UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-K  [X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2012  [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  STUDIO II BRANDS, INC. (Name of small business in its charter)  Florida0-5000065-0664963(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification Number)16/F Honest Building, 9-11 Leighton Road, Causeway Bay, Hong Kong(Address of principal executive offices)Registrants telephone number, including area code: (852) 2890 1818 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $0.001  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act [ ] Yes [ X ] No  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the [ ]Yes [X] No  Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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. [X] Yes [  ] No  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes  [  ] No  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not  contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X ]     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.  Large accelerated filer [ ]Accelerated filer [ ]Non-accelerated filer [ ]  (Do not check if a smaller reporting company)Smaller reporting company [ X ]  1         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [  ]Yes [X] No  State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of the last business day of the registrants most recently completed second fiscal quarter. $0.00  As of June 29, 2012, Issuer had 14,838,018 shares of common stock issued and outstanding.                                 2      PART I  ITEM 1. BUSINESS  Corporate History Studio II Brands, INC. (the Company) was incorporated under the laws of the State of Florida on May 6, 1996. The Company was formed as a blank check or shell company for the purpose of seeking, investigating, and, if warranted, acquiring one or more properties or businesses.  From inception to February 10, 2011, the Company remained in the development stage. The Companys only activities during this period were organizational activities, compliance with SEC reporting obligations, and seeking a suitable business acquisition. On February 10 2011, the Company acquired all of the issued and outstanding shares of Hippo Lace Limited, a BVI corporation (HLL), which was incorporated in December, 2009.   As a result of completion of this share exchange transaction, HLL became our wholly-owned subsidiary.  Also, as more fully described below, HLLs subsidiary, Legend Sun Limited, a Hong Kong corporation (Legend Sun), which HLL acquired in February, 2010, became our operating subsidiary. The Company completed the share exchange transaction with HLL in order to acquire the business operations carried on through its subsidiary, Legend Sun, and with the intent of focusing our business activity exclusively on those operations. On March 29 2012, the Company acquired through its subsidiary all of the issued and outstanding shares of Sino Wish Limited, a Hong Kong corporation (Sino Wish), which was incorporated in November, 2009 and became the franchisee of the Company to operate Caffé Kenon restaurant at Tai Yau Plaza, Hong Kong since March, 2010.   As a result of completion of this share exchange transaction, Sino Wish became our wholly-owned subsidiary.  Corporate Structure  The Chart below depicts the Companys corporate structure as of March 31, 2012 following its acquisition of the shares of Sino Wish on March 29, 2012.   As depicted below, Studio II Brands owns 100% of HLL and HLL owns 100% of Legend Sun and Sino Wish. [studioii_10kmar2012final001.jpg]  3       Current Operations  Through the Companys operating subsidiaries, Legend Sun and Sino Wish, the Company is in the business of operating coffee shop restaurants under the tradename Caffe Kenon.  The Company currently owns and operates two Caffé Kenon coffee shops located in Hong Kong which have been in operation since June, 2009 and March, 2010 respectively.  These shops are operated under the terms of a franchise agreement between HLL and Sizegenic Holdings Limited (Sizegenic), a British Virgin Islands corporation. On May 31, 2011, HLL terminated the subfranchise agreement for the restaurant in Beijing, PRC.  Accordingly, the location is no longer operated as a Caffe Kenon restaurant.  Subsequent to the share exchange transaction with shareholder of Sino Wish on March 29, 2012, on April 1, 2012, HLL terminated the subfranchise agreement for the restaurant at Tai Yau Plaza, Hong Kong.  Sizegenic entered into an International Exclusive Distribution and Promotion Agreement (the Café Centro Agreement) with Café Centro Brazil Wurzburger Vittorio &C. S.a.s., an Italian corporation (Café Centro) on June 26, 2009, pursuant to which Sizegenic has the exclusive right to distribute and sell coffee products supplied by Café Centro and the exclusive license to use the brand name and trademark Caffe Kenon in business operations for a period of ten (10) years within the region consisting of Hong Kong, Macau, Taiwan and China.  On February 10, 2010 and April 1, 2012, Sizegenic entered into franchise agreements with HLL pursuant to which HLL was granted the right to operate a Caffe Kenon restaurant at 38 Yiu Wa Street, Causeway Bay, Hong Kong and shop no. 208 and 209 of the 2nd floor of the Tai Yau Plaza shopping center in Wanchai, Hong Kong, respectively.  At the two restaurants they offer Italian-style espresso drinks using Kenon brand coffee imported from Italy.  They also serve breakfast, lunch and dinner with a moderately-priced Italian style standard menu which includes pizza, spaghetti, risotto, salads, sandwiches and desserts. In addition, Caffé Kenon Bistro serves periodic specialty meals in addition to the standard menu items. The Company seeks to establish restaurant locations in shopping and commercial areas with significant foot traffic and with easy access to underground railroad or other public transportation.  Our restaurants are designed comfortably with seating areas for customers around a counter area which includes display cases for pastries and other items and a work area where staff prepare espresso drinks.  The Company uses a modern stylish design for the interior with a flexible combination of tables and chairs designed to allow us to host various types of events and to accommodate a total of approximately 50 and 80 guests, respectively.  Future Plan of Operations  The Companys future plan of operations is to seek to continue to expand by adding additional Café Kenon locations in Hong Kong and in China.  Some of the new locations may be Company owned and operated as franchises of Sizegenic, and some may be subfranchise operations from which the Company receives franchise and management fees.  The Company also plans to search possible investment and business opportunities in different potential restaurant and catering service business segments including hotpot and traditional Chinese cuisine restaurants, and possible investment and business opportunities related to ownership and operation of a coffee farm and production of our own brand of packed coffee beans and canned coffee to be sold to wholesale and retail customers. The Company will require additional working capital in order to open new Company owned Café Kenon locations or to pursue other potential investment and business opportunities, and there is no assurance that such additional working capital funding will be available, or will be available on terms which are acceptable to the Company.  Facilities  The Company currently maintains a mailing address at 16/F Honest Motors Building 9-11 Leighton Road Causeway Bay, Hong Kong, which is provided to us without charge pursuant to a verbal agreement with our President, Cheung Ming.  The premises are provided to us without charge because the cost is considered to be immaterial. This property is currently under lease to Ever Lucid Limited, a Hong Kong corporation which is a subsidiary of Sizegenic, and is used for commercial purposes by Ever Lucid Limited and by other subsidiaries of Sizegenic. The lease term is from July 7, 2011 to July 6, 2013, at a monthly rental of HK$47,627 (approximately $6,115).   The Company is also using a warehouse at Room 1622, 16/F, Tuen Mun Central Square, 28 Hoi Wing Road, Tuen Mun, N.T., Hong Kong to store spare items including shop furniture and equipment.  The premises is provided by our President, Cheung Ming and charged Legend Sun and HLL  at a monthly rate of HK$5,000 (approximately $642) retrospectively from May 2009 pursuant to an agreement entered by Legend Sun  4      and Sizegenic in March 2012. The agreement can be terminated by either party by giving one month written notice to other party before termination.  The Company leases premises at Ground Floor Nam Hing Fong, 38 Yiu Wa Street, Causeway Bay, Hong Kong, and shop no. 208 and 209 of the 2nd floor of the Tai Yau Plaza shopping center in Wanchai, Hong Kong for operation of the two Caffé Kenon restaurants.  The lease for the premises located at Nam Hing Fong is for a term of 5 years, commencing June 1, 2009, at a monthly rental rate of HK$52,000 for the first three years and HK$65,000 for the last two years. (approximately $6,667 and $8,333 per month respectively).  The Company exercised an option to extend the term for an additional 2 years from June 1 2012 to May 31, 2014.  In addition to monthly rent, The Company is also obligated to pay a monthly management fee of HK$3,897 (approximately $500), and quarterly government fees of HK$12,600 (approximately $1,615) throughout the term of the lease.  At the time of execution of the lease, the Company paid a refundable security deposit of HK$279,485 (approximately $35,831) representing 5 months rent and management fees. Following the extension of the lease, the Company paid additional security deposit of HK$65,000 and the total amount of security deposit paid is HK$344,485 (approximately $44,278).  The lease may be terminated by the landlord prior to the expiration of its term in the event it breaches any of the material terms and conditions of the lease agreement.  The Companys other Caffé Kenon restaurant is located at shop no. 208 and 209 of the 2nd floor of the Tai Yau Plaza shopping center in Wanchai, Hong Kong. The center is part of a 24 floor office building situated at the area combining business and residential customers and just a few minutes walk to the underground railway station.  The lease for these premises is for a term of 6 years, commencing March 1, 2010, at a monthly base rental rate of HK$58,120 (approximately $7,451) for the first three years and upon not less than 5 months prior notice at the end of the initial term of the lease, have an option to extend the term for an additional 3 years at current market rent to be agreed with the landlord.  In addition to monthly base rent, we are also obligated to pay a additional rent at 12% of the monthly gross sales of the shop in excess of the base rent of HK$58,120, monthly service charges of HK$10,171 (approximately $1,304) and quarterly government fee of HK$4,800 (approximately $615).  At the time of execution of the lease, the subfranchisee paid a refundable security deposit of HK$422,960 (approximately $54,226) representing 6 months base rent, service charge and government fee.  The lease may be terminated by the landlord due to materially default of the tenant to observe and perform its obligations of the lease.  Franchise Agreements  Pursuant to Franchise Agreement dated February 10, 2010 and the Supplementary Franchise Agreement dated March 1, 2010, between Sizegenic and HLL, the Companys operating subsidiary, Legend Sun, was granted the right to operate a coffee shop restaurant at Ground Floor Nam Hing Fong, 38 Yiu Wa Street, Causeway Bay, Hong Kong.  The Franchise Agreement is based on the International Exclusive Distribution and Promotion Agreement (the Café Centro Agreement) entered by and between Café Centro Brazil Wurzburger Vittorio &C. S.a.s. Café Centro and Sizegenic on June 26, 2009 under which Sizegenic has the exclusive right to distribute and sell coffee products supplied by Café Centro and the exclusive license to use the brand name and trademark Caffe Kenon in business operations for a period of ten (10) years within the region consisting of Hong Kong, Macau, Taiwan and China.  The Franchise Agreement and the Supplementary Franchise Agreement between Sizegenic and HLL are for an initial term of three year, commencing on February 10, 2010, and includes a right of renewal for a second three year term.  The Franchise Agreement provides for payment of an initial franchise fee of HK $40,000 (approximately US $5,145) for the 1st year and HK$80,000 (approximately $10,272) for each remaining year of the term, and payment of a monthly management fee of 10% of the franchisees net income.  Under the terms of the franchise agreement, the franchisor has the right to approve the location, interior and exterior design, layout, furniture, fixtures, equipment, signs and decoration to be used by the franchisee, and the franchisee has the right to use the Caffé Kenon name and trademark and other associated intellectual property in the operation of its business. The franchisee is required to install and use a point of sale system designated by the franchisor and to provide sales data and financial information, including an annual financial report to the franchisor. The franchise agreement gives the franchisor the right to automatically terminate the franchise agreement without a right to cure in certain circumstances such as insolvency of the franchisee, levy or execution against the franchisee by a creditor, or in the event the franchisee materially defaults under the terms of the franchise agreement three times within a 12 month period.  In addition, pursuant to a supplement to the foregoing Franchise Agreement, which supplement was made and entered into as of March 1, 2010, Sizegenic authorized Legend Sun, as an affiliate of HLL, to grant a subfranchise for operation of  5      additional restaurants at the two following locations:  - Shop No. 02-04, 5/F, Joy City, No 28 Qingnian Road, Chaoyang District, Beijing, PRC - Shop No. 208 and 209, Tai Yau Plaza, 181 Johnston Road, Wan Chai, Hong Kong, PRC  HLL through its subsidiary Legend Sun entered into a Franchise Agreement with Sino Wish on March 1, 2010, granting Sino Wish the right to operate a restaurant at Shop No. 208 and 209, Tai Yau Plaza, 181 Johnston Road, Wan Chai, Hong Kong, PRC Under the terms of the franchise agreement Sino Wish paid an initial franchise fee of HK $80,000 (approximately $10,272), and is obligated to pay a monthly management fee equal to 10% of its net income.  HLL through its subsidiary Legend Sun entered into a Franchise Agreement with Beijing Kenon Bistro Catering Limited, a PRC corporation, on April 1, 2010, granting Beijing Kenon Bistro the right to operate a restaurant at Shop no. 02-04, 5/F, Joy City, No 28 Qingnian Road, Chaoyang District, Beijing, PRC. Under the terms of the franchise agreement, Beijing Kenon Bistro paid an initial franchise fee of RMB 80,000 (approximately $ 11,080), and is obligated to pay a monthly management fee equal to 10% of its net income.  This subfranchise agreement was terminated on May 31, 2011.  Each of the foregoing franchise agreements executed by HLL has a term of 3 years from the date of execution, and includes a renewal option for a second 3 year term. The franchise agreements also give the franchisor the right to approve the location, interior and exterior design, layout, furniture, fixtures, equipment, signs and decoration to be used by the franchisee, and the franchisee has the right to use the Caffé Kenon name and trademark and other associated intellectual property in the operation of its business. The franchisee is required to install and use a point of sale system designated by the franchisor and to provide sales data and financial information, including an annual financial report to the franchisor. The franchise agreement gives the franchisor the right to automatically terminate the franchise agreement without a right to cure in certain circumstances such as insolvency of the franchisee, levy or execution against the franchisee by a creditor, or in the event the franchisee materially defaults under the terms of the franchise agreement three times within a 12 month period.  On May 31, 2011, HLL terminated the subfranchise agreement for the restaurant in Beijing, PRC. Subsequent to end of the fiscal year, on April 1, 2012, HLL terminated the subfranchise agreement for the restaurant at Tai Yau Plaza, Hong Kong and according to  a supplementary agreement with Sizegenic entered in April 2010 to grant the right  to Sino Wish to operate a coffee shop restaurant at Shop No. 208 and 209, Tai Yau Plaza, 181 Johnston Road, Wan Chai, Hong Kong at third year franchise fee of $5,136.  Competition  The retail food industry, in which the Company competes, is made up of supermarkets, convenience stores, coffee shops, snack bars, delicatessens and restaurants, and is intensely competitive with respect to food quality, price, service, convenience, location and concept.  The industry is often affected by changes in consumer tastes; regional or local economic conditions; currency fluctuations; demographic trends; traffic patterns; the type, number and location of competing food retailers and products; and disposable purchasing power.  In Hong Kong where the Company currently operates one restaurant and have one franchised location it competes with a large number of coffee shops which primarily sell coffee drinks and have only a limited selection of food. These include large international franchise operations such as Starbucks, and many small shops which have only a single location or a limited number of locations.  In addition, because of the fact that it also has a full menu and offer moderately-priced meals , it also competes with numerous cafés and coffee shops which are primarily restaurants and may or may not offer espresso style coffee drinks.  Therefore, at the present time, our primary competitors vary in each location, and consist of other moderately-priced restaurants, cafés and specialty coffee shops located in the same area.   Suppliers and Raw Materials  The Companys restaurants and franchisees purchase a substantial number of food and paper products, equipment and other restaurant supplies from a variety of third party distribution companies. The principal items purchased include food products, paper and packaging materials.  The Company purchase all coffee beans and coffee products, including the necessary equipment to make espresso drinks, from Café Centro Brazil Wurzburger Vittorio &C. S.a.s., an Italian corporation (Café Centro) under the terms of the International Exclusive Distribution and Promotion Agreement (the Café Centro Agreement) dated June 26, 2009 between Sizegenic and Café Centro. In both Hong Kong and Beijing, where  6      our restaurants and franchisees are located, there are many suppliers of food and paper products, and in each location it currently purchases these items from numerous local suppliers, none of which supply a significant percentage of the supplies and raw materials it requires.   Employees  The Company currently has a total of approximately 26 full-time and 3 part time employees, including 10 management and administration personnel, and approximately 19 other employees who each work in a particular restaurant location.  The restaurant employees include chefs, baristas who make espresso coffee drinks, and servers.   Intellectual Property  The Company has the right to use the Trademark Caffe Kenon in its operations pursuant to the terms of the Franchise Agreement with Sizegenic. The Franchise Agreement for Legend Sun had an initial term of one year, which expired February 10, 2011 and has been renewed for another two years.  The Franchise Agreement for Sino Wish had an initial term of three years and an option to renew for another three years.  These two Franchise Agreements had the Companys right to use the Trademark continues as long as they remain in effect.  In addition, the Company has proprietary recipes it has developed which it uses and which it authorizes its franchisees to use.   Government Regulation  The Companys operating subsidiaries, Legend Sun and Sino Wish acquired Business Registration Certificate from the Inland Revenue Department of HKSAR on March 30, 2009 and November 26, 2009, respectively.  Legend Sun and Sino Wish are required to renew the Certificate with a fee and to file annual profit tax return supported by audited financial statements on annual basis.  The restaurants owned by acquired relevant restaurant license from Food and Environmental Hygiene Department of HKSAR for the provision of foods and beverages at the above-mentioned premises by compliance to the following conditions:  (a) compliance with licensing requirements in respect of health, ventilation, gas safety, building structure and means of escape imposed by Licensing Authority; and (b) compliance with fire services requirements imposed by the Director of Fire Services.  Legend Sun and Sino Wish are required to provide statutory required benefits such as mandatory provident fund contribution, leaves, holidays and employee compensation insurance to eligible staff.  ITEM 2. PROPERTIES.  The Company currently has no investments in real estate, real estate mortgages, or real estate securities.  As mentioned in ITEM 1 Facilities, the Company maintains a mailing address at 16/F Honest Motors Building, 9-11 Leighton Road, Causeway Bay, Hong Kong which is provided without charge pursuant to a verbal agreement with our CEO, Cheung Ming, and the Company also lease premises at Ground Floor Nam Hing Fong, 38 Yiu Wa Street, Causeway Bay, Hong Kong, and at shop no. 208 and 209 of the 2nd floor of Tai Yau Plaza shopping center, Wanchai, Hong Kong, for operation of our  restaurants.  ITEM 3. LEGAL PROCEEDINGS.  The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated. No director, officer or affiliate of the Company, and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.  ITEM 4. (REMOVED AND RESERVED)  7       PART II  ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUERS PURCHASES OF EQUITY SECURITIES.  Market Information.  No public trading market exists for the Company's securities.  Holders.  As of March 31, 2012 there were 14,838,018 shares of common stock issued and outstanding and approximately 75 shareholders of record.  Dividends.  The Company has not declared or paid any cash dividends on its common stock during the fiscal years ended March 31, 2012 or 2011.  There are no restrictions on the common stock that limit our ability to pay dividends if declared by the Board of Directors, and the holders of common stock are entitled to receive dividends when and if declared by the Board of Directors, out of funds legally available therefore and to share pro-rata in any distribution to the stockholders. Generally, the Company is not able to pay dividends if after payment of the dividends, it would be unable to pay its liabilities as they become due or if the value of the Companys assets, after payment of the liabilities, is less than the aggregate of the Companys liabilities and stated capital of all classes.  ITEM 6. SELECTED FINANCIAL DATA.  Not Applicable.  ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.  SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS  CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-K AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.  RESULTS  8       The following discussion regarding results of operation relates to the business operations which are carried on through our operating subsidiaries, Legend Sun and Sino Wish.  The Company believes the following information is relevant to an assessment and understanding of our results of operation and financial condition for the periods before and after the Company acquired HLL and its subsidiary Legend Sun in February 2011 as well as before and after the Company acquired Sino Wish in March 2012. The following discussion should be read in conjunction with the Consolidated Financial Statements and related Notes appearing elsewhere in this Form.  Our consolidated financial statements are stated in US Dollars and are prepared in accordance with generally accepted accounting principles of the United States (US GAAP).  All the below analysis are comparing the year ended March 31, 2012 (after acquisition of Sino Wish and up to the immediate fiscal year end) with the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) so that the comparison are made on a year-to-year basis.  Revenues  Revenue for the year ended March 31, 2012 mainly consists of operating revenue from company-owned restaurants ($381,716), subfranchise annual and management fee income from subfranchisee Sino Wish ($12,472) as well as other income of tip ($3,497).  Revenue for the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) mainly consists of operating revenue from company-owned restaurant ($341,565), subfranchise annual and management fee income from subfranchisees Sino Wish and BJ Kenon ($22,716) as well as other income of tip ($4,777).  The increase of operating income as compared to the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) mainly due to increased sales volume of coffee products captured and price adjustment on annual basis.  HLL and Beijing Kenon Bistro Catering Limited (BJ Kenon), the subfranchisee located in Beijing, agreed to terminate the franchise agreement signed on April 1, 2010 with effect from May 31, 2011 due to restructuring of Beijing subfranchisee who agreed to pay HLL an early termination fee of RMB40,000 (approximately $6,200).  In this conjunction, no subfranchise fee income of RMB80,000 (approx. $11,080) for each of the remaining two year term of the agreement to be recognized in April of 2011 and 2012 respectively.  Following the completion of the stock purchase transaction to acquire 100% Sino Wishs shares from its sole shareholder Vivian Choi in March 2012, Sino Wish became a subsidiary of the Company.  In this connection, the subfranchise agreement was terminated in April 2012 and HLL based on the franchise agreement entered with  Sizegenic in March 2010 to grant the right with annual franchise fee of $5,136 payable to Sizegenic for Sino Wish to operate the Caffé Kenon restaurant at shop 208-209 Tau Yau Plaza for the remaining third  years term from April 1, 2012 to March 31, 2013.  Cost of Revenues  Cost of revenue for the year ended March 31, 2012 amounting to $104,681 represents finished goods include food and beverage materials and products for catering services sold by company-owned restaurants ($94,409) and subfranchise annual fee expenses ($10,272) in respect of the subfranchise annual fee and termination fee income from Sino Wish and BJ Kenon respectively.  Cost of revenue for the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) amounting to $108,272 consists of finished goods include food and beverage materials and products for catering services sold by company-owned restaurant ($98,000) and subfranchise annual fee expenses ($10,272) in respect of the subfranchise annual fee income from Sino Wish and BJ Kenon.  The decrease of cost of revenue from restaurant operation as compared to the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) mainly due to material cost and waste control.  9       Pursuant to the terms regarding subfranchise stipulated in the supplementary franchise agreement entered between HLL and Sizegenic on March 1, 2010, HLL is required to pay Sizegenic for the second year subfranchise fee of HK$40,000 (approximately $5,128) for BJ Kenon due in April 2011 before the termination of franchise agreement with Beijing Kenon with effect from May 31, 2011.  HLL is not required to pay third year subfranchise fee following the termination of agreement with Beijing Kenon with effect from May 31, 2011.  Gross Profit  Gross profit for the year ended March 31, 2012 amounting to $289,507 represents the result of the revenues and costs of revenues from company owned restaurants ($282,172) and subfranchise fees income ($7,335).  Gross profit for the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) amounting to $256,009 represents the result of the revenues and costs of revenues from company owned restaurant ($243,565) and subfranchise fee income and expenses ($12,444). The increase of gross profit from restaurant operation as compared to the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) mainly due to increased sales volume captured and material cost control for company owned restaurants.  Operating Expenses  Operating expenses for the year ended Mar 31, 2012 and the periods from February 10, 2011 to March 31, 2011 and  from April 1, 2010 to February,9, 2011consist of the following nature :  Year endedSuccessor
February 10, 2011Predecessor
April 1, 2010 toMarch 31, 2012to March 31, 2011February 9, 2011Staff costs76,65413,26665,787Rent, government fee, management fee115,81517,46874,363Electricity, gas and utilities20,9822,50317,481Depreciation24,4763,40620,785Professional and audit fee129,51228,5119,604Others49,4505,69627,839416,88970,850215,859   According to the franchise and supplementary agreements entered by HLL and Sizegenic in February and March 2010 respectively, franchise annual fee for the first year was discounted by 50% to $5,136 (HK$40,000) and required to pay full amount at $10,272 (HK$80,000) for the second and last year of the term of agreement.  Operating Loss/income  Operating loss for year ended March 31, 2012 amounting to $127,382 represents the result of revenues, costs of revenues and operating expenses from company owned restaurants and subfranchise operations ($22,759), and the Company and HLL operating expenses ($150,141) mainly for professional and audit fees.  Operating loss for the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) amounting to $30,700 represents the result of revenues, costs of revenues and operating expenses from company owned restaurant and subfranchise operation ($7,415) and Company and HLL operating expenses ($38,115) mainly for professional and audit fees.  Other income and expenses  10       Other income and expenses for the year ended March 31, 2012 were $3,497 and $1,372 respectively.  Other income represents the tip from Company-owned restaurants. Other expenses represents franchise management fee expenses of Company-owned restaurant.  Other income and expenses for the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) were $4,777 and $1,168 respectively.  Other income represents the tip income from Company-owned restaurant. Other expenses represents franchise management fee expenses of Company-owned restaurant.  Net income or loss  Net loss for the year ended March 31, 2012 amounting to $130,862 represents the operating income of company owned restaurants ($17,154), net other income of tips and franchise management fee expenses of company owned restaurant ($2,125) and the Company and HLL operating expenses $150,141 mainly for legal and professional fees.  Net loss for the period from April 1, 2010 to February 9, 2011 (Predecessor) and February 10, 2011 to March 31, 2011 (Successor) amounting to $30,675 represents the operating income of company owned restaurants and subfranchise opration ($7,415), net other income of tips and franchise management fee expenses of company owned restaurant ($3,609) and the Company and HLL operating expenses $41,699 mainly for legal and professional fees.  Net cash provided by and used in operating activities for the year ended  March 31, 2012 and the period from February 10, 2011 to March 31, 2011 were $8,761 and $682 respectively.  They represent increased legal and professional expenses accrued for the acquisitions and of HLL and Sino Wish and the statutory reporting and filing requirements, and net loss mainly due to limited revenue and gross profit consolidation period from February 10, 2011 to March 31, 2011 respectively.  Net cash provided by investing activities for the year ended March 31, 2012 and the period from February 10, 2011 to March 31, 2011 were $7,067 and $14,088respectively.  Net cash provided by investing activities for the year ended March 31, 2012 and for period from February 10, 2011 to March 31, 2011 represent cash acquired in acquisition of Sino Wish and HLL, respectively.  Net cash used in and provided by financing activities for the year ended March 31, 2011 and the period from February 10, 2011 to March 31, 2011 were $(13,861) and $10,539 respectively.   Net cash used in financing activities for the year ended March 31, 2012 represent repayment of stockholder loan.  Net cash provided for the period from February 10, 2011 to March 31, 2011 represent proceed from stockholder for payment of legal and professional expenses on behalf of the Company and cash received from issuance of common stock approved in November 2010.   LIQUIDITY AND CAPITAL RESOURCES  A shareholder of the Company, Cheung Ming, has paid expenses on behalf of the Company in exchange for a promissory note, non-interest bearing and without fixed repayment term.  Amounts payable to the aforesaid shareholders at March 31, 2012 and 2011 were $545,455 and $131,688, respectively.  The external source of liquidity attributed to increasing operating income, improved gross margin contribution and stable operating expenses.  No material unused sources of liquid assets.  The Company anticipates that the approximately $7,000 monthly average net cash inflow generated from our Company owned restaurants will be sufficient to meet our working capital requirements for our current level of operations and to sustain our business operations at the current levels for the next twelve months.  As of March 31, 2012 and March 31, 2011, there were no material commitments for capital expenditures for business operations.   11      OFF-BALANCE SHEET ARRANGEMENTS  As of March 31, 2012 and 2011, the Company does not have any off-balance sheet arrangements.   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  Not Applicable.  ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.  The financial statements of the Company and its predecessor required by Article 8 of Regulation S-X are attached to this report in the following order:  (a) Studio II Brands as of  March 31, 2012 and for the year ended March 31, 2012, and as of March 31, 2011 and for the period from February 10, 2011 to March 31, 2011 (Successor after acquisition of Hippo Lace on February 10, 2012)  (b) Hippo Lace  as of  February 9, 2011 and for the period from April 1, 2010 to February 9, 2011 (Predecessor prior to acquisition by Studio II)  12       STUDIO II BRANDS, INC. AND SUBSIDIARIESAUDITED FINANCIAL STATEMENTSFOR THE YEAR ENDED MARCH 31, 2012INDEX TO CONSOLIDATED FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting FirmF-1Consolidated Balance Sheets as of March 31, 2012 and March 31, 2011F-2Consolidated Statements of Operationsfor the year ended March 31, 2012, from February 10, 2011 to  March 31, 2011 and from April 1, 2010 to February 9, 2011F-3Consolidated Statement of Stockholders Equityfor the year ended March 31, 2011 and 2012F-4Consolidated Statements of Cash Flowsfor the year ended March 31, 2012, from February 10, 2011 to  March 31, 2011 and from April 1, 2010 to February 9, 2011F5-F6Notes to the Consolidated Financial StatementsF7-F24   13        UHY VOCATION HK CPA LIMITED Chartered Accountants Certified Public Accountants 3/F, Malaysia Building, 50 Gloucester Road, Wanchai, HONG KONG, Tel (852) 2332 0661(23 lines) Fax (852) 2332 0304, 2388 2086 E-mail :cpa@uhy-hk.com Website www.uhy-hk.com  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF STUDIO II BRANDS INC. AND SUBSIDIARIES  We have audited the accompanying consolidated balance sheets of Studio II Brands, Inc. and subsidiaries (the Company) as of March 31, 2012 and 2011, and the related consolidated statements of operations, changes in stockholders equity, and cash flows for the year ended March 31, 2012, and for the period from February 10, 2011 to March 31, 2011 (Successor) and for the period from April 1, 2010 to February 9, 2011 (Predecessor). 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 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide 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 Studio II Brands, Inc. and subsidiaries as of March 31, 2012 and 2011, and the related consolidated results of its operations and its cash flows for the year ended March 31, 2012 and for the period from February 10, 2011 to March 31, 2011 (Successor) and for the period from April 1, 2010 to February 9, 2011 (Predecessor), in conformity with accounting principles generally accepted in the United States of America.  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in note 2 to the financial statements, the Companys minimal revenues and its dependency from continued funding from its stockholder raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.  /s/ UHY Vocation HK CPA Limited UHY VOCATION HK CPA LIMITED Certified Public Accountants  Hong Kong, the Peoples Republic of China,    29 JUN 2012 A member of Urbach Hacker Young International Limited, an international network of independent accounting and consulting firms The UHY network is a member of the Forum of Firms  F1         STUDIO II BRANDS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMarch 31, 2012March 31, 2011ASSETSCURRENTS ASSETSCash$        25,912$      23,945Due from related parties320,79612,984Accounts receivable-16,886Inventories3,9502,058Total current assets350,65855,873Property and equipment, net121,784105,478Security deposits105,51441,216Goodwill311,29155,484TOTAL ASSETS$      889,247$    258,051LIABILITIES AND STOCKHOLDER'S EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses$      109,222$       51,987Income tax payable4,0726,006Payable to stockholder88,998-Due to related parties26,0725,923TOTAL CURRENT LIABILITIES228,36463,916Payable to stockholder538,296131,688TOTAL LIABILITIES766,660195,604STOCKHOLDER'S EQUITYCommon stock, 100,000,000 shares authorized with par value $0.001;14,838,018 shares issued and outstanding at March 31, 2012;  11,899,276 shares issued and outstanding at March 31, 2011)14,83811,900Additional paid-in capital446,935258,871Accumulated losses(339,186)(208,324)TOTAL STOCKHOLDER'S EQUITY122,58762,447TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY$    889,247$    258,051See accompanying notes to consolidated financial statements.  F2


|                                                             |            |                    |                      |                                                 |                                                
|------------------------------------------------------------ | ---------- | ------------------ | -------------------- | ----------------------------------------------- | -----------------------------------------------
|STUDIO II BRANDS, INC. AND SUBSIDIARIES                     
|CONSOLIDATED STATEMENTS OF OPERATIONS                       
|                                                            
|                                                             |            |                    | Year ended March 31, | (Successor)
From February 10, 2011 to March 31, | (Predecessor) From April 1, 2010 to
February 9,
|                                                             |            |                    | 2012                 | 2011                                            | 2011                                           
|REVENUE                                                      |            |                    |                      |                                                 |                                                
|Food and beverage income                                     |            |                    | $      381,716       | $        52,139                                 | $     289,426                                  
|                                                             |            |                    |                      |                                                 |                                                
|Franchise and management fee income                          |            |                    | 12,472               | 450                                             | 22,266                                         
|                                                             |            |                    | 394,188              | 52,589                                          | 311,692                                        
|Cost of goods sold (exclusive of depreciation)               |            |                    | (104,681)            | (12,540)                                        | (95,732)                                       
|                                                             |            |                    |                      |                                                 |                                                
|Gross profit                                                 |            |                    | 289,507              | 40,049                                          | 215,960                                        
|Operating expenses                                           |            |                    | (416,889)            | (70,850)                                        | (215,859)                                      
|                                                             |            |                    |                      |                                                 |                                                
|(Loss)/Income from operations                                | (127,382)  | (30,801)           | 101                 
|                                                             |            |                    |                      |                                                 |                                                
|OTHER INCOME/(EXPENSES)                                      |            |                    |                      |                                                 |                                                
|Other income                                                 |            |                    | 3,497                | 708                                             | 4,069                                          
|Other expenses                                               |            |                    | (1,372)              | (104)                                           | (1,064)                                        
|Total other income, net                                      |            | 2,125              | 604                  | 3,005                                          
|                                                             |            |                    |                      |                                                 |                                                
|(Loss)/Income before income taxes                            |            |                    | (125,257)            | (30,197)                                        | 3,106                                          
|Income tax (expense)/benefits                                |            |                    | (6,501)              | ­­­­           726                              | (4,310)                                        
|Net loss from continuing operations                          |            | (131,758)          | (29,471)             | (1,204)                                        
|Discontinued operation, net of tax                           |            | 896                | -                    | -                                              
|                                                             |            |                    |                      |                                                 |                                                
|NET LOSS                                                     |            |                    | $    (130,862)       | $    (29,471)                                   | $     (1,204)                                  
|Net loss per common share                                    |            |                    |                      |                                                 |                                                
|Basic and fully diluted                                      |            | $           (0.01) | -                    | $     (1,204)                                  
|Weighted average common shares outstanding                   | 11,996,399 | 11,899,276         | 1                   
|See accompanying notes to consolidated financial statements. |           

F3


|                                                                 |                                   |             |                 |           |          
|---------------------------------------------------------------- | --------------------------------- | ----------- | --------------- | --------- | ---------
|STUDIO II BRANDS, INC. AND SUBSIDIARIES                         
|CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY                  
|                                                                 |                                   |             |                 |           |          
|                                                                 | Common Stock, Par value of $0.001 |             |                 | Total    
|                                                                 | Additional                        | Accumulated | stockholder's  
|                                                                 | Number                            | Amount      | Paid-in capital | losses    | equity   
|                                                                 |                                   |             |                 |           |          
|Balance as of
April 1, 2010                                      | 3,745,676                         | 3,746       | 42,486          | (146,371) | (100,139)
|Common stock
issued for cash                                     | 5,862,500                         | 5,863       | -               | -         | 5,863    
|Net loss for the period from April 1, 2010 to February 9, 2011   | -                                 | -           | -               | (32,482)  | (32,482) 
|Balance as of February 9, 2011                                   | 9,608,176                         | 9,609       | 42,486          | (178,853) | (126,758)
|Common stock issued
for acquisition of HLL                       | 2,291,100                         | 2,291       | 216,385         | -         | 218,676  
|Net loss for the period from February 10, 2011 to March 31, 2011 | -                                 | -           | -               | (29,471)  | (29,471) 
|Balance as of
March 31, 2011                                     | 11,899,276                        | 11,900      | 258,871         | (208,324) | 62,447   
|Common stock issued
for acquisition of Sino Wish                 | 2,938,742                         | 2,938       | 188,064         | -         | 191,002  
|Net loss for the year                                            | -                                 | -           | -               | (130,862) | (130,862)
|Balance as of March 31, 2012                                     | 14,838,018                        | 14,838      | 446,935         | (339,186) | 122,587  
|See accompanying notes to consolidated financial statements.    

F4


|                                                                                          |  |          |                      |                                               |                                              
|----------------------------------------------------------------------------------------- |  | -------- | -------------------- | --------------------------------------------- | ---------------------------------------------
|STUDIO II BRANDS, INC. AND SUBSIDIARIES                                                  
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                    
|                                                                                          |  |          | Year ended
March 31, | Successor
From
February 10, 2011 to March 31, | Predecessor
From April 1, 2010
to February 9,
|                                                                                          |  |          | 2012                 | 2011                                          | 2011                                         
|CASH FLOWS FROM OPERATING ACTIVITIES                                                      |  |          |                      |                                              
|Net loss                                                                                  |  |          | $    (131,758)       | $      (29,471)                               | $      (1,204)                               
|Adjustments to reconcile net loss to
net cash provided by/(used in) operating activities: |  |          |                      |                                               |                                              
|Depreciation                                                                              |  |          | 16,099               | 3,406                                         | 20,785                                       
|Changes in operating assets and liabilities:                                              |  |          |                      |                                               |                                              
|Account and other receivable                                                              |  |          | 16,543               | 4,907                                         | (10,390)                                     
|Inventories                                                                               |  |          | 2,679                | (2,058)                                       | 2,604                                        
|Due from related parties                                                                  |  |          | (185,999)            | -                                             | 17,832                                       
|Security deposit                                                                          |  |          | (107)                | -                                             | (5,807)                                      
|Accounts payable and accrued expenses                                                     |  |          | 49,570               | 24,317                                        | (10,614)                                     
|Income tax payable                                                                        |  |          | (2,160)              | (726)                                         | 4,311                                        
|Due to related parties                                                                    |  |          | (53,503)             | (1,057)                                       | (1,832)                                      
|Shareholders loan                                                                        |  | -        | -                    | 184,226                                      
|Payable to stockholder                                                                    |  | 302,533  | -                    | -                                            
|Cash provided by/(used in) operating activities-continuing operations                     |  | 13,897   | (682)                | 199,911                                      
|Cash used in discontinued operations                                                      |  | (5,136)  | -                    | -                                            
|NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES                                       |  | 8,761    | (682)                | 199,911                                      
|CASH FLOWS FROM INVESTING ACTIVITIES                                                      |  |          |                      |                                              
|Purchase of plant and machinery                                                           |  | (657)    | -                    | (4,879)                                      
|Cash acquired in acquisition of subsidiary                                                |  |          | 7,724                | 14,088                                        | -                                            
|NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES                                       |  | 7,067    | 14,088               | (4,879)                                      
|CASH FLOWS FROM FINANCING ACTIVITIES                                                      |  |          |                      |                                              
|(Repayment of)/proceeds from stockholders loan                                           |  |          | (13,861)             | 4,676                                         | (196,266)                                    
|Cash received from issuance of common stock                                               |  | -        | 5,863                | -                                            
|NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES                                       |  | (13,861) | 10,539               | (196,266)                                    
|NET CHANGE IN CASH                                                                        |  |          | 1,967                | 23,945                                        | (1,234)                                      

F5


|                                                   |  |  |                      |                                               |                                              
|-------------------------------------------------- |  |  | -------------------- | --------------------------------------------- | ---------------------------------------------
|STUDIO II BRANDS, INC. AND SUBSIDIARIES           
|CONSOLIDATED STATEMENTS OF CASH FLOWS             
|                                                   |  |  | Year ended
March 31, | Successor
From
February 10, 2011 to March 31, | Predecessor
From April 1, 2010
to February 9,
|                                                   |  |  | 2012                 | 2011                                          | 2011                                         
|CASH                                               |  |  |                      |                                               |                                              
|Beginning of period                                |  |  | 23,945               | -                                             | 15,322                                       
|End of period                                      |  |  | $      25,912        | $      23,945                                 | $     14,088                                 
|Supplemental disclosures of cash flow information: |  |  |                      |                                              
|Cash paid for interest                             |  |  | $             -      | $                -                            | $                 -                          
|Cash paid for income taxes                         |  |  | $     8,609          | $                 -                           | $                 -                          

Cash acquired from acquisition of subsidiary:


|                                                           |                                       |                          |  |            |  |  |  |             |  |           
|---------------------------------------------------------- | ------------------------------------- | ------------------------ |  | ---------- |  |  |  | ----------- |  | ----------
|Consideration:                                             |                                       |                          |  |            |  |  |  |            
|Equity instruments (2,938,742 common stock of the Company) |                                       |                          |  | $  191,002
|Cash acquired                                              |                                       |                          |  |            |  |  |  | (7,724)    
|Consideration, net of cash acquired                        |                                       |                          |  | $  183,278
|                                                           |                                       |                          |  |            |  |  |  |             |  |           
|Allocated to:                                              |                                       |                          |  |            |  |  |  |            
|                                                           | Inventory                             |                          |  |            |  |  |  | 4,571      
|                                                           | Due from related parties              |                          |  |            |  |  |  | 103,128    
|                                                           | Security deposit                      |                          |  |            |  |  |  | 63,848     
|                                                           | Property and equipment                |                          |  |            |  |  |  | 40,125     
|                                                           | Accounts payable and accrued expenses |                          |  |            |  |  |  | (74,941)   
|                                                           | Due to related party                  |                          |  |            |  |  |  | (15,297)   
|                                                           | Stockholders loan payable            |                          |  |            |  |  |  | (193,964)  
|                                                           |                                       | Net tangible liabilities |  |            |  |  |  | $  (72,530)
|                                                           |                                       |                          |  |            |  |  |  |             |  |           
|Value of excess of purchase price over net liabilities     |                                       |                          |  |           
|                                                           | Acquired allocated to:                |                          |  |            |  |  |  |            
|                                                           |                                       | Goodwill                 |  |            |  |  |  |             |  | $  255,808

See accompanying notes to consolidated financial statements.     F6


NOTE 1 ORGANIZATION  Studio II Brands, Inc. (the Company) was formed on May 6, 1996 in the State of Florida. The Companys activities before February, 2011 were primarily directed towards the raising of capital and seeking business opportunities.  The Company has transitioned from its development stage to operational activities as of February 10, 2011.  On February 10, 2011, the Company entered into and consummated a share exchange agreement and supplementary agreement with Hippo Lace Limited (HLL), a BVI corporation and Mr. Gu Yao (Gu), the sole stockholder of HLL to acquire Gus 100% interests of HLL and its wholly owned subsidiary, Legend Sun Limited (Legend Sun) a limited liability company incorporated and domiciled in Hong Kong and with its principal activity to provide catering services in Hong Kong, and pay off the stockholders loan from Gu to HLL. In conjunction with the acquisition and pay off the stockholders loan from Gu, the Company completed the closing of the exchange transaction under the terms of the Exchange Agreement and Supplementary Agreement on February 10, 2011 by issued 2,291,100 shares of its Common Stock to Gu as consideration (i) to acquire all of the issued and outstanding shares of HLL owned by Gu Yao valued at $34,450 or approximately $0.015 per share, and (ii) to pay off the outstanding shareholder loan owed to Gu Yao by HLL.  Accordingly, after completion of the transaction described above, the outstanding shareholder loan in the amount of $184,226 was owed by HLL to the Company.  On March 29, 2012, the Company through its subsidiary HLL entered into and consummated a stock purchase agreement with Sino Wish and Ms Vivian Choi (Vivian), the sole stockholder of Sino Wish to (i) acquire Vivians 100% interests of Sino Wish which is incorporated and domiciled in Hong Kong as a Companys franchisee to operate Caffé Kenon restaurant at Tai Yau Plaza, Hong Kong, and (ii) repay the stockholders loan from Vivian to HLL. The purchase price for the acquisition of Sino Wish amounted to $280,000, and was determined through arms length negotiation.  A total of $191,002 was paid through issuance to the seller of a total of 2,938,742 shares of common stock of the Company valued at $0.065 per share.  Such shares are restricted securities as defined in Rule 144 under the Securities Act of 1933.  The balance of the purchase price in the amount of $88,998 is payable through the assumption of the outstanding balance of a shareholder loan owed by Sino Wish to the seller. The shareholder loan assumed by HLL is due and payable, without interest, in four equal quarterly installments, with payments due as of the last day of each calendar quarter following the Closing Date hereunder, with the first such installment due on or before June 30, 2012, and with the entire unpaid balance due on or before March 31, 2013.  HLL or its designees may also prepay the shareholder loan in whole or in part at any time during the fiscal year from April 1 2012 to March 31, 2013.  NOTE 2 GOING CONCERN AND MANAGEMENTSS PLANS  These consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, they do not include any adjustments that might result from the outcome of this uncertainty.  The Companys minimal revenues, its dependency from continued funding from its stockholders raise substantial double about its ability to continue as a going concern.    The Company's business plan includes raising funds from outside potential investors.  However, there is no assurance that it will be able to do so.   F7       NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (a) Basis of Presentation  The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The Companys functional currency is the United States Dollar.  (b) Principles of Consolidation  The balance sheet as of March 31, 2012 and 2011 includes the Company and its wholly-owned subsidiaries, HLL, Legend Sun and Sino Wish, and HLL and Legend Sun, respectively.  Additionally, the results of operations and cash flows include the operations of HLL, Legend Sun and Sino Wish from the date of acquisition. All significant intercompany accounts and transactions have been eliminated in consolidation.  (c) Use of estimates  The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Companys significant estimates include the reserves related to receivables, the recoverability and useful lives of long lived assets and realizable values for inventories.  (d) Foreign currency translation  Assets and liabilities of foreign subsidiaries are translated at the rate of exchange in effect on the balance sheet date; income and expenses are translated at the average rate of exchange prevailing during the period. The related transaction adjustments are reflected in Accumulated other comprehensive income / (loss) in the equity section of our consolidated balance sheet.  March 31, 2012March 31, 2011February 9, 2011Period end HK$:US$ exchange rate7.76427.7884-Average twelve-months ended HK$:US$ exchange rate7.7759--Average period ended HK$:US$ exchange rate-7.77347.7644   F8       NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (e) Property and equipment  Property and equipment are stated at cost less accumulated depreciation and impairment losses. Improvements to leased assets or fixtures are amortized over their estimated useful lives or lease period, whichever is shorter. Expenditures for repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred.  Depreciation expense is recorded over the assets estimated useful lives or lease period, using the straight line method, at the following annual rates:-  Furniture and equipment: 10% - 20%, per annum Computer equipment: 10%, per annum Leasehold improvements: over the lease term  (f) Inventories  Inventories consist of finished goods which include food and beverage materials and products for catering service.  Inventories are measured at the lower of cost or market. The cost of inventories comprises all costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location and condition and is assigned by using a first-in first-out basis. Market value is determined by reference to selling prices after the balance sheet date or to managements estimates based on prevailing market conditions. The management also regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine if a valuation allowance is required.  (g) Accounts receivables  Accounts receivable are shown net of allowance for doubtful accounts. During the period, there were no bad debts incurred and no allowance for doubtful accounts recorded at March 31, 2012. The Companys management has established an allowance for doubtful accounts sufficient to cover probable and reasonably estimable losses. The allowance for doubtful accounts considers a number of factors, including collection experience, current economic trends, estimates of forecasted write-offs, aging of the accounts receivable portfolios, industry norms, regulatory decisions and other factors.  Management reviews the composition of accounts receivable and analyzes any historical bad debts, customer concentrations, and customer credit worthiness.  Managements policy is to record reserve primarily on a specific identification basis.  Accounts are written off after use of a collection agency is deemed to be no longer useful.  (h) Security deposits  Security deposits mainly consist of five months rental and management fee security deposits, electricity and water meter deposits for company owned restaurant.  (i) Cash  Cash consist of cash on hand and at banks.  The Company's cash deposits are held with financial institutions located in United States and Hong Kong.  Management believes these financial institutions are of high credit quality.  F9       NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (j) Goodwill  Goodwill represents the excess of the purchase price over the fair value of the identifiable tangible and intangible assets acquired and the fair value of liabilities assumed in an acquisition.  Accounting Standards Codification (ASC)-350-30-50 Goodwill and Other Intangible Assets requires the testing of goodwill and indefinite-lived intangible assets for impairment at least annually.  The Company tests goodwill for impairment in the fourth quarter each year.  Goodwill impairment is computed using the expected present value of associated future cash flows.  There was no impairment of goodwill as of March 31, 2012 and 2011.  We reviewed goodwill for potential impairment as of March 31st of each year or more frequently if events or circumstances occurred that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  (k) Impairment of long-lived assets  Long-lived assets are comprised of property and equipment. Pursuant to the provisions of ASC360-10, Property, plant and equipment, long-lived assets to be held and used are reviewed for possible impairment whenever events indicate that the carrying amount of such assets may not be recoverable by comparing the undiscounted cash flows associated with the assets to their carrying amounts. If such a review indicates an impairment, the carrying amount would be reduced to fair value.  Based on the Companys assessment, there were no events or changes in circumstances that would indicate any impairment of long-lived assets as of March 31, 2012 and 2011.  (l) Accounts payable and accrued expenses consist of the following:


|                 |                                      |               |        |                 |        |                      |  |                     
|---------------- | ------------------------------------ | ------------- | ------ | --------------- | ------ | -------------------- |  | --------------------
|                 |                                      |               |        |                 |        | As of March 31, 2012 |  | As of March 31, 2011
|Accounts payable |                                      | $      44,025 |        | $         8,516
|Accrued expenses |                                      |               |        |                
|                 | Legal and professional fees          |               | 22,324 |                 | 32,361
|                 | Payroll and other operating expenses | 42,873        |        | 11,110         
|                 |                                      |               |        |                 |        | $   109,222          |  | $       51,987      

(m) Fair value measurements  ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:  F10       NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  Level 1  Quoted prices in active markets for identical assets or liabilities. Level 2  Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.  The carrying values of cash, accounts receivables, accounts payable and accrued expenses, short-term borrowings from and lending to related party, and payable to stockholder approximate fair values due to their short maturities.  There was no asset or liability measured at fair value on a non-recurring basis as of March 31, 2012 and 2011.  (n) Income Taxes  Income taxes are provided for using the liability method of accounting in accordance with ASC 740 Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date.  The Company adopted ASC 740 which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.  (o) Other comprehensive income  The Company has adopted ASC 220 Comprehensive Income.  This statement establishes rules for the reporting of comprehensive income and its components.  Comprehensive income consists of net income and foreign currency translation adjustments.   F11       NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (p) Revenue recognition  Revenue represents the invoiced value of goods sold or services provided.  Revenue is recognized when all the following criteria are met:  (i) Persuasive evidence of an arrangement exists. (ii) Services had been rendered. (iii) The sellers price to the buyer is fixed or determinable, and (iv) Collectivity is reasonably assured.  Revenue from sales is recognized when food and beverage products are sold. Franchise fee income on the annual fee for sublicensing of the brand name and trademark Caffe Kenon and the 10% management fee on eligible monthly net income of subfranchiee are recognized after granting the non-exclusive rights and all contractual obligations are performed and report of net income from subfranchisee respectively.  (q) Employee benefits  The Company operates a Mandatory Provident Fund Scheme (the "MPF Scheme") under the Hong Kong Mandatory Provident Fund Schemes Ordinance for those employees employed under the jurisdiction of the Hong Kong Employment Ordinance. The MPF Scheme is a defined contribution scheme, the assets of which are held in separate trustee-administered funds. The Company's contributions to the scheme are expensed as incurred and are vested in accordance with the scheme' vesting scales.  (r) Segment information  The Company uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Companys chief operating decision maker for making operating decisions and assessing performance as the source for determining the Companys operating segments. Management, including the chief operating decision maker, reviews operating results solely by monthly revenue and operating results of Legend Sun, the operating subsidiary in Hong Kong. As such, management has determined that Legend Sun is the Companys only operating segment. As the Companys operations and customers are principally all located in Hong Kong, no geographic information has been presented.  (s) Commitments and contingencies  In the normal course of business, the Company is subject to contingencies, including legal proceedings and environmental claims arising out of the normal course of businesses that relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history, scientific evidence and the specifics of each matter.  As of March 31, 2012 and 2011, the Company's management has evaluated all such proceedings and claims. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's financial position, liquidity or results of operations.  F12       NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (t) Recent Accounting Pronouncements  We describe below recent pronouncements that have had or may have a significant effect on our financial statements. We do not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our financial condition, results of operations, or disclosures.  FASB Accounting Standards Update No. 2011-04  In May, 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-04 Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011.  The Company has adopted the methodologies prescribed by this ASU by the date required, and the ASU does not have a material effect on its financial position or results of operations.  FASB Accounting Standards Update No. 2011-05  In June 2011, the FASB issued ASU 2011-05, which is an update to Topic 220, Comprehensive Income. This update eliminates the option of presenting the components of other comprehensive income as part of the statement of changes in stockholders equity, requires consecutive presentation of the statement of net income and other comprehensive income and requires reclassification adjustments from other comprehensive income to net income to be shown on the financial statements.  ASU 2011-05 is effective for all interim and annual reporting periods beginning after December 15, 2011. The Company does not expect the adoption of this guidance to have a material impact on its financial position or results of operations.  All other requirements in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011.  FASB Accounting Standards Update No. 2011-08  In September 2011, the FASB issued ASU No. 2011-08, IntangiblesGoodwill and Other (Topic 350): Testing Goodwill for Impairment, (ASU 2011-08), which amends current guidance to allow a company to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The amendment also improves previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entitys financial statements for the most recent annual or interim period have not yet been issued. We do not expect that the adoption of ASU 2011-08 will have a material impact on our consolidated financial statements.  F13       NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  FASB Accounting Standards Update No. 2011-11  In December 2011, the FASB issued the FASB ASU No. 2011-11 Balance Sheet: Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.  The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  FASB Accounting Standards Update No. 2011-12  In December 2011, the FASB issued the FASB ASU No. 2011-12Comprehensive Income: Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU No. 2011-05 (ASU 2011-12).This Update is a deferral of the effective date pertaining to reclassification adjustments out of accumulated other comprehensive income in ASU 2011-05. FASB is to going to reassess the costs and benefits of those provisions in ASU 2011-05 related to reclassifications out of accumulated other comprehensive income. Due to the time required to properly make such a reassessment and to evaluate alternative presentation formats, the FASB decided that it is necessary to reinstate the requirements for the presentation of reclassifications out of accumulated other comprehensive income that were in place before the issuance of Update 2011-05.  Except for the above, there is no recently issued accounting pronouncement adopted by the Company.  Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.   NOTE 4 BUSINESS ACQUISITION  On March 29, 2012, the Company entered into and consummated a Stock Purchase Agreement with Sino Wish and Ms. Vivian Choi (Vivian), the sole shareholder of Sino Wish to (i) acquire Vivians 100% interests of Sino Wish incorporated and domiciled in Hong Kong as a Companys franchisee to operate Caffé Kenon restaurant at Tai Yau Plaza, Hong Kong, and (ii) pay off the stockholders loan from Vivian to HLL. The purchase price for the acquisition of Sino Wish was a total of $280,000, and was determined through arms length negotiation.  A total of $191,002 was paid through issuance to the seller of a total of 2,938,742 shares of common stock of the Registrant valued at $0.065 per share.  Such shares are restricted securities as defined in Rule 144 under the Securities Act of 1933.  The balance of the purchase price in the amount of $88,998 is payable through the agreement of HLL to assume and pay the outstanding balance of a shareholder loan owed by Sino Wish to the seller.   The shareholder loan assumed by HLL is due and payable, without interest, in four equal quarterly installments, with payments due as of the last day of each calendar quarter following the Closing Date hereunder, with the first such installment due on or before June 30, 2012, and with the entire unpaid balance due on or before March 31, 2013.  HLL or its designees may also prepay the shareholder loan in whole or in part at any time during the fiscal year from April 1 2012 to March 31, 2013.   F14       NOTE 4 BUSINESS ACQUISITION (/Contd)  Closing of the exchange transaction under the terms of the above-mentioned Exchange Agreement was completed on March 29, 2012.  As a result of closing of the stock purchase transaction, the Company acquired Sino Wish which became wholly-owned subsidiaries of the Company and consolidates Sino Wish as of March 29, 2012 in accordance with ASC 810.  In conjunction with the acquisition, the Company issued 2,938,742 shares of its common stock to Vivian as consideration (i) to acquire all of the issued and outstanding shares of Sino Wish owned by Vivian valued at $191,002 or approximately $0.065 per share, and (ii) to pay off the outstanding shareholder loan amounting to $88,998 owed to Vivian by Sino Wish.  Accordingly, after completion of the transaction described above, the outstanding shareholder loan in the amount of $88,998 was owed by Sino Wish to the Company or its designee.  As a result of the issuance of common stock under the Stock Purchase Agreement, the Company has a total of 14,838,018 shares of its common stock issued and outstanding, of which 11,899,276 shares, or approximately 80.2%, are owned by previously existing shareholders of the Company, with the balance of 2,938,742 shares, or approximately 19.8%, are owned by Vivian.  The fair values of the assets acquired and liabilities assumed at the date of acquisition as determined in accordance with ASC 805, and the purchase price allocation at the date of acquisition, were as follows:


|                                                           |                                       |                          |  |  |  |           |  |            
|---------------------------------------------------------- | ------------------------------------- | ------------------------ |  |  |  | --------- |  | -----------
|Consideration:                                             |                                       |                          |  |  |  |          
|Equity instruments (2,938,742 common stock of the Company) |                                       | $  191,002              
|Cash acquired                                              |                                       |                          |  |  |  | (7,724)  
|Consideration, net of cash acquired                        |                                       | $   183,278             
|                                                           |                                       |                          |  |  |  |           |  |            
|Allocated to:                                              |                                       |                          |  |  |  |          
|                                                           | Inventory                             |                          |  |  |  | 4,571    
|                                                           | Due from related parties              |                          |  |  |  | 103,128  
|                                                           | Security deposit                      |                          |  |  |  | 63,848   
|                                                           | Property and equipment                |                          |  |  |  | 40,125   
|                                                           | Accounts payable and accrued expenses |                          |  |  |  | (74,942) 
|                                                           | Due to related party                  |                          |  |  |  | (15,297) 
|                                                           | Stockholders loan payable            |                          |  |  |  | (193,964)
|                                                           |                                       | Net tangible liabilities |  |  |  |           |  | $  (72,530)




|                                                       |                        |          |  |  |  |  |  |            
|------------------------------------------------------ | ---------------------- | -------- |  |  |  |  |  | -----------
|Value of excess of purchase price over net liabilities |                        |         
|                                                       | Acquired allocated to: |          |  |  |  | 
|                                                       |                        | Goodwill |  |  |  |  |  | $   255,808

NOTE 5 INVENTORIES  Inventories are stated at lower of cost or market.  Inventories represent finished goods include food and beverage materials and products for catering services.   F15       NOTE 6 PROPERTY AND EQUIPMENT  Property and equipment of the Company consist primarily of restaurant facilities and equipment owned and operated by the Company's wholly owned subsidiaries. Property and equipment as of March 31, 2012 and 2011 are summarized as follows:  March 31, 2012March 31, 2011Furniture & equipment$       75,058$       51,835Leasehold improvement113,15086,001Computer equipment14,7037,066Total202,911144,902Accumulated depreciation and amortization(81,127)(39,424)Balance as at year ended$   121,784$      105,478  Depreciation and amortization expense for the year ended March 31, 2012, March 31, 2011 and from April 1, 2011 to February 9, 2011 were $24,476, $3,406 and $20,784 respectively.   NOTE 7 SECURITY DEPOSITS  Security deposits mainly consist of five months rental and management fee security deposits, electricity and water meter deposits for company owned restaurant, and was recorded by the time of payment. Security and deposits as of March 31, 2012 and 2011 are summarized as follows:   March 31, 2012March 31, 2011Rental and management fee security deposit$        90,198$       35,888Electricity deposit7,4473,595Water deposit1,541771Gas deposit1,926-Food supplies deposit2,953962Others1,195-$       105,260$      41,216   NOTE 8 COST OF GOODS SOLD  Cost of goods sold consists of finished goods include food and beverage materials and products for catering services sold by company-owned restaurant and the subfranchise annual fee expenses, and exclusive of depreciation expenses shown separately under Note 8 Operating Expenses.   F16       NOTE 9 OPERATING EXPENSES  Operating expenses consist of the following for the year ended March 31, 2012 and for the period from February 10, 2011 to March 31, 2011 and from April 1, 2010 to February 9, 2011.


|                                       |                           |  |                                                    |  |                                                   
|-------------------------------------- | ------------------------- |  | -------------------------------------------------- |  | --------------------------------------------------
|                                       | Year ended March 31, 2012 |  | Successor
From February 10, 2011 to
March 31, 2011 |  | Predecessor
From April 1, 2010 to
February 9, 2011
|Staff costs                            | $       76,654            |  | $    13,266                                        |  | $65,787                                           
|Property rent, rate and management fee | 115,815                   |  | 17,468                                             |  | 74,363                                            
|Electricity and utilities              | 20,982                    |  | 2,503                                              |  | 17,481                                            
|Depreciation                           | 24,476                    |  | 3,406                                              |  | 20,785                                            
|Professional and audit fee             | 129,512                   |  | 28,511                                             |  | 9,604                                             
|Others                                 | 49,450                    |  | 5,696                                              |  | 27,839                                            
|Total                                  | $    416,889              |  | $    70,850                                        |  | $  215,859                                        

NOTE 10 DISCONTINUED OPERATIONS  HLL and Beijing Kenon Bistro Catering Limited (BJ Kenon), the subfranchisee located in Beijing, agreed to terminate the franchise agreement signed on April 1, 2010 with effect from May 31, 2011 due to restructuring of Beijing subfranchisee who agreed to pay HLL an early termination fee of RMB40,000 (approximately $6,200).  In this conjunction, no subfranchise fee income of RMB80,000 (approx. $11,880) for each of the remaining two year term of the agreement to be recognized in April of 2011 and 2012 respectively.  The result of subfranchise operation of BJ Kenon for the year ended March 31, 2012 and for the period from February 10, 2011 to March 31, 2011 are separately reported as discontinued operation.  The net income from discontinued operation for the year ended March 31, 2012 and for the period from February 10, 2011 to March 31, 2011 are as follows:


|                                       |                      |  |                     |  |                        
|-------------------------------------- | -------------------- |  | ------------------- |  | -----------------------
|                                       |                      |  |                     |  | (Predecessor)          
|                                       | Year ended           |  | February 10, 2011   |  | April 1, 2010          
|                                       | March 31, 2012       |  | to March 31 2012    |  | to February 9, 2011    
|Revenue                                | $              6,210 |  | $                 - |  | $                11,880
|Cost of revenue and operating expenses | (5,136)              |  | -                   |  | (5,136)                
|Operating income                       | 1,074                |  | -                   |  | 6,744                  
|Income tax                             | (178)                |  | -                   |  | (1,113)                
|Net income                             | $                896 |  | $                 - |  | 5,631                  

F17       NOTE 10 DISCONTINUED OPERATIONS (/Contd)  The carrying amounts of the major classes of assets and liabilities of subfranchise of BJ Kenon as of March 31, 2012 and 2011 are amount due from related party as discussed in note 14 below, and as follows:  March 31, 2012March 31, 2011Current assets (included in due from related party in consolidated balance sheet)$            19,194$            12,984  Net income of Beijing Kenon subfranchise operation for the period from April 1, 2011 to May 31, 2011 and for the year ended March 31, 2011 are as follows:  May 31, 2011March 31, 2011Income before income tax$           1,074-Income tax(178)-Net Income$              896$                  -   NOTE 11 FRANCHISE ARRANGEMENTS  Franchise arrangements are pursuant to franchise agreements entered by the Company as the franchisee and Sizegenic as the franchisor.  The Agreements require payment of franchise fees on anniversary basis and continuing monthly management fee base upon a percent of franchisees net income after tax to Sizegenic throughout the term of franchise.  Under this arrangement, two franchise agreements were entered in February and March 2010 respectively in which the Company is granted the right to operate a café bistro using the brand name Caffe Kenon for a term of 3 years and sublicense right to two subfranchisees in Hong Kong and Beijing respectively to use brand name caffe Kenon to operate a café bistro for a term of 3 years commencing from April 1, 2010.  Franchise fee expenses on the use of the license of the brand name and trademark Caffe Kenon is recorded upon the granting of the non-exclusive rights by Sizegenic as the fee is non-refundable to and non-cancellable by the Company.  Franchise fee income on the sublicensing of the brand name and trademark Caffe Kenon is recognized upon the granting of the non-exclusive rights  to the franchisee as the fee is non-refundable to and non-cancellable by the franchisee and the Company has no further obligations since they are all assumed  by franchisee throughout the term.  The franchisee and the subfranchisees pay related occupancy costs including rent, property management fee and government rent and rates, insurance and maintenance for their owned restaurant.  Franchisor has no obligation to any legal consequences arose from what the franchisee and subfranchisees assumed.  The franchisee and subfranchisees have the right to renew for one additional term equal to the initial term granted under Franchisors franchise agreement after expiration  of the initial term provided that franchisee and subfranchisees have, during the term of the agreement, substantially complied with all its provisions.  Franchisee and subfranchisees must pay franchisor, three months prior to the date of renewal, a renewal fee to be agreed between franchisor and the franchisee/subfranchisees.  F18       NOTE 11 FRANCHISE ARRANGEMENTS (/Contd)  Revenues from franchised Caffe Kenon are as follows:


|                                    |  |                            |  |                                                          |  |                                                         
|----------------------------------- |  | -------------------------- |  | -------------------------------------------------------- |  | --------------------------------------------------------
|                                    |  | Year ended  March 31, 2012 |  | Successor
Period from February 10, 2011 to March31, 2011 |  | Predecessor
Period from April1, 2010 to February 9, 2011
|                                    |  |                            |  |                                                          |  |                                                         
|Franchise and management fee income |  | $     12,472               |  | $         450                                            |  | $     22,266                                            

Franchise and management fee income due to the Company are as follows:  As of
March 31, 2012As of
March 31, 2011Subfranchise annual fee due to the Company:
Sino Wish$       5,907$       10,272Beijing Kenon11,88011,880$      17,787$        22,152  Future minimum franchise fee payments due from the Company under existing franchise and subfranchise arrangements are:  Year ended March 31,2013$       5,1362014-2015-2016-Total$              -  Future minimum franchise fee payments due to the Company under existing franchise and subfranchise arrangements are nil.  Franchise fees owed to Sizegenic consist of franchise and subfranchise annual fee and monthly franchise management fee applicable to profit after tax of Company-owned restaurant.  The first year franchise annual fee owed to Sizegenic for the Company-owned restaurant at $5,136 as of March 31, 2010 was after a special 50% discount and full amount of $10,272 is due per annum for the second year and waived in the third year of the initial term of the agreement. On April 1, 2012, the Company based on a supplementary franchise agreement with Sizegenic in April 2010 to  grant the right to HLL for Sino Wish to operate Caffé Kenon at Tai Yau Plaza, Hong Kong at annual fee of $5,136 for the third year.   F19       NOTE 12 SEGMENT INFORMATION  The Company has two reportable segments that include franchised to operate an owned Caffe Kenon in Hong Kong and subfranchise to operate two Caffe Kenon in Hong Kong and Beijing respectively.  Each reportable segment is separately organized and focuses on different customer groups of consumers and subfranchisees.  Each reportable segment prepares a stand-alone set of financial reporting package including information such as revenue, expenses, and goodwill, and the package is regularly reviewed by the President.  The following is a summary of relevant information relating to each segment reconciled to amounts on the accompanying consolidated financial statements for the year ended Mar 31, 2012 and for the period from April 1, 2010 to February 9, 2011:  A) Business segment reporting  by services


|                                                                                |  |            |  |                 |  |            |  |               
|------------------------------------------------------------------------------- |  | ---------- |  | --------------- |  | ---------- |  | --------------
|                                                                                |  | Franchise  |  | Subfranchise    |  | Corporate  |  | Total         
|                                                                                |  |            |  |                 |  |            |  |               
|Revenue                                                                         |  | $ 381,716  |  | $        18,681 |  |            |  | $      400,397
|                                                                                |  |            |  |                 |  |            |  |               
|Depreciation and amortization                                                   |  | (24,476)   |  | -               |  |            |  | (24,476)      
|                                                                                |  |            |  |                 |  |            |  |               
|Cost of revenues and operating expenses excluding depreciation and amortization |  | (341,817)  |  | (10,272)        |  | (150,141)  |  | (502,230)     
|                                                                                |  |            |  |                 |  |            |  |               
|Operating (loss)/income                                                         |  | 15,423     |  | 8,409           |  | (150,141)  |  | (126,309)     
|                                                                                |  |            |  |                 |  |            |  |               
|Other income                                                                    |  | 3,497      |  | -               |  | -          |  | 3,497         
|                                                                                |  |            |  |                 |  |            |  |               
|Other expenses                                                                  |  | (1,372)    |  | -               |  | -          |  | (1,372)       
|                                                                                |  |            |  |                 |  |            |  |               
|Total other income (net)                                                        |  | 2,125      |  | -               |  | -          |  | 2,125         
|                                                                                |  |            |  |                 |  |            |  |               
|Income tax expenses                                                             |  | 5,291      |  | 1,387           |  | -          |  | 6,678         
|                                                                                |  |            |  |                 |  |            |  |               
|Net income/(loss) after tax                                                     |  | $   12,257 |  | $         7,022 |  | $(150,141) |  | $ (130,862)   
|                                                                                |  |            |  |                 |  |            |  |               
|Total assets, excluding goodwill                                                |  | 426,834    |  | -               |  | -          |  | 426,834       
|Goodwill                                                                        |  | 311,291    |  | -               |  | -          |  | 311,291       
|Capital expenditure                                                             |  | 959        |  | -               |  | -          |  | 959           

F20       NOTE 12 SEGMENT INFORMATION (/Contd)


|                                                                                |  |              |  |                 |  |           |  |               
|------------------------------------------------------------------------------- |  | ------------ |  | --------------- |  | --------- |  | --------------
|Predecessor:                                                                    |  | Franchise    |  | Subfranchise    |  | Corporate |  | Total         
|                                                                                |  |              |  |                 |  |           |  |               
|Revenue                                                                         |  | $    289,426 |  | $        22,266 |  | -         |  | $      311,692
|                                                                                |  |              |  |                 |  |           |  |               
|Depreciation and amortization                                                   |  | (20,784)     |  | -               |  | -         |  | (20,784)      
|                                                                                |  |              |  |                 |  |           |  |               
|Cost of revenues and operating expenses excluding depreciation and amortization |  | (269,696)    |  | (11,593)        |  | (9,518)   |  | (290,807)     
|                                                                                |  |              |  |                 |  |           |  |               
|Operating (loss)/income                                                         |  | (1,054)      |  | 10,673          |  | (9,518)   |  | 101           
|                                                                                |  |              |  |                 |  |           |  |               
|Other income                                                                    |  | 4,069        |  | -               |  | -         |  | 4,069         
|                                                                                |  |              |  |                 |  |           |  |               
|Other expenses                                                                  |  | (1,064)      |  | -               |  | -         |  | (1,064)       
|                                                                                |  |              |  |                 |  |           |  |               
|Total other income (net)                                                        |  | 3,005        |  | -               |  | -         |  | 3,005         
|                                                                                |  |              |  |                 |  |           |  |               
|Income tax expenses                                                             |  | (2,549)      |  | (1,761)         |  | -         |  | (4,310)       
|                                                                                |  |              |  |                 |  |           |  |               
|Net income/(loss) after tax                                                     |  | $   (598)    |  | $         8,912 |  | $ (9,518) |  | $ (1,204)     
|                                                                                |  |              |  |                 |  |           |  |               
|Total assets, excluding goodwill                                                |  | 198,964      |  | -               |  | -         |  | 198,964       
|Goodwill                                                                        |  | 118,758      |  | -               |  | -         |  | 118,758       
|Capital expenditure                                                             |  | 4,879        |  | -               |  | -         |  | 4,879         

B) Business segment reporting  by geography  As its secondary segments, the Company reports two geographical areas, which are the main market areas: Hong Kong and Beijing.  There is no any single foreign country market accounting for more than 10% of total revenues for the year ended March 31, 2012.  Geographical information (Predecessor)Year endedFrom April 1, 2010March 31, 2012to February 9, 2011Hong Kong$       387,978$           299,812Beijing6,21011,880Total$       394,188$           311,692   F21       NOTE 13 INCOME TAX  The Company and its subsidiaries are subject to income tax on an entity basis on income arising in or derived from the tax jurisdictions in which they operate.  The Company and HLL have not provided for income tax due to continuing loss.  Substantially all of the Companys income before income tax expenses is generated by its operating subsidiary, Legend Sun, in Hong Kong.  A reconciliation of the expected income tax expense (based on HK income tax rate) to the actual income tax expense is as follows:


|                                                              |                            |  |                                                    |  |                                                   
|------------------------------------------------------------- | -------------------------- |  | -------------------------------------------------- |  | --------------------------------------------------
|                                                              | Year ended,
March 31, 2012 |  | Successor
From February 10, 2011 to  March 31,2011 |  | Predecessor From April 1, 2010 to February 9, 2011
|(Loss) / Income before tax                                    | $      (114,985)           |  | $   (30,197)                                       |  | $             3,106                               
|HK income tax rate                                            | 16.5%                      |  | 16.5%                                              |  | 16.5%                                             
|Expected income tax expenses calculated at
HK income tax rate | (18,972)                   |  | (4,983)                                            |  | 512                                               
|Tax effect of non-deductible expenses                         | 22,610                     |  | 13,636                                             |  | -                                                 
|Temporary difference                                          | 10,139                     |  | (7,927)                                            |  | 3,798                                             
|Actual income tax (expenses)/benefit                          | $         (6,501)          |  | $             726                                  |  | $            4,310                                

The Company's income tax provision in respect of operations in Hong Kong is calculated at the applicable tax rates on the estimated assessable profits for the year based on existing legislation, interpretations and practices in respect thereof. The standard tax rate applicable to the Company was 16.5%. The temporary difference of $10,139 for the year ended March 31, 2012 represents income tax provision and $7,927 for the period from February 10, 2011 to March 31, 2011 represents the difference between depreciation expenses and depreciation tax allowance for the plant and machinery.  No deferred tax liability has been provided as the amount involved is immaterial.  NOTE 14 OPERATING LEASE COMMITMENTS  The Company entered into rent agreements on June 1, 2009 and March 1, 2010 to lease premises for operation of two restaurants located at ground floor of Nam Hing Fong, Causeway Bay and shop no. 208 and 209 of Tai Yau Plaza, Wanchai respectively.  The lease of premises at Nam Hing Fong was for a term of 5 years at a monthly rental rate of $6,667 for the first three years and $8,333 for the last two years.  The lease of premises at Tai Yau Plaza was for a term of 6 years at a monthly rental rate of $7,451 and monthly service charges of $1,304 for the first three years and at the prevailing current market rate for the last three years.  F22       NOTE 14 OPERATING LEASE COMMITMENTS (/Contd)  As of March 31, 2012, the total future minimum lease payments under non-cancellable operating lease in respect of leased premises are payable as follows:-  Year ended March 31,2013$    209,8882014111,960201518,660Total$    340,508  NOTE 15 RELATED PARTY TRANSACTIONS


|                                                                   |  |                |  |                
|------------------------------------------------------------------ |  | -------------- |  | ---------------
|Balance with related party                                         |  | March 31, 2012 |  | March 31, 2011 
|                                                                   |  |                |  |                
|Payable to shareholders:                                           |  |                |  |                
|(a) Cheung Ming, stockholder                                       |  | $   525,455    |  | $ 131,688      
|                                                                   |  |                |  |                
|(b) Gu Yao, stockholder                                            |  | $     12,841   |  | $             -
|                                                                   |  |                |  |                
|(c)Vivian Choi, stockholder                                        |  | $     88,998   |  | $             -
|                                                                   |  |                |  |                
|Due from related party:                                            |  |                |  |                
|(d) Beijing Kenon Bristro Catering Limited ("BJ Kenon")            |  |                |  |                
|Common stockholder, Gu Yao                                         |  | $     19,194   |  | $   12,984     
|                                                                   |  |                |  |                
|(e) Sizegenic Holdings Limited group companies ("Sizegenic group") |  |                |  |                
|Common stockholder, Cheung Ming                                    |  | $   293,390    |  | $             -
|                                                                   |  |                |  |                
|Due to related party:                                              |  |                |  |                
|(g) Frascona, Joiner, Goodman and Greenstein, P.C (FJGG)         |  |                |  |                
|Common stockholder, Gary Joiner                                    |  | $     18,239   |  | $             -

The Company had amount payable to shareholders:  (a) The payables to Cheung Ming mainly represent payment by Cheung Ming on behalf of the Company for primarily the legal and professional expenses.  This advance is unsecured, non-interest bearing and without fixed repayment term.  (b) The payables to Gu Yao mainly represent cash advance by Gu Yao for operation need of Sino Wish.  This advance is unsecured, non-interest bearing and without fixed repayment term.  (c)The payables to Vivian Choi mainly represent cash advance by Vivian for operation need of Sino Wish. This advance is unsecured, non-interest bearing and an amount of $88,998 is repayable by four installments due as of the last day of each calendar quarter following the Closing Date of the stock purchase agreement on March 29, 2012 to acquire 100% share of Sino Wish from Vivian, the sole shareholder with the first such installment due on or before June 30, 2012, and with the entire unpaid balance due on or before March 31, 2013.  HLL or its designees may also prepay the shareholder loan in whole or in part at any time during the fiscal year from April 1 2012 to March 31, 2013.   F23       NOTE 15 RELATED PARTY TRANSACTIONS (/Contd)  The Company had amount receivable from and payable to related parties.  (d) The amount receivable from BJ Kenon mainly represents the franchise annual fee and termination fee income pursuant to the franchise agreement for a term of 3 years entered on April 1, 2010 and terminated on May 31, 2011.  (e) The amount receivable from Sizegenic group represents cash advance to Sizegenic Holdings Limited and its group companies for operation need.  These advances are unsecured, non-interest bearing and without fixed repayment term.  (f) The amount payable to FJGG mainly represents the legal and professional fee for provision of legal advice, review and comment, and filing of statutory reports.   NOTE 16 CERTAIN RISK AND CONCENTRATION  Credit risk  As of March 31, 2012 and 2011, substantially all of the Companys cash included bank deposits in accounts maintained within Hong Kong, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.  There were no significant customers or vendors which accounts for 10% or more of the Companys revenues or purchases during the periods presented.   NOTE 17 SUBSEQUENT EVENT  We evaluated subsequent events through the issuance date of our financial statements.     After acquisition of Sino Wish by HLL, HLL and Sino Wish agreed to terminate the franchise agreement signed on April 1, 2010 with effect from April 1, 2012.  In this connection, HLL based on a supplementary agreement entered with Sizegenic in March 2010 to grant the right to Sino wish to operate the caffé Kenon restaurant at Tai Yau Plaza, Hong Kong at annual fee of $5,136 for the third year of the term. NOTE 17 SUBSEQUENT EVENT (/Contd)  In conjunction with the termination of subfranchise agreement:  (a) no subfranchise fee income of HK$80,000 (approx. $10,272) from Sino Wish for  the remaining third year term of the agreement to be recognized in April of 2012. (b) franchise fee expenses of HK$40,000 (approx. $5,136) for Sino Wish for the remaining third year term of the agreement to be recognized in April of 2012.      F24


|                                                                     |                                                                                                                          |        
|-------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | -------
|HIPPO LACE LIMITED                                                  
|                                                                    
|FOR THE PERIOD FROM                                                 
|APRIL 1, 2010 TO FEBRUARY 9, 2011                                   
|                                                                    
|INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                          
|                                                                     |                                                                                                                         
|                                                                     | Page                                                                                                                    
|                                                                     |                                                                                                                         
|Report of Independent Registered Public Accounting Firm              | FF1                                                                                                                     
|Consolidated Balance Sheets as of February 9,2011 and March 31, 2010 | FF2                                                                                                                     
|                                                                     |                                                                                                                          |        
|                                                                     |                                                                                                                         
|                                                                     |                                                                                                                         
|Consolidated Statements of Income and                                |                                                                                                                         
|                                                                     | Comprehensive Income for the Period from February 24, 2010 to  March 31, 2010 and from April 1, 2010 to February 9, 2011 | FF3    
|                                                                     |                                                                                                                          |        
|                                                                     |                                                                                                                         
|                                                                     |                                                                                                                         
|Consolidated Statement of Stockholders Equity                       |                                                                                                                         
|                                                                     | for the Period from February 24, 2010 to  March 31, 2010 and from April 1, 2010 to February 9, 2011                      | FF4    
|                                                                     |                                                                                                                         
|                                                                     |                                                                                                                         
|                                                                     |                                                                                                                         
|Consolidated Statements of Cash Flows                                |                                                                                                                         
|                                                                     | for the Period from February 24, 2010 to  March 31, 2010 and from April 1, 2010 to February 9, 2011                      | FF5-FF6
|                                                                     |                                                                                                                         
|                                                                     |                                                                                                                         
|                                                                     |                                                                                                                         
|Notes to the Consolidated Financial Statements                       | FF7F21                                                                                                                 

F25       UHY VOCATION HK CPA LIMITED Chartered Accountants Certified Public Accountants 3/F, Malaysia Building, 50 Gloucester Road, Wanchai, HONG KONG, Tel (852) 2332 0661(23 lines) Fax (852) 2332 0304, 2388 2086 E-mail :cpa@uhy-hk.com Website www.uhy-hk.com  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF HIPPO LACE LIMITED  We have audited the accompanying consolidated balance sheets of Hippo Lace Limited and subsidiary (the Company) as of February 9, 2011 and March 31, 2010, and the related consolidated statements of operations, changes in stockholders equity, and cash flows for the periods from April 1, 2010 to February 9, 2011 and from February 24, 2010 to March 31, 2010. 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 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide 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 Hippo Lace Limited and subsidiary as of February 9, 2011 and March 31, 2010, and the consolidated results of its operations and its cash flows for the periods from April 1, 2010 to February 9, 2011 and from February 24, 2010 to March 31, 2010, in conformity with accounting principles generally accepted in the United States of America.  /s/ UHY Vocation HK CPA Limited UHY VOCATION HK CPA LIMITED Certified Public Accountants  Hong Kong, the Peoples Republic of China,    20 APR 2012  A member of Urbach Hacker Young International Limited, an international network of independent accounting and consulting firms The UHY network is a member of the Forum of Firms   FF1


HIPPO LACE LIMITEDCONSOLIDATED BALANCE SHEETSFebruary 9, 2011March 31, 2010ASSETSCURRENTS ASSETSCash$     14,088$     15,322Due from related party12,98530,817Accounts receivable10,273-Other receivable5,8515,734Prepaid expenses5,668-Inventories-2,604Total current assets48,86554,477Property and equipment, net108,883124,789Security deposits41,21641,077Goodwill118,758118,758TOTAL ASSETS$   317,722$   339,101LIABILITIES AND STOCKHOLDER'S EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses$      22,059$     32,673Income tax payable6,7322,421Due to related party6,9808,812Stockholder's loan184,226-TOTAL CURRENT LIABILITIES219,99743,906Stockholder's loan-196,266TOTAL LIABILITIES219,997240,172STOCKHOLDER'S EQUITYCommon stock, 50,000 shares authorized without a par value;1 share issued and outstanding11Additional paid-in capital86,19886,198Retained earnings11,52612,730TOTAL STOCKHOLDER'S EQUITY97,72598,929TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY$     317,722$    339,101See accompanying notes to consolidated financial statements.  FF2        HIPPO LACE LIMITEDCONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOMEFor the period from April 1, 2010 to
February 9,For the period from February 24, 2010 to March 31,20112010REVENUEFood and beverage income$     289,426$       23,695Franchise and management fee income22,266-311,69223,695Cost of goods sold (exclusive of depreciation)(95,732)(9,008)Gross profit215,96014,687Operating expenses(215,859)(48,115)OPERATING INCOME/(LOSS) BEFORE INCOME TAXES101(33,428)OTHER INCOME/(EXPENSES)Other income4,06951,997Other expenses(1,064)TOTAL OTHER INCOME, NET3,00551,997INCOME BEFORE INCOME TAXES3,10618,569INCOME TAXES EXPENSES(4,310)(2,421)NET (LOSS)/INCOME$    (1,204)$      16,148Earnings per common shareBasic and fully diluted$    (1,204)$      16,148WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING11See accompanying notes to consolidated financial statements.  FF3





|                                                 |                                                                     |            |               |               |               | 
|------------------------------------------------ | ------------------------------------------------------------------- | ---------- | ------------- | ------------- | ------------- | 
|                                                 | HIPPO LACE LIMITED                                                 
|                                                 | CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY                     
|                                                 | FOR THE PERIOD FROM DECEMBER 11, 2009 (INCEPTION) TO MARCH 31, 2010
|                                                 | AND FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011,         
|                                                 |                                                                    
|                                                 |                                                                     |            |               |               |              
|                                                 |                                                                     |            |               |               |              
|                                                 | Common Stock                                                        | Additional |               | Total        
|                                                 | paid-in                                                             | Retained   | stockholder's
|                                                 | Number                                                              | Amount     | capital       | earnings      | equity       
|                                                 |                                                                     |            |               |               |              
|Balance at December 11, 2009 (date of inception) |                                                                     |            |               |               |              
|-                                                | $        -                                                          | -          | $           - | $           -
|Common stock issued for cash                     | 1                                                                   | 1          |               | -             | 1            
|Acquisition of Legend Sun                        | -                                                                   | -          | 86,198        | -             | 86,198       
|Net income for the period                        | -                                                                   | -          | -             | 12,730        | 12,730       
|Balance as of March 31, 2010                     | 1                                                                   | $        1 | $    86,198   | $      12,730 | $    98,929  
|Net loss for the period                          | -                                                                   | -          | -             | (1,204)       | (1,204)      
|Balance as of February 9, 2011                   | 1                                                                   | $        1 | $     86,198  | $      11,526 | $      97,725
|                                                 | See accompanying notes to consolidated financial statements.       




FF4


|                                                                                                   |           |         |                                                  |                                                   
|-------------------------------------------------------------------------------------------------- | --------- | ------- | ------------------------------------------------ | --------------------------------------------------
|HIPPO LACE LIMITED                                                                                
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                             
|                                                                                                   |           |         | For the period from April 1, 2010 to February 9, | For the period from February 24, 2010 to March 31,
|                                                                                                   |           |         | 2011                                             | 2010                                              
|                                                                                                   |           |         |                                                  |                                                   
|CASH FLOWS FROM OPERATING ACTIVITIES                                                               |           |         |                                                 
|Net (loss)/income                                                                                  |           |         | $        (1,204)                                 | $      16,148                                     
|Adjustments to reconcile net (loss) income to
net cash provided by (used in) operating activities: |           |         |                                                  |                                                   
|Depreciation                                                                                       |           |         | 20,785                                           | 45                                                
|Changes in operating assets and liabilities:                                                       |           |         |                                                  |                                                   
|Due from related party                                                                             |           |         | 17,832                                           | (20,545)                                          
|Account receivable                                                                                 |           |         | (10,273)                                         | -                                                 
|Other receivable                                                                                   |           |         | (117)                                            | (5,417)                                           
|Inventories                                                                                        |           |         | 2,604                                            | 2,597                                             
|Prepaid expenses                                                                                   |           |         | (5,668)                                          | 9,218                                             
|Security deposits                                                                                  |           |         | (139)                                            | -                                                 
|Accounts payable and accrual expenses                                                              |           |         | (10,614)                                         | 15,405                                            
|Income tax payable                                                                                 |           |         | 4,311                                            | 2,421                                             
|Due to related party                                                                               |           |         | (1,832)                                          | (22,005)                                          
|Shareholders loan                                                                                 |           |         | 184,226                                          | -                                                 
|NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES                                                |           | 199,911 | (2,133)                                         
|CASH FLOWS FROM INVESTING ACTIVITIES                                                               |           |         |                                                 
|Cash paid for acquisition of subsidiary, net of cash acquired                                      |           | -       | (177,565)                                       
|Purchase of property and equipment                                                                 |           |         | (4,879)                                          | ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­   -              
|NET CASH USED IN INVESTING ACTIVITIES                                                              |           | (4,879) | (177,565)                                       
|                                                                                                   |           |         |                                                  |                                                   
|CASH FLOWS FROM FINANCING ACTIVITIES                                                               |           |         |                                                 
|(Repayment of)/Proceed from stockholder's loan                                                     |           |         | (196,266)                                        | 195,020                                           
|NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES                                                | (196,266) | 195,020
|                                                                                                   |           |         |                                                  |                                                   
|NET (DECREASE)/INCREASE IN CASH                                                                    |           |         | _     _(1,234)                                   | 15,322                                            
|CASH                                                                                               |           |         |                                                  |                                                   
|Beginning of period                                                                                |           |         | 15,322                                           | -                                                 
|                                                                                                   |           |         |                                                  |                                                   
|End of period                                                                                      |           |         | $      14,088                                    | $      15,322                                     

FF5


|                                                               |                                         |          |                   |                    |  |  |                |  |                |  | 
|-------------------------------------------------------------- | --------------------------------------- | -------- | ----------------- | ------------------ |  |  | -------------- |  | -------------- |  | 
|                                                               |                                         |          |                   |                   
|Supplemental disclosures of cash flow information:             |                                         |          |                  
|Cash paid for interest                                         |                                         |          | $               - | $                -
|Cash paid for income taxes                                     |                                         |          | $               - | $                -
|                                                               |                                         |          |                   |                   
|Cash paid for acquisition of subsidiary, net of cash acquired: |                                         |          |                  
|                                                               |                                         |          |                   |                    |  |  |                |  |               
|Consideration paid:                                            |                                         |          |                   |                    |  |  |               
|Cash paid, net of cash acquired                                |                                         |          |                   |                    |  |  | $     177,565 
|                                                               |                                         |          |                   |                    |  |  |               
|Allocated to:                                                  |                                         |          |                   |                    |  |  |               
|                                                               | Inventory                               |          |                   |                    |  |  | $        5,201
|                                                               | Due from related party                  |          |                   |                    |  |  | 10,272        
|                                                               | Other receivable and prepaid expenses   |          |                   |                    |  |  | 9,651         
|                                                               | Security deposit                        |          |                   |                    |  |  | 40,960        
|                                                               | Property and equipment                  |          |                   |                    |  |  | 124,834       
|                                                               | Accounts payable                        |          |                   |                    |  |  | (7,561)       
|                                                               | Accrued expenses                        |          |                   |                    |  |  | (7,535)       
|                                                               | Due to related party                    |          |                   |                    |  |  | (30,817)      
|                                                               | Stockholders loan payable to Sizegenic |          |                   |                    |  |  | (86,198)      
|                                                               |                                         |          |                   |                    |  |  | $     58,807  
|Value of excess of purchase price over net assets              |                                         |          |                   |                   
|                                                               | Acquired allocated to:                  |          |                   |                    |  |  |               
|                                                               |                                         | Goodwill |                   |                    |  |  |                |  | $      118,758

See accompanying notes to consolidated financial statements.  FF6


HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 1 ORGANIZATION  Hippo Lace Limited (the Company) was incorporated on December 11, 2009 in the British Virgin Islands (BVI) with a maximum authorized share capital of 50,000 ordinary shares. On January 12, 2010, a share was issued for $1 to Mr. Gu Yao, who is the sole shareholder of the Company. The Company principally acts as an investing holding company.  In February 2010, the Company entered into and consummated an agreement with Sizegenic Holdings Limited, a BVI corporation, to acquire 100% interests of its wholly owned subsidiary, Legend Sun Limited (Legend Sun). The consideration of $182,982, pursuant to the supplementary agreement, , was paid in full on February 17, 2010 (i) to acquire all of the issued and outstanding shares of Legend Sun owned by Sizegenic, and (ii) to pay off the outstanding shareholder loan owed to Sizegenic by Legend Sun, and the share transfer was completed on February 24, 2010. Legend Sun is a limited liability company incorporated and domiciled in Hong Kong and its principal activity is to provide catering services in Hong Kong.  NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (a) Basis of Presentation  The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The Companys functional currency is the Hong Kong Dollar, however the accompanying consolidated financial statements have been translated and presented in United States Dollars.  (b) Principles of Consolidation  The balance sheet as of February, 9, 2011 includes the Company and its wholly-owned subsidiary, Legend Sun. Additionally, the results of operations and cash flows includes the operations for the period from April 1, 2010 to February 9, 2011 of Legend Sun.  All intercompany accounts and transactions have been eliminated  (c) Use of estimates  The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Companys significant estimates include the reserves related to receivables, the recoverability and useful lives of long lived assets and realizable values for inventories.   FF7       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (d) Property and equipment  Property and equipment are stated at cost less accumulated depreciation and impairment losses. Improvements to leased assets or fixtures are amortized over their estimated useful lives or lease period,whichever is shorter.Expenditures for repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred.  Depreciation expense is recorded over the assets estimated useful lives or lease period, using the straight line method, at the following annual rates:-  Furniture and equipment: 10% - 20%, per annum Computer equipment: 10%, per annum Leasehold improvement: over the lease term  (e) Inventories  Inventories consist of finished goods which include food and beverage materials and products for catering service.  Inventories are measured at the lower of cost or market. The cost of inventories comprises all costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location and condition and is assigned by using a first-in first-out basis.  Market value is determined by reference to selling prices after the balance sheet date or to managements estimates based on prevailing market conditions. The management also regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine if a valuation allowance is required.  (f) Accounts receivables  Accounts receivable are shown net of allowance for doubtful accounts. During the period, there were no bad debts incurred and no allowance for doubtful accounts recorded at February 9, 2011. The Companys management has established an allowance for doubtful accounts sufficient to cover probable and reasonably estimable losses. The allowance for doubtful accounts considers a number of factors, including collection experience, current economic trends, estimates of forecasted write-offs, aging of the accounts receivable portfolios, industry norms, regulatory decisions and other factors. Management reviews the composition of accounts receivable and analyzes any historical bad debts, customer concentrations, and customer credit worthiness.  Managements policy is to record reserve primarily on a specific identification basis.  Accounts are written off after use of a collection agency is deemed to be no longer useful.  The accounts receivable balance at February 9, 2011 represents the first year subfranchise annual fee from Sino Wish, the subfranchisee located in Hong Kong commenced in April 2010.  (g) Other receivable  Other receivables mainly represent the coffee machine purchased on behalf of Sino Wish.  FF8       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (h) Cash  Cash consist of cash on hand and at banks. Substantially all of the Company's cash deposits are held with financial institutions located in Hong Kong. Management believes these financial institutions are of high credit quality.  (i) Goodwill  Goodwill represents the excess of the purchase price over the fair value of the identifiable tangible and intangible assets acquired and the fair value of liabilities assumed in an acquisition.  Accounting Standards Codification (ASC)-350-30-50 Goodwill and Other Intangible Assets requires the testing of goodwill and indefinite-lived intangible assets for impairment at least annually.  The Company tests goodwill for impairment in the fourth quarter each year.  Goodwill impairment is computed using the expected present value of associated future cash flows.  There was no impairment of goodwill as of February 9, 2011 and March 31, 2010.  (j) Impairment of long-lived assets  Long-lived assets are comprised of property and equipment. Pursuant to the provisions of ASC360-10, Property, plant and equipment, long-lived assets to be held and used are reviewed for possible impairment whenever events indicate that the carrying amount of such assets may not be recoverable by comparing the undiscounted cash flows associated with the assets to their carrying amounts. If such a review indicates an impairment, the carrying amount would be reduced to fair value.  Based on the Companys assessment, there were no events or changes in circumstances that would indicate any impairment of long-lived assets as of February 9, 2011 and March 31, 2010.  (k) Accounts payable and accrued expenses consist of the following:  As ofAs ofFebruary 9, 2011March 31, 2010Accounts payable14,049$         6,049Accrued expensesLegal and professional fees5,26416,000Payroll and other operating expenses2,74610,62422,059$        32,673   FF9       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (l) Fair value measurements  ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:  Level 1  Quoted prices in active markets for identical assets or liabilities. Level 2  Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (m) Fair value measurements (/Contd)  Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.  The carrying values of cash, accounts and other receivables, accounts payable and accrued expenses, short-term borrowings from and lending to related party, and stockholders loan approximate fair values due to their short maturities.  There was no asset or liability measured at fair value on a non-recurring basis as of February 9, 2011 and March 31, 2010.  (m) Income Taxes  Income taxes are provided for using the liability method of accounting in accordance with ASC 740 Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.   FF10       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date.  The Company adopted ASC 740 which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.  (n) Other comprehensive income  The Company has adopted ASC 220 Comprehensive Income.  This statement establishes rules for the reporting of comprehensive income and its components.  Comprehensive income consists of net income and foreign currency translation adjustments.  (o) Revenue recognition  Revenue represents the invoiced value of goods sold or services provided.  Revenue is recognized when all the following criteria are met: (i) Persuasive evidence of an arrangement exists. (ii) Services had been rendered. (iii) The sellers price to the buyer is fixed or determinable, and (iv) Collectivity is reasonably assured.  Revenue from sales is recognized when food and beverage products are sold.  Franchise fee income on the annual fee for sublicensing of the brand name and trademark Caffe Kenon and the 10% management fee on eligible monthly net income of subfranchisee are recognized after granting the non-exclusive rights and all contractual obligation are performed and report of net income from subfranchisee respectively.  The franchise fee income of $22,266 recognized for the period from April 1, 2010 to February 9, 2011 represents;  1st annual subfranchise fee (HK$80,000) from Sino Wish Limited$      10,2721st annual subfranchise fee (RMB80,000) from Beijing Kenon Catering Ltd.11,88010% subfranchise management fee from Sino Wish Limited114$      22,266   FF11       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  (p) Employee benefits  The Company operates a Mandatory Provident Fund Scheme (the "MPF Scheme") under the Hong Kong Mandatory Provident Fund Schemes Ordinance for those employees employed under the jurisdiction of the Hong Kong Employment Ordinance. The MPF Scheme is a defined contribution scheme, the assets of which are held in separate trustee-administered funds. The Company's contributions to the scheme are expensed as incurred and are vested in accordance with the scheme' vesting scales.  (q) Segment information  The Company uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Companys chief operating decision maker for making operating decisions and assessing performance as the source for determining the Companys operating segments. Management, including the chief operating decision maker, reviews operating results solely by monthly revenue and operating results of Legend Sun, the operating subsidiary in Hong Kong. As such, management has determined that Companys franchise operations in Hong Kong and Beijing are two operating segments and geographic information has been presented.  (r) Commitments and contingencies  In the normal course of business, the Company is subject to contingencies, including legal proceedings and environmental claims arising out of the normal course of businesses that relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history, scientific evidence and the specifics of each matter.  As of February 9, 2011 and March 31, 2010, the Company's management has evaluated all such proceedings and claims. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's financial position, liquidity or results of operations.  (s) Recent Accounting Pronouncements  We describe below recent pronouncements that have had or may have a significant effect on our financial statements. We do not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our financial condition, results of operations, or disclosures.  In January 2010, the FASB issued new accounting guidance, under ASC Topic 820 on Fair Value Measurements and Disclosures. The guidance requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement. The guidance now requires a reporting entity to use judgment in determining the appropriate classes of assets and liabilities and to provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. The guidance is effective for interim and annual reporting periods beginning after December 15, 2009. As this standard relates specifically to disclosures, the adoption did not have a material impact on the Companys consolidated financial statements.  FF12        HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (/Contd)  In February 2010, the FASB issued new accounting guidance, under ASC Topic 855 on Subsequent Events, which requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirements that an SEC filer disclose the date through which subsequent events have been evaluated.  The guidance was effective upon issuance. The adoption of the guidance did not have a material impact on the Companys consolidated financial statements.  NOTE 3 BUSINESS ACQUISITION  In February 2010, the Company entered into a sale and purchase agreement with Sizegenic Holdings Limited, a BVI corporation, to acquire its wholly owned subsidiary, (Legend Sun). Pursuant to the sale and purchase agreement, the Company agreed to pay total consideration of $182,982 (approximate HK$1,425,024) in exchange for 100% ownership of Legend Sun. Legend Sun is a Hong Kong company and it principally engages in provision of catering services in Hong Kong.  Pursuant to a Supplementary Agreement to the sale and purchase agreement, the consideration of 182,982 was (i) to acquire all of the issued and outstanding shares of Legend Sun owned by Sizegenic, and (ii) to pay off the outstanding shareholder loan owed to Sizegenic by Legend Sun.  Cheung Ming is the sole shareholder of Sizegenic.    There was no relationship between Gu Yao and Sizegenic or Cheung Ming prior to the sale of Legend Sun. The fair values of the assets acquired and liabilities assumed at the date of acquisition as determined in accordance with ASC 805, and the purchase price allocation at the date of acquisition, were as follows:  Consideration paid:Cash paid$     182,982Cash acquired(5,417)Cash paid, net of cash acquired177,565Allocated to:Inventory$         5,201Due from related party10,272Other receivable and prepaid expenses9,651Security deposit40,960Property and equipment124,834Accounts payable(7,561)Accrued expenses(7,535)Due to related party(30,817)Stockholders loan payable to Sizegenic(86,198)Net tangible assets$      58,807Value of excess of purchase price over net assetsAcquired allocated to:Goodwill$     118,758  FF13          HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 4 INVENTORIES  Inventories are stated at lower of cost or market.  Inventories represent finished goods include food and beverage materials and products for catering services.   NOTE 5 PROPERTY AND EQUIPMENT  Property and equipment of the Company consist primarily of restaurant facilities and equipment owned and operated by the Company's wholly owned subsidiaries. Property and equipment as of February 9, 2011 and March 31, 2010 are summarized as follows:  February 9, 2011March 31, 2010Furniture & equipment$    51,835$    46,956Leasehold improvement86,00186,001Computer equipment7,0667,066Total144,902140,023Accumulated depreciation and amortization(36,019)(15,234)Balance as at period ended$  108,883$   124,789  Depreciation and amortization expense for the period from April 1, 2010 to February 9, 2011 and for the period from February 24, 2010 to March 31, 2010 were $20,785 and $45 respectively.   NOTE 6 SECURITY DEPOSITS  Security deposits mainly consist of five months rental and management fee security deposits, electricity and water meter deposits for company owned restaurant, and was recorded by the time of payment. Security and deposits as of February 9, 2011 are summarized as follows:  Rental and management fee security deposit$       35,888Electricity deposit3,595Water deposit771Food supplies deposit962$       41,216   NOTE 7 COST OF GOOD SOLD  Cost of goods sold consists of finished goods include food and beverage materials and products for catering services sold by company-owned restaurant and the subfranchise annual fee expenses and exclusive of depreciation expenses shown separately under Note 8 Operating Expenses.   FF14        HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 8 OPERATING EXPENSES  Operating expenses consist of the following for the period from April 1, 2010 to February 9, 2011 and for the period from February 24, 2010 to March 31, 2010:   Period from
April 1, 2010 to February 9, 2011Period from February 24, 2010 to
March 31, 2010Staff costs$  65,787$   11,059Property rent, rate and management fee74,3639,409Electricity and utilities17,4811,879Depreciation20,78445Professional and audit fee9,60416,153Others27,8399,570Total$ 215,859$   48,115   NOTE 9 FRANCHISE ARRANGEMENTS  Franchise arrangements are pursuant to franchise agreements entered by the Company as the franchisee and Sizegenic Holdings Limited (Sizegenic) as the franchisor.  The Agreements require payment of franchise fees on anniversary basis and continuing monthly management fee base upon a percent of franchisees net income after tax to Sizegenic throughout the term of franchise.  Under this arrangement, two franchise agreements were entered in February and March 2010 respectively in which the Company is granted the right to operate a café bistro using the brand name Caffe Kenon for a term of 3 years and sublicense right to two subfranchisees in Hong Kong and Beijing respectively to use brand name caffe Kenon to operate a café bistro for a term of 3 years commencing from April 1, 2010.  Franchise fee expenses on the use of the license of the brand name and trademark Caffe Kenon is recorded upon the granting of the non-exclusive rights by Sizegenic as the fee is non-refundable to and non-cancellable by the Company.  Franchise fee income on the sublicensing of the brand name and trademark Caffe Kenon is recognized upon the granting of the non-exclusive rights  to the franchisee as the fee is non-refundable to and non-cancellable by the franchisee and the Company has no further obligations since they are all assumed  by franchisee throughout the term.  The franchisee and the subfranchisees pay related occupancy costs including rent, property management fee and government rent and rates, insurance and maintenance for their owned restaurant.  Franchisor has no obligation to any legal consequences arose from what the franchisee and subfranchisees assumed.  FF15       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 9 FRANCHISE ARRANGEMENTS (/Contd)  The franchisee and subfranchisees have the right to renew for one additional term equal to the initial term granted under Franchisors franchise agreement after expiration  of the initial term provided that franchisee and subfranchisees have, during the term of the agreement, substantially complied with all its provisions.  Franchisee and subfranchisees must pay franchisor, three months prior to the date of renewal, a renewal fee to be agreed between franchisor and the franchisee/subfranchisees.  Franchise and management fee expenses due to Sizegenic are as follows: As of
February 9, 2011As of
March 31, 2010Annual fee expenses for Company and subfranchisee-owned restaurant$     -$  5,136Management fee expense--$       -$  5,136  Future minimum franchise fee payments due from the Company under existing franchise and subfranchise arrangements are:  Year Ended March 31, 2011$    20,544201220,54420135,136Total$    46,224  Future minimum franchise fee payments due to the Company under existing subfranchise arrangements are:  Year Ended March 31, 2011$    22,152201216,472201310,272Total$    48,896  Franchise fees owed to Sizegenic consist of franchise and subfranchise annual fee and monthly franchise management fee applicable to profit after tax of Company-owned restaurant.  The subfranchise annual fee expense in total of $10,272 for Hong Kong and Beijing owed to Sizegenic partially offset the annual fee income in total of $22,152 owed by subfranchisee in HK and Beijing.  The first year franchise annual fee owed to Sizegenic for the Company-owned restaurant at $5,136 as of Mar 31, 2010 was after a special 50% discount and full amount of $10,272 is due per annum beginning in the second year and throughout the term of the agreement.    FF16       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 10 SEGMENT INFORMATION  The Company has two reportable segments that include franchised to operate an owned Caffe Kenon in Hong Kong and subfranchise to operate two Caffe Kenon in Hong Kong and Beijing respectively.  Each reportable segment is separately organized and focuses on different customer groups of consumers and subfranchisees.  Each reportable segment prepares a stand-alone set of financial reporting package including information such as revenue, expenses, and goodwill, and the package is regularly reviewed by the Chief Executive Officer.  The following is a summary of relevant information relating to each segment reconciled to amount son the accompanying consolidated financial statements for the period from April 1, 2010 to February 9, 2011.  (A) Business segment reporting  by services FranchiseSubfranchiseTotalRevenue$ 289,426$  22,266$ 311,692Depreciation and amortization(20,785)-(20,785)Cost of revenues and operating expensesexcluding depreciation and amortization(278,972)(11,834)(290,806)Operating income/(loss)(10,331)10,432101Other income4,069-4,069Other expenses(1,064)-(1,064)Total other income, net3,005-3,005Income tax2,5891,7214,310Net income after tax($   9,915)$   8,711($  1,204)Total assets, excluding goodwill176,69822,266198,964Goodwill32,560-32,560Capital expenditure4,879-4,879   FF17       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 10 SEGMENT INFORMATION (/Contd)  (B) Business segment reporting  by geography  As its secondary segments, the Company reports two geographical areas, which are the main market areas: Hong Kong and Beijing.  There is no any single foreign country market accounting for more than 10% of total revenues for the period from April 1, 2010 to February 9, 2011.  Hong KongBeijingTotalGeographic segment revenue$      299,812$     11,880$       311,692   NOTE 11 INCOME TAX  The Company and its subsidiaries are subject to income tax on an entity basis on income arising in or derived from the tax jurisdictions in which they operate.  Substantially all of the Companys income before income tax expenses is generated by its operating subsidiary, Legend Sun, in Hong Kong.  A reconciliation of the expected income tax expense (based on HK income tax rate) to the actual income tax expense is as follows:  Period from
April 1, 2010 to
February 9, 2011Period from
February 24, 2010 to March 31, 2010Income before tax3,106$ 18,569HK income tax rate16.5%16.5%Expected income tax expenses calculated atHK income tax rate5123,064Temporary difference3,798(643)Actual income tax expense$   4,310$      2,421  The Company's income tax provision in respect of operations in Hong Kong is calculated at the applicable tax rates on the estimated assessable profits for the year based on existing legislation, interpretations and practices in respect thereof. The standard tax rate applicable to the Company was 16.5%. The temporary difference of $3,798 mainly represents adjustment of overprovision of income tax due to loss result for February 2011 and posted at February month end account closing.  The tax adjustment attributed to the loss for the period from February 1 to 9, 2011 is $249 and immaterial. No deferred tax liability has been provided as the amount involved is immaterial.    FF18       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 12 OPERATING LEASE COMMITMENTS  The Company entered into a rent agreement on June 1, 2009 to lease premises for operation of our Company-owned restaurant for a term of 5 years at a monthly rental rate of $6,667 for the first three years and $8,333 for the last two years.  A of February 9, 2011, the total future minimum lease payments under non-cancellable operating lease in respect of leased premises are payable as follows:-  Year ended March 31,2011$   10,959201280,004201396,664201499,996201516,666Total$  304,289   NOTE 13 RELATED PARTY TRANSACTIONS  Balance with related party February 9, 2011March 31, 2010(a)Stockholders loan:- Gu Yao, stockholder$  184,226$196,266Due from related party:(b)Beijing Kenon Bistro Catering Limited (BJ Kenon) (Under common control of Gu Yao)$    12,985-(c) Due from related party:- Joystick Limited (Joystick)
(Under common control of Cheung Ming)$              -$    30,817Amount charge to Joystick$              -$     51,362(d) Due to related party:- Sizegenic Holdings Limited (Sizegenic) (Common stockholder, Cheung Ming)$      6,980$       8,812  (a) The stockholders loan mainly represents the loan advance to the Company by Gu Yao for acquisition of the wholly own subsidiary on February 24, 2010, Legend Sun.  This loan agreement was entered by the Company and Gu Yao on December 11, 2009 for a term of 2 years.  This loan is unsecured, non-interest bearing and repayable after one year on December 11, 2011.  FF19       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 13 RELATED PARTY TRANSACTIONS (/Contd)  The Company had amount charged to and by related parties.  (b) The amount charged to BJ Kenon represents the first year annual franchise fee income pursuant to the franchise agreement for a term of 3 years entered on April 1, 2010.  (c) The amount due from Joystick represents the monthly fee at $10,272 for consultancy services to Joystick to operate a Portugal café bristro for January to March 2010.  It has been offset with amount due to Sizegenic as of December 2010 through agreement with Sizegenic.  The amount charged to Joystick represents the consultancy services fee for February to March 2010 and the forfeited consultancy service deposit due to termination of agreement before expiration of the term.  (d)The amount charged by Sizegenic as of March 31, 2010 and February 9, 2011 mainly represents the respective franchise annual fee after 50% discount and subfranchise annual fee for the first year pursuant to the related franchise agreements in place.   NOTE 14 CERTAIN RISK AND CONCENTRATION  Credit risk As of February 9, 2011 and March 31, 2010, substantially all of the Companys cash included bank deposits in accounts maintained within Hong Kong, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.  There were no significant customers or vendors which accounts for 10% or more of the Companys revenues or purchases during the periods presented.   NOTE 15 SUBSEQUENT EVENT  We evaluated subsequent events through the issuance date of our financial statements.  On February 10, 2011, the Company and the sole shareholder Mr. Gu Yao (Gu) entered into Share Exchange Agreement and Supplementary Agreement with Studio II Brands, INC. (Studio II), a Florida corporation whereby Studio II agreed to issue 2,291,100 shares of the common stock to Mr. Gu Yao as consideration (i) to acquire all of the issued and outstanding shares of HLL owned by Gu Yao valued at $34,450, and (ii) to pay off the outstanding shareholder loan owed to Gu Yao by HLL.  Accordingly, after completion of the transaction described above, the outstanding shareholder loan in the amount of $184,226 was owed by HLL to its sole shareholder, Studio II.   FF20       HIPPO LACE LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 1, 2010 TO FEBRUARY 9, 2011  NOTE 15 SUBSEQUENT EVENT (/Contd)  Upon consummation of the transaction, Studio II would become the ultimate holding entity of the Company.  The exchange transaction was a private placement transaction, and the shares issued in the exchange transaction were not registered under the Securities Act of 1933, in reliance upon exemptions from registration provided by Section 4(2) of the Securities Act and by Regulation S promulgated under the Securities Act. Accordingly, all shares issued in the exchange transaction will constitute restricted securities as defined in Rule 144 under the Securities Act of 1933.   HLL and Beijing Kenon Bistro Catering Limited (BJ Kenon), the subfranchisee located in Beijing, agreed to terminate the franchise agreement signed on April 1, 2010 with effect from May 31, 2011 due to restructuring of Beijing subfranchisee who agreed to pay HLL an early termination fee of RMB40,000 (approximately $6,200).  In this conjunction, no subfranchise fee income of RMB80,000 (approx. $11,080) for each of the remaining two year term of the agreement to be recognized in April of 2011 and 2012 respectively.  FF21       ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  None.  ITEM 9A(T). CONTROLS AND PROCEDURES.  Disclosure Controls and Procedures  The Securities and Exchange Commission defines the term disclosure controls and procedures to mean the company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.  As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of our President and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our President and Chief Financial Officer have identified a material weakness in connection with the preparation of our consolidated financial statements as of and for the period ended March 31 2012 and have thus concluded that our disclosure controls and procedures were not effective to provide reasonable assurance of the achievement of these objectives.  A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. The identified material weakness and control deficiency primarily related to absence of a Chief Financial Officer with appropriate professional experience with U.S. GAAP and SEC rules and regulations.  We believe that the material weakness and other control deficiencies we have identified are temporary because our management intends to hire a consultant with experience in U.S. GAAP accounting and SEC rules and regulations, but based on the current size and cashflow of the company, we are not able to do so.  Our management intends to conduct an assessment of the effectiveness of our disclosure control and procedures, andinternal control over financial reporting in the coming months if we acquire another operating business or assets, and re-consider the need for hiring a consultant.  Internal Control Over Financial Reporting  The management of the Company is responsible for the preparation of the financial statements and related financial information appearing in this Annual Report on Form 10-K. The financial statements and notes have been prepared in conformity with accounting principles generally accepted in the United States of America. The management of the Company also is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company's internal control over financial reporting is defined as a process designed to provide reasonable  22       assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.  Management, including the President and Chief Financial Officer, does not expect that the Company's disclosure controls and internal controls will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.  With the participation of the President and Chief Financial Officer, our management evaluated the effectiveness of the Company's internal control over financial reporting as of March 31, 2012 based upon the framework in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, and due to the identified material weakness and internal control deficiency as discussed above, our management has concluded that, as of March 31, 2012, the Company's internal control over financial reporting was not effective.  This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this Annual Report on Form 10-K.  There were changes in the Company's internal control over financial reporting during the last fiscal quarter, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.  The changes were; (i) the restatement of the financial statements in Exhibit 99.1 and 99.2.1 to the Form 8K Amendment no. 2 filed on August 8, 2011 to respond to SEC letter of comment issued on June 17, 2011 regarding principal of consolidation from the date of acquisition of Legend Sun by Hippo Lace on February 24, 2010 and comment 40 regarding the inclusion of financial statements of Legend Sun (predecessor to Hippo Lace) for April 1, 2009 through February 23, 2010 and Hippo Lace (successor) for the period from February 24, 2010 through March 31, 2010 in bifurcated format in the Form 10-K for the year ended March 31, 2011.  The result of such restatement indicates immaterial understated net income and goodwill of $459, respectively; (ii) the restatement of the financial statements in Exhibit 99.1, 99.2.1 to the Form 8K Amendment no. 5 filed on December 13, 2011 and 99.5.1 to the Form 8K Amendment no. 4 filed on December 12, 2011 to respond to SEC letter of comment issued on February 1, 2012 regarding comment to the valuation of goodwill in the purchase price allocation for Legend Sun acquired by Hippo Lace in February, 2010.  The result of such restatement indicates understated additional paid-in capital and goodwill of $86,198 respectively;  23       ITEM 9B. OTHER INFORMATION.  None.   PART III  ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.  As of March 31, 2012, the directors and executive officers serving the Company were as follows:   NameAgePositionCheung Ming52President and ChairmanCheung Sing49Director and Vice ChairmanYam Kee Cheong57DirectorLeung Kin Wah50Chief Financial OfficerChan Tak Hing61Director  The directors named above will serve until the next annual meeting of the Company's stockholders. Thereafter, directors will be elected for one-year terms at the annual stockholders' meeting. Officers will hold their positions at the pleasure of the board of directors, absent any employment agreement, of which none currently exists or is contemplated. There is no arrangement or understanding between any of the directors or officers of the Company and any other person pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management shareholders will exercise their voting rights to continue to elect the current directors to the Company's board. There are also no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of the Company's affairs.  The directors and officers will devote their time to the Company's affairs on an "as needed" basis, which, depending on the circumstances, could amount to as little as two hours per month, or more than forty hours per month, but more than likely will fall within the range of five to ten hours per month. There are no agreements or understandings for any officer or director to resign at the request of another person, and none of the officers or directors are acting on behalf of, or will act at the direction of, any other person.  Biographical Information  Cheung Ming - Mr. Cheung Ming is 52 years old.  Mr. Cheung Ming served as President and as a Director of the Company since April 13, 2012.  From February, 2008 to May 16, 2011, Cheung Ming served as President, Chief Executive Officer and as a Director of the Company, and served as Chairman of the Board of Directors from November, 2010 to May 16, 2011. On May 16, 2011, Cheung Ming resigned from his positions as President, Chief Executive Officer, Director and Chairman of the Board of Directors. In addition to his work with the Company, Mr. Cheung Ming also serves as the Chief Executive Officer of Hengli & Liqi Furniture Limited, a Hong Kong corporation that specializes in furniture production from early 2006 to the present.  As President of the Company, Mr. Cheung Ming was responsible for the overall business development of the Company.  Mr. Cheung Ming was appointed as a director because he has extensive business management experience, including 27 years of experience in the area of retail business in China, Hong Kong and Taiwan.   24       Cheung Sing  Mr. Cheung Sing is 49 years old.  Mr. Cheung Sing has served as a Director of the Company since April, 2008, and as Vice Chairman of the Board of Directors since November, 2010. On May 16, 2011, Cheung Sing was appointed as President, Chief Executive Officer and Chairman of the Board of Directors.  On February 17, 2012, Cheung Sing resigned from the position as Chief Executive Officer of the Company, and Chairman of the Board of Directors.  On April 13, 2012, Cheung Sing resigned from the position as President of the Company.  In addition to his work with the Company, from July, 1999, to the present, Mr. Cheung Sing, has been the Vice President of Hengli & Liqi Furniture Limited which is located in Hong Kong and is in the business of manufacturing indoor furniture.  As Vice President of Hengli & Liqi, Mr. Cheung Sing is responsible for product developments, sales presentation, order executions and customer relations.  From June 2000 to December 2002, Mr. Cheung Sing served as the Director of Operations of China Merchandise Company Limited (CMCL) which is located in Ningbo, China and is in the business of manufacturing outdoor furniture.  As Director of Operations of CMCL, Mr. Cheung Sing was responsible for marketing and sales, order executions and the administration of the office in Ningbo.  Mr. Cheung Sing was appointed as a director because he has extensive management experience in various business areas including manufacturing, product development, sales and marketing in both Hong Kong and China.  Yam Kee Cheong  Mr. Yam is 57 years old and since November, 2010, has served as a Director of the Company. Mr. Yam was admitted as a solicitor of Hong Kong in 1994.  From 1997 to the present he has been engaged in the practice of law in Hong Kong as a founder and partner of the solicitors firm, Messrs Johnnie Yam, Jacky Lee & Co. in 1997. Mr. Yam was also admitted as a solicitor of England and Wales.  Mr. Yam has also obtained LL.B. of University of London, LL.B. of Peking University and LLD of China University of Political Science and Laws.  Mr. Yam was appointed as a director because of his expertise in commercial law matters in Hong Kong and his professional qualifications as a Chinese lawyer.  Leung Kin Wah  Mr. Leung is 50 years old and since November, 2010 has served as Chief Financial Officer of the Company.  From June, 2009 to November, 2010, he served as Head of Finance of Ever Lucid, Ltd., from January, 2008 to May, 2009, he was self studying for ACCA examination, and from November, 1984 through December, 2008, he worked at PCCW Ltd., a Hong Kong listed company, with the last title of assistant accounting manager.  Mr. Leung is a Certified General Accountant of Canada and fellow of the ACCA.  Mr. Leung was appointed as Chief Financial Officer because of his professional accountancy qualifications, experience in working with public companies listed in Hong Kong, and knowledge regarding financial and internal control management.  Chan Tak Hing Mr. Chan is 61 years old and since November, 2010 has served as a Director of the Company.  From September, 2009, to the present, he has served as Executive Chef of Ever Lucid, Ltd., and responsible for the management of kitchen operations.  Mr. Chan was a Chef of a Chinese restaurant from mid-year of 1996 to 1999 and looked after his grandchildren until August, 2009.  Mr. Chan has 30 years experiences of Chinese and Western style cuisine and kitchen management.  Prior to joining the Company, Mr. Chan served various styles of Chinese and Western restaurants included Chinese traditional style and hotpot restaurants, western style bistros and restaurants.  Mr. Chan was appointed as a director because of his extensive experience in food preparation and kitchen management.   25       Family Relationships  Mr. Cheung Ming and Mr. Cheung Sing are brothers.  Subsequent Event  As reported in a Current Report on Form 8-K dated April 13, 2012, and filed with the Securities and Exchange Commission on April 18, 2012, Mr. Cheung Sing resigned from his positions as President of the Company.  On April 13, 2012, the Board of Directors appointed Mr. Cheung Ming as President of the Company.  Involvement in Certain Legal Proceedings  None of our officers, directors, promoters or control persons has been involved in the past five (5) years in any of the following:  (1) Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;  (2) Any conviction in a criminal proceedings or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);  (3) Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or  (4) Being found by a court of competent jurisdiction (in a civil action), the SEC or the U.S. Commodity Futures Trading Commission to have violated a federal or state securities laws or commodities law, and the judgment has not been reversed, suspended, or vacated.  Directorships  None of the Companys executive officers or directors is a director of any company with a class of equity securities registered pursuant to Section 12 of the Securities exchange Act of 1934 (the Exchange Act) or subject to the requirements of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.  Compliance with Section 16(a) of the Exchange Act  Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers and directors, and persons who own more than ten percent of a registered class of the Company's equity securities, to file reports of ownership of Form 3 and changes in ownership on Form 4 or Form 5 with the Securities and Exchange Commission.  Such officers, directors and 10% stockholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file.  Based solely on its review of the copies of such forms received by it, the Company believes that, as of March 31, 2012, all Section 16(a) filing requirements applicable to its officers, directors and 10% stockholders were satisfied.      26       Code of Ethics  The Company has not yet adopted a code of ethics.  The Company intends to adopt a code of ethics in the near future.  Audit Committee Expert  The Company does not have an Audit Committee because the Company does not currently have any material operations.  Because the Company does not have an Audit Committee it does not currently have a financial expert serving on an Audit Committee.   ITEM 11. EXECUTIVE COMPENSATION.  No plan or non-plan compensation has been awarded to, earned by, or paid to any director or executive officer of the Company during the fiscal years ended March 31, 2012 and 2011.  There is no plan or understanding, express or implied, to pay any compensation to any director or executive officer pursuant to any compensatory or benefit plan as a result of the acquisition of HHL through completion of stock exchange, although it anticipates that it eventually will compensate our officers and directors for services with stock or options to purchase stock, in lieu of cash.    ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS.  Security Ownership of Management and Certain Beneficial Owners  The following table sets forth, as of March 31, 2012, the ownership of each executive officer and director of the Registrant, and of all executive officers and directors of the Registrant as a group, and each person known by the Registrant to be a beneficial owner of 5% or more of its common stock. Except as otherwise noted, each person listed below is a sole beneficial owner of the shares and has sole investment and voting power as to such shares.  No person listed below has any options, warrants or other right to acquire additional securities of the Registrant except as may be otherwise noted.    Title and ClassName and Address 
of Beneficial OwnerAmount and Nature 
of Beneficial OwnershipPercent of classCommonCheung Ming (1)
16/F Honest Motors Building, 9-11 Leighton Road, Causeway Bay, Hong Kong5,023,00033.85%CommonCheung Sing (1)
16/F Honest Motors Building, 9-11 Leighton Road, Causeway Bay, Hong Kong350,0002.36%  27        CommonYam Kee Cheong (1)
Flat 706, Blk 2, Heng Fa Chuen, Chai Wan, HongKong70,0000.47%CommonLeung Kin Wah (1)
Flat A, 21/F.,Blk 8, East Point City, Tseung Kwan O,
N.T. Hong Kong35,0000.24%CommonChan Tak Hing (1)
Rm C, Flat L, 8/F., Malahon Apartments, 501-515 Jeffe Road, Wanchai, Hong Kong35,0000.24%CommonGu Yao
Room 3003, Building Six,
Hong Qiao Road,
Shanghai, China2,291,10015.44%CommonFang Huaying
Rm 402, Building 14, 3329 Hongmei Rd, Minhang District, Shanghai, China1,050,0007.08%CommonVivian Choi
Flat B, 17/F., Tower 8, Pacific Palisades Phase 1, 1 Braemar Hill Road, North Point, Hong Kong2,938,49219.8%CommonAll Directors and Executive Officers as a Group ( 5 in number)5,688,00037.15%  (1) The person listed was an officer, a director, or both, of the Company as of March 31, 2012.   ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE  Certain conflicts of interest exist and will continue to exist between the Company and its officers and directors due to the fact that they have other employment or business interests to which they devote substantial attention. Ultimately, our shareholders must rely on the fiduciary responsibility owed to them by the Companys officers and directors.  The Companys subsidiary, HLL has an outstanding shareholder loan in the amount of $184,226, and $184,226, as of March 31, 2012, and March 31, 2011, respectively.  Prior to February 10, 2011, the loan was from Gu Yao who is the holder of 2,291,100 shares, or approximately 15.44%, of the Companys issued and outstanding common stock. The stockholders loan mainly represents amount advanced to HLL by Gu Yao for the purpose of acquiring Legend Sun as the wholly owned subsidiary, on February 24, 2010.  This loan is unsecured, non-interest bearing and repayable on December 11, 2011.  On February 10, 2011, the Company issued a total of 2,291,100 shares of its common stock to Gu Yao as consideration (i) to acquire all of the issued and outstanding shares of HLL owned by Gu Yao valued at $34,450, and (ii) to pay off the outstanding  28       shareholder loan owed to Gu Yao by HLL.Accordingly, after completion of the transaction described above, the outstanding shareholder loan in the amount of $184,226 was owed by HLL to its sole shareholder, Studio II.  HLL also had amounts payable to and receivable from related parties as of March 31, 2012 and 2011.  The amounts payable to related parties were $89,015 and $5,923, as of March 31, 2012 and 2011, respectively.  They mainly represent payable to Cheung Ming and Gu Yao, shareholders of the Company and franchise fees payable to Sizegenic Holdings, Ltd., an entity which is under common control of Cheung Ming, the Companys President.  As of March 31, 2012, HLL had $19,194 receivable from Beijing Kenon Bistro Catering Limited, which mainly represents the first year annual franchise fee and termination fee income.  Beijing Kenon Bistro Catering Limited is under common control with Gu Yao, the holder of approximately 15.44% of the Companys issued and outstanding common stock.  The Company also had amounts payable to shareholders in the amount of $627,294 and $131,688 as of March 31, 2012 and 2011, respectively.  They are amounts payable to Cheung Ming , Gu Yao and Vivian Choi who are the holders of 5,023,000 shares, or approximately 33.85%, 2,291,100 shares, or approximately 15.44%, and 2,938,492 shares, or approximately 19.8%, of the Companys issued and outstanding common stock. The amounts payable to Cheung Ming in the amount of $545,455 and 131,688 as of March 31, 2012 and 2011, respectively mainly represent payment of legal and professional services for the Company. The payable is unsecured, non-interest bearing and no fixed repayment term.  The amount payable to Gu Yao in the amount of $12,841 mainly represents the cash advance to Sino Wish for its operation need.  The amount payable to Vivian Choi in the amount of $88,998 as of March 31, 2012 mainly represents the amount payable by the Companys subsidiary Sino Wish acquired in March, 2012 pursuant to the stock purchase agreement entered by HLL, Sino Wish and Vivian Choi, the former shareholder owned 100% share of Sino Wish.  The payable of $88,998 will be repaid without interest, in four equal quarterly installments, with payments due as of the last day of each calendar quarter following the Closing Date on March 29, 2012, with the first such installment due on or before June 30, 2012, and with the entire unpaid balance due on or before March 31, 2013.  HLL or its designees may also prepay the shareholder loan in whole or in part at any time during the fiscal year from April 1 2012 to March 31, 2013.  The law firm of Frascona, Joiner, Goodman and Greenstein, P.C., has billed the Company $56,994 and $33,376 for legal fees for the fiscal year ended March 31, 2012, and March 31, 2011, respectively.  Gary Joiner, who is a shareholder of the Company, is also a shareholder, officer and director, of Frascona, Joiner, Goodman and Greenstein, P.C., a law firm which provides legal services to the Company.  There can be no assurance that members of management will resolve all conflicts of interest in our favor. The officers and directors are accountable to us and our shareholders as fiduciaries. Failure by them to conduct our business in a manner which is in our best interests may create liability for them.  The area of fiduciary responsibility is a rapidly developing area of law, and persons who have questions concerning the duties of the officers and directors to us should consult their counsel.   Director Independence  The NASDAQ Stock Market has instituted director independence guidelines that have been adopted by the Securities & Exchange Commission.  These guidelines provide that a director is deemed independent only if the board of directors affirmatively determines that the director has no relationship with the company which, in the boards opinion, would interfere with the directors exercise of independent judgment in carrying out his or her responsibilities.  Significant stock ownership will not, by itself, preclude a board finding of independence.   29       For NASDAQ Stock Market listed companies, the director independence rules list six types of disqualifying relationships that preclude an independence filing.  The Companys board of directors may not find independent a director who:  1. is an employee of the company or any parent or subsidiary of the company;  2. accepts, or who has a family member who accepts, more than $60,000 per year in payments from the company or any parent or subsidiary of the company other than (a) payments from board or committee services; (b) payments arising solely from investments in the companys securities; (c) compensation paid to a family member who is a non-executive employee of the company (d) benefits under a tax qualified retirement plan or non-discretionary compensation; or (e) loans to directors and executive officers permitted under Section 13(k) of the Exchange Act;  3. is a family member of an individual who is employed as an executive officer by the company or any parent or subsidiary of the company;  4. is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the company made, or from which the company received, payments for property or services that exceed 5% of the recipients consolidated gross revenues for that year, or $200,000, whichever is more, other than (a) payments arising solely from investments in the companys securities or (b) payments under non-discretionary charitable contribution matching programs;  5. is employed, or who has a family member who is employed, as an executive officer of another company whose compensation committee includes any executive officer of the listed company; or   6. is, or has a family member who is, a current partner of the companys outside auditor, or was a partner or employee of the companys outside auditor who worked on the companys audit.  Based upon the foregoing criteria, our Board of Directors has determined that as of March 31, 2011, Yam Kee Cheong and Gary Joiner are independent directors.  ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES  Audit Fees  (1) The aggregate fees billed by UHY Vocation HK CPA Limited for audit of the Companys financial statements for the fiscal year ended March 31, 2012 were $28,000.  Audit Related Fees  (2) UHY Vocation HK CPA Limited billed the Company $43,080 for assurance and related services that were related to its audit or review of the Companys financial statements during the fiscal year ended March 31, 2011.  Tax Fees  (3) The aggregate fees billed by UHY Vocation HK CPA Limited for tax compliance, advice and planning were $0.00 for the fiscal year ended March 31, 2012. All Other Fees  30        (4) The aggregate fees billed by UHY Vocation HK CPA Limited for services other than the foregoing were $0 during the fiscal year ended March 31, 2012.  Audit Committee Pre-approval Policies and Procedures  (5) Studio II Brands, Inc., a blind pool reporting company which is not yet publicly traded, does not have an audit committee per se. The current board of directors functions as the audit committee.   PART IV  ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.  Audited Balance Sheet of Studio II Brands, Inc., and subsidiaries, as of March 31, 2012 and 2011, and related consolidated statements of operations, changes in stockholders equity, and cash flows for the year ended March 31, 2012, and for the period from February 10, 2011 to March 31, 2011 (Successor) and for the period from April 1, 2010 to February 9, 2011 (Predecessor.  Audited Balance Sheet of Hippo Lace Limited and Subsidiary as of February 9, 2011 and March 31, 2010, and related consolidated statements of operations, changes in stockholders equity, and cash flows for the periods from April 1, 2010 to February 9, 2011 and from February 24, 2010 to March 31, 2010.  (a) The following exhibits are filed herewith:  31.1 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  31.2 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  32.1 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  101 SCH XBRL Schema Document.  101 SCH XBRL Instance Document.  101 CAL XBRL Taxonomy Extension Calculation Linkbase Document.  101 LAB XBRL Taxonomy Extension Label Linkbase Document.  101 PRE XBRL Taxonomy Extension Presentation Linkbase Document.  101 DEF XBRL Taxonomy Extension Definition Linkbase Document.  SIGNATURE PAGE TO FOLLOW  31       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.    By:  /S/ Cheung Ming Cheung Ming, President, Principal Executive Officer  Date: June 29, 2002  In accordance with Section 13 or 15(d) of 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:    By:  /S/ Cheung Ming Cheung Ming, President, Director  Date:  June 29, 2002    By:  /S/ Leung Kin Wah Leung Kin Wah, Chief Financial Officer, Principal Accounting Officer  Date:  June 29, 2002    By:  /S/ Cheung Sing Cheung Sing, Director  Date: June 29, 2002    By:  /S/ Yam Kee Cheong Yam Kee Cheong, Director  Date:  June 29, 2002    By:  /S/ Chan Tak Hing Chan Tak Hing, Director  Date:  June 29, 2002   32