**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB**





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





For
      the
      fiscal year ended **December 31, 2006**





o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE EXCHANGE ACT




For
      the
      transition period from: _________ to __________




**Commission
      file number: 0-26760**




**SINO-AMERICAN
      DEVELOPMENT CORPORATION**





(Exact
      name of small business issuer as specified in it charter)


**Nevada**
            
            **20-5065416**(State
                or other jurisdiction of incorporation or
            
            (IRS
                Employer Identification No.)organization)





**1427
      West Valley Boulevard, Suite 101**


**Alhambra,
      CA 91803**





(Address
      of principal executive offices)




**(310)
      208-1182**





(issuer’s
      telephone number)







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








Securities
      registered pursuant to Section 12(b) of the Act:





Title
                of each class
            Name
                of each exchange on which registeredNone
            None




Securities
      registered pursuant to Section 12(g) of the Act:





Common
      stock, $0.001 par value















(Title
      of
      Class)





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 for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. YesoNox





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not 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).         YesoNo [X]





The
      issuer's revenues for the fiscal year ended December 31, 2006:
      $13,715,501.





As
      of
      November 17, 2006, the aggregate market value of the Common Stock held by
      non-affiliates, approximately 201,527 shares of Common Stock, was approximately
      $1,027,788 based on an average of the bid and ask prices of approximately $5.10
      per share of Common Stock on such date.





The
      number of shares outstanding of the issuer's Common Stock, $.001 par value,
      as
      of September 10, 2007 was 2,408,000 shares.





Documents
      Incorporated By Reference: None.





Transitional
      Small Business Disclosure Format (check one): Yes o No x





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            -











TABLE
      OF CONTENTS


TO
      ANNUAL
      REPORT ON FORM 10-KSB


FOR
      YEAR
      ENDED DECEMBER 31, 2006







PART
                I
            
            PageItem
                1.
            Description
                of Business
            4Item
                2.
            Description
                of Property
            9Item
                3.
            Legal
                Proceedings
            9Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            9








PART
                IIItem
                5.
            Market
                for Registrant's Common Equity and Related
                Stockholder
              Matters
            10Item
                6.
            Management's
                Discussion and Analysis or Plan of
                Operation
            11Item
                7.
            Financial
                Statements
            27Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting
                and Financial Disclosure
            41Item
                8A.
            Controls
                and Procedures
            41Item
                8B.
            Other
                Information
            41











PART
                IIIItem
                9.
            Directors,
                Executive Officers, Promoters and Control Persons and Corporate
                Governance; Compliance with Section 16(a) of the Exchange
                Act
            42Item
                10.
            Executive
                Compensation
            43Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            43Item
                12.
            Certain
                Relationships and Related Transactions; Director
                Independence
            44Item
                13.
            Exhibits
            45Item
                14.
            Principal
                Accountant Fees and Services
            45





Signatures








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            of Contents








**CAUTIONARY
      NOTES REGARDING**


**FORWARD
      LOOKING INFORMATION**





Readers
      of this document and any document incorporated by reference herein, are advised
      that this document and documents incorporated by reference into this document
      contain both statements of historical facts and forward looking statements.
      Forward looking statements are subject to certain risks and uncertainties,
      which
      could cause actual results to differ materially for those indicated by the
      forward-looking statements. Examples of forward looking statements include,
      but
      are not limited to (i) projections of revenues, income or loss, earning or
      loss
      per share, capital expenditures, dividends, capital structure and other
      financial items, (ii) statements of the plans and objectives of the Company
      or
      its management or Board of Directors, including the introduction of new
      products, or estimates or predictions of actions by customers, suppliers,
      competitors or regulatory authorities, (iii) statements of future economic
      performance, and (iv) statements of assumptions underlying other statements
      and
      statements about the Company or its business.





This
      document and any documents incorporated by reference herein also identify
      important factors which could cause actual results to differ materially from
      those indicated by forward looking statements. These risks and uncertainties
      include price competition, the decisions of customers, the actions of
      competitors, the effects of government regulation, possible delays in the
      introduction of new products and services, customer acceptance of products
      and
      services, the Company's ability to secure debt and/or equity financing on
      reasonable terms, and other factors which are described herein and/or in
      documents incorporated by reference herein.





The
      cautionary statements made above and elsewhere by the Company should not be
      construed as exhaustive or as any admission regarding the adequacy of
      disclosures made by the Company. Forward looking statements are beyond the
      ability of the Company to control and in many cases the Company cannot predict
      what factors would cause results to differ materially from those indicated
      by
      the forward looking statements. Unless otherwise required by applicable law,
      we
      do not undertake, and we specifically disclaim any obligation, to update any
      forward looking statements to reflect occurrences, developments, unanticipated
      events or circumstances after the date of such statement.





**PART
      I**





**Item
                1.** **Description
                of
                Business.**





**Company
      History**





SINO-American
      Development Corporation, (the "Company", "SOAD", "we", "us" or "our") was
      originally incorporated in Colorado in 1985 as Gemini Ventures, Inc. The name
      was changed in 1989 to Solomon Trading Company, Ltd., in 1994 to the Voyageur
      First, Inc., in 1995 to North American Resorts, Inc., in 2000 to Immulabs Corp.
      Effective March 28, 2003, as filed with the State of Colorado, the Company
      changed its name to Xerion EcoSolutions Group Inc. and was engaged in the
      business of developing gold extraction technology for the mining industry until
      it became inactive in 2004.





In
      October of 2005, the Company entered into a stock exchange agreement (the
“Exchange Agreement”) with Town House Land Limited, a Hong Kong limited
      liability company ("Town House"), whereby the Company issued stock equal to
      98.75% in its ownership to the equity owners of Town House in exchange for
      100%
      of the ownership interest in Town House. This transaction was treated as a
      recapitalization of Town House for financial reporting purposes.





On
      May
      31, 2006, the shareholders elected to reincorporate the Company from the state
      of Colorado to the state of Nevada and to change the name to SINO-American
      Development Corporation. The





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Company
      also approved a one-for-eight reverse stock split which reduced the number
      of
      shares outstanding from 227,321,840 to 28,415,230.





Town
      House (formerly: Hong Kong Window of the World Apparel Co., Limited) was
      incorporated in Hong Kong, as a private limited liability company on August
      13,
      2001 with an authorized capital of $64,103 (HK$500,000) divided into 500,000
      ordinary shares of par value $0.12 (HK$1.00) each. Town House changed to its
      present name on August 13, 2003. On August 15, 2003, Town House acquired 97%
      of
      the outstanding registered capital of Wuhan Town House Land Limited, a limited
      liability company incorporated in the People’s Republic of China ("Wuhan Town
      House"). Terms of the transaction call for Town House to pay $1,602,564 in
      cash
      plus the contribution of an additional $5,857,488 in share capital in Town
      House
      as consideration for the acquisition of the 97% interest in Wuhan Town House's
      registered capital. For financial reporting purposes, Wuhan Town House was
      considered to be the acquiring entity and the additional cash consideration
      paid
      was treated as a distribution to members. Town House had no operations prior
      to
      this reverse acquisition and there was substantially no change in ownership
      from
      that of Wuhan Town House as a result of this transaction.





During
      2004, Wuhan Town House incorporated two wholly-owned subsidiaries in the United
      States in order to acquire and develop real properties in the southwest regions
      of the country: Town House Land (Miami) Corporation, a Florida corporation
      ("Miami Town House"), and Town House Land (USA) Inc., a California corporation
      ("USA Town House").





**Recent
      Development**





***Reverse
      Stock Split***





On
      December 5, 2006, our Board of Directors and the majority holders of the
      Company’s capital stock jointly adopted and approved resolutions by written
      consent to amend our Articles of Incorporation to effectuate a one-for-seventeen
      reverse stock split of the common stock of the Company (the “Reverse Split”).
      The Reverse Split became effective on January 12, 2007, after the filing of
      the
      Certificate of Amendment to the Articles of Incorporation on January 11, 2007.
      The Reverse Split reduced the number of shares outstanding from approximately
      40,936,000 to 2,408,000.





***Stock
      Purchase Agreement and Change of Control***




As
      discussed more fully in the Form 8-K Current Report filed with the SEC on
      December 16, 2006 and in the Form 8-K/A Current Report filed with the SEC on
      December 19, 2006, the Company entered into a Stock Purchase Agreement (the
      “Stock Purchase Agreement”) on December 11, 2006, with twenty-two accredited
      investors (collectively, the “Buyers”) pursuant to which we issued 12,505,000
      shares of the Company’s common stock, par value $0.001, in consideration for an
      aggregate of $12,505 in cash (the “Stock Purchase”). Additionally on December
      11, 2006, the Buyers directly acquired (the “Stock Acquisition”) from the
      following stockholders all of their shares of our common stock: Mr. Fang Zhong,
      a current director and our President, Chief Executive Officer,
      Chief Financial Officer, and Treasurer at the time of the Stock
      Acquisition; Ms. Hu Min, a current director and our Secretary at the time of
      the
      Stock Acquisition; Mr. Fang Wei Jun, a current director of the Company; and
      Mr.
      Fang Zhong in his capacity as legal representative of Fang Hui. The Stock
      Purchase Agreement and the Stock Acquisition effectuated a change in control
      of
      the Company, and in connection therewith, Mr.Fang Zhong resigned as our
      President, Chief Executive Officer, Chief Financial Officer, and Treasurer,
      and Ms. Hu Min resigned as our Secretary, both effective December 11, 2006.
      In
      their places, Mr. Silas Phillips was appointed as our President, Chief Executive
      Officer, Chief Financial Officer, and Treasurer, effective December 11,
      2006.





***Spin-Off
      of Town House Land Limited***





Pursuant
      to the Stock Purchase Agreement, we agreed that, after the closing of the Stock
      Purchase and the Stock Acquisition, all current assets of the Company would
      be
      transferred to Town House, and all





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of
      the
      Company’s liabilities to be assumed by Town House. Thereafter, immediately after
      the closing of any future transaction whereby the Company acquires control
      and
      ownership of another company, the Company would transfer all of the shares
      of
      Town House held by the Company to a trust (the “Trust”), the beneficiaries of
      which would be the stockholders of the Company immediately prior to the December
      11, 2006 Stock Purchase, thereby effectuating a spin-off of the Company’s
      wholly-owned Hong Kong subsidiary, Town House (“Spin-Off”). Following the
      Spin-Off, the stockholders of the Company will continue to hold shares of our
      Company, the beneficiaries of the Spin-Off Trust will receive, pro rata, shares
      of Town House, and Town House (and its subsidiaries) shall no longer be a
      subsidiary of the Company. Thereafter, Town House (and its business) shall
      continue as a privately held company in Hong Kong. A more complete description
      of the Spin-Off will be provided in an information statement to be delivered
      to
      our stockholders, which shall include further details including reasons for
      the
      Spin-Off.





As
      of the
      date of this report, the Spin-Off has not been effectuated, although the
      management anticipates doing so in the near future.








**Company
      Organization and Descriptions of Our Subsidiaries**





At
      December 31, 2006, Town House held 97% of the registered capital of Wuhan Town
      House, which directly held 100% of the equity in Miami Town House and 100%
      of
      the equity in USA Town House as follows:





***Wuhan
      Town House****:* Wuhan Town House (formerly: Wuhan Pacific
      Real Estate Development Company Limited) was registered as a formal third level
      property Company in Hubei Province, in the People's Republic of China as a
      limited liability company (in which investors' potential losses are limited
      to
      their capital contributions) on December 18, 1995 with a registered capital
      of
      $1,207,729 (Rmb. 10,000,000) and a defined period of existence of 14 years
      to
      December 18, 2009. To meet the qualifications of third level property company,
      the company must (1) have registered capital of Rmb.10,000,000, (2) have
      engineering and staff of not less that 12 people, (3) should have completed
      at
      least 50,000 square meters of accumulated development area, and (4) have a
      100%
      passing rate in construction quality and 10% ranked as excellent. Wuhan Town
      House was registered as a Sino Foreign Joint Investment Enterprise on October
      10, 2003, and changed its from Wuhan Pacific Real Estate Development Company
      Limited changed its name to Wuhan Town House Land Limited on February 20,
      2004.





Subsequent
      recapitalizations during 2000 increased Wuhan Town House's registered capital
      to
      $6,038,647 and changed its classification to a second level property company.
      To
      meet the qualifications of a second level property company, the company must
      (1)
      have registered capital of Rmb. 40,000,000, (2) have engineering and management
      staff of not less than 24 people, (3) should have completed 150,000 square
      meters of accumulated areas completed within three years, (4) 100% pass rate
      in
      construction quality with 10% ranked as excellent, and (5) at least three years
      experience in property development. On August 15, 2003, Wuhan Town House entered
      into a reverse merger agreement with Town House.





Wuhan
      Town House is one of the first privately owned property development companies
      in
      Wuhan City in China and is one of the largest property developers in Wuhan
      City,
      based on a list of top 100 property development enterprises in Wuhan City in
      terms of gross floor area ("GFA"), published by the Wuhan Statistics Bureau
      and
      the Development Research Center. It is engaged principally in the development
      and sale of high quality commercial and private residential properties catering
      to the middle-class residential property market in Wuhan City and in the City
      of
      Yi Chang. In August 2003, Town House acquired 97% of Wuhan Town House.
      Substantially all of the assets and operations of Town House in China are
      conducted through Wuhan Town House.





***Miami
      Town House****:* Miami Town House is a Florida corporation
      incorporated in November 2004 by the Company as a wholly owned subsidiary to
      acquire undeveloped land for the purpose of real estate developments of
      residential homes in Nevada and California.





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***USA
      Town House****:*USA Town House is a California corporation
      incorporated in March 2004 by the Company as a wholly owned subsidiary to
      acquire undeveloped land for the purpose of real estate developments of
      residential homes in the City of Fontana, California.





SOAD,
      Town House, Wuhan Town House, Miami Town House and USA Town House are
      hereinafter collectively referred to as the "Company".





**Property
      Development**





The
      Company's principal activity is the development and sale of commercial and
      residential real estate. The Company's principal operations through December
      31,
      2006 were located in the People's Republic of China ("PRC"); however, the
      Company held substantial real estate holdings in the United States which it
      plans to develop in the near future.





For
      the
      fiscal year ended December 31, 2006, the Company primarily engaged in the
      development and sales of luxury apartment buildings and mixed use buildings
      in
      the City of Wuhan and in the City of Yi Chang in China. The apartments are
      targeted for different segments within the mass residential property market,
      including young “white collar” employees, middle to senior managers in
      enterprises, entrepreneurs and families with young children. These upwardly
      mobile people represent the emerging middle class and are a growing source
      of
      demand in the mass residential property market. Certain properties developed
      by
      the Company are mixed-use properties that also include retail and commercial
      floors on the lower levels of the buildings.





The
      Company has equity interests in eight property development projects in central
      China and has obtained land use rights certificates in respect of each of these
      eight property development projects.





**Information
      Concerning Wuhan City**





Wuhan
      City, located in inland China, has played an important role of connecting the
      east with the west, the south with the north in China. Wuhan City, with an
      urban
      population of approximately 8 million, ranks as the sixth city among the top
      25
      cities in China with favorable development potential. In 2001, the GDP of the
      city reached 134.8 billion Yuan (US$16.2 billion), or 12% higher than 2000;
      and
      the annual income of citizens of Wuhan City was 7,304 Yuan, or an increase
      of 8%
      over 2000.





Located
      at the middle reaches of the Yangtze River, Wuhan is a thoroughfare to nine
      provinces in China. The Beijing-Guangzhou Railway and the Yangtze River
      intersect in Wuhan City. The Beijing-Kowloon Railway and Wuhan-Guangzhou Railway
      also connect in the city. The Beijing-Zhuhai and Shanghai-Chengdu super highway
      also cross at Wuhan City. In addition, a high-speed railway along the Yangtze
      River is in the process of being constructed. These high-speed road, railway
      and
      river transportation methods make Wuhan a transportation hub.





Wuhan
      is
      the largest logistics and commercial enter in inland China. Commodities can
      easily be transported to 5 provinces around Wuhan, such as Hunan, Jiangxi,
      Anhui, Henan and Sichuan, which have a combined population of nearly 400
      million. There are presently more than 10,000 commercial organizations, 105,000
      business branches, and 8 department stores in Wuhan City.





As
      an
      important industrial base in China, Wuhan City has a very solid foundation
      in
      either high-tech industry or traditional manufacturing. Along the 88 kilometer
      ring of the city, a series of industrial zones have been established, such
      as
      China Optical Valley, Sino-Citroen Automobile City, Taiwan Business Zone and
      Yangluo Development Zone. With 33 different sectors and more than 30,000
      industrial enterprises, Wuhan City has businesses encompassing all industries,
      including iron and steel, automobile, machinery, petrochemical, optical telecom,
      Chinese and western medicine, biology engineering, textile, garment, food
      industry, etc.




Wuhan
      City is a technology research and education center, with its research and
      education capacity ranked third in the country, behind Beijing and Shanghai.
      There are 35 universities in the city, serving approximately 300,000 students.
      There are 736 science research institutes and 10 national labs in Wuhan
      City.





In
      recent
      years, Wuhan Municipal Government has focused on policies favoring an open
      business environment and environmental renovation, and the investment
      environment of Wuhan City has been continuously improved. A series of important
      infrastructure projects have been finished, such as Wuhan International Airport,
      Airport Super Highway, No. 1 Yangtze River Bridge, No. 3 Yangtze River Bridge,
      an extensive telephone system, a water plant, a power plant and a waste water
      treatment plant.





**Market**





The
      principal market of the Company for its real estate development activities
      has
      been in the City of Wuhan and in the City of Yi Chang in China.





The
      City
      of Wuhan is an ancient city and is the capital of Hubei Province in central
      China. Wuhan is the sixth largest city in China with a population of
      approximately 8,000,000. Wuhan is an important transportation center on the
      Jianhan Plain, sitting at the confluence of the Yangtze River, the Hanjiang
      River, and its longest branch - the Hansui River. The City of Wuhan is comprised
      of three cities: Hanyang, Wuchang and Hankou.





Because
      of the significant economic growth and development of central China, the City
      of
      Wuhan has experienced increasing demand for luxury residential properties and
      for retail and commercial space. The concept of mixed use buildings with retail
      and commercial space on the street level and the lowest floors with luxury
      apartment units on the higher floors has become increasingly popular in China.
      As a result, recent building activity of Town House has been designed with
      the
      mixed use concept as principal objective.





The
      Company is in competition with other real estate development companies in the
      City of Wuhan, some of which are larger and have greater financial resources
      than the Company.





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**Project
      Financing**




As
      of
      December 31, 2006, the real estate projects of the Company had been financed
      primarily by secured bank loans and by loans from Mr. Fang Zhong, a current
      director and our former President, Chief Executive Officer, Chief Financial
      Officer and Treasurer.




**Property
        Development Activities in China**





During
      the three year period ended December 31, 2006, Wuhan Town House designed,
      constructed and developed the following residential apartment and
      retail/commercial properties in the City of Wuhan in China:





**Name**
            
            **Property
                Type**(1)
            Gutian
                Apartments
            
            Residential
                Apartments(2)
            Garden
                of Eden
            
            Residential
                Apartment(3)
            General
                GardensPhase
                I
            
            Residential
                ApartmentsPhase
                II
            
            Residential
                Apartments(4)
            Diamond
                Mansion
            
            Commercial
                and Residential Apartments(5)
            Pacific
                Shopping Mall
            
            Commercial(6)
            Wuhan
                Town House Plaza
            
            Residential
                Apartments(7)
            Yi
                Chang Town House Plaza
            
            Commercial
                and Residential Apartments




1. Gutian
      Apartments. The Gutian
      Apartments consists of 112 apartment units ranging from 1,435 square feet to
      2,037 square feet. The Gutian Apartments are located close to a retail and
      commercial area in the City of Wuhan.





2. The
      Garden of Eden. The Garden of Eden
      apartment complex is composed of three apartment buildings that have 138
      apartment units ranging from 1,245 square feet to 2,408 square feet. The Garden
      of Eden has a European style, and is conveniently located near a retail and
      commercial area also located in the City of Wuhan.





3. General
      Gardens. The General Gardens is
      comprised of two phases, both residential apartments. Phase I consists of
      buildings that have 936 apartment units ranging from 514 square feet to 1,170
      square feet. Phase II is composed of apartment buildings that have 667 apartment
      units ranging from 595 square feet to 1,887 square feet.





4. Diamond
      Mansion. The Diamond Mansion is
      an 18 story building located on a significant retail and commercial thoroughfare
      which is blocked from vehicle traffic. The first five floors were designated
      for
      retail and commercial operations, while sixth through seventeenth floors are
      comprised of residential apartments. Due to inadequate sales of the commercial
      spaces, our management determined to convert the unsold commercial spaces to
      residential units during the quarter ended June 30, 2006.




5. Wuhan
      Town House Plaza - The Wuhan Town
      House Plaza is located in Wuhan City, and is consists of buildings that have
      210
      residential apartment units.




6. YiChang
      Town House Plaza - The YiChang
      Town House Plaza is located in the outer urban part of Wuhan City. The 22 floor
      building combines 600 residential and 20 commercial units.




As
      of December 31, 2006, the Company decided to abandon the Jing Qi Project in
      Wuhan City which had been long delayed while we were waiting for the government
      to build access roads.





**Ownership
      of Land in China**





There
      is
      no private ownership of land in China, and all land ownership is held by the
      government of China, its agencies and collectives.





However,
      land use rights can be obtained from the government for periods ranging from
      40
      to 70 years, and are typically renewable. Land use rights can be transferred
      and
      these transfers account for most of the business activity in the primary real
      estate market in China upon approval by the land administrative authorities
      of
      China (State Land Administration Bureau) upon payment of the required land
      transfer fees.





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Properties
      may under certain circumstances be sold in advance of the completion of the
      actual full development of a property. Apartments can be purchased by customers
      by payment-in-full, payment by installment, or payment by mortgaged property
      loans.





**United
      States Operations**





In
      2005,
      Miami Town House acquired undeveloped land comprised of 1.55 acres at 5825
      West
      Desert Inn Road in Las Vegas, Nevada, for a total consideration of $1,156,348,
      for residential development. It also acquired undeveloped land in Chino Hills,
      California, for a total consideration of $2,007,111.





In
      2005,
      USA Town House acquired undeveloped land in the City of Fontana, California,
      for
      a total consideration of $1,603,844, for residential development.





As
      of
      December 31, 2006, the United States real estate development projects continued
      to be in the planning and design stage, and no development contracts have been
      completed.





**Government
      Regulation**





The
      Company's projects are subject to various laws and governmental regulations,
      such as zoning regulations, relating to its business operations and project
      developments. We must obtain and keep current various licenses, permits and
      regulatory approvals for its development projects. We believe that the Company
      is in compliance with all laws, rules and regulations applicable to its projects
      and that such laws, rules and regulations do not currently have a material
      impact on our operations. Due to the increasing levels of development in the
      areas of China where we currently operates, it is possible that new laws, rules
      and/or regulations may be adopted that could affect the Company’s existing
      projects or proposed projects. The enactment of such laws, rules or regulations
      in the future could have a negative impact on our projected growth or
      profitability, which could decrease our projected revenues or increase its
      costs
      of doing business.





**Employees**





As
      of December 31, 2006, the Company and its subsidiaries had approximately 150
      employees. No employee group is covered under a collective bargaining
      agreement.





**Item
                2. Description of
                Property.**





The
      principal executive office of the Company is located at 10900 Wilshire
      Boulevard, Suite 500, Los Angeles, California 90024, which is
      leased.





Reference
      is made to Item 1 regarding the real estate properties of the Company and
      properties under construction or in development by the Company.




**Item
                3.** **Legal
                Proceedings.**





The
      Company is not a party to any legal proceedings and to the Company's knowledge,
      no such proceedings are threatened or contemplated. At this time, the Company
      has no bankruptcy, receivership, or similar proceedings pending.




**Item
                4.** **Submission
                of Matter to a
                Vote of Security
                Holders.**





On
      December 5, 2006, our Board of Directors and the majority holders of the
      Company’s capital stock jointly adopted and approved resolutions by written
      consent to amend our Articles of Incorporation to effectuate a one-for-seventeen
      reverse stock split of the common stock of the Company (the
“Reverse





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Split”).
      The Reverse Split became effective on January 12, 2007, after the filing of
      the
      Certificate of Amendment to the Articles of Incorporation on January 11,
      2007.






**PART
      II**





**Item
                5.** **Market
                for Registrant’s
                Common Equity and Related Stockholder
                Matters.**





Although
      quotations for the Company's Common Stock appear on the Over the Counter
      Bulletin Board (OTCBB), there has been a limited trading market for its Common
      Stock. For the past two calendar years to the present, transactions in the
      Common Stock can only be described as sporadic. In fact, there has been no
      active trading market for the Common Stock after November 17, 2006.
      Consequently, The Company is of the opinion that any published prices cannot
      be
      attributed to a liquid and active trading market and, therefore, are not
      indicative of meaningful market value.





The
      following table sets forth for the respective periods indicated the prices
      of
      The Company's Common Stock on OTCBB, trading symbol SOAM. Such prices are based
      on inter-dealer bid prices, without markup, markdown, commissions, or
      adjustments and may not represent actual transactions.





Common
      Stock




Quarter
                Ended
            High
                Bid
            Low
                BidJune
                30, 2007
            N/A
            N/AMarch
                31, 2007
            N/A
            N/ADecember
                31, 2006
            $9.35*
            $5.10*September
                30, 2006
            $30.43*
            $12.75*June
                30, 2006
            $8.67*
            $2.55*March
                31, 2006
            $9.35*
            $1.70*December
                31, 2005
            $0.35
            $0.15September
                30, 2005
            $0.20
            $0.12June
                30, 2005
            $0.15
            $0.12March
                31, 2005
            $0.18
            $0.12





*
      Prices
      adjusted to reflect the one-for-eight reverse stock split in June 2006 and
      the
      one-for-seventeen reverse stock split in January 2007.





**Holders**





As
      of
      September 10, 2007, there were 2,408,000 shares of the Company's common stock
      outstanding held of record by approximately 313 persons (not including
      beneficial owners who hold shares at broker/dealers in “street
      name”).




**Dividends**





The
      Company has never paid cash dividends on its Common Stock and does not intend
      to
      do so in the foreseeable future. Our management does not foresee that we will
      have the ability to pay a dividend on our Common Stock in the foreseeable
      future.





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**Sales
      of Unregistered Securities**





On
      December 11, 2006, the Registrant entered into a Stock Purchase Agreement (the
      “Stock Purchase Agreement”) with twenty-two accredited investors (collectively,
      the “Buyers”) pursuant to which the Registrant issued 12,505,000 shares of the
      Company’s common stock, par value $0.001 (the “Common Stock”), in consideration
      for an aggregate of $12,505 in cash. The offer and sale of all securities
      pursuant to the foregoing transaction was exempt from the registration
      requirements of the Securities Act of 1933, as amended (the “Securities Act”),
      under Rule 506 with reference to the following facts and circumstances: (1)
      the
      investors were accredited within the meaning of Rule 501(a); (2) the transfer
      of
      the securities were restricted by the Registrant in accordance with Rule 502(d);
      (3) there were no, and in any case no more than 35 non-accredited investors
      in
      the transaction within the meaning of Rule 506(b), after taking into
      consideration all prior investors under Section 4(2) of the Securities Act
      within the twelve months preceding the transaction; and (4) none of the offers
      and sales were effected through any general solicitation or general advertising
      within the meaning of Rule 502(c).





On
      October 31, 2005, in connection with the share exchange transaction under the
      Exchange Agreement, we issued 224,480,317 (pre one-for-eight stock split and
      pre
      one-for-seventeen stock split) shares of our common stock, representing 98.7%
      of
      our issued and outstanding common stock, to the equity owners of Town House
      and
      their designees in exchange for 100% of Town House’s outstanding registered
      capital. These shares were issued to non-US persons in reliance on an exemption
      from the registration requirements of the Securities Act under Regulation S.
      The
      shares issued have not been registered under the Securities Act or any state
      securities of “blue sky” laws, and the securities may not be offered or sold
      absent registration or an applicable exemption from the registration
      requirements of the Securities Act and applicable state securities laws. As
      a
      result of the transactions contemplated under the Exchange Agreement, we
      acquired the business and operations of Town House.





**Repurchases
      of Equity Securities**





The
      Company did not repurchase any of its outstanding equity securities during
      the
      fourth quarter of the year ended December 31, 2006.





**Item
      6.** **Management’s
      Discussion and
      Analysis or Plan of Operation**





Statements
      contained herein that are not historical facts are forward-looking statements
      as
      that term is defined by the Private Securities Litigation Reform Act of 1995.
      Although we believe that the expectations reflected in such forward looking
      statements are reasonable, the forward looking statements are subject to risks
      and uncertainties that could cause actual results to differ from those
      projected. We caution investors that any forward looking statements made by
      us
      are not guarantees of future performance and that actual results may differ
      materially from those in the forward-looking statements. Such risks and
      uncertainties include, without limitation: well-established competitors who
      have
      substantially greater financial resources and longer operating histories,
      regulatory delays or denials, ability to compete as a start-up company in a
      highly competitive market, and access to sources of capital.





The
      following discussion and analysis should be read in conjunction with our
      financial statements and notes thereto included elsewhere in this Form 10-KSB.
      Except for the historical information contained herein, the discussion in this
      Form 10-KSB contains certain forward-looking statements that involve risks
      and
      uncertainties, such as statements of our plans, objectives, expectations and
      intentions. The cautionary statements made in this Form 10-KSB should be read
      as
      being applicable to all related forward looking statements wherever they appear
      in this Form 10-KSB. The Company's actual results could differ materially from
      those discussed here.








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**Overview**





We
      are a
      real estate development company with our business operations primarily in Wuhan
      City, China. On October 31, 2005, the Company acquired Town House and, as a
      result, Town House’s operating subsidiary Wuhan Townhouse, by way of the
      exchange of 224,480,317 shares of the Company’s common stock for 100% of the
      issued and outstanding registered capital of Town House. We accounted for this
      share exchange transaction as a recapitalization and, as a result, our
      consolidated financial statements are in substance those of Town House. Having
      no substantive operation of its own, Town House, through its operating
      subsidiary, Wuhan Townhouse, develops commercial and residential properties
      primarily in Wuhan City, China.





**Critical
      Accounting Policies**





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





While
      our
      significant accounting policies are more fully described in Note 3 to our
      consolidated financial statements appearing at the end of this prospectus,
      we
      believe that the following accounting policies are the most critical to aid
      you
      in fully understanding and evaluating our reported financial
      results.





Consolidation
      Policy: The consolidated financial statements include the accounts of the
      Company, Town House, Wuhan Town House, Town House USA, and Town House Miami.
      All
      significant inter-company transactions and balances within the Company are
      eliminated on consolidation.





Cash
      and Equivalents: The Company considers all highly liquid debt instruments
      purchased with maturity period of three months or less to be cash equivalents.
      The carrying amounts reported in the accompanying consolidated balance sheet
      for
      cash and cash equivalents approximate their fair value. The Company has
      restricted cash in accordance with the loan covenants. As of December 31, 2006
      there were no restrictions on the Company’s cash balances.





Accounts
      Receivable: The Company provides an allowance for doubtful accounts equal to
      the estimated uncollectible amounts. The Company's estimate is based on
      historical collection experience and a review of the current status of trade
      accounts receivable. Accounts receivable in the balance sheet is stated net
      of
      such provision.





Properties
      Held for Sale: Properties held for sale are comprised of properties held for
      sale and repossessed properties held for resale and are stated at the lower
      of
      cost or net realizable value. Cost includes acquisition costs of land use
      rights, development expenditure, interest and any overhead costs incurred in
      bringing the developed properties to their present location and condition.
      Net
      realizable value is determined by reference to management estimates based on
      prevailing market conditions.








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Property
      and Equipment: Property and equipment are recorded at cost and are being
      depreciated over the estimated useful lives of the related assets. Depreciation
      is computed on the straight-line basis for both financial and income tax
      reporting purposes over useful lives net of a 5% salvage value as
      follows:





Building and land rights
            40
                yearsEquipment
            5
                yearsMotor vehicles
            5-8
                yearsOffice furniture and fixtures
            5
                years





Repairs
      and maintenance costs are normally charged to the statement of operations in
      the
      year in which they are incurred. In situations where it can be clearly
      demonstrated that the expenditure has resulted in an increase in the future
      economic benefits expected to be obtained from the use of the asset, the
      expenditure is capitalized as an additional cost of the asset.





Property
      and equipment are evaluated annually for any impairment in value. Where the
      recoverable amount of any property and equipment is determined to have declined
      below its carrying amount, the carrying amount is reduced to reflect the decline
      in value. There were no property and equipment impairments recognized during
      the
      years ended December 31, 2006 and 2005.





Income
      Recognition: Revenue from the sale of properties is recognized when the
      following four criteria are met: (1) a sale is consummated, (2) the buyers
      initial and continuing investments are adequate to demonstrate a commitment
      to
      pay for the property, (3) the seller's receivable is not subject to future
      subordination, and (4) the seller has transferred to the buyer the usual risks
      and rewards of ownership in a transaction that is in substance a sale and does
      not have a substantial continuing involvement with the property. Interest income
      is recognized when earned, taking into account the average principal amounts
      outstanding and the interest rates applicable.





Cost
      of Properties Sold: The cost of goods sold includes the carrying amount of
      the properties being sold and the business taxes paid by the Company in
      connection with the sales. Business taxes included in cost of sales were
      $688,011 and $365,217 for the years ended December 31, 2006 and 2005,
      respectively.





Foreign
      Currencies: These financial statements have been prepared in U.S. dollars.
      The functional currencies for Town House and Wuhan Town House are the "Hong
      Kong
      dollar" and "Renminbi" or "Yuan", respectively. Non-monetary assets and
      liabilities are translated at historical rates, monetary assets and liabilities
      are translated at the exchange rates in effect at the end of the year, and
      income statement accounts are translated at average exchange rates.


Taxation:
      Taxation on overseas profits has been calculated on the estimated assessable
      profits for the year at the rates of taxation prevailing in the countries in
      which the Company operates. Provision for The People's Republic of China
      enterprise income tax is calculated at the prevailing rate based on the
      estimated assessable profits less available tax relief for losses brought
      forward.





Fair
      Value of Financial Instruments: The carrying amounts of certain financial
      instruments, including cash, accounts receivable, commercial notes receivable,
      other receivables, accounts payable, commercial notes payable, accrued expenses,
      and other payables approximate their fair values as of December 31, 2006 because
      of the relatively short-term maturity of these instruments.





Earnings
      per Share: Basic earnings per share is computed by dividing net income by
      the weighted-average number of common shares outstanding during the period.
      Diluted earnings per share is computed by dividing net income by the
      weighted-average number of common shares and dilutive potential common shares
      outstanding during the period. As of December 31, 2006 and 2005, there were
      no
      outstanding securities or other contracts to issue common stock, such as
      options, warrants or conversion rights, which would have a dilutive effect
      on
      earnings per share. For presentation purposes, earnings per share for 2006
      and
      2005 were computing assuming the reorganization occurred on January 1,
      2004.





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On
      May
      31, 2006 the Company approved an eight for one reverse stock split which reduced
      the number of shares outstanding from 227,321,840 to 28,415,230. The effect
      of
      this reverse stock split has been reflected retroactively for all periods
      included in these financial statements.





**Recent
      Accounting Pronouncements**





SFAS
      123(R), SFAS 151, SFAS 152, SFAS 153 and SFAS 154 - SFAS 123 (R), Share Based
      Payment replaces SFAS 123, Accounting for Stock-Based Compensation, SFAS No.
      151, Inventory Costs - an amendment of ARB No. 4 and SFAS No. 152, Accounting
      for Real Estate Time-Sharing Transactions - an amendment of FASB Statements
      No.
      66 and 67, SFAS No. 153, Exchange of Non-monetary Assets - an amendment of
      APB
      Opinion No. 29 and SFAS No. 154, Accounting Changes and Error Corrections -
      a
      replacement of APB No. 20 and SFAS 3 were recently issued. SFAS No. 123(R),
      151,
      152, 153 and 154 have no current applicability to the Company and have no effect
      on the consolidated financial statements.





In
      February 2006, the FASB issued Statement No. 155, “Accounting for Certain
      Hybrid Financial Instruments” (“SFAS No. 155”), which amends FASB
      Statements No. 133 and 140. This Statement permits fair value remeasurement
      for any hybrid financial instrument containing an embedded derivative that
      would
      otherwise require bifurcation, and broadens a Qualified Special Purpose Entity’s
      (“QSPE”) permitted holdings to include passive derivative financial instruments
      that pertain to other derivative financial instruments. This Statement is
      effective for all financial instruments acquired, issued or subject to a
      remeasurement event occurring after the beginning of an entity’s first fiscal
      year beginning after September 15, 2006. This Statement has no current
      applicability to the Company’s financial statements. Management plans to adopt
      this Statement on January 1, 2007 and it is anticipated that the initial
      adoption of this Statement will not have a material impact on the Company’s
      financial position, results of operations, or cash flows.





In
      March
      2006, the FASB issued Statement No. 156,*“Accounting for Servicing of
      Financial Assets - an amendment of FASB Statement No. 140”*
      (“SFAS No. 156”). This Statement is effective for fiscal years
      beginning after September 15, 2006. This Statement requires that all
      separately recognized servicing assets and servicing liabilities be initially
      measured at fair value, if practicable. This Statement has no current
      applicability to the Company’s financial statements. Management plans to adopt
      this Statement on January 1, 2007 and it is anticipated that the initial
      adoption of this Statement will not have a material impact on the Company’s
      financial position, results of operations, or cash flows.





In
      June
      2006, the FASB issued Interpretation 48, “Accounting for Uncertainty in Income
      Taxes” (“FIN 48”), an interpretation of FASB Statement No. 109,
“Accounting for Income Taxes.” FIN 48 clarifies the accounting and
      reporting for income taxes where interpretation of the law is uncertain.
      FIN 48 prescribes a comprehensive model for the financial statement
      recognition, measurement, presentation and disclosure of income tax
      uncertainties with respect to positions taken or expected to be taken in income
      tax returns. FIN 48 is effective for fiscal years beginning after
      December 15, 2006. This Statement has no current applicability to the
      Company’s financial statements. Management plans to adopt this Statement on
      January 1, 2007 and it is anticipated that the initial adoption of
      FIN 48 will not have a material impact on the Company’s financial position,
      results of operations, or cash flows.




In
      September 2006, the FASB issued Statement No. 157, “Fair Value
      Measurements” (“SFAS No. 157”). SFAS No. 157 addresses how
      companies should measure fair value when they are required to use a fair value
      measure for recognition or disclosure purposes under GAAP.
      SFAS No. 157 defines fair value, establishes a framework for measuring
      fair value and expands disclosures about fair value measurements.
      SFAS No. 157 is effective for fiscal years beginning after
      November 15, 2007, with earlier adoption permitted. Management is assessing
      the impact of the adoption of this Statement.







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In
      September 2006, the FASB issued Statement No. 158, “Employers’ Accounting
      for Defined Benefit Pension and Other Postretirement Plans”
(“SFAS No. 158”), an amendment of FASB Statements No. 87, 88, 106
      and 132(R). SFAS No. 158 requires (a) recognition of the funded
      status (measured as the difference between the fair value of the plan assets
      and
      the benefit obligation) of a benefit plan as an asset or liability in the
      employer’s statement of financial position, (b) measurement of the funded
      status as of the employer’s fiscal year-end with limited exceptions, and
      (c) recognition of changes in the funded status in the year in which the
      changes occur through comprehensive income. The requirement to recognize the
      funded status of a benefit plan and the disclosure requirements are effective
      as
      of the end of the fiscal year ending after December 15, 2006. The
      requirement to measure the plan assets and benefit obligations as of the date
      of
      the employer’s fiscal year-end statement of financial position is effective for
      fiscal years ending after December 15, 2008. This Statement has no current
      applicability to the Company’s financial statements. Management plans to adopt
      this Statement on December 31, 2006 and it is anticipated the adoption of
      SFAS No. 158 will not have a material impact to the Company’s
      financial position, results of operations, or cash flows.




In
      September 2006, the Securities Exchange Commission issued Staff Accounting
      Bulletin No. 108 (“SAB No. 108”). SAB No. 108
      addresses how the effects of prior year uncorrected misstatements should be
      considered when quantifying misstatements in current year financial statements.
      SAB No. 108 requires companies to quantify misstatements using a
      balance sheet and income statement approach and to evaluate whether either
      approach results in quantifying an error that is material in light of relevant
      quantitative and qualitative factors. When the effect of initial adoption is
      material, companies will record the effect as a cumulative effect adjustment
      to
      beginning of year retained earnings and disclose the nature and amount of each
      individual error being corrected in the cumulative adjustment.
      SAB No. 108 will be effective beginning January 1, 2007 and it is
      anticipated that the initial adoption of SAB No. 108 will not have a
      material impact on the Company’s financial position, results of operations, or
      cash flows.





In
      February 2007, the FASB issued Statement No. 159 “The Fair Value Option for
      Financial Assets and Financial Liabilities” (SFAS 159). This statement permits
      companies to choose to measure many financial assets and liabilities at fair
      value. Unrealized gains and losses on items for which the fair value option
      has
      been elected are reported in earnings. SFAS 159 is effective for fiscal years
      beginning after November 15, 2007. The Company is currently assessing the impact
      of SFAS 159 on its consolidated financial statements.




**Results
      of Operations**





Comparison
      of operations for the year ended December 31, 2006 with the year ended December
      31, 2005:





**Revenues**





Sales
      revenues increased by $7,338,262 or 115% to $13,715,501 in 2006 from $6,377,239
      in 2005. The favorable variance in sales revenue was mainly attributable to
      a
      better than expected results from the sales of our remaining residential units
      in the Wuhan Town House Plaza and the Yi Chang Town House Plaza.





**Cost
      of Goods Sold**





Cost
      of
      properties sold increased by $5,369,543, or 107%, to $10,381,212 in 2006,
      compared to $5,011,669 in 2005. The increase in cost of goods sold is due in
      part to an increase of in the properties sold, and the increased business taxes
      paid by the Company in connection with the sales. Additionally, the Company
      revised its cost estimates to complete the Yi Chang Town House Plaza project.
      This upward revision resulted in a substantial increase in cost of sales during
      the second quarter to reflect both additional cost associated with sales made
      in
      the first quarter as well as costs incurred on sales during the second and
      third
      quarters.





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**Operating
      and other expenses**





Selling
      expenses decreased by $374,862, or 48%, to $403,175 in 2006 from $778,037 in
      2005, primarily as a result of the significant decrease in advertising expenses.
      Advertising expenses decreased by $221,553, or 55%, due to the cessation of
      an
      advertising campaign to stimulate sales of the Wuhan Town House Plaza which
      began in 2005 and was completed after the first quarter of fiscal
      2006.





General
      and administrative expenses decreased by $146,063, or 6%, to $2,178,907 in
      2006
      from $2,324,970 in 2005, primarily as a result of the decrease in traveling
      expenses as we had no development activities in the United States of America
      during fiscal 2006. The decrease in traveling expenses was offset by some
      increase in the salaries of our administrative staff for pay raises and bonuses,
      as well as increases in both our legal fees and audit fees.





Depreciation
      expense increased by $3,678, or 2%, to $190,076 in 2006 from $186,398 in 2005.
      This increase is primarily attributable to the purchase of additional assets
      in
      fiscal 2005, which was offset by the full depreciation of certain assets during
      fiscal 2006.





Interest
      and finance costs decreased by $139,266, or 32%, to $293,934 in 2006 from
      $433,200 in 2005. This decrease is primarily a result of a decrease in
      outstanding balances related to short term loans coupled with bank handling
      charges.





We
      recorded the following impairment losses:





During
      the year ended December 31, 2006, management determined that the unsold
      commercial properties located on floors one through five of the Diamond Mansion,
      Phase One should be converted to residential properties as the commercial space
      was not selling. This resulted in impairment in value of $3,803,959 on these
      properties as residential properties have a significantly lower retail value
      than commercial properties.





During
      the year ended December 31, 2006, the Company decided to abandon the Jing Qi
      project which had been long delayed waiting for the Province to build access
      roads. This resulted in an impairment loss of $1,552,035.




**Liquidity
      and Capital Resources**





As
      of
      December 31, 2006, the Company had a working capital deficit of $5,540,308.
      The
      Company’s ability to continue as a going concern is dependent on the ability to
      renegotiate an extension of the bank debt maturities and to obtain a profitable
      level of operations. These issues raise doubts about the Company’s ability to
      continue as a going concern.





The
      financial statements do not give effect to any adjustments which would be
      necessary should the Company be unable to continue as a going concern and
      therefore be required to realize its assets and discharge its liabilities in
      the
      normal course of business at amounts different from those reflected in the
      financial statements.





**Cash
      flows**





Operating





Net
      cash
      flow provided by operating activities increased by $166,730, or 8%, to
      $2,138,589 in 2006 from $1,971,859 in 2005. This increase is primarily
      attributable to the addition of accounts payable partially offset by decreases
      in advances from buyers.





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Investing





Cash
      used
      in investing activities decreased $4,690,047, or 96%, to $208,292 in 2006 from
      $4,898,339 in 2005. This decrease is primarily attributable to the acquisition
      of properties in fiscal 2005.





Financing





The
      Company has net loan repayments of $2,434,464 in 2006 compared to net borrowing
      of $7,662,310 in 2005. This change is primarily a result of completing projects
      and paying down financing. The Company paid cash advances to directors and
      affiliated companies of $723,937 in 2006, as compared to $3,250,892 in
      2005.





**Off-Balance
      Sheet Arrangements**





As
      of
      December 31, 2006, we have not entered into any off-balance sheet arrangements
      with any individuals or entities.





**Related
      Party Transactions**





Amounts
      due from/ (to) directors at December 31, 2006 are as follows:








Fang
                Zhong (Director)
            
            $
            1,692,036Hu
                Min (Director)
            
            
            5,970Fang
                Wei Jun (Director)
            
            
            (879
            )Fang
                Wei Feng (Director)
            
            
            (43,245
            )$
            1,653,882




The
      amounts due are unsecured, interest free and have no fixed repayment terms.
      For
      financial reporting purposes, the net balance due from directors has been
      reflected as an offset against stockholders equity.





During
      the year ended December 31, 2006, the Company advanced a total of $700,113
      to
      Mr. Fang Zhong, the Chief Executive Officer, President and a director of the
      Company, and were treated as payments/advances to Mr. Fang Zhong. Of these
      advances, $669,038 went to Wuhan Pacific Shopping Mall Limited pursuant to
      a
      guarantee of Mr. Fang Zhong.





**Risk
      Factors**




*Investing
      in our common stock involves a high degree of risk. If any of the following
      risks actually materializes, our business, financial condition and results
      of
      operations would suffer. You should read the section entitled “Forward-Looking
      Statements” immediately following these risk factors for a discussion of what
      types of statements are forward-looking statements, as well as the significance
      of such statements in the context of this prospectus.*





***Change
      in political and economic c*onditions.**





Since
      the
      Company's main country of business operations is China, Town House's business
      operations and financial position are subject, to a significant degree, to
      the
      economic, political and legal developments in China.





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China's
      government started implementing its economic reform policy in 1978, which has
      enabled China economy to gradually transform from a "planned economy" to a
      "socialist market economy." In 1993, the concept of the socialist market economy
      was introduced into the Constitution of China, and the country has since
      accelerated development of a market economy. A noteworthy phenomenon in the
      recent development of China economy is that non-state owned enterprises such
      as
      private enterprises play an increasingly important role in China economy and
      the
      degree of direct control by China government over the economy is gradually
      declining.





China
      government has been taking macro-economic austerity measures to suppress
      inflation and curb the pace of economic growth since July 1993. These measures
      include raising interest rates, tightening credit supply, delaying
      implementation of certain reform policies on pricing, enhancing financial
      supervision as well as tightening control on the granting of approval for
      property and infrastructure projects. However, since 1998, there has been
      deflation in China economy and the current economic policies of China mainly
      focus on stimulating consumption and expansion of domestic demand.





While
      China government has not stopped its economic reform policy since 1978, any
      significant adverse changes in the social, political and economic conditions
      of
      China, may have fundamental changes in China economic reform


policies
      and thus the Company's operations and profits may be adversely
      affected.





***Change
      in tax laws and r*egulations in China.**





Various
      tax reform policies have been implemented in China in recent years.
      Interpretation of certain tax policies is still awaiting guidance from China
      government. Moreover, there can be no assurance that the existing tax laws
      and
      regulations will not be revised or amended in the future.





***Changes
      in China*'s legal system.**





China's
      legal system is based on statutory law. Unlike the common law system, statutory
      law is based on written statutes. Prior court decisions may be cited as
      persuasive authority but do not have binding effect. Since 1979, China
      government has been promulgating and amending the laws and regulations regarding
      economic matters, such as corporate organization and governance, foreign
      investment, commerce, taxation and trade. However, China's legal system is
      still
      not as fully developed as those western countries with a common law legal
      system.





***Chinese
      real estate l*aw.**





Over
      the
      past five years, the majority of China's urban dwellers have changed their
      housing situation for apartments provided by their work units at a pittance
      to
      housing that they have had to buy and pay to maintain (through homeowner's
      associations that hire state supervised management companies). There are some
      estimates that 80% of urban Chinese now own their own home. But China has no
      legal concept of condominiums and no statute (yet) that defines the rights
      of
      these millions of homeowners.





In
      1998,
      China created the basic building block of a market economy in real estate -
      a
      transferable ownership interest. This interest, called the "granted land use
      right" - is not 100% ownership as we know it in the West. The period of the
      interest is limited to a fixed term - varying from 40-70 years, depending upon
      the charter of the right - and the use to which the property must be put is
      specified as part of the grant. The granted land use right is transferable,
      mortgageable, leaseable, and usually can be subdivide. Further, it theoretically
      is renewable, but there will be a fee and since these land ownership rights
      are
      new there is no experience yet with renewals. Chinese anti-speculation rules
      provide that one cannot acquire or hold property just to "ride the market;"
      the
      property must be put to productive use within a set time of acquisition of
      the
      land use right - usually two years, or face penalties and ultimately forfeiture
      of the right.





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For
      the
      development of a new commercial real estate project, the developer must first
      obtain granted land use rights. Land use rights can be granted through bidding,
      auction and listings. The developer then enters into a land use right grant
      contract with the relevant government authority. The granted land use right
      can
      be transferred, leased, or mortgaged. The transferor and transferee must enter
      into a land use right transfer contract and file the executed contract with
      the
      appropriate government bureau, which will then issue a new land use certificate
      in the name of the transferee. In May 2002, the Ministry of Land and Resources
      issued a regulation regarding the land use right transfer. Whereas in the past,
      private parties were able to transfer land use rights by mutual agreement,
      this
      practice was prohibited by the new regulation. Under the new scheme, any
      procurement of land for business purposes can only be effected through bidding,
      auction and listing on an authorized exchange floor.





The
      long
      term value of Chinese land rights are still quite uncertain, and their rights
      not the kind of secure investment that would lead a lender, as might happen
      in
      American, to rely primarily on the land value and look beyond the individual
      ability of a borrower to repay the debt. Chinese banks, for example, rarely
      make
      construction loans because in theory they cannot lend more than the value of
      the
      land that is their security at the time of the loan. The Chinese deal with
      this
      problem by signing "prelease" or "prepurchase" contracts whereby the end user
      pays all of the consideration before the building is commenced. Effectively,
      the
      users finance the seller's construction. Users borrow the money from the banks
      under arrangements which later will "morph" into mortgage loans when there
      is
      something to which the mortgage can attach. Usually the developer must deposit
      the purchase proceeds in the bank and the bank monitors the
      expenditures.





Before
      a
      presale method can be legally adopted, the developer of the project must have
      obtained (i) a land use right certificate, (ii) a planning permit for
      construction use of land, (iii) a planning permit for the construction project,
      (iv) a certificate of commencement of construction, and (v) a permit for presale
      of commercial housing.





***Mortgages.***





In
      1993,
      the Central Government allowed state-owned banks to provide mortgage facilities
      to property buyers. In accordance with the banking regulations announced in
      1998, loan repayment period was initially for a maximum of 20 years, and extent
      of the mortgage loan amount was for a maximum of 70 percent of the purchased
      property price. In 1999, banking regulations were amended to extend the loan
      repayment period to a maximum of 30 years and the extent of the mortgage loan
      amount was increased to a maximum of 80 percent of the purchased property price.
      As further incentives, state-owned banks were allowed to increase the mortgage
      loan facilities by an additional 15 percent of the approved banking facilities
      (maximum of 92 percent of the purchased property price). The provision of
      mortgage facilities to property buyers is considered to have created increasing
      demand for properties in the China.





In
      accordance with market practice in the China, the Company is required to provide
      guarantees (during the development phase) to the banks in respect of mortgages
      offered to the property buyers until submission of the relevant real estate
      ownership certificates and certificates of other interests in the property
      unit
      by the relevant property buyers to the mortgagee bank. In the experience of
      the
      Company, such guarantee periods normally last for up to 6 months. If a property
      buyer defaults under the loan and the Company is required, during the guarantee
      period, to repay all debt owed by the defaulting property buyer to the mortgagee
      bank, the mortgagee bank will assign its rights under the loan and the mortgage
      to the Company and, subject to registration, the Company will have full recourse
      to the property. In line with industry practice, the Company does not conduct
      independent credit checks on the property buyers but relies instead on the
      credit checks conducted by the mortgagee banks. For financial reporting
      purposes, the sale of a property unit is not recognized until title has passed
      and the Company is released from its loan guarantee on the unit.








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***Wholly-owned
      foreign e*nterprises.**





A
      wholly
      foreign-owned enterprise ("WFOE") is an entity 100 percent owned by a foreign
      investor or investors. An apparent advantage of a WFOE is that it can enjoy
      exclusive management control of its business activities and have autonomy in
      its
      operation without too much external interference.





The
      original WFOE regulations only permitted WFOEs in certain limited sectors and
      required that the foreign party either provided advanced technology or that
      at
      least 50% of the production could be exported. These conditions were relaxed
      over time as more WFOEs were permitted in increasingly broader sectors of the
      economy. In accordance with the Wholly Foreign-owned Enterprise Law as amended
      in 2001 and the Industrial Catalogue Guiding Foreign Investments (2004) (the
      "2004 Catalogue"), the export requirement is no longer permitted and WFOEs
      are
      now much more common, except in certain "restricted" or "prohibited" sectors
      as
      provided in the 2004 Catalogue.





With
      respect to China's real estate industry, the market has been gradually opened
      to
      WFOEs since China's entry into the World Trade Organization. Pursuant to the
      2004 Catalogue, WFOEs are permitted to engage in the development, construction
      and management of ordinary residential houses while they, with limited
      exceptions, are restricted to participate in the development of high standard
      real estate projects.





One
      of
      the most important issues covered in the project documentation is the business
      scope of the WOFE. Business scope is narrowly defined for all businesses in
      China and the WOFE can only conduct business within its approved business scope,
      which ultimately appears on the business license. Any amendments to the business
      scope require further application and approval. The Company's business scope,
      is
      defined to include general real estate development, sales, leasing and property
      management.





***Changes
      in currency conversion p*olicies in China.**





Renminbi
      (Yuan) is not a freely exchangeable currency. Since 1998, the State
      Administration of Foreign Exchange of China has promulgated a series of
      circulars and rules in order to further enhance the verification of the
      truthfulness of foreign exchange payments under the current account items of
      a
      China enterprise and has imposed strict requirements in respect of borrowings
      and repayments of foreign exchange debts from and to foreign creditors under
      the
      capital account items and creation of foreign security in favor of foreign
      creditors.





This
      may
      cause complicated procedures in foreign exchange payments to foreign creditors
      under the current account items and thus will affect the restrictions on
      borrowing of international commercial loans, creation of foreign security and
      borrowing of Renminbi loans under guarantees in foreign currencies. (The
      majority of the income from the Town House entities is in Renminbi).
      Furthermore, the value of Renminbi (Yuan) may become subject to supply and
      demand, which could be largely affected by the international economic and
      political environment and any fluctuations in the exchange rate of Renminbi
      could have an adverse effect on the operational and financial condition of
      its
      subsidiaries in China.





***Borrowing*policies.**





The
      Company borrows at competitive rates of interest. Borrowed funds will not be
      used for dividends to the shareholders.





The
      precise amount, if any, borrowed by the Company will depend in part upon the
      availability of financing, and prevailing interest rates and other loan costs.
      There is no assurance that such financing, if any, will be available to the
      Company in the amounts desired or on terms considered reasonable by the Board
      of
      Directors.





Loan
      agreements may require that the Company maintain certain reserves or
      compensating balances and may impose other obligations on the Company. Moreover,
      since a significant proportion of





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revenues
      may be reserved for repayment of debt, the use of financing may reduce the
      cash
      that might otherwise be available for dividends until the debt has been repaid
      and may reduce total cash flow for a significant period.





The
      Company may, under appropriate circumstances, attempt to cause Town House to
      borrow funds at fixed interest rates. However, the Company may borrow funds
      at
      rates that vary with a "prime" or "base" rate, particularly on an interim basis
      or when interest rates are believed to be trending downward. A rise in the
      indexed rate may increase borrowing costs and reduce the amount of its income
      and cash available for distribution. In past years, the prime rates charged
      by
      major banks have fluctuated significantly; as a result, the precise amount
      of
      interest that the Company might be charged cannot be predicted with any
      certainty.





***Expansion
      risks.***





The
      Company anticipates that its proposed expansion of its real estate development
      activities will include the construction of new building projects. The Company's
      cost estimates and projected completion dates for construction of new building
      projects may change significantly as the projects progress. In addition, the
      Company's projects will entail significant construction risks, including
      shortages of materials or skilled labor, unforeseen environmental or engineering
      problems, weather interferences and unanticipated cost increases, any of which
      could have a material adverse effect on the projects and could delay their
      scheduled openings. A delay in scheduled openings will delay the Company's
      receipt of increased sale revenues.





***New
      projects.***





The
      projects of the Company to finance, develop, and expand its real estate
      processing facilities will be subject to the many risks inherent in the rapid
      expansion of a high growth business enterprise, including unanticipated design,
      construction, regulatory and operating problems, and the significant risks
      commonly associated with implementing a marketing strategy in changing and
      expanding markets. There can be no assurance that any of these projects will
      become operational within the estimated time frames and projected budgets at
      the
      time the Company enters into a particular agreement, or at all. In addition,
      the
      Company may develop projects as joint ventures in an effort to reduce its
      financial commitment to individual projects. There can be no assurance that
      the
      significant expenditures required to expand its real estate processing plants
      will ultimately result in the establishment of increased profitable
      operations.





When
      the
      Company's future expansion projects become operational, the Company will be
      required to add and train personnel, expand its management information systems
      and control expenses. If the Company does not successfully address the Company's
      increased management needs or the Company otherwise is unable to manage its
      growth effectively, the Company's operating results could be materially and
      adversely affected.





***Uncertainty
      of market acceptance.***





The
      Company is currently selling its developed properties principally in the City
      of
      Wuhan. Achieving market acceptance for the Company's properties, particularly
      in
      new markets, will require substantial marketing efforts and the expenditure
      of
      significant funds. There is substantial risk that any new markets may not accept
      or be as receptive to the Company's properties. Market acceptance of the
      Company's current and proposed properties will depend, in large part, upon
      the
      ability of the Company to inform potential customers that the distinctive
      characteristics of its properties make them superior to competitive properties
      and justify their pricing. There can be no assurance that the Company's current
      and proposed properties will be accepted by consumers or that any of the
      Company's current or proposed properties will be able to compete effectively
      against other properties. Lack of market acceptance of the Company's properties
      would have a material adverse effect on the Company.





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***Changing
      consumer preferences.***





As
      is the
      case with other companies’ new real estate developments, the Company is subject
      to changing consumer preferences and location-related concerns.





***Sales
      force.***





The
      Company intends to hire additional sales personnel during 2007. There is no
      assurance that hiring these additional sales people will result in increased
      sales. The Company anticipates using independent sales agents to sell and
      distribute its real estate development projects. The Company cannot predict
      whether it will be able to obtain and maintain satisfactory sales arrangements
      and the failure to do so could have a material adverse effect on its business,
      operations and finances.





***Geographic
      concentration; fluctuations in regional economic
      conditions.***





Nearly
      all of the Company's sales are concentrated in the central area of China.
      Accordingly, the Company is susceptible to fluctuations in its business caused
      by adverse economic conditions in this region. Difficult economic conditions
      in
      other geographic areas into which the Company may expand may also adversely
      affect its business, operations and finances.





***Dependence
      on certain executives.***





The
      Company is highly dependent on the services of Mr. Fang Zhong, and the loss
      of
      his services would have a material adverse impact on the operations of the
      Company. He has been primarily responsible for the development of the Company
      and the development and marketing of its real estate projects. The Company
      has
      not applied for key-man life insurance on the lives of its executives, but
      may
      do so in the future.





***Competition.***





The
      real
      estate business is highly competitive and, therefore, the Company faces
      substantial competition in connection with the marketing and sale of its
      projects. In general, real estate properties are price sensitive and affected
      by
      many factors beyond the control of the Company, including changes in consumer
      tastes, fluctuation commodity prices and changes in supply due to weather,
      production, and natural disaster. The Company's real estate properties face
      competition from other developers in its marketing areas. Most of the Company's
      competitors are well established, have greater financial, marketing, personnel
      and other resources, have been in business for longer periods of time that
      the
      Company, and have projects that have gained wide customer acceptance in the
      marketplace. The largest competitors of the Company are state-owned companies
      owned by the government of China. Large foreign real estate companies have
      also
      entered the real estate industry in China. The greater financial resource of
      such competitors will permit them to procure properties and to implement
      extensive marketing and promotional programs, both generally and indirect
      response to advertising claims by the Company.





***Lack
      of property and general liability insurance.***





The
      Company and its subsidiaries are self-insured, and they do not carry any
      property insurance, general liability insurance, or any other insurance that
      covers the risks of their business operations. As a result, any material loss
      or
      damage to its properties or other assets, or personal injuries arising from
      its
      business operations would have a material adverse affect on its financial
      condition and operations.








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***Government
      regulation.***





The
      Company is subject to extensive regulation by China and by other province,
      county and local authorities in jurisdiction in which its properties are sold.
      The Company believes that it is currently in substantial compliance with all
      material governmental laws and regulations and maintains all material permits
      and licenses relating to its operations. Nevertheless, there can be no assurance
      that the Company will continue to be in substantial compliance with current
      laws
      and regulations, or whether the Company will be able to comply with any future
      laws and regulations. To the extent that new regulations are adopted, the
      Company will be required to conform its activities in order to comply with
      such
      regulations. Failure by the Company to comply with applicable laws and
      regulations could subject the Company to civil remedies, including fines,
      injunctions, recalls or seizures, as well as potential criminal sanctions,
      which
      could have a material adverse effect on its business, operations and
      finances.





***Doing
      business in China.***





Doing
      business in China involves various risks including internal and international
      political risks, evolving national economic policies as well as financial
      accounting standards, expropriation and the potential for a reversal in economic
      conditions. Since the late 1970s, the government of China has been reforming
      China's economic system. These reforms have resulted in significant economic
      growth and social progress. Although we believe that economic reform and the
      macroeconomic policies and measures adopted by the current China government
      will
      continue to have a positive effect on economic development in China and that
      we
      will continue to benefit from such policies and measures. These policies and
      measure may from time to time be modified or revised. Adverse changes in
      economic policies of the China government or in the laws and regulations, if
      any, could have a material adverse effect on the overall economic growth of
      China, and could adversely affect our business operations.





***China
      currency, "Renminbi", is not a freely convertible currency, which could limit
      our ability to obtain sufficient foreign currency to support our business
      operations in the future.***





We
      rely
      on China government's foreign currency conversion policies, which may change
      at
      any time, in regard to our currency exchange needs. We receive substantially
      all
      of our revenues in Renminbi, which is not freely convertible into other foreign
      currencies. In China, the government has control over Renminbi reserves through,
      among other things, direct regulation of the conversion or Renminbi into other
      foreign currencies and restrictions on foreign imports. Although foreign
      currencies which are required for "current account" transactions can be bought
      freely at authorized China banks, the proper procedural requirements prescribed
      by China law must be met. At the same time, China companies are also required
      to
      sell their foreign exchange earnings to authorize China banks and the purchase
      of foreign currencies for capital account transactions still requires prior
      approval of the China government. This type of heavy regulation by the China
      government of foreign currency exchange restricts certain of our business
      operations and a change in any of these government policies, or any other,
      could
      further negatively impact our operations.





***Fluctuations
      in the exchange rate between the China currency and the United States dollar
      could adversely affect our operating results.***





The
      functional currency of our operations in China is "Renminbi". Results of our
      operations are translated at average exchange rates into United States dollars
      for purposes of reporting results. As a result, fluctuations in exchange rates
      may adversely affect our expenses and results of operations as well as the
      value
      of our assets and liabilities. Fluctuations may adversely affect the
      comparability of period-to-period results. Although we may use hedging
      techniques in the future (which we currently do not use), we may not be able
      to
      eliminate the effects of currency fluctuations. Thus, exchange rate fluctuations
      could have a material adverse impact on our operating results and stock
      prices.





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***Fluctuations
      in exchange rates of the Renminbi could adversely affect the value of stock
      ownership in the Company.***





For
      over
      10 years the official exchange rate for the conversion of Renminbi to US dollars
      was unofficially pegged at US$1 to RMB8.28. In July 2005, the People's Bank
      of
      China (PBOC), the country's central bank, began a new policy of calculating
      the
      Renminbi's value against the US dollar using a weighted average of the prices
      given by major banks. The highest and lowest offers are excluded from the
      calculation. As a result of this change the RBM has appreciated against the
      US
      dollar so that the exchange rate was US$1 to RMB8.11 at December 31, 2005,
      and
      is now approximately US$1 to RMB8.04. It should be expected that currency
      exchange fluctuations will occur in the future as a result of circumstances
      beyond the Company's control, such as the level of trade deficit or equalization
      between the US and the China, global economic conditions, global currency
      markets, and other factors. All of the Company's revenue is generated in the
      China in Renminbi, so that during periods that the US dollar is worth less
      in
      relation to the value of the Renminbi, the total revenue and results of
      operations of the Company reported in US dollars in the financial statements
      we
      publish in the US will be less. Consequently, fluctuations in exchange rates
      could adversely affect the US dollar value of our results of operations and
      the
      perceived value of the Company in the public market.





***Uncertainty
      relating to the existing law and regulations in the China may restrict the
      level
      of legal protections to foreign investors.***





The
      China
      currently adopts civil law system which relies heavily on written statutes,
      and
      decisions made by the courts are not binding precedents, but for guidance only.
      The legal system in the China cannot provide the investors with the same level
      of protection as in the US. The Company is governed by the law and regulations
      generally applicable to local enterprises. These laws and regulations were
      recently introduced and remain experimental in nature and subject to changes
      and
      refinements. Interpretation, implementation and enforcement of the existing
      law
      and regulations can be uncertain and unpredictable and therefore have
      restrictions on legal protections on both Hong Kong and foreign
      investors.





***The
      Company has traditionally been dependent on bank debt to finance its projects
      and is therefore subject to availability of such financing and fluctuations
      in
      interest rates.***





The
      development of high quality housing requires substantial funds. The Company
      had
      internally funded its development projects from presale revenue and externally
      from bank loans. The Company cannot guarantee that sufficient capital can be
      generated to develop every one of the Company's projects by way of only presale
      revenue. In addition, the Company cannot guarantee its ability to continue
      to
      obtain bank loans and credit facilities and renewals of existing borrowings
      from
      financial institutions on maturity under favorable terms and conditions. Changes
      in interest rates on the Company's borrowings will also affect its financing
      costs and consequently its results of operations.





***Reliance
      on independent contractors in providing various services creates risks and
      the
      Company is exposed to various risks in relation to contractors’
performance.***





The
      Company engages independent third party contractors, through open tenders,
      to
      provide various services including construction, piling and foundation, building
      and fitting-out works, interior decoration and installation of elevators.
      Although it is the Company's strategy and policy to select reputable independent
      third party contractors with positive track records in most cases and supervises
      the construction progress, there is no assurance that the services rendered
      by
      any of these independent third party contractors will always be satisfactory
      or
      match the targeted quality level required by the Company. Additionally, the
      Company is exposed to the risk that a contractor may require additional capital
      in excess of the cost they tendered to complete a contractual property
      development and the Company may have to provide such additional capital.
      Furthermore, there is risk that contractors may experience financial or other
      difficulties which may affect their ability to carry out construction works,
      thus delaying the completion of





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the
      Company's property developments or resulting in additional costs for the
      Company. Any of these factors could adversely affect the Company's revenues
      and
      reputation.





***In
      order for the China subsidiaries of the Company to pay dividends in the United
      States, a conversion of Renminbi into US dollar is
      required.***





Under
      current China law, the conversion of Renminbi into foreign currency generally
      required government consent. Government authorities may impose restrictions
      that
      could have a negative impact in the future on the conversion process and upon
      the ability of the Company to meet its cash needs, and to pay dividends to
      its
      shareholders. However, the subsidiaries of the Company are presently classified
      as a wholly owned foreign enterprise ("WOFE") in China that have verifiable
      foreign investment in China, funding having been made through an official China
      banking channel. Because the subsidiaries of the Company qualify for treatment
      as a WOFE, the subsidiaries can declare dividends and their funds can be
      repatriated to the Company in the United States under current laws and
      regulations in China.





***Mortgage
      interest rates may increase, cooling demand for the Company's
      properties.***





Bank
      mortgages are becoming increasingly popular as a means of financing property
      purchases in China. Any increase in bank mortgage interest rates may
      significantly increase the cost of mortgage financing to property buyers, thus
      reducing the attractiveness of mortgages as a source of financing property
      purchases and, accordingly, adversely affecting the affordability of residential
      properties. The Chinese government may also increase the level down payment
      requirement or impose certain other conditions which would make mortgage
      financing unavailable or unattractive to the potential property
      buyers.





***The
      practice of pre-selling developments may expose the Company to substantial
      liabilities.***





The
      existing common practices by property developers to pre-sale properties (while
      still under construction) in China involves certain risks. For example, the
      Company may fail to complete a property development which may have been fully
      or
      partially pre-sold. In such circumstances, it could find itself liable to
      purchasers of pre-sold units for losses suffered by them. There can be no
      assurance that these losses would not exceed the purchase price paid in respect
      of the pre-sold units. In addition, if a pre-sold property development is not
      completed on time, the purchasers of pre-sold units may be entitled to
      compensation for late delivery. If the delay extends beyond a certain period,
      the purchasers may even be entitled to terminate the pre-sale agreement and
      claim for damages.





***The
      shares of the Company may have limited liquidity, and after completion of the
      Spin-Off, the spun-off shares of Town House Land Limited, a Hong Kong company,
      will have no market for resale..***




A
      substantial portion of the Company’s shares of common stock are subject to
      registration, and are closely held by certain institutional and insider
      investors. Consequently, the public float for the shares may be highly limited.
      As a result, should you wish to sell your shares into the open market you may
      encounter difficulty selling large blocks of your shares or obtaining a suitable
      price at which to sell your shares.





In
      addition, concerning holders of our stock immediately prior to the December
      11,
      2006 stock purchase and change of control, the shares of Town House Land Limited
      (“Town House”) to be spun off will have no market for resale, and there can be
      no assurance that such a market will ever be developed. Town House is a private
      company organized and existing under the laws of Hong Kong. Any future transfer
      of shares of Town House will be subject to applicable restrictions under Hong
      Kong law.




***If
      we fail to maintain the adequacy of our internal controls, our ability to
      provide accurate financial statements and comply with the requirements of the
      Sarbanes-Oxley Act of 2002 could be impaired, which could cause our stock price
      to decrease* *substantially.***





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We
      will
      need to continue to improve our financial and managerial controls, reporting
      systems and procedures, and documentation thereof. If our financial and
      managerial controls, reporting systems or procedures fail, we may not be able
      to
      provide accurate financial statements on a timely basis or comply with the
      Sarbanes-Oxley Act of 2002 as it applies to us. Any failure of our internal
      controls or our ability to provide accurate financial statements could cause
      the
      trading price of our common stock to decrease substantially.





***Our
      common shares are thinly traded and, you may be unable to sell at or near ask
      prices or at all if you need to sell your shares to raise money or otherwise
      desire to liquidate such shares.***





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





The
      market price for SOAD’s common stock is particularly volatile given our status
      as a relatively small company with a small and thinly traded “float” and lack of
      current revenues that could lead to wide fluctuations in our share price. You
      may be unable to sell your common stock at or above your purchase price if
      at
      all, which may result in substantial losses to you.





The
      market for SOAD’s common shares is characterized by significant price volatility
      when compared to seasoned issuers, and we expect that our share price will
      continue to be more volatile than a seasoned issuer for the indefinite future.
      The volatility in SOAD’s share price is attributable to a number of factors.
      First, as noted above, our common shares are sporadically and/or thinly traded.
      As a consequence of this lack of liquidity, the trading of relatively small
      quantities of shares by its shareholders may disproportionately influence the
      price of those shares in either direction. The price for its shares could,
      for
      example, decline precipitously in the event that a large number of our common
      shares are sold on the market without commensurate demand, as compared to a
      seasoned issuer which could better absorb those sales without adverse impact
      on
      its share price. Secondly, an investment in Speedhaul is a speculative or
“risky” investment due to our lack of revenues or profits to date and
      uncertainty of future market acceptance for current and potential products.
      As a
      consequence of this enhanced risk, more risk-adverse investors may, under the
      fear of losing all or most of their investment in the event of negative news
      or
      lack of progress, be more inclined to sell their shares on the market more
      quickly and at greater discounts than would be the case with the stock of a
      seasoned issuer.




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





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market
      or
      of broker-dealers who participate in the market, management will strive within
      the confines of practical limitations to prevent the described patterns from
      being established with respect to our securities. The occurrence of these
      patterns or practices could increase the volatility of our share
      price.





***We
      do not anticipate paying any cash dividends.***





We
      presently do not anticipate that we will pay any dividends on any of our capital
      stock in the foreseeable future. The payment of dividends, if any, would be
      contingent upon our revenues and earnings, if any, capital requirements, and
      general financial condition. The payment of any dividends will be within the
      discretion of our Board of Directors. We presently intend to retain all
      earnings, if any, to implement our business plan; accordingly, we do not
      anticipate the declaration of any dividends in the foreseeable
      future.





***Fluctuations
      in exchange rates of the Renminbi could adversely affect the value of stock
      ownership in the Company.***





For
      over
      10 years the official exchange rate for the conversion of Renminbi to US dollars
      was unofficially pegged at US$1 to RMB8.28. In July 2005, the People's Bank
      of
      China (PBOC), the country's central bank, began a new policy of calculating
      the
      Renminbi's value against the US dollar using a weighted average of the prices
      given by major banks. The highest and lowest offers are excluded from the
      calculation. As a result of this change the RBM has appreciated against the
      US
      dollar so that the exchange rate was US$1 to RMB8.11 at December 31, 2005,
      and
      is now approximately US$1 to RMB7.67. It should be expected that currency
      exchange fluctuations will occur in the future as a result of circumstances
      beyond the Company's control, such as the level of trade deficit or equalization
      between the US and the China, global economic conditions, global currency
      markets, and other factors. All of the Company's revenue is generated in the
      China in Renminbi, so that during periods that the US dollar is worth less
      in
      relation to the value of the Renminbi, the total revenue and results of
      operations of the Company reported in US dollars in the financial statements
      we
      publish in the US will be less. Consequently, fluctuations in exchange rates
      could adversely affect the US dollar value of our results of operations and
      the
      perceived value of the Company in the public market.





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





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








**Item
                7.**
            **Financial
                Statements.**





The
      information required by Item 7 and an index thereto commences on the next
      page.





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**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**






We
      have
      audited the accompanying consolidated balance sheet of SINO-American Development
      Corporation. as of December 31, 2006, and the related consolidated statements
      of
      operations, stockholders’ equity, and cash flows for the two years then ended.
      These consolidated financial statements are the responsibility of the Company’s
      management. Our responsibility is to express an opinion on these consolidated
      financial statements based on our audit.




We
      conducted our audit 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
      consolidated financial statements are free of material misstatement. The Company
      is not required to have, nor were we engaged to perform, an audit of its
      internal control over financial reporting. Our audit included consideration
      of
      internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the Company’s internal control
      over financial reporting. Accordingly, we express no such opinion. An audit
      also
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the consolidated financial statements, assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audit provides a reasonable basis for our
      opinion.




In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of SINO-American
      Development Corporation as of December 31, 2006, and the consolidated results
      of
      their operations and cash flows for the two years then ended, in conformity
      with
      accounting principles generally accepted in the United States of
      America.




The
      accompanying financial statements have been prepared assuming that SINO-American
      Development Corporation will continue as a going concern. As discussed in Note
      2
      to the financial statements, SINO-American Development Corporation has incurred
      net losses during the years ended December 31, 2006 and 2005 and has negative
      working capital as of December 31, 2006. These matters raise substantial doubt
      about the ability of SINO-American Development Corporation to continue as a
      going concern. Management's plans in regard to these matters are described
      in
      Note 2. The financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.









/s/
      Murrell, Hall, McIntosh & Co, PLLP






Oklahoma
      City, Oklahoma


June
      5,
      2007







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**SINO-AMERICAN
                DEVELOPMENT CORPORATION****CONSOLIDATED
                BALANCE SHEET****DECEMBER
                31, 2006**ASSETSCurrent
                AssetsCash
                and equivalents
            
            $
            1,526,738Accounts
                receivable, net of allowance of $385,510
            
            
            123,083Prepaid
                expenses
            
            
            152,561Construction
                in process
            
            
            -Properties
                held for resale
            
            
            5,588,898Total
                Current
                Assets
            
            
            7,391,280Land
                held for development
            
            
            4,826,378Property
                and equipment, net of accumulated depreciation
            
            
            2,854,609$
            15,072,267LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)Current
                LiabilitiesAccounts
                payable and accrued expenses
            
            $
            7,503,662Advances
                from buyers
            
            
            2,976,673Enterprise
                taxes payable
            
            
            1,729,426Other
                taxes payables
            
            
            1,915,519Short-term
                loans
            
            
            3,403,883Total
                Current
                Liabilities
            
            
            17,529,163Minority
                Interest
            
            
            490,320Stockholders'
                EquityCommon
                stock, Par value $0.001, 150,000,000 shares authorized,1,671,484
                shares issued and
                outstanding atDecember
                31,
                2006
            
            
            1,672Additional
                paid in capital
            
            
            5,973,331Retained
                deficit
            
            
            (6,972,513
            )Accumulated
                other comprehensive income
            
            
            (295,824
            )Total
                stockholders' equity before
                advances offset
            
            
            (1,293,334
            )Advances
                to directors
            
            
            (1,653,882
            )Total
                stockholders' equity, net
                of advances offset
            
            
            (2,947,216
            )$
            15,072,267See
                accompanying summary of accounting policies and notes to the consolidated
                financial statements.






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**SINO-AMERICAN
                DEVELOPMENT CORPORATION****CONSOLIDATED
                STATEMENTS OF OPERATIONS****FOR
                THE YEARS ENDED DECEMBER 31, 2006 AND 2005****2006**
            
            
            **2005**Sales
                revenues
            
            $
            13,715,501
            
            
            $
            6,377,239Cost
                of properties sold
            
            
            14,544,803
            
            
            
            5,011,669Gross
                profit
            
            
            (829,302
            )
            
            
            1,365,570Selling,
                general and administrative expenseSelling
                expenses
            
            
            403,174
            
            
            
            778,037Depreciation
                expense
            
            
            190,076
            
            
            
            186,398General
                and administrative expenses
            
            
            2,178,907
            
            
            
            2,324,9702,772,157
            
            
            
            3,289,405Income
                (loss) from operations
            
            
            (3,601,459
            )
            
            
            (1,923,835
            )Other
                income (expense)Other
                revenues (expense)
            
            
            44,225
            
            
            
            92,828Impairment
                losses
            
            
            (5,760,770
            )Interest
                and finance costs
            
            
            (293,934
            )
            
            
            (433,200
            )(6,010,479
            )
            
            
            (340,372
            )Net
                (loss) before income taxes and minority interest
            
            
            (9,611,938
            )
            
            
            (2,264,207
            )(Provision
                for) benefit from income taxes
            
            
            (681,131
            )
            
            
            1,484,799Net
                (loss) before minority interest
            
            
            (10,293,069
            )
            
            
            (779,408
            )Minority
                interest in (earnings) loss
            
            
            (137,840
            )
            
            
            30,577Net
                (loss)
            
            $
            (10,430,909
            )
            
            $
            (748,831
            )Other
                comprehensive income (loss)
            
            $
            (529,324
            )
            
            $
            262,709Total
                comprehensive (loss)
            
            $
            (10,960,233
            )
            
            $
            (486,122
            )Basic
                and diluted (loss) per share
            
            $
            (6.24
            )
            
            $
            (0.45
            )Basic
                and diluted comprehensive (loss) per share
            
            $
            (6.56
            )
            
            $
            (0.29
            )Basic
                and diluted weighted average shares outstanding
            
            
            1,671,484
            
            
            
            1,671,484See
                accompanying summary of accounting policies and notes to the consolidated
                financial statements.







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**SINO-AMERICAN
                DEVELOPMENT CORPORATION****CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS' EQUITY****FOR
                THE YEARS ENDED DECEMBER 31, 2006 AND 2005**Additional
            
            
            
            
            
            Other
            
            
            TotalCommon
                Stock
            
            
            Paid-In
            
            
            Retained
            
            
            Comprehensive
            
            
            Shareholders'Shares
            
            
            Amount
            
            
            Capital
            
            
            Earnings
            
            
            Income
            
            
            EquityBalance,
                December 31, 2005
            
            
            1,650,591
            
            
            $
            1,651
            
            
            $
            5,918,465
            
            
            $
            4,207,227
            
            
            $
            -
            
            
            $
            10,127,343Net
                loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (748,831
            )
            
            
            
            
            
            
            (748,831
            )Other
                comprehensive income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            262,709
            
            
            
            262,709Effect
                of recapitalization
            
            
            20,893
            
            
            
            21
            
            
            
            54,866
            
            
            
            
            
            
            
            
            
            
            
            54,887Balance,
                December 31, 2005
            
            
            1,671,484
            
            
            
            1,672
            
            
            
            5,973,331
            
            
            
            3,458,396
            
            
            
            262,709
            
            
            
            9,696,108Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (10,430,909
            )
            
            
            
            
            
            
            (10,430,909
            )Other
                comprehensive loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (558,533
            )
            
            
            (558,533
            )Balance,
                December 31, 2006
            
            
            1,671,484
            
            
            $
            1,672
            
            
            $
            5,973,331
            
            
            $
            (6,972,513
            )
            
            $
            (295,824
            )
            
            $
            (1,293,334
            )See
                accompanying summary of accounting policies and notes to the consolidated
                financial statements.






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**SINO-AMERICAN
                DEVELOPMENT
                CORPORATION****CONSOLIDATED
                STATEMENTS OF CASH FLOWS****Year
                Ended****December
                31,****2006**
            
            
            **2005**Cash
                Flows From Operating ActivitiesNet
                (Loss)
            
            $
            (10,430,909
            )
            
            $
            (748,831
            )Adjustments
                to reconcile net loss to net cash provided byoperating
                activitiesDepreciation
            
            
            190,076
            
            
            
            186,398Minority
                interest
            
            
            137,840
            
            
            
            32,966Impairment
                of properties
            
            
            5,760,770
            
            
            
            -Changes
                inAccounts
                receivable, net and
                other receivable
            
            
            471,702
            
            
            
            501,520Properties
                held for
                resale
            
            
            1,558,707
            
            
            
            (393,128
            )Advances
                to
                suppliers
            
            
            196,637
            
            
            
            1,542Construction-in-progress
            
            
            -
            
            
            
            (1,128,451
            )Prepaid
                expenses
            
            
            (152,561
            )
            
            
            -Accounts
                payable and other
                payables
            
            
            4,943,905
            
            
            
            805,823Advances
                from
                buyers
            
            
            (2,476,545
            )
            
            
            4,223,160Income
                and other taxes
                payable
            
            
            1,968,178
            
            
            
            (1,509,140
            )Net
                Cash Flows Provided By Operating Activities
            
            
            2,167,800
            
            
            
            1,971,859Cash
                Flows From Investing ActivitiesPurchase
                of land held for development
            
            
            -
            
            
            
            (4,767,303
            )Purchases/transfer
                of fixed assets
            
            
            (208,292
            )
            
            
            (131,036
            )Net
                Cash (Used) by Investing Activities
            
            
            (208,292
            )
            
            
            (4,898,339
            )Cash
                Flows from Financing ActivitiesLoan
                proceeds
            
            
            425,820
            
            
            
            7,662,310Principal
                loans repayments
            
            
            (2,434,464
            )
            
            
            (3,140,981
            )Advances
                to directors and affiliated companies
            
            
            (723,937
            )
            
            
            (3,250,892
            )Net
                Cash Provided (Used) by Financing Activities
            
            
            (2,732,581
            )
            
            
            1,270,437Foreign
                currency translation adjustment
            
            
            (558,533
            )
            
            
            262,709(Decrease)
                in Cash
            
            
            (1,331,606
            )
            
            
            (1,393,334
            )Cash
                at Beginning of Year
            
            
            2,858,344
            
            
            
            4,251,678Cash
                at End of Year
            
            $
            1,526,738
            
            
            $
            2,858,344Supplemental
                disclosure of cash flow informationInterest
                Paid in Cash
            
            $
            293,934
            
            
            $
            433,200Properties
                transferred from construction-in-progressto
                properties held for sale
            
            $
            8,221,620
            
            
            $
            -Enterprise
                income taxes paid
            
            $
            -
            
            
            $
            86,067See
                accompanying summary of accounting policies and notes to the consolidated
                financial statements.








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SINO-AMERICAN
      DEVELOPMENT CORPORATION





NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS





1.
            DESCRIPTION
                OF BUSINESS





ORGANIZATIONAL
      STRUCTURE





SINO-American
      Development Corporation, (the "Company") was originally incorporated in Colorado
      in 1985 as Gemini Ventures, Inc. The name was changed in 1989 to Solomon Trading
      Company, Ltd., in 1994 to the Voyageur First, Inc., in 1995 to North American
      Resorts, Inc., in 2000 to Immulabs Corp. Effective March 28, 2003, as filed
      with
      the State of Colorado, the Company changed its name to Xerion EcoSolutions
      Group
      Inc. and was engaged in the business of developing gold extraction technology
      for the mining industry until it became inactive in 2004.





In
      October of 2005, the Company entered into a stock exchange agreement with Town
      House Land Limited (`Town House") whereby the Company issued stock equal to
      98.75% in its ownership in exchange for 100% of the ownership interest in Town
      House.





This
      transaction was treated as a recapitalization of Town House for financial
      reporting purposes.





On
      May
      31, 2006, the shareholders elected to reincorporate the Company from the state
      of Colorado to the state of Nevada and to change the name to SINO-American
      Development Corporation.  The Company also approved an eight for one
      reverse stock split which reduced the number of shares outstanding from
      227,321,840 to 28,415,230.   The effect of this reverse stock split
      has been reflected retroactively for all periods included in these financial
      statements.





On
      December 11, 2006, the company entered into an agreement with twenty-two
      accredited investors pursuant to which the company agreed to issue 12,505,000
      shares of the it’s common stock, in consideration for an aggregate of $12,505 in
      cash at such time as the Town House subsidiary is spun-off to Mr. Fang Zhong
      .
      Additionally on December 11, 2006, the Buyers directly acquired (the “Stock
      Acquisition”) from the following stockholders all of their shares of our common
      stock: Mr. Fang Zhong, a current director and our President, Chief Executive
      Officer, Chief Financial Officer, and Treasurer at the time of the Stock
      Acquisition; Ms. Hu Min, a current director and our Secretary at the time of
      the
      Stock Acquisition; Mr. Fang Wei Jun, a current director of the Company; and
      Mr.
      Fang Zhong in his capacity as legal representative of Fang Hui. The Stock
      Purchase Agreement and the Stock Acquisition effectuated a change in control
      of
      the Company, and in connection therewith, Mr. Fang Zhong resigned as our
      President, Chief Executive Officer, Chief Financial Officer, and Treasurer,
      and Ms. Hu Min resigned as our Secretary, both effective December 11, 2006.
      In
      their places, Mr. Silas Phillips was appointed as our President, Chief Executive
      Officer, Chief Financial Officer, and Treasurer, effective December 11,
      2006.





The
      Stock
      Purchase Agreement also requires that, after the closing (the “Closing”) of the
      Stock Purchase and the Stock Acquisition , all current assets of the Company
      would be transferred to Town House, and all of the Company’s liabilities to be
      assumed by Town House. Thereafter, immediately after the closing of any future
      transaction whereby the Company acquires control and ownership of another
      company, the Company would transfer all of the shares of Town House held by
      the
      Company to a trust (the “Trust”), the beneficiaries of which would be the
      stockholders of the Company immediately prior to Closing.




Town
      House Land (formerly: Hong Kong Window of the World Apparel Co., Limited) was
      incorporated in Hong Kong, as a private limited liability company on August
      13,
      2001 with an authorized capital of $64,103 (HK$500,000) divided into 500,000
      ordinary shares of par value $0.12





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(HK$1.00)
      each. Town House Land Limited ("Town House Land") changed to its present name
      on
      August 13, 2003. On August 15, 2003, Town House Land acquired 97% of the
      outstanding registered capital of Wuhan Town House Land. Terms of the
      transaction call for Town House Land to pay $1,602,564 in cash plus the
      contribution of an additional $5,857,488 in share capital in Town House Land
      as
      consideration for the acquisition of the 97% interest in Wuhan Town House's
      registered capital. For financial reporting purposes, Wuhan Town House was
      considered to be the acquiring entity and the additional cash consideration
      paid
      was treated as a distribution to members. Town House Land had no operations
      prior to this reverse acquisition and there was substantially no change in
      ownership from that of Wuhan Town House as a result of this
      transaction.





At
      December 31, 2006 Town House Land held 97% of the registered capital of Wuhan
      Town House, directly held 100% of the equity in Town House Land (Miami)
      Corporation and indirectly 97% of the equity in Town House Land (USA) Inc.
      Collectively hereinafter, Town House Land, Wuhan Town House, Town House Land
      (Miami) Corporation and Town House Land (USA), Inc., are referred to as "the
      Company".





Wuhan
      Town House Land Limited ("Wuhan Town House") (formerly: Wuhan Pacific Real
      Estate Development Company Limited) was registered as a formal third level
      property Company in Hubei Province, in the People's Republic of China as a
      limited liability company (in which investors' potential losses are limited
      to
      their capital contributions) on December 18, 1995 with a registered capital
      of
      $1,207,729 (Rmb. 10,000,000) and a defined period of existence of 14 years
      to
      December 18, 2009. To meet the qualifications of third level property company,
      the company must (1) have registered capital of Rmb.10,000,000, (2) have
      engineering and staff of not less that 12 people, (3) should have completed
      at
      least 50,000 square meters of accumulated development area, and (4) have a
      100%
      passing rate in construction quality and 10% ranked as excellent.





Subsequent
      recapitalizations during 2000 increased Wuhan Town House's registered capital
      to
      $6,038,647 and changed is classification to a second level property company.
      To
      meet the qualifications of a second level property company, the company must
      (1)
      have registered capital of Rmb. 40,000,000, (2) have engineering and management
      staff of not less than 24 people, (3) should have completed 150,000 square
      meters of accumulated areas completed within three years, (4) 100% pass rate
      in
      construction quality with 10% ranked as excellent, and (5) at least three years
      experience in property development. On August 15, 2003, Wuhan Town House entered
      into a reverse merger agreement with Town House Land Limited ("Town House
      Land").





On
      October 10, 2003 Wuhan City Foreign Investment Bureau approved the registration
      of Wuhan Town House Land as a Sino Foreign Joint Investment Enterprise with
      a
      defined period of existence of 20 years to October 27, 2023.





Pursuant
      to the approval of Wuhan City Industrial and Commercial Administrative Bureau
      on
      February 20, 2004 Wuhan Pacific Real Estate Development Company Limited changed
      its name to Wuhan Town House Land Limited.





Town
      House Land (USA) Inc. ("Town House USA") was incorporated in California on
      March
      4, 2004 and owns real estate which it is holding for development. Town House
      Land is a wholly owned subsidiary of Wuhan Town House.





Town
      House Land (Miami) Corporation ("Town House Miami") was incorporated in Florida
      on November 18, 2004 and owns real estate which it is holding for development.
      Town House Miami is a wholly owned subsidiary of Wuhan Town House.




The
      Company's principal activity is the development and sale of commercial and
      residential real estate. The Company's principal country of operations through
      December 31, 2006 was The People's





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Republic
      of China ("PRC"), however, the Company held substantial real estate holdings
      in
      the United States as of that date which it plans to develop in the near
      future.





2.
            Going
                concern





The
      Company had a working capital deficit of $10,137,883 as of December 31, 2006.
      The Company also incurred a loss of $10,430,909 during the year ended December
      31, 2006. The Company’s ability to continue as a going concern is dependent on
      the ability to renegotiate an extension of the bank debt maturities and to
      obtain a profitable level of operations. These issues raise doubts about the
      Company’s ability to continue as a going concern. Management is in the process
      of attempting to raise additional capital through debt and equity
      offerings.





The
      financial statements do not give effect to any adjustments which would be
      necessary should the Company be unable to continue as a going concern and
      therefore be required to realize its assets and discharge its liabilities in
      the
      normal course of business at amounts different from those reflected in these
      financial statements.





3.
            SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES





The
      following is a summary of significant accounting policies:





CONSOLIDATION
      POLICY - The consolidated financial statements include the accounts of the
      Company, Town House, Wuhan Town House, Town House USA, and Town House Miami.
      All
      significant inter-company transactions and balances within the Company are
      eliminated on consolidation.





CASH
      AND
      EQUIVALENTS - The Company considers all highly liquid debt instruments purchased
      with maturity period of three months or less to be cash equivalents. The
      carrying amounts reported in the accompanying consolidated balance sheet for
      cash and cash equivalents approximate their fair value. The Company has
      restricted cash in accordance with the loan covenants.





ACCOUNTS
      RECEIVABLE - The Company provides an allowance for doubtful accounts equal
      to
      the estimated uncollectible amounts. The Company's estimate is based on
      historical collection experience and a review of the current status of trade
      accounts receivable. Accounts receivable in the balance sheet is stated net
      of
      such provision.





PROPERTIES
      HELD FOR SALE - Properties held for sale are comprised of properties held for
      sale and repossessed properties held for resale and are stated at the lower
      of
      cost or net realizable value. Cost includes acquisition costs of land use
      rights, development expenditure, interest and any overhead costs incurred in
      bringing the developed properties to their present location and
      condition.





Net
      realizable value is determined by reference to management estimates based on
      prevailing market conditions.





PROPERTY
      AND EQUIPMENT - Property and equipment are recorded at cost and are being
      depreciated over the estimated useful lives of the related assets. Depreciation
      is computed on the straight-line basis for both financial and income tax
      reporting purposes over useful lives net of a 5% salvage value as
      follows:





Building
                and land rights
            40
                yearsEquipment
            5
                yearsMotor
                vehicles
            5-8
                yearsOffice
                furniture and fixtures
            5
                years








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Repairs
      and maintenance costs are normally charged to the statement of operations in
      the
      year in which they are incurred. In situations where it can be clearly
      demonstrated that the expenditure has resulted in an increase in the future
      economic benefits expected to be obtained from the use of the asset, the
      expenditure is capitalized as an additional cost of the asset.





Property
      and equipment are evaluated annually for any impairment in value. Where the
      recoverable amount of any property and equipment is determined to have declined
      below its carrying amount, the carrying amount is reduced to reflect the decline
      in value. There were no property and equipment impairments recognized during
      the
      years ended December 31, 2006 and 2005.





CONSTRUCTION-IN-PROGRESS
      - Properties currently under development are accounted for as
      construction-in-progress. Construction-in-progress is recorded at acquisition
      cost, including land rights costs, development expenditures, and professional
      fees during the course of construction for the purpose of financing the project.
      Upon completion and readiness for use of the project, the cost of
      construction-in-progress is to be transferred to properties held for
      sale.





RELATED
      COMPANIES - A related company is a company in which a director has beneficial
      interests in and in which the Company has significant influence.





INCOME
      RECOGNITION - Revenue from the sale of properties is recognized when the
      following four criteria are met: (1) a sale is consummated, (2) the buyers
      initial and continuing investments are adequate to demonstrate a commitment
      to
      pay for the property, (3) the seller's receivable is not subject to future
      subordination, and (4) the seller has transferred to the buyer the usual risks
      and rewards of ownership in a transaction that is in substance a sale and does
      not have a substantial continuing involvement with the property.





Interest
      income is recognized when earned, taking into account the average principal
      amounts outstanding and the interest rates applicable.





COST
      OF
      PROPERTIES SOLD - The cost of goods sold includes the carrying amount of the
      properties being sold and the business taxes paid by the Company in connection
      with the sales. Business taxes included in cost of sales were $688,011 and
      $365,217 for the years ended December 31, 2006 and 2005,
      respectively.





ADVERTISING
      - Advertising costs are expensed as incurred. During the years ended December
      31, 2006 and 2005, the Company incurred advertising expenses of $179,691 and
      $401,244 respectively.





FOREIGN
      CURRENCIES - These financial statements have been prepared in U.S. dollars.
      The
      functional currencies for Town House and Wuhan Pacific are the "Hong Kong
      dollar" and "Renminbi" or "Yuan", respectively. Nonmonetary assets and
      liabilities are translated at historical rates, monetary assets and liabilities
      are translated at the exchange rates in effect at the end of the year, and
      income statement accounts are translated at average exchange rates.





TAXATION
      - Taxation on overseas profits has been calculated on the estimated assessable
      profits for the year at the rates of taxation prevailing in the countries in
      which the Company operates.





Provision
      for The People's Republic of China enterprise income tax is calculated at the
      prevailing rate based on the estimated assessable profits less available tax
      relief for losses brought forward.








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Enterprise
      income tax





Under
      the
      Provisional Regulations of The People's Republic of China ("PRC")Concerning
      Income Tax on Enterprises promulgated by the State Council and which came into
      effect on January 1, 1994, income tax is payable by enterprises at a rate of
      33%
      of their taxable income. Preferential tax treatment may, however, be granted
      pursuant to any law or regulations from time to time promulgated by the State
      Council. For the years ended December 31, 2006 and 2005, the Company has been
      granted the privilege of computing the gross profit margins on real estate
      development sales at 15% of sales and computed the enterprise income tax at
      33%
      on only 15% of sales. During 2005, the Company was able to settle its 2004
      and
      prior years enterprise tax liabilities with the PRC taxing authorities for
      substantially less than the prevailing statutory rate resulting in the
      recognition of a net income tax benefit of $1,484,799 during the year ended
      December 31, 2005.





Enterprise
      income tax ("EIT") is provided on the basis of the statutory profit for
      financial reporting purposes, adjusted for income and expense items, which
      are
      not assessable or deductible for income tax purposes.





RETIREMENT
      BENEFIT COSTS - According to The People's Republic of China regulations on
      pension, the Company contributes to a defined contribution retirement plan
      organized by municipal government in the province in which the Company was
      registered and all qualified employees are eligible to participate in the plan.
      Contributions to the plan are calculated at 20% or 26% of the employees'
      salaries above a fixed threshold amount and the employees contribute 6% while
      the Company contributes the balance contribution of 14% or 20%. The Company
      has
      no other material obligation for the payment of retirement benefits beyond
      the
      annual contributions under this plan.





For
      the
      years ended December 31, 2006 and 2005, the Company's pension cost charged
      to
      the statements of operations under the plan amounted to $7,473 and $7,415,
      respectively.





FAIR
      VALUE OF FINANCIAL INSTRUMENTS - The carrying amounts of certain financial
      instruments, including cash, accounts receivable, commercial notes receivable,
      other receivables, accounts payable, commercial notes payable, accrued expenses,
      and other payables approximate their fair values as of December 31, 2006 because
      of the relatively short-term maturity of these instruments.




EARNINGS
      PER SHARE - Basic earnings per share is computed by dividing net income by
      the
      weighted-average number of common shares outstanding during the period. Diluted
      earnings per share is computed by dividing net income by the weighted-average
      number of common shares and dilutive potential common shares outstanding during
      the period. As of December 31, 2006 and 2005, there were no outstanding
      securities or other contracts to issue common stock, such as options, warrants
      or conversion rights, which would have a dilutive effect on earnings per share.
      For presentation purposes, earnings per share for 2006 and 2005 were computing
      assuming the reorganization occurred on January 1, 2004.





On
      May
      31, 2006 the Company approved an eight for one reverse stock split which reduced
      the number of shares outstanding from 227,321,840 to 28,415,230. The effect
      of
      this reverse stock split has been reflected retroactively for all periods
      included in these financial statements.




On
      December 5, 2006, the Board of Directors and the majority holders of the
      Company's stock jointly approved resolutions by written consent to amend the
      Articles of Incorporation to effectuate a one for seventeen reverse stock split
      which reduced the number of shares outstanding from 28,415,230 to
      1,671,484.  This stock split became effective on January 12, 2007. The
      effect of this reverse stock split has been reflected retroactively for all
      periods included in these financial statements.





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USE
      OF
      ESTIMATES - The preparation of financial statements in accordance with generally
      accepted accounting principles require management to make estimates and
      assumptions that affect reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and reported amounts of revenues and expenses during the reporting
      period. Actual results could differ from those estimates. The most significant
      estimates related to allowance for uncollectible accounts receivable,
      depreciation, costs to complete construction in progress, taxes, and
      contingencies. Estimates may be adjusted as more current information becomes
      available, and any adjustment could be significant.





In
      February 2006, the FASB issued Statement No. 155, “Accounting for Certain
      Hybrid Financial Instruments” (“SFAS No. 155”), which amends FASB
      Statements No. 133 and 140. This Statement permits fair value remeasurement
      for any hybrid financial instrument containing an embedded derivative that
      would
      otherwise require bifurcation, and broadens a Qualified Special
      Purpose





Entity’s
      (“QSPE”) permitted holdings to include passive derivative financial instruments
      that pertain to other derivative financial instruments. This Statement is
      effective for all financial instruments acquired, issued or subject to a
      remeasurement event occurring after the beginning of an entity’s first fiscal
      year beginning after September 15, 2006. This Statement has no current
      applicability to the Company’s financial statements. Management plans to adopt
      this Statement on January 1, 2007 and it is anticipated that the initial
      adoption of this Statement will not have a material impact on the Company’s
      financial position, results of operations, or cash flows.





In
      March
      2006, the FASB issued Statement No. 156, “Accounting for Servicing of Financial
      Assets - an amendment of FASB Statement No. 140” (“SFAS No. 156”). This
      Statement is effective for fiscal years beginning after September 15, 2006.
      This
      Statement requires that all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value, if practicable. This Statement
      has no current applicability to the Company’s financial statements. Management
      plans to adopt this Statement on January 1, 2007 and it is anticipated that
      the
      initial adoption of this Statement will not have a material impact on the
      Company’s financial position, results of operations, or cash flows.





In
      June
      2006, the FASB issued Interpretation 48, “Accounting for Uncertainty in Income
      Taxes” (“FIN 48”), an interpretation of FASB Statement No. 109,
“Accounting for Income Taxes.” FIN 48 clarifies the accounting and
      reporting for income taxes where interpretation of the law is uncertain.
      FIN 48 prescribes a comprehensive model for the financial statement
      recognition, measurement, presentation and disclosure of income tax
      uncertainties with respect to positions taken or expected to be taken in income
      tax returns. FIN 48 is effective for fiscal years beginning after
      December 15, 2006. This Statement has no current applicability to the
      Company’s financial statements. Management plans to adopt this Statement on
      January 1, 2007 and it is anticipated that the initial adoption of
      FIN 48 will not have a material impact on the Company’s financial position,
      results of operations, or cash flows.




In
      September 2006, the FASB issued Statement No. 157, “Fair Value
      Measurements” (“SFAS No. 157”). SFAS No. 157 addresses how
      companies should measure fair value when they are required to use a fair value
      measure for recognition or disclosure purposes under GAAP.
      SFAS No. 157 defines fair value, establishes a framework for measuring
      fair value and expands disclosures about fair value measurements.
      SFAS No. 157 is effective for fiscal years beginning after
      November 15, 2007, with earlier adoption permitted. Management is assessing
      the impact of the adoption of this Statement.




In
      September 2006, the FASB issued Statement No. 158, “Employers’ Accounting
      for Defined Benefit Pension and Other Postretirement Plans”
(“SFAS No. 158”), an amendment of FASB Statements No. 87, 88, 106
      and 132(R). SFAS No. 158 requires (a) recognition of the funded
      status





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(measured
      as the difference between the fair value of the plan assets and the benefit
      obligation) of a benefit plan as an asset or liability in the employer’s
      statement of financial position, (b) measurement of the funded status as of
      the employer’s fiscal year-end with limited exceptions, and (c) recognition
      of changes in the funded status in the year in which the changes occur through
      comprehensive income. The requirement to recognize the funded status of a
      benefit plan and the disclosure requirements are effective as of the end of
      the
      fiscal year ending after December 15, 2006. The requirement to measure the
      plan assets and benefit obligations as of the date of the employer’s fiscal
      year-end statement of financial position is effective for fiscal years ending
      after December 15, 2008. This Statement has no current applicability to the
      Company’s financial statements.





In
      February 2007, the FASB issued Statement No. 159 “The Fair Value Option for
      Financial Assets and Financial Liabilities” (SFAS 159). This statement permits
      companies to choose to measure many financial assets and liabilities at fair
      value. Unrealized gains and losses on items for which the fair value option
      has
      been elected are reported in earnings. SFAS 159 is effective for fiscal years
      beginning after November 15, 2007. The Company is currently assessing the impact
      of SFAS 159 on its consolidated financial statements.




In
      September 2006, the Securities Exchange Commission issued Staff Accounting
      Bulletin No. 108 (“SAB No. 108”). SAB No. 108
      addresses how the effects of prior year uncorrected misstatements should be
      considered when quantifying misstatements in current year financial statements.
      SAB No. 108 requires companies to quantify misstatements using a
      balance sheet and income statement approach and to evaluate whether either
      approach results in quantifying an error that is material in light of relevant
      quantitative and qualitative factors. When the effect of initial adoption is
      material, companies will record the effect as a cumulative effect adjustment
      to
      beginning of year retained earnings and disclose the nature and amount of each
      individual error being corrected in the cumulative adjustment.
      SAB No. 108 will be effective beginning January 1, 2007 and it is
      anticipated that the initial adoption of SAB No. 108 will not have a
      material impact on the Company’s financial position, results of operations, or
      cash flows.





RECLASSIFICATIONS
      - Certain amounts in the 2005 financial statements have been reclassified to
      conform to the 2006 presentation.





4.
            CONCENTRATIONS
                OF BUSINESS AND CREDIT RISK





At
      December 31, 2006, the Company had $1,524,490 cash in banks located in the
      People's Republic of China ("PRC") and these balances are not covered by any
      type of protection similar to that provided by the FDIC on funds held in United
      States banks.





Substantially
      all of the Company's operations are in the PRC other than three significant
      real
      estate holdings in the United States.




The
      Company provides credit in the normal course of business. The Company performs
      ongoing credit evaluations of its customers and clients and maintains allowances
      for doubtful accounts based on factors surrounding the credit risk of specific
      customers and clients, historical trends, and other information. Accounts
      receivable totaling $123,083 and $611,758 as of December 31, 2006 and 2005,
      respectively, were collateralized by real estate.





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5.
            ACCOUNTS
                RECEIVABLE AND OTHER RECEIVABLES





Accounts
      receivable consist of the following as of December 31, 2006:




Accounts
                receivable
            
            $
            508,593Less:
                Provision for doubtful debts
            
            
            (385,510
            )Accounts
                receivable net of provision for doubtful debts
            
            $
            123,083






6.
            PROPERTIES
                HELD FOR RESALE





As
      of
      December 31, 2006, the Company had the following properties held for
      resale:





General
                Garden
            
            $
            13,771Diamond
                Mansion Residential
            
            
            29,338Gutian
                Apartments
            
            
            289,209YiChang
                Town House Plaza Commercial
            
            
            365,065YiChang
                Town House Plaza Residential
            
            
            4,488,702YiChang
                Town House Plaza Car Park
            
            
            402,813Total
            
            $
            5,588,898







During
      the year ended December 31, 2006, management determined that the unsold
      commercial properties located on floors one through five of the Diamond Mansion,
      Phase One should be converted to residential properties as the commercial space
      was not selling.  This resulted in impairment in value of $3,803,959 on
      these properties as residential properties have a significantly lower retail
      value than commercial properties.





During
      the quarter ended June 30, 2006 the Company revised its cost estimates to
      complete the YiChang Town House Plaza project.  These upward revisions
      resulted in an increase in cost of sales during the second quarter to reflect
      both additional cost associated with sales made in the first quarter as well
      as
      costs incurred on sales during the second quarter.  Management anticipates
      that it will be able to recover its costs in remaining unsold and uncompleted
      units on this project





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7.
            PROPERTIES
                AND EQUIPMENT





Properties
      and equipment as of December 31, 2006, stated at cost less accumulated
      depreciation and amortization, consist of:








Land
                use rights and buildings
            
            $
            2,596,963Plant
                and machineries
            
            
            31,330Motor
                vehicles
            
            
            683,366Office
                equipment
            
            
            192,987Furniture
                and fixtures
            
            
            30,4973,535,143Less:
                Accumulated depreciation and amortization
            
            
            (680,534
            )$
            2,854,609







As
      of
      December 31, 2006, the Company owned three tracts of land located in the United
      States which it was holding for development. The cost basis in this land at
      December 31, 2006 was $4,826,378. At December 31, 2006, substantially all of
      this land was pledged as collateral on various loans.




8.
            CONSTRUCTION
                IN PROGRESS





During
      the first quarter of 2006, the Company decided to abandon the Jing Qi project
      which had been long delayed waiting for the Province to build access roads.
      This
      resulted in an impairment loss of $1,552,035.





9.
            ADVANCES
                FROM BUYERS





Advances
      from buyers represented deposits from residential property buyers and which
      procedures for the transfer of ownership of the property purchased have not
      been
      completed as at the balance sheets date. The deposits from such property buyers
      for residential properties to be transferred in the subsequent years are carried
      forward as deferred revenue. Included in advances from buyers is $1,484,470
      of
      deposits that are for property in the redevelopment of a portion of the Diamond
      Mansion project by Wuhan Pacific Shopping Mall Limited. The allocation of these
      deposits between the Company and Wuhan Pacific will be made when the
      redevelopment is complete.





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10.
            TRANSACTIONS
                WITH RELATED PARTIES





Amounts
      due from/(to) directors at December 31, 2006 are as follows:








Fang
                Zhong (Director)
            
            $
            1,692,036Hu
                Min (Director)
            
            
            5,970Fang
                Wei Jun (Director)
            
            
            (879
            )Fang
                Wei Feng (Director)
            
            
            (43,245
            )$
            1,653,882




The
      amounts due are unsecured, interest free and have no fixed repayment terms.
      For
      financial reporting purposes, the net balance due from directors has been
      reflected as an offset against stockholders equity.





During
      the year ended December 31, 2006 Fang Zhong received $700,113 in advances from
      the Company. Of these advances, $669,038 went to Wuhan Pacific Shopping Mall
      Limited pursuant to a guarantee of Fang Zhong.








11.
            SHORT-TERM
                LOANS





The
      Company had the following short-term loans at December 31, 2006:





Town
                House Land (Miami) short-term bank loan,secured
                by real estate property in the UnitedStates,
                interest at 1% over prime (9.250% atDecember
                31, 2006), principal due onDecember
                31, 2006.
            800,000Wuhan
                Town House short-term bank loan,secured
                by YiChang Project land use rights,interest
                at 115% of the national rate(5.58% atDecember
                31, 2006), principal due based upona
                percentage of sales through December 20, 2006,extended
                to June 20, 2007.
            383,631Town
                House Land (USA) short-term bank loan,secured
                by real estate property in the UnitedStates,
                interest at Far East Bank Prime RatePlus
                1% (9.25% at December 31, 2006) paidperiodically,
                principal due onJanuary
                1, 2007.
            760,000Town
                House Land (Miami) short-term loan from afinancial
                institution, secured by real property,interest
                at Far East Bank Prime Rate plus 1%(9.25%
                at December 31, 2006) paid periodically,principal
                due on January 1, 2007.
            100,000Wuhan
                Town House short-term bank loan,Secured
                by YiChang Project land use rights,interest
                at 115% of national rate(5.76%
                at December 31, 2006) paidperiodically,
                principal due based upon apercentage
                of sales through February 28, 2007.
            255,754Indirect
                financing
            1,104,498$3,403,883




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12.
            EQUITY





On
      May
      31, 2006, the shareholders elected to reincorporate the Company from the state
      of Colorado to the state of Nevada and to change the name to SINO-American
      Development Corporation.  The Company also approved an 8 for one reverse
      stock split which reduced the number of shares outstanding from 227,321,840
      to
      28,415,230.   The effect of this reverse stock split has been
      reflected retro actively for all periods included in these financial
      statements.





The
      Common Stock retained a par value of $.001 per share but the Authorized Capital
      was reduced from 300,000,000 shares to 150,000,000 shares.  The preferred
      stock, of which there was none outstanding at September 30, 2006 was changed
      to
      a par value of $.001 per share from no par.





On
      December 5, 2006, the Board of Directors and the majority holders of the
      Company's stock jointly approved resolutions by written consent to amend the
      Articles of Incorporation to effectuate a one for seventeen reverse stock split
      which reduced the number of shares outstanding from 28,415,230 to
      1,671,484.  This stock split became effective on January 12, 2007. The
      effect of this reverse stock split has been reflected retroactively for all
      periods included in these financial statements.





13.
            INCOME
                TAX





Provision
      for the People's Republic of China enterprise income tax ("EIT") is calculated
      at the prevailing rate based on the estimated assessable profits less available
      tax relief for losses carried forward.





For
      the
      years ended December 31, 2006 and 2005, the Company has been granted the
      privilege of computing the gross profit margins on real estate development
      sales
      at 15% of sales and computed the enterprise income tax at 33% on only 15% of
      sales.





EIT
      is
      provided on the basis of the statutory profit for financial reporting purposes,
      adjusted for income and expense items, which are not assessable or deductible
      for income tax purposes.




A
      reconciliation of EIT tax at the statutory rate to the Company's effective
      rate
      is as follows:





2006
            
            
            2005Computed
                tax at Federal statutory rate of 34%
            
            $
            (1,330,599
            )
            
            $
            (254,608
            )Difference
                primarily attributable to EIT taxassessed
                on gross real estate sales andadjustments
                to prior years tax liabilitiesbased
                on assessments from the PRC taxingauthorities
            
            
            2,011,730
            
            
            
            (1,230,191
            )Provision
                for (benefit from) income taxes
            
            $
            681,131
            
            
            $
            (1,484,799
            )






14.
            IMPAIRMENT
                LOSSES





During
      the year ended December 31, 2006, management determined that the unsold
      commercial properties located on floors one through five of the Diamond Mansion,
      Phase One should be converted to residential properties as the commercial space
      was not selling.  This resulted in impairment in value of $3,803,959 on
      these properties as residential properties have a significantly lower retail
      value than commercial properties.





During
      the year ended December 31, 2006, management determined that remaining Yi Chang
      Town House Plaza parking garages were impaired by $404,776.





During
      the year ended December 31, 2006, the Company decided to abandon the Jing Qi
      project which had been long delayed waiting for the Province to build access
      roads. This resulted in an impairment loss of $1,552,035.





15.
            STOCK
                PURCHASE AGREEMENT





As
      discussed more fully in the Form 8-K Current Report filed with the SEC on
      December 16, 2006 and in the Form 8-K/A Current Report filed with the SEC on
      December 19, 2006, the Company entered into a Stock Purchase Agreement (the
      “Stock Purchase Agreement”) on December 11, 2006, with twenty-two accredited
      investors (collectively, the “Buyers”) pursuant to which we issued 12,505,000
      shares of the Company’s common stock, par value $0.001, in consideration for an
      aggregate of $12,505 in cash (the “Stock Purchase”). Additionally on December
      11, 2006, the Buyers directly acquired (the “Stock Acquisition”) from the
      following stockholders all of their shares of our common stock: Mr. Fang Zhong,
      a current director and our President, Chief Executive Officer,
      Chief Financial Officer, and Treasurer at the time of the Stock
      Acquisition; Ms. Hu Min, a current director and our Secretary at the time of
      the
      Stock Acquisition; Mr. Fang Wei Jun, a current director of the Company; and
      Mr.
      Fang Zhong in his capacity as legal representative of Fang Hui. The Stock
      Purchase Agreement and the Stock Acquisition effectuated a change in control
      of
      the Company, and in connection therewith, Mr. Fang Zhong resigned as our
      President, Chief Executive Officer, Chief Financial Officer, and Treasurer,
      and Ms. Hu Min resigned as our Secretary, both effective December 11, 2006.
      In
      their places, Mr. Silas Phillips was appointed as our President, Chief Executive
      Officer, Chief Financial Officer, and Treasurer, effective December 11,
      2006.







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The
      Stock
      Purchase Agreement also requires that, after the closing (the “Closing”) of the
      Stock Purchase and the Stock Acquisition , all current assets of the Company
      would be transferred to Town House, and all of the Company’s liabilities to be
      assumed by Town House. Thereafter, immediately after
      the
      closing of any future transaction whereby the Company acquires control and
      ownership of another company, the Company would transfer all of the shares
      of
      Town House held by the Company to a trust (the “Trust”), the beneficiaries of
      which would be the stockholders of the Company immediately prior to
      Closing.





16.
            COMMITMENTS





As
      of
      December 31, 2006 the Company had contractual commitments of lease expenditures
      of $3,944.





During
      January of 2005, the Company and Fang Zhong entered into a three year commitment
      to advance up to Rmb. 30,000,000 ($3,699,137) to Wuhan Pacific Shopping Mall
      Limited. Fang Zhong has personally guaranteed the repayment of these advances.
      As of December 31, 2006, the Company had advanced a total of $3,278,774 to
      Wuhan
      Pacific Shopping Mall Limited, all of which was treated as a repayment/advance
      of funds to Fang Zhong.





**Item
      8.    Changes in and Disagreements with
      Accountants on Accounting and Financial Disclosure.**





As
      reported in a Form 8-K Current Report filed with the SEC on November 16, 2005,
      the Company changed its independent accountants from Manning Elliott, Chartered
      Accountants (“Manning Elliott”), to Murrell, Hall, McIntosh & Co., PLLP,
      effective November 11, 2005. For the two fiscal years ended December 31, 2004
      and 2003, and the subsequent interim periods ended March 31 and June 30, 2005,
      through the date of this report, there were no disagreements between the Company
      and Manning Elliott on any matter of accounting principles or practice,
      financial statement disclosure, or auditing scope or practices, which if not
      resolved to the satisfaction of Manning Elliott, would have caused Manning
      Elliott to make reference to the subject matter of the disagreement in
      connection with its reports.








**Item
                8A.   Controls and
                Procedures.**





Based
      on
      their most recent evaluation, which was completed as of the end of the period
      covered by this annual report on Form 10-KSB, the Company's Chief Executive
      Officer and Chief Financial Officer believe the Company's disclosure controls
      and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) are
      effective to ensure that information required to be disclosed by the Company
      in
      this report is accumulated and communicated to the Company's management,
      including its principal executive officer and principal financial officer,
      as
      appropriate, to allow timely decisions regarding required
      disclosure.





During
      the last fiscal quarter to which this report relates, there were no changes
      in
      the Company's internal controls or other factors that could significantly affect
      these controls subsequent to the date of their evaluation and there were no
      corrective actions with regard to deficiencies and material
      weaknesses.








**Item
      8B.    Other
      Information.**





None.







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**PART
      III**





**Item9.** **Directors,
                Executive
                Officers, Promoters, Control Persons and Corporate Governance; Compliance
                with Section 16(A) of the Exchange
                Act.**





**Directors
      and Executive Officers**





The
      following table sets forth the names and ages of our directors and executive
      officers, as of the date of this report:




NAME
            
            AGE
            
            POSITIONFang
                Zhong
            
            44
            
            Chief
                Executive Officer, Chief Financial Officer, and
                DirectorSilas
                Phillips
            
            35
            
            President,
                Treasurer, Secretary and DirectorFang
                Wei Jun
            
            42
            
            DirectorFang
                Wei Feng
            
            40
            
            Director




The
      following sets forth certain biographical information concerning each director
      and executive officer:





Silas
      Phillips: In connection with the Stock Purchase Agreement and the Stock
      Acquisition, on December 11, 2006, Mr. Silas Phillips was appointed the
      Company’s President, Chief Executive Officer, Treasurer, Chief Financial
      Officer, and Secretary. On September 7, 2007, Mr. Phillips resigned as our
      Chief
      Executive Officer and Chief Financial Officer, but remained as the Company’s
      President, Treasurer, and Secretary. Mr. Phillips is also currently the
      President and Chief Executive Officer of Internet Media Group, Inc., a company
      he formed and has owned since March 1999. Internet Media Group, Inc. provides
      E-Commerce, Business Development and Project Management consulting services,
      and
      develops outsourcing relationships with outbound telemarketing organizations.
      Mr. Phillips’ business experience includes the creation and development of fully
      automated and robust backend lead generation systems comprised of Client, Vendor
      and Reporting modules. Mr. Phillips has also served as a management consultant
      to companies in his field of expertise.





Fang
      Zhong: In connection with the Stock Purchase Agreement and the Stock
      Acquisition, on December 11, 2006, Mr. Fang Zhong resigned as our President,
      Chief Executive Officer, Chief Financial Officer and Treasurer, but remains
      as a
      director. On September 7, 2007, Mr. Fang Zhong was reappointed the Company’s
      Chief Executive Officer and Chief Financial Officer. From 1995 to the present,
      he has been the Chief Executive Officer and a director of Wuhan Town House
      Real
      Estate Development Company Limited ("Wuhan Town House"), which is the principal
      operating subsidiary of Town House. Mr. Fang Zhong received a Bachelor of
      Science degree in industrial and domestic architecture from the Wuhan Institute
      of Urban Construction. He also participated in the MBA program at Northern
      Jiaotong University. He has received various awards, including "Young
      Entrepreneur in Central-south Area" of China and "One of Ten Excellent Young
      Entrepreneurs Leading Private Enterprises in Wuhan.” He has also held other
      significant positions such as the Standing Director Hubei Physical Culture
      Foundation, Deputy to Jiang'an District People's Congress, a Standing Member
      to
      Jiang'an District Political Consultative Conference, and the Vice Chairman
      of
      Jiang'an District Young People Association.





Fang
      Wei Jun: Mr. Fang Wei Jun became a director of the Company effective
      November 26, 2005. He has been employed as the manager of the Engineering
      Department of Wuhan Town House since 2000. He has been an employee of Wuhan
      Town
      House for over ten (10) years. He became the General Manager of Operations
      of
      Wuhan Town House in 2003. He attended Zhengzhou College and graduated in
      1985.





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Fang Wei Feng: Mr. Fang Wei Feng became a director of the Company
      effective November 26, 2005. He has been employed as the Manager of the
      Materials Department and Construction Operations of Wuhan Town House,
      responsible for construction material purchases and distribution, since 1996.
      He
      became a director and Vice President-Construction Operations of Wuhan Town
      House
      in 2003.





Hu
      Min: Ms. Hu Min is a director of the Company and has been employed as the
      Human Resources Manager of Wuhan Town House since 2000. She graduated from
      Wuhan
      University in 2001. She is the wife of Mr. Fang Zhong.





**Family
      Relationships**





Mr.
      Fang
      Zhong, Mr. Fang Wei Jun and Mr. Fang Wiefeng are brothers.  Mr. Fang
      Zhong and Ms. Hu Min are husband and wife.





**Involvement
      in Certain Legal Proceedings**





There
      have been no events under any bankruptcy act, no criminal proceedings and no
      judgments, injunctions, orders or decrees material to the evaluation of the
      ability and integrity of any director, executive officer, promoter or control
      person of Registrant during the past five (5) years.





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





The
      Company does not have a separately designated audit committee of our Board,
      as
      it is not required to, and the functions customarily delegated to this committee
      are performed by the full Board. As the Company does not maintain an audit
      committee, it does not have an audit committee “financial expert” within the
      meaning of Item 407(d)(5) of Regulation SB.





**Code
      of Ethics**





For
      the
      year ended December 31, 2006, we did not have a formal written code of
      ethics applicable to our principal executive officer and principal financial
      officer, because the board of directors has not determined it to be immediately
      necessary from a management perspective to adopt a formal code at this time.
      However, we plan to adopt and approve a formal written code of ethics in the
      near future.





**Compliance
      With Section 16(a) of the Securities Exchange Act of 1934**





Section
      16(a) of the Securities Exchange Act of 1934 requires the Company's officers
      and
      directors, and persons who own more than 10% of a registered class of the
      Company's equity securities, to file reports of ownership and changes in
      ownership with the Securities and Exchange Commission (“SEC”). Officers,
      directors, and greater than 10% shareholders are required by SEC regulation
      to
      furnish the Company with copies of all Section 16(a) forms they file. Based
      solely on its review of copies of such reports received or written
      representations from certain reporting persons, the Company believes that,
      during the year ended December 31, 2006, all Section 16(a) filing requirements
      applicable to its officers, directors and ten percent shareholders were in
      compliance with SEC regulations.






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**Item
      10.** **Executive
      Compensation.**





The
      following summary compensation table sets forth the aggregate compensation
      awarded to, earned by, or paid to the chief executive officer, and other
      executive officers whose annual compensation exceeded $100,000, for the fiscal
      year ended December 31, 2006 and 2005:




**SUMMARY
                COMPENSATION TABLE**Name
                and Principal Position
            Year
            Salary
              ($)
            Bonus
              ($)
            Stock
                Awards
              ($)
            Option
                Awards
              ($)
            Non-Equity
                Incentive Plan Compensation
              ($)
            Nonqualified
                Deferred Compensation Earnings
              ($)
            All
                Other Compensation
              ($)
            Total
                ($)Silas
                Phillips (1)
            2006
            0
            0
            0
            0
            0
            0
            0
            02005
            N/A
            N/A
            N/A
            N/A
            N/A
            N/A
            N/A
            N/AFang
                Zhong (2)
            2006
            264,000
            0
            0
            0
            0
            0
            0
            264,0002005
            18,233
            0
            0
            0
            0
            0
            0
            18,233





(1)
            In
                connection with the Stock Purchase Agreement and the Stock Acquisition,
                Mr. Silas Phillips was appointed our President, Chief Executive Officer,
                Treasurer, Chief Financial Officer, and Secretary on December 11,
                2006.




(2)
            In
                connection with the Stock Purchase Agreement and the Stock Acquisition,
                Mr. Fang Zhong resigned as our President, Chief Executive Officer,
                Treasurer and Chief Financial Officer on December 11,
                2006.







The
      following table sets forth information concerning unexercised options, stock
      that has not vested, and equity incentive plan awards for our chief executive
      officer as of the end of the fiscal year ended December 31, 2006:




**OUTSTANDING
                EQUITY AWARDS AT FISCAL YEAR-END**OPTION
                AWARD
            STOCK
                AWARDName
            Number
                of Securities Underlying Unexercised Options
              (Exercisable)
              (#)
            Number
                of Securities Underlying Unexercised Options
              (Unexercisable)
              (#)
            Equity
                Incentive Plan Awards: Number of Securities Underlying Unexercised
                Unearned Options
              (#)
            Option
                Exercise Price
              ($)
            Option
                Exercise Date
            Number
                of Shares or Units of Stock That Have Not Vested (#)
            Market
                Value of Shares or Units of Stock That Have Not Vested ($)
            Equity
                Incentive Plan Awards Number of Unearned Shares, Units or Other Rights
                That Have Not Vested
              (#)
            Equity
                Incentive Plan Awards: Market or Payout Value of Unearned Shares,
                Units or
                Other Rights That Have Not VestedSilas
                Phillips (1)
            --
            --
            --
            --
            --
            --
            --
            --
            --Fang
                Zhong
              (2)
            --
            --
            --
            --
            --
            --
            --
            --
            --








(1)
            In
                connection with the Stock Purchase Agreement and the Stock Acquisition,
                Mr. Silas Phillips was appointed our President, Chief Executive Officer,
                Treasurer, Chief Financial Officer, and Secretary on December 11,
                2006.





(2)
            In
                connection with the Stock Purchase Agreement and the Stock Acquisition,
                Mr. Fang Zhong resigned as our President, Chief Executive Officer,
                Treasurer and Chief Financial Officer on December 11,
                2006.







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**Employment
      Contracts**





We
      currently have no employment agreements with any of our executive officers,
      nor
      any compensatory plans or arrangements resulting from the resignation,
      retirement or any other termination of any of our executive officers, from
      a
      change-in-control, or from a change in any executive officer’s responsibilities
      following a change-in-control.





**Compensation
      of Directors**





The
      Company paid no compensation to its Directors for any services provided as
      a
      Director during the year ended December 31, 2006. There are no other formal
      or
      informal understandings or arrangements relating to compensation; however,
      the
      Directors may be reimbursed for all reasonable expenses incurred by them in
      conducting the Company’s business. These expenses would include out-of-pocket
      expenses for such items as travel, telephone, and postage. For the fiscal year
      2006, none of the Directors received reimbursement payments from the
      Company.





**Employee
      Benefit and Consulting Services Compensation Plans**





The
      Company does not have any pension plan, profit sharing plan, or similar plans
      for the benefit of its officers, directors or employees. However, The Company
      may establish such plans in the future.




**Item
                11.** **Security
                Ownership of
                Certain Beneficial Owners and Management and Related Stockholder
                Matters.**





The
      following table sets forth information as of September 10, 2007 with respect
      to
      the beneficial ownership of the outstanding shares of the Company’s capital
      stock by (i) each person known by the Company who will beneficially own five
      percent (5%) or more of the outstanding shares; (ii) the officers and directors
      of the Company; and (iii) all the aforementioned officers and directors as
      a
      group.





Beneficial
      ownership is determined in accordance with the rules of the Securities and
      Exchange Commission and generally includes voting or investment power with
      respect to securities. Shares of common stock subject to options, warrants
      or
      convertible securities exercisable or convertible within 60 days of September
      10, 2007 are deemed outstanding for computing the percentage of the person
      or
      entity holding such options, warrants or convertible securities but are not
      deemed outstanding for computing the percentage of any other person, and is
      based on 2,408,000 common shares issued and outstanding as of September 10,
      2007.




Name
                of Beneficial Owner and Address
            
            Number
                of Shares of Common Stock Beneficially Owned
            
            
            Percent
                of Shares of Common Stock
                Beneficially Owned (1)Erick
                E. Richardson, Jr. (2)
            
            
            1,223,487
            
            
            
            50.81
            %Nimish
                Patel (2)
            
            
            165,213
            
            
            
            6.86
            %Mark
                Abdou (2)
            
            
            146,856
            
            
            
            6.10
            %Silas
                Phillips (2) (4)
            
            
            --
            
            
            
            --Fang
                Zhong (3) (4) (5) (6)
            
            
            --
            
            
            
            --Fang
                Wei Feng (3) (4) (5)
            
            
            --
            
            
            
            --Fang
                Wei Jun (3) (4) (5)
            
            
            --
            
            
            
            --Hu
                Min (3) (4) (6)All
                Executive Officers and Directors
              as
                a Group (6 persons)
            
            
            --
            
            
            
            --





(1)
            Based
                upon 2,408,000 common shares issued and outstanding as of September
                10,
                2007.





(2)
            The
                address of the beneficial owner is 10900 Wilshire Boulevard, Suite
                500,
                Los Angeles, California 90024.





(3)
            The
                address of the beneficial owner is Suite A-C, 20/F Neich Tower, 128
                Gloucester Road, Wanchai, Hong Kong, People’s Repubic of
                China.




(4)
            An
                officer and/or director of the Company.(5)
            Mr.
                Fang Zhong, Mr. Fang Wei Feng and Mr. Fang Wei Jun are
                brothers.(6)
            Mr.
                Fang Zhong and Ms. Hu Min are husband and
                wife.





**Equity
      Compensation Plan Information**





The
      Company does not have any pension plan, profit sharing plan, or similar plans
      for the benefit of its officers, directors or employees. However, The Company
      may establish such plans in the future.






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**Item
                12.    Certain Relationships and
                Related Transactions, and Director
                Independence.**





**Transactions
      with Related Person**




Amounts
      due from/(to) directors at December 31, 2006 are as follows:





Fang
                Zhong (Director)
            
            $
            1,692,036Hu
                Min (Director)
            
            
            5,970Fang
                Wei Jun (Director)
            
            
            (879
            )Fang
                Wei Feng (Director)
            
            
            (43,245
            )$
            1,653,882




The
      amounts due are unsecured, interest
      free and have no fixed repayment terms. For financial reporting purposes, the
      net balance due from directors has been reflected as an offset against
      stockholders equity.





During
      the year ended December 31, 2006, the Company advanced $668,038 to Wuhan Pacific
      Shopping Mall Limited (“Limited”), an unrelated third party. Because these
      advances were made pursuant to a personal guarantee of Mr. Fang Zhong, they
      were
      treated as loan advances to Mr. Fang Zhong.





**Director
      Independence**





The
      Company has determined that none of its directors are independent under the
      independence standards of NASDAQ Marketplace Rule 4200(a)(15). In determining
      independence, the Board reviews and seeks to determine whether directors have
      any material relationship with the Company, direct or indirect, which would
      interfere with the exercise of independent judgment in carrying out the
      responsibilities of a director. The Board reviews business, professional,
      charitable and familial relationships of the independent directors in
      determining independence.




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**Item
                13.**
            **Exhibits.**ExhibitNumber
            Description2.1
            Stock
                Exchange Agreement dated as of October 19, 2005, by and among Xerion
                EcoSolutions Group, Inc., Town House Land Limited and its Shareholders
                (1)3.1
            Articles
                of Incorporation of Gemini Ventures, Inc. filed on November 11, 1985
                with
                the Secretary of State of the State of Colorado (2)3.2
            Articles
                of Amendment to the Articles of Incorporation filed July 3, 1989
                (2)3.3
            Certificate
                of Correction filed on December 9, 1994, to correct the name of the
                Company to The Voyageur First, Inc. (2)3.4
            Articles
                of Amendment to the Articles of Incorporation filed November 29,
                1995,
                changing the name of the Company to North American Resorts, Inc.,
                and
                additional changes (2)3.5
            Amendments
                to Articles of Incorporation filed April 21, 1998, increasing the
                authorized number of shares of common stock to 150,000,000 shares,
                par
                value $.001 (2)3.6
            Amendment
                to Articles of Incorporation filed October 5, 1998, naming the members
                of
                the Board of Directors (2)3.7
            Amendment
                to Articles of Incorporation filed April 14, 2000, to change directors
                and
                amend Bylaws (2)3.8
            Amendment
                to Articles of Incorporation filed on June 30, 2000, to change the
                name of
                the Company to Immulabs Corporation (2)3.9
            Amendment
                to Articles of Incorporation filed on March 28, 2005, changing the
                name of
                the Company to Xerion EcoSolutions Group Inc. (2)3.10
            Bylaws
                of the Company (2)10.1
            Stock
                Purchase Agreement dated as of December 11, 2006 by and among
                Sino-American Development Corporation and Certain Purchasers
                (3)21.1
            List
                of Subsidiaries (2)23.1
            Consent
                of Murrell, Hall, McIntosh & Co., PLLP (4)31.1
            Section
                302 Certification by the Corporation’s Chief Executive Officer and Chief
                Financial Officer (4)32.1
            Section
                906 Certification by the Corporation’s Chief Executive Officer and Chief
                Financial Officer (4)99.1
            Charter
                of the Compensation Committee of the Board of Directors
                (2)99.2
            Charter
                of the Audit Committee of the Board of Directors
                (2)





**______________________**





(1) Incorporated
                by reference from
                the Registrant’s Current Report on Form 8-K/A filed on November 14,
                2005.


(2) Incorporated
                by reference from
                the Registrant’s Annual Report on Form 10-KSB filed on April 17,
                2006.


(3) Incorporated
                by reference from
                the Registrant’s Current Report on Form 8-K filed on December 15,
                2006.


(4) Filed
                herewith.






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**Item
      14.** **Principal
      Accountant Fees and
      Services.**





**Change
      of Auditor**





The
      Company’s preceding principal independent auditor was Manning Elliott LLP,
      Chartered Accountants (“Manning Elliott”). Manning Elliott performed the audit
      for the fiscal years ended December 31, 2003 and 2004. Manning Elliott resigned
      as the Company’s independent auditor effective November 11, 2005. On November
      11, 2005, we engaged Murrell, Hall, McIntosh & Co., PLLP (“MHM”) to review
      the unaudited financial statements through the quarter ended September 30,
      2006
      and to audit the Company’s financial statements for the fiscal years ended
      December 31, 2005 and 2006. The following are the services provided and the
      amount billed.





**Audit
      Fees**





The
      aggregate fees billed by MHM, for the audit of our annual financial statements
      and the reviews of the unaudited financial statements included in our quarterly
      reports on Form 10-QSB for fiscal years 2006 and 2005 were $71,774 and
      $46,745, respectively.





**Audit-Related
      Fees**





There
      were no other fees billed by Manning Elliott or by MHM during the last two
      fiscal years for assurance and related services that were reasonably related
      to
      the performance of the audit or review of the Company’s financial statements and
      not reported under “Audit Fees” above.





**Tax
      Fees**





There
      were no aggregate fees billed for professional services rendered by Manning
      Elliott or by MHM for tax compliance services in fiscal years 2006 and
      2005.





**All
      Other Fees**





There
      were no other fees billed by Manning Elliott or by MHM during the last two
      fiscal years for products and services provided by Manning Elliott or by
      MHM.





**Pre-Approval
      Policies and Procedures**





Prior
      to
      engaging its accountants to perform particular services, our board of directors
      obtains an estimate for the service to be performed. All of the services
      described above were approved by the board of directors in accordance with
      its
      procedure.





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**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.


**SINO-AMERICAN
                DEVELOPMENT CORPORATION**
              (Registrant)Date: September
                11, 2007
            By:
            /s/ Fang
                ZhongFang
                Zhong
              Principal
                Executive Officer,
              Principal
                Financial and Accounting Officer








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.





Name
            Title
            Date/s/
                Fang Zhong
              
              Fang
                Zhong
            Chief
                Executive Officer/Chief
              Financial
                Officer/Director
            September
                11, 2007/s/
                Silas Phillips
              
              Silas
                Phillips
            President/Treasurer/Secretary
            September
                11, 2007/s/
                Fang Wei Jun
              
              Fang
                Wei Jun
            Director
            September
                11, 2007/s/
                Fang Wei Feng
              
              Fang
                Wei Feng
            Director
            September
                11, 2007/s/
                Hu Min
              
              Hu
                Min
            Director
            September
                11, 2007