjustments to other comprehensive
      income, a component of stockholders’ equity. The exchange rates in effect as of
      December 31, 2007 and 2006 were RMB1 for $0.1371 and HKD1 for $0.1282, and
      RMB1
      for $0.1283 and HKD1 for $0.1286 respectively. The average exchange rates for
      the years ended December 31, 2007 and 2006 were RMB1 for $0.1317 and HKD1 for
      $0.1282, and RMB1 for $0.1256 and HKD1 for $0.1287 respectively. There
      was no
      significant fluctuation in the exchange rates for conversion of RMB and HKD
      to
      US$ after the balance sheet date.





Fair
      value of financial instruments





The
      Company considers the carrying values reported in the consolidated balance
      sheet
      for current assets and current liabilities qualifying as financial instruments
      approximate their fair values due to the short-term maturity of such
      instruments.





It
      is the
      management’s opinion that the Company is not exposed to significant interest,
      price, foreign currency or credit risks arising from these financial
      instruments.





Basic
      and diluted earnings per share





The
      Company reports basic earnings per share in accordance with SFAS No. 128,
“Earnings Per Share”. Basic earnings per share is computed using the weighted
      average number of shares outstanding during the periods presented. The weighted
      average number of shares of the Company represents the number of common stock
      outstanding during the reporting periods.




F-12


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**3.**  **Summary
      of significant accounting policies (Cont’d)**





Recently
      issued accounting pronouncements





In
      July
      2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”).
      This interpretation requires the recognition in financial statements the impact
      of a tax position, if that position is more likely than not of being sustained
      on audit, based on the technical merits of the position. The provisions of
      FIN
      48 are effective as of the beginning of the 2007 fiscal year. The adoption
      of
      FIN 48 has no material effect on the Company’s financial
      statements.





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      (“SFAS”) No. 157 “Fair Value Measurement”. SFAS 157 defines fair value,
      establishes a framework for measuring fair value, and expands disclosures about
      fair value measurements. This statement shall be effective for financial
      statements issued for fiscal years beginning after November 15, 2007, and
      interim periods within those fiscal years. Earlier application is encouraged,
      provided that the reporting entity has not yet issued financial statements
      for
      that fiscal year, including any financial statements for an interim period
      within that fiscal year. The provisions of this statement should be applied
      prospectively as of the beginning of the fiscal year in which this statement
      is
      initially applied, except in some circumstances where the statement shall be
      applied retrospectively. The adoption of SFAS 157 has
      no material effect on the Company’s financial statements.





In
      February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for
      Financial Assets and Financial Liabilities - Including an Amendment of FASB
      Statement No. 115”. SFAS 159 permits entities to choose to measure many
      financial instruments and certain other items at fair value. Entities that
      elect
      the fair value option will report unrealized gains and losses in earnings at
      each subsequent reporting date. The fair value option may be elected on an
      instrument-by-instrument basis, with few exceptions. SFAS 159 also establishes
      presentation and disclosure requirements to facilitate comparisons between
      companies that choose different measurement attributes for similar assets and
      liabilities. The requirements of SFAS 159 are effective for the fiscal year
      beginning January 1, 2008. The Company is in the process of evaluating the
      impact that SFAS 159 will have on its financial statements upon
      adoption.





In
      December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
      Consolidated Financial Statements - an amendment of ARB No. 51”. SFAS 160
      establishes accounting and reporting standards for the noncontrolling interest
      in a subsidiary and for the deconsolidation of a subsidiary. The guidance will
      become effective for the fiscal year beginning after December 15, 2008. The
      Company is in the process of evaluating the impact that SFAS 160 will have
      on
      its financial statements upon adoption.





In
      December 2007, the FASB issued SFAS No. 141 (Revised) “Business Combinations”.
      SFAS 141 (Revised) establishes principles and requirements for how the acquirer
      of a business recognizes and measures in its financial statements the
      identifiable assets acquired, the liabilities assumed, and any noncontrolling
      interest in the acquiree. The statement also provides guidance for recognizing
      and measuring the goodwill acquired in the business combination and determines
      what information to disclose to enable users of the financial statements to
      evaluate the nature and financial effects of the business combination. The
      guidance will become effective for the fiscal year beginning after December
      15,
      2008. The Company is in the process of evaluating the impact that SFAS 141
      (Revised) will have on its financial statements upon adoption.




F-13


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**4.**  **Finance
      costs**




Year
                ended December 31,2007
            
            2006Interest
                expenses
            
            $
            2,532
            
            $
            38Bank
                charges and net exchange loss
            
            
            36,270
            
            
            301$
            38,802
            
            $
            339




**5.**  **Income
      taxes**





The
      Company is subject to the United States of America Tax law at tax rate of 34%.
      It has no assessable profit for both years ended December 31, 2007 and 2006.
      The
      Company has not provided deferred taxes on undistributed earnings of its
      non-U.S. subsidiaries as of December 31, 2007, as it is the Company’s current
      policy to reinvest these earnings in non-U.S. operations.





Omnia
      BVI
      was incorporated in the BVI and, under the current laws of the BVI, is not
      subject to income tax.





Oriental
      Fashion is subject to the PRC Enterprise Income Tax (“EIT”) at 27%, of which 24%
      is for national tax and 3% is for local tax, of the assessable profits. Pursuant
      to the relevant PRC tax laws and regulations, Oriental Fashion enjoys a
      preferential income tax rate of 15% since it operates in the Shenzhen Special
      Economic Zone of the PRC.





In
      April
      2007, Oriental Fashion obtained an approval from the PRC government that its
      principal activities be amended to include manufacture of apparels. As Oriental
      Fashion became a wholly-foreign owned enterprise engaged in manufacture industry
      which was duly approved by the PRC tax authority, it was entitled to two years’
exemption, from the first profit making calendar year of operations after offset
      of accumulated taxable losses, followed by 50% tax reduction of national tax
      and
      full exemption of local tax for the immediate next three calendar years. This
      tax holiday commenced in the fiscal financial year 2007.





The
      effective income tax expenses differ from the PRC EIT tax rate of 15% as
      follows:





Year
                ended December 31,2007
            
            2006Provision
                for income taxes at 15%
            
            $
            (164,323
            )
            $
            72,720Non-deductible
                items for tax
            
            
            532,021
            
            
            5,394Tax
                holiday
            
            
            (367,698
            )
            
            -$
            -
            
            $
            78,114




During
      the year ended December 31, 2007, the amount of benefit from tax holiday was
      $367,698 and the effect on loss per share was $0.02.




F-14


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**5.**  **Income
      taxes (Cont’d)**





PRC’s
      legislative body, the National People’s Congress, adopted the unified Enterprise
      Income Tax (“EIT”) Law on March 16, 2007. This new tax law will replace the
      existing separate income tax laws for domestic enterprises and foreign-invested
      enterprises and will become effective on January 1, 2008. Under the new tax
      law, a unified income tax rate is set at 25% for both domestic enterprises
      and
      foreign-invested enterprises. However, there will be a transition period for
      enterprises, whether foreign-invested or domestic, that are currently receiving
      preferential tax treatments granted by relevant tax authorities. Enterprises
      that are subject to an enterprise income tax rate lower than 25% may continue
      to
      enjoy the lower rate and will transit into the new tax rate over a five year
      period beginning on the effective date of the EIT Law. Enterprises that are
      currently entitled to exemptions for a fixed term may continue to enjoy such
      treatment until the exemption term expires. Preferential tax treatments may
      continue to be granted to industries and projects that qualify for such
      preferential treatments under the new law.




**6.**  **(Loss)
      earnings per share - basic and diluted**





The
      basic
      and diluted (loss) earnings per share is calculated using the net (loss) income
      and the weighted average number of shares outstanding during the reporting
      periods. All share and per share data have been adjusted to reflect the
      recapitalization of the Company in the RTO .





As
      of
      December 31, 2007, the warrants issued to the investors and a financial advisor
      in the 2007 Private Placement and the warrants issued in exchange for the BVI
      Warrants were anti-dilutive. There were no dilutive instruments as of December
      31, 2006. Accordingly, the basic and diluted (loss) earnings per share are
      the
      same for both the reporting periods.




**7.**  **Trade
      receivables**





Included
      in trade receivables is an amount of $1,020,441 due from the major customer,
      Hubei Province Tian Men Fashion Factory. Ms. Zheng Luo has undertaken to repay
      the said amount to the Company if this customer defaults on payment. Hubei
      Province Tian Men Fashion Factory and Ms. Luo are business associates and do
      not
      hold any other relationship.





Subsequent
      to the balance sheet date, Hubei Province Tian Men Fashion Factory had settled
      approximately 80% of the receivable.




**8.**  **Inventories**


At
              December
                31,2007Raw
                materials
            
            $
            55,320Work
                in progress
            
            
            29,955Finished
                goods
            
            
            2,598,2572,683,532Allowance
                of obsolete inventories
            
            
            (80,879
            )$
            2,602,653





F-15


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**9.**  **Deposits**


At
              December
                31,2007Rental,
                utilities and other deposits
            
            $
            100,460Trade
                deposits to suppliers
            
            
            1,894,769$
            1,995,229





Included
      in the trade deposits to suppliers is an amount of $137,489 paid to Yin Hu
      Company (“Yin Hu Company”). Yin Hu Company is deemed to have been under common
      control with the Company as a principal stockholder of the Company was also
      a
      principal share holder
      of
      Yin Hu Company during part of the current reporting period. The Company believes
      that the terms obtained and the consideration paid in connection with the
      transaction that gave rise to the trade deposit were no less favorable than
      those that would have been obtained by the Company in arm’s-length transactions
      with an unrelated party.




**10.** **Property
        and equipment, net**


At
              December
                31,2007Office
                equipment and computers
            
            $
            375,048Machinery
            
            
            14,454Leasehold
                improvements
            
            
            455,052Motor
                vehicles
            
            
            17,343861,897Accumulated
                depreciation
            
            
            (137,216
            )Property
                and equipment, net
            
            $
            724,681





Depreciation
      for the years ended December 31, 2007 and 2006 was $129,678 and $20
      respectively. There was no disposal during the reporting
      periods.





**11.**  **Trademarks**


Oriental
        Fashion, currently owns four trademarks, namely “Omnialuo”, “Omnialo”,
“ 歐柏秓羅 ”
and
        “ 歐柏秓奴 ”
which
        were registered in the PRC. These trademarks were transferred to the subsidiary
        from a major stockholder of the Company for nil consideration during
        2006.





**12.**  **Loans
      from stockholders**




Certain
      stockholders extended loans to the Company in 2006, which were interest-free,
      unsecured and repayable on demand. The Company repaid $89,726 to the
      stockholders in 2007.




F-16


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**





**13.
        O** **ther
        payables, deposits received and accrued expenses**


At
              December
                31,2007Other
                payables and accruals
            
            $
            135,558Receipt
                in advance from customers
            
            
            594,678Deposits
                received
            
            
            432,931Value-added
                taxes payable
            
            
            205,723$
            1,368,890




**14.**  **Make
      good escrow agreement**





In
      connection with the 2007 Private Placement, Ms. Zheng Luo and another
      stockholder agreed to place 3,546,268 shares of the Company’s common stock they
      collectively own in escrow (the “Escrow Shares”). If the Company fails to report
      net income of at least $2.0 million under U.S. GAAP (before adjustments for
      non-cash and cash charges related to the RTO and the 2007 Private Placement,
      including any liquidated damages payments under the registration rights
      agreement with the 2007 Private Placement investors (the “Registration Rights
      Agreement”) and any expense relating to any issuance of shares by the Company
      prior to the RTO and the 2007 Private Placement, and for any charges related
      to
      the release of the Escrow Shares, and before accounting for the impact on net
      income of any equity incentive options or shares granted) for the fiscal year
      2007, the escrow agent shall transfer to the investors in the 2007 Private
      Placement the number of Escrow Shares based on the following formula: (($2.0
      million - 2007 Adjusted reported net income)/$2.0 million) multiplied by the
      Escrow Shares, subject to a maximum number of 50% of the Escrow
      Shares.





If
      the
      Company fails to report net income of at least $4.3 million under U.S. GAAP
      (before adjustments for non-cash and cash charges related to the RTO and the
      2007 Private Placement, including any liquidated damages payments under the
      Registration Rights Agreement and any expense relating to any issuance of shares
      by the Company prior to the RTO and the 2007 Private Placement, and for any
      charges related to the release of Escrow Shares, and before accounting for
      the
      impact on net income of any equity incentive options or shares granted) for
      the
      fiscal year 2008, the escrow agent shall transfer to the investors in the 2007
      Private Placement the lesser of: (i) the number of Escrow Shares based on the
      following formula: (($4.3 million - 2008 Adjusted reported new income)/$4.3
      million) multiplied by the Escrow Shares; or (ii) the number of Escrow Shares
      still in escrow.




As
      overall segment profit (before unallocated expenses relating to the reverse
      acquisition, the 2007 Private Placement and related SEC resale registration
      totaling $ 970,320 (“RTO
      Expenses”), but less other unallocated general and administrative expenses of
      $ 2,098 relating
      to corporate operations, not included in the segment information) for the year
      ended December 31, 2007 was $ 2,176,827,
      t he
      Company achieved the net income threshold for the fiscal year 2007 and the
      shares held in escrow will be released back to Ms. Luo and the other
      stockholder. Since Ms. Luo is also the director and chief executive officer
      of
      the Company, the release of shares from escrow to her constitutes a compensatory
      plan and are treated
      as an expense for the amount of the market value of the shares as of the date
      the performance goals are met, i.e. December 31, 2007.




RTO
                  Expenses comprise:Legal
                  fee
              
              
              $301,403Consultancy
                  feea
              
              
              233,763Audit
                  fee
              
              
              67,293Travel
                  expenses
              
              
              63,380Entertainment
              
              
              5,123Exchange
                  loss
              
              
              19,242Shell
                  company related expensesb
              
              
              218,113Others
              
              
              62,003$970,320
  a
              For
                provision of market research and consulting services related to the
                RTO
                and 2007 Private Placementb
              Included
                mainly reverse merger fee and reimbursement of expensese related
                to the
                RTO and 2007 Private Placement




F-17




**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**14.**  **Make
      good escrow agreement (Cont’d)**





The
      Company’s common stock began trading on the Over-the-Counter Bulletin Board on
      January 10, 2008. The per share closing price of the Company’s common stock on
      January 10, 2008 of $1.5 was used to calculate the compensation expense. The
      total expense recognized for the fiscal year 2007 is $2,299,893 and the
      potential impact of the release of shares upon the financial statements is
      estimated to be approximately $2.3 million for fiscal year 2008.





The
      release of shares from escrow to the other stockholder does not constitute
      a
      compensatory plan as this stockholder did not hold and currently does not hold
      any position in the Company and has no relationship to the Company other than
      as
      a stockholder.




**15.**  **Commitments**





Operating
      lease arrangements





The
      Company leases office premises and showrooms under various non-cancelable
      operating lease agreements that expire at various dates through years 2008
      to
      2013. The minimum future commitments payable under these agreements as of
      December 31, 2007 is $1,112,411.





Payable
                in:2008
            
            $
            357,3262009
            
            
            279,6102010
            
            
            259,5422011
            
            
            146,6542012
            
            
            36,949Over
                5 years
            
            
            32,330$
            1,112,411





Rental
      expenses under operating leases were $227,602 and $10,577 for the years ended
      December 31, 2007 and 2006 respectively.




**16.**  **S** **tatutory
      reserve**





The
      statutory reserve comprises the statutory reserve of Oriental Fashion. In
      accordance with the relevant PRC regulations, Oriental Fashion is required
      to
      appropriate 10% of its net income determined in accordance with PRC GAAP each
      year, if any, to fund the statutory reserve until the balance of the reserve
      reaches 50% of the registered capital.





The
      statutory reserve is not distributable and can be used to make up cumulative
      prior year losses.




F-18


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**17.**  **Defined
      contribution plan**





The
      Company’s subsidiary has a defined contribution plan for all its qualified
      employees in the PRC. The Company’s subsidiary and its employees are each
      required to make contributions to the plan at the rates specified in the plan.
      The only obligation of the Company’s subsidiary with respect to retirement
      scheme is to make the required contributions under the plan. No forfeited
      contribution is available to reduce the contribution payable in future years.
      The defined contribution plan contributions were charged to the consolidated
      statements of income. The Company’s subsidiary contributed $15,197 and $968 for
      the years ended December 31, 2007 and 2006 respectively.




**18.**  **Related
      party transactions**





Apart
      from the transactions and information as disclosed elsewhere in the financial
      statements, the Company had the following material transactions with Yin Hu
      Company and Shenzhen Oumeng Industrial Co., Ltd. (“Oumeng”) during the reporting
      periods:





Year
                ended December 31,2007
            
            2006Purchase
                of finished goods from Yin Hu Company
            
            $
            1,185,895
            
            $
            -Subcontracting
                charges paid to Yin Hu Company
            
            
            389,234
            
            
            -Purchase
                of finished goods from Oumeng
            
            $
            1,451,699
            
            $
            821,196





Certain
      of the Company’s principal stockholders were also principal shareholders of
      Oumeng during the reporting period and a director of Oriental Fashion, who
      is
      also the spouse of a principal Company’s stockholder and director of Oriental
      Fashion, managed part of the business of Oumeng during the reporting periods.
      A
      principal stockholder of the Company was also a principal shareholder of Yin
      Hu
      Company during part of the reporting period. Therefore, each of Oumeng and
      Yin
      Hu Company is deemed to have been under common control with the Company during
      the reporting periods.





The
      Company has advised that it believes the terms obtained and consideration paid
      in connection with the transactions described above were no less favorable
      than
      those that would have been obtained by the Company in arm’s-length transactions
      with an unrelated party.




F-19


**OmniaLuo,
      Inc.**


**(Formerly
      Wentworth II, Inc.)**


**Notes
      to Consolidated Financial Statements**


**(Stated
      in US Dollars)**




**19.**  **Segment
      information**





The
      Company operates in the women’s apparel industry. Revenues for the current
      reporting period consist of retail sales (including Company-owned and co-owned
      stores) and sales to distributors. Information for the two segments is disclosed
      as below :-





Retail
                sales
            
            Sales
                to distributors
            
            Total2007
            
            2006
            
            2007
            
            2006
            
            2007
            
            2006Revenue
                from external customers
            
            $
            1,849,765
            
            $
            -
            
            $
            6,025,992
            
            $
            1,479,603
            
            $
            7,875,757
            
            $
            1,479,603Gross
                profit
            
            $
            1,110,490
            
            
            -
            
            
            3,140,781
            
            
            691,553
            
            
            4,251,271
            
            
            691,553Interest
                income
            
            
            1,075
            
            
            -
            
            
            3,506
            
            
            900
            
            
            4,581
            
            
            900Interest
                expenses
            
            
            595
            
            
            -
            
            
            1,937
            
            
            38
            
            
            2,532
            
            
            38Depreciation
            
            
            36,109
            
            
            -
            
            
            93,569
            
            
            20
            
            
            129,678
            
            
            20Segment
                profit
            
            
            137,294
            
            
            -
            
            
            2,039,533
            
            
            484,797
            
            
            2,176,827
            
            
            484,797Segment
                assets
            
            
            3,195,679
            
            
            -
            
            
            5,663,133
            
            
            1,154,715
            
            
            8,858,812
            
            
            1,154,715Expenditure
                for segment assets
            
            $
            168,859
            
            $
            -
            
            $
            642,666
            
            $
            15,815
            
            $
            811,525
            
            $
            15,815





For
      the
      year ended December 31, 2006, all of the Company’s consolidated revenue
      consisted of sales to distributors. The Company did not operate its own retail
      shops yet.





A
      reconciliation is provided for unallocated amounts relating to corporate
      operations which is not included in the segment information :-





Year
                ended December 31,2007
            
            2006Total
                consolidated revenues
            
            $
            7,875,757
            
            $
            1,479,603Total
                profit for reportable segments
            
            $
            2,176,827
            
            $
            484,797Unallocated
                amounts relating to operations:Other
                income
            
            
            1,066
            
            
            -General
                and administrative expenses
            
            
            (973,484
            )
            
            -Make
                good provision
            
            
            (2,299,893
            )
            
            -(Loss)
                income before income taxes
            
            $
            (1,095,484
            )
            $
            484,797





December
                31,2007AssetsTotal
                assets for reportable segments
            
            $
            8,858,812Cash
                and cash equivalents
            
            
            1,121,110$
            9,979,922





All
      of
      the Company’s long-lived assets and customers are located in the PRC.
      Accordingly, no geographic information is presented.




F-20




**EXHIBITS**




**Exhibit**
              **No.**
            
            **Description**2.1
            
            Share
                Exchange Agreement, dated October 9, 2007, among the registrant,
                certain
                stockholders of the registrant signatory thereto, Omnia Luo Group
                Limited,
                and the shareholders of Omnia Luo Group Limited (filed as an exhibit
                to
                the Current Report of Wentworth II, Inc. on Form 8-K, as filed with
                the
                SEC on October 15, 2007, and incorporated herein by
                reference).*3.1
            
            Certificate
                of Incorporation of Wentworth II, Inc. as filed with the Secretary
                of
                  State of Delaware (filed as an exhibit to the registration statement
                of
                Wentworth II, Inc. on Form SB-2, as filed with the SEC on December
                12,
                2001, and incorporated herein by reference).*3.2
            
            Bylaws
                of Wentworth II, Inc. (filed as an exhibit to the registration statement
                of Wentworth II, Inc. on Form SB-2, as filed with the SEC on December
                12,
                2001, and incorporated herein by reference).*4.1
            
            Form
                of Warrant to Purchase Common Stock issued by the registrant to certain
                investors, dated October 9, 2007 (filed as an exhibit to the Current
                Report of Wentworth II, Inc. on Form 8-K, as filed with the SEC on
                October
                15, 2007, and incorporated herein by reference).*4.2
            
            Form
                of Warrant to Purchase Common Stock issued by the registrant to certain
                of
                the former shareholders of Omnia Luo Group Limited in exchange for
                their
                warrants to purchase ordinary shares of Omnia Luo Group Limited,
                dated
                October 9, 2007 (filed as an exhibit to the Current Report of Wentworth
                II, Inc. on Form 8-K, as filed with the SEC on October 15, 2007,
                and
                incorporated herein by reference).*4.3
            
            Form
                of Common Stock Placement Agent Warrant issued by the registrant
                to
                Keating Securities, LLC, dated October 9, 2007 (filed as an exhibit
                to the
                Current Report of Wentworth II, Inc. on Form 8-K, as filed with the
                SEC on
                October 15, 2007, and incorporated herein by reference).*4.4
            
            Form
                of Registration Rights Agreement by and among the registrant , investors
                and other stockholders signatory thereto, dated October 9, 2007 (filed
                as
                an exhibit to the Current Report of Wentworth II, Inc. on Form 8-K,
                as
                filed with the SEC on October 15, 2007, and incorporated herein by
                reference).*4.5
            
            Form
                of Lock-up Agreement among the registrant and certain stockholders,
                dated
                October 9, 2007 (filed as an exhibit to the Current Report of Wentworth
                II, Inc. on Form 8-K, as filed with the SEC on October 15, 2007,
                and
                incorporated herein by reference).*10.1
            
            Form
                of Securities Purchase Agreement by and among the registrant, and
                certain
                investors, dated October 9, 2007 (filed as an exhibit to the Current
                Report of Wentworth II, Inc. on Form 8-K, as filed with the SEC on
                October
                15, 2007, and incorporated herein by reference).*10.2
            
            Form
                of Make Good Escrow Agreement by and among the registrant, Zheng
                Luo, Kong
                Amy Wai Man Ng, Keating Securities, LLC, as agent and Corporate Stock
                Transfer, Inc., as escrow agent, dated October 9, 2007 (filed as
                an
                exhibit to the Current Report of Wentworth II, Inc. on Form 8-K,
                as filed
                with the SEC on October 15, 2007, and incorporated herein by reference).*









10.3
            
            First
                Amendment Agreement by and among the registrant, Omnia Luo Group
                Limited,
                Zheng Luo and JAIC-CROSBY Greater China Investment Fund Limited,
                dated as
                of October 4, 2007 (filed as an exhibit to the Current Report of
                Wentworth
                II, Inc. on Form 8-K, as filed with the SEC on October 15, 2007,
                and
                incorporated herein by reference).*10.4
            
            First
                Amendment Agreement by and among the registrant, Omnia Luo Group
                Limited,
                Zheng Luo and certain holders of Omnia Luo Group Limited preferred
                shares,
                dated as of October 4, 2007 (filed as an exhibit to the Current Report
                of
                Wentworth II, Inc. on Form 8-K, as filed with the SEC on October
                15, 2007,
                and incorporated herein by reference).*10.5
            
            Agreement
                with Principal Shareholder, Chief Executive Officer and Director
                by and
                between the registrant and Zheng Luo, dated October 9, 2007 (filed
                as an
                exhibit to the Current Report of Wentworth II, Inc. on Form 8-K,
                as filed
                with the SEC on October 15, 2007, and incorporated herein by reference).*10.6
            
            Assignment
                and Assumption Agreement by and between Omnia Luo Group Limited and
                the
                registrant, dated October 9, 2007 (filed as an exhibit to the Current
                Report of Wentworth II, Inc. on Form 8-K, as filed with the SEC on
                October
                15, 2007, and incorporated herein by reference).*14.1
            
            Business
                Ethics Policy and Code of Conduct (Incorporated by reference to Exhibit
                14.1 to the registrant’s Current Report on Form
              8-K
                filed on February 1, 2008).*21
            
            Subsidiaries
                of the registrant (Incorporated by reference to Exhibit 21 to the
                registrant’s Current Report on Form 8-K filed on October 15,
                2007).*31.1
            
            Certification
                of Principal Executive Officer filed pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.**31.2
            
            Certification
                of Principal Financial Officer filed pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.**32.1
            
            Certification
                of Principal Executive Officer furnished pursuant to 18 U.S.C. Section
                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002.**32.2
            
            Certification
                of Principal Financial Officer furnished pursuant to 18 U.S.C. Section
                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002.**




*
      Incorporated by reference.





**
      Filed
      herewith.