UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
      DC 20549





**FORM
      10-KSB**





(Mark
                One)x
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIESEXCHANGE
                ACT OF 1934For
                the Fiscal Year ended December 31, 2006o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIESEXCHANGE
                ACT OF 1934





For
      the
      transition period from __________ to __________




Commission
      File No.: 333-75297









**INTRA-ASIA
      ENTERTAINMENT CORPORATION**




(Name
      of
      small business issuer in its charter)





Nevada
            87-0616524(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer
              Identification
                No.)





1111
      Corporate Center Road, Suite 203B Monterey Park, CA 91754


(Address
      of principal executive offices) (Zip Code)





Issuer's
      telephone number: (323) 261-0078





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 per share




Indicate
      by check mark if the issuer is not required to file reports pursuant to Section
      13 or 15(d) of the Exchange Act: o





Indicate
      by check mark if the issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
      shorter period that the registrant was required to file such reports), and
      (2)
      has been subject to such filing requirements for the past 90 days: Yes x No
o





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-B is not contained herein, and will not be contained, to the best
      of registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB: o





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





Registrant's
      revenues for fiscal year ending December 31, 2006: $0





Aggregate
      market value of voting common stock held by non-affiliates, computed by
      reference to the average bid and asked price as of April 13, 2007 (based on
      closing price of $0.51 per share and 20,078,346 **** shares
      held by non-affiliates): $10,340,348





Number
      of
      shares outstanding of the registrant's $.001 par value common stock, as of
      the
      close of business on April 11, 2007: 65,399,583





Transitional
      Small Business Disclosure Format: Yes o No x









**TABLE
      OF CONTENTS**


**TO
      ANNUAL REPORT ON FORM 10-KSB**


**FOR
      YEAR ENDED DECEMBER 31, 2006**




PART
                I
            
            PageItem
                1.
            Description
                of Business
            1Item
                2.
            Description
                of Property
            3Item
                3.
            Legal
                Proceedings
            3Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            3PART
                IIItem
                5.
            Market
                for Registrant's Common Equity and Related Stockholder Matters
            3Item
                6.
            Management's
                Discussion and Analysis or Plan of Operation
            5Item
                7.
            Financial
                Statements
            10Item
                8.
            Changes
                in and Disagreements on Accounting and Financial
                Disclosure
            10Item
                8A.
            Controls
                and Procedures
            11Item
                8B.
            Other
                InformationPART
                IIIItem
                9.
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange Act
            11Item
                10.
            Executive
                Compensation
            13Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management
            14Item
                12.
            Certain
                Relationships and Related Transactions
            15Item
                13.
            Exhibits
            16Item
                14.
            Principal
                Accountant Fees and Services
            17Signatures
            
            18









**PART
      I**





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





This
      Report contains forward-looking statements. All forward-looking statements
      are
      inherently uncertain as they are based on current expectations and assumptions
      concerning future events or future performance of the Company. Readers are
      cautioned not to place undue reliance on these forward-looking statements,
      which
      are only predictions and speak only as of the date hereof. Forward-looking
      statements usually contain the words “estimate,” “anticipate,” “believe,”
“expect,” or similar expressions, and are subject to numerous known and unknown
      risks and uncertainties. In evaluating such statements, prospective investors
      should carefully review various risks and uncertainties identified in this
      Report, including the matters set forth under the captions “Risk Factors” and in
      the Company’s other SEC filings. These risks and uncertainties could cause the
      Company’s actual results to differ materially from those indicated in the
      forward-looking statements. The Company undertakes no obligation to update
      or
      publicly announce revisions to any forward-looking statements to reflect future
      events or developments.




Although
      forward-looking statements in this Annual Report on Form 10-KSB reflect the
      good
      faith judgment of our management, such statements can only be based on facts
      and
      factors currently known by us. Consequently, forward-looking statements are
      inherently subject to risks and uncertainties and actual results and outcomes
      may differ materially from the results and outcomes discussed in or anticipated
      by the forward-looking statements. Factors that could cause or contribute to
      such differences in results and outcomes include, without limitation, those
      specifically addressed under the heading “Risks Factors” below, as well as those
      discussed elsewhere in this Annual Report on Form 10-KSB. Readers are urged
      not
      to place undue reliance on these forward-looking statements, which speak only
      as
      of the date of this Annual Report on Form 10-KSB. We file reports with the
      Securities and Exchange Commission (“SEC”). You can read and copy any materials
      we file with the SEC at the SEC’s Public Reference Room, 100 F. Street, NE,
      Washington, D.C. 20549. You can obtain additional information about the
      operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
      In
      addition, the SEC maintains an Internet site (www.sec.gov) that contains
      reports, proxy and information statements, and other information regarding
      issuers that file electronically with the SEC, including us.




*We
      undertake no obligation to revise or update any forward-looking statements
      in
      order to reflect any event or circumstance that may arise after the date of
      this
      Annual Report on Form 10-KSB. Readers are urged to carefully review and consider
      the various disclosures made throughout the entirety of this annual report,
      which attempt to advise interested parties of the risks and factors that may
      affect our business, financial condition, results of operations and
      prospects.*





**General**





During
      2005, we (references to "we", "us," "our," or the "Company" refer collectively
      to Intra-Asia Entertainment Corporation, a Nevada corporation, and its
      subsidiary, Intra-Asia Entertainment Corporation, a Delaware corporation
      (“Intar-Asia Delaware”)) owned an 85% interest in and managed the Weifang Fuhua
      Amusement Park in China's eastern Shandong Province. We held our equity interest
      in the park through Weifang Fuhua Amusement Park Co., Ltd., a Chinese joint
      venture organized in 1991. Weifang Neo-Luck (Group) Corporation, a Chinese
      corporation owned by the Weifang State Asset Administration Bureau, held the
      remaining 15% interest.





The
      park
      began commercial operations in April 1994, providing visitors with a
      high-quality and affordable family-oriented entertainment experience through
      a
      number of rides, games, shops, restaurants, entertainment venues and an indoor
      water park, the grand opening of which we held on February 6, 2005.





On
      January 31, 2006, we entered into a Share Purchase Agreement, pursuant to which
      we sold our shares of Weifang Fuhua Amusement Park Co., Ltd. (the “Park”), and
      therefore our interest in the Park, to Beijing Maidashi Investment Co., Ltd.,
      a
      Chinese corporation (“Beijing Maidashi”) (the “Sale”). Pursuant to the Share
      Purchase Agreement, Beijing Maidashi paid us ten million dollars ($10,000,000
      [US]) for our interest.




1




In
      connection with the Share Purchase Agreement, we entered into a Mutual Release
      with the Park and Beijing Maidashi whereby each party agreed to release from
      any
      claims or liabilities all other parties to the Mutual Release arising from
      the
      Sale.





We
      are
      currently seeking to acquire one or more businesses using the proceeds of the
      sale of our shares of Weifang Fuhua Amusement Park Co., Ltd. In furtherance
      of
      this objective, we executed a letter of intent on October 27, 2006, pursuant
      to
      which we hope to acquire a controlling interest in a geography information
      system (“GIS”) technology company in Beijing, China. The letter is non-binding
      and sets forth the basic terms of the proposed transaction and the understanding
      of the parties involved. We are currently conducting our due diligence
      investigation of the proposed acquiree. If we elect to consummate this
      transaction, we expect that it will provide us with the platform necessary
      to be
      competitive in the GIS section in China.





We
      do not
      currently have any other business operations, and until we acquire other than
      nominal assets, such as the GIS business described above, we are technically
      considered a "shell company", as defined in Rule 12b-2 of the Exchange
      Act.





**Our
      Background**





We
      incorporated in Nevada on August 3, 1998 under the name R & R Ranching, Inc.
      to breed and raise bison. From December 1998 through March 26, 2003, we pursued
      breeding and ranching activities under a management agreement with Blue Sky
      Bison Ranch, Ltd., of Carvel, Alberta, Canada.





On
      March
      26, 2003, we entered into an agreement and plan of reorganization with GloTech
      Industries, Inc., a Delaware corporation, as reported on Form 8-K filed with
      the
      Securities and Exchange Commission. Under the agreement, we acquired 100% of
      the
      outstanding shares of GloTech Delaware in exchange for approximately 82% of
      our
      outstanding common stock making GloTech Delaware our wholly-owned subsidiary.
      Pursuant to the agreement, we changed our name to GloTech Industries, Inc.
      and
      Heinz Fraunhoffer became our sole director and executive officer.





GloTech
      Delaware was incorporated in Delaware on July 18, 2002 to design and market
      safety products using electroluminescent, or "EL", technology developed in
      cooperation with the University of Florida. Applications for this technology
      include products designed to enhance the safety of bicyclists, construction
      workers and emergency service personnel. Because of its bright, cool light,
      EL
      is usable where other light sources might create a fire hazard, such as
      backlighting wristwatches and instrument panels in cars, boats and airplanes.
      Prior to a January 2004 share exchange with Intra-Asia Entertainment
      Corporation, a Delaware corporation, that we did not consummate until September
      30, 2004, we had identified four markets that could readily utilize the EL
      technology: Vehicle Safety, Safety Apparel, Novelty and Visual
      Enhancement/Emergency Lighting. Concurrent with the January 2004 share exchange,
      we ceased research and development of our EL technology, and on June 29, 2004,
      disposed of this business in favor of concentrating on the amusement park
      business.





On
      December 19, 2003, we executed an Agreement and Plan of Reorganization with
      Intra-Asia Delaware and certain Intra-Asia Delaware shareholders, whereby we
      agreed to acquire not less than 2,550,189 common shares of Intra-Asia Delaware.
      These shares of Intra-Asia Delaware represented approximately 91% of the
      outstanding shares of common stock of Intra-Asia Delaware, which we agreed
      to
      exchange for up to 56,000,000 shares of our restricted common stock, or 100%
      of
      our post-Reorganization Agreement issued and outstanding securities. This share
      exchange took into account the reverse split of our then issued and outstanding
      shares of common stock at a 1-for-5.37 ratio.





Effective
      December 19, 2003, we amended our Articles of Incorporation to change our name
      to "Intra-Asia Entertainment Corporation," and subsequently obtained a new
      Cusip
      Number and OTC Bulletin Board Symbol (IRAE) for such name.





At
      the
      time we executed the Reorganization Agreement, we had not satisfied a number
      of
      conditions precedent to its effectiveness. Effective as of September 30, 2004,
      we executed an addendum to the Reorganization Agreement, which confirmed the
      satisfaction of all conditions precedent and declared the reorganization
      effective as of September 30, 2004 and the reverse split of our common stock
      effective as of January 2, 2004. We treated the combination of these entities
      as
      a reorganization and capitalization for accounting purposes, and Intra-Asia
      Delaware is now our majority-owned subsidiary.




2




On
      February 7, 2006, we filed Form 8-A with the Securities and Exchange Commission,
      registering our common stock pursuant to Section 12(g) of the Exchange Act.
      As a
      result, we are subject to the proxy rules, the Section 16 short-swing profit
      provisions and the Williams Act, which regulates tender offers and other
      significant acquisitions of public company securities.





**Employees**





We
      currently have 1 employee, who is also employed full-time.





**Item
              2.**
            **Description
                of Property.**





We
      currently do not own any property.





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





We
      are
      from time to time subject to legal claims and legal proceedings that arise
      in
      the ordinary course of its business. In the opinion of management, the ultimate
      outcome of claims and litigation of which management is aware will not have
      a
      material adverse effect on our consolidated financial position or results of
      operation. Management is not currently aware of any claims and litigation
      against the Company except for the discussion below.





On
      September 19, 2005, Joseph C. Visconti filed an action in the Circuit Court
      of
      the 15 th Judicial
      Circuit in and for Palm Beach County, Florida against us for breach of contract
      arising out of an alleged employment contract between Mr. Visconti and us.
      Mr.
      Visconti sought unspecified damages. On April 9, 2007, we entered into a
      Settlement Agreement and Mutual Release with Mr. Visconti (“Settlement
      Agreement”). Pursuant to the Settlement Agreement, the Company issued to J.
      Stephen & Company a warrant for the purchase of 1,600,000 shares of our
      common stock at an exercise price of $0.35 per share (the “Warrant”). Mr.
      Visconti exercised the Warrant on the same date as the effective date to the
      Settlement Agreement, resulting in a purchase by Mr. Visconti of a total of
      851,337 shares of our common stock. We relied upon Section 4(2) of the
      Securities Act of 1933 for the exemption from registration for these
      sales.





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





A
      majority of the Company’s stockholders approved the Company’s sale of our entire
      interest in Weifang Fuhua Amusement Park Co., Ltd. to Beijing Maidashi
      Investment Co., Ltd. (the “Sale”) under the Share Exchange Agreement by written
      consent in lieu of a meeting on January 31, 2006 (the "Sale Consent"), in
      accordance with the applicable provisions of Chapter 78 of the Nevada Revised
      Statues (the "Nevada Business Code").





On
      May 6,
      2006, we received a written consent in lieu of a meeting of stockholders from
      the holders of 39,530,400 shares representing approximately 61.54% of the
      64,235,869 shares of our total issued and outstanding shares of voting stock
      electing Stanley Wu, Xiaofang Ji, Leliang Zhang, and James Reskin as our
      directors.





**PART
      II**





**Item
              5.**
            **Market
                for Common Equity, Related Stockholder Matters and Small Business
                Issuer
                Purchases of Equity
                Securities**







Our
      common stock is eligible to be traded in the over-the-counter market and
      quotations are published on the OTC Bulletin Board under the symbol "IRAE"
      and
      in the National Quotation Bureau, Inc. "pink sheets" under Intra-Asia
      Entertainment Corporation.




The
      following table sets forth the range of high and low bid prices of our shares
      for the periods indicated, as reported by the OTC Bulletin Board. These prices
      represent prices between dealers, do not include retail markups, markdowns
      or
      commissions and do not represent actual transactions.




3




Common
      Stock




Year
                2007
            
            High
                Bid
            
            Low
                BidFirst
                Quarter
            
            $
            0.96
            
            $
            0.15Year
                2006
            
            
            High
                Bid
            
            
            Low
                BidFirst
                Quarter
            
            $
            0.28
            
            $
            0.10Second
                Quarter
            
            
            0.22
            
            
            0.085Third
                Quarter
            
            
            0.14
            
            
            0.07Fourth
                Quarter
            
            
            0.15
            
            
            0.04Year
                2005
            
            
            High
                Bid
            
            
            Low
                BidFirst
                Quarter
            
            $
            0.50
            
            $
            0.16Second
                Quarter
            
            
            0.50
            
            
            0.24Third
                Quarter
            
            
            0.48
            
            
            0.24Fourth
                Quarter
            
            
            0.40
            
            
            0.23




On
      April
      11, 2007, the last reported sale of our common stock on the OTC Bulletin Board
      was $0.51 per share. As of April 11, 2007, there were approximately 154 holders
      of record of our common stock, which figure does not take into account those
      shareholders whose certificates are held in the name of
      broker-dealers.




**Recent
      Sales of Unregistered Securities**





Pursuant
      to a Settlement Agreement and Mutual Release among our Company and Joseph C.
      Visconti dated April 9, 2007 (“Settlement Agreement”), we issued to J. Stephen
& Company a warrant for the purchase of 1,600,000 shares of our common stock
      at an exercise price of $0.35 per share (the “Warrant”). Mr. Visconti exercised
      the Warrant on the same date as the effective date to the Settlement Agreement,
      resulting in a purchase by Mr. Visconti of a total of 851,337 shares of our
      common stock. We relied upon Section 4(2) of the Securities Act of
      1933 for the exemption from registration for these sales.





On
      July
      28, 2006, $269,626 of convertible promissory notes and $56,214 of accrued
      interest were converted into 1,163,714 shares of the Company’s common stock, per
      the request of the note holders, at the conversion price of $0.28 per share.
      The
      transaction was pursuant to a signed agreement dated April 1, 2006 with Top
      Loyal Investment Co., Ltd. (which invested in the Company’s convertible notes),
      Neo-Luck Group, and Weifang Fuhua Amusement Park Co., Ltd. Pursuant to the
      signed agreement, the Company transferred its right to receive the amount of
      approximately $386,054 from Neo-Luck to Top Loyal and reduced the outstanding
      convertible notes by the same amount accordingly. Pursuant to the signed
      agreement, Top Loyal was to collect cash payment of $386,054 directly from
      Fuhua
      and convert the remaining outstanding principal of $269,626 and the accrued
      interest of $56,214 as of March 31, 2006 into 1,163,714 shares of the
      Company’s common stock at $0.28 per share, which was specified in the original
      convertible note subscription agreement. Pursuant to the signed agreement,
      the
      Company was not obligated to repay Top Loyal the approximate amount of $386,054
      if Neo-Luck and/or Fuhua ultimately did not pay this amount to Top Loyal. These
      issuances were made pursuant to the exemption from registration provided by
      SEC
      Rule 506 promulgated under Regulation D of the Securities Act of
      1933.




4




On
      February 22, 2006, Mr. Maurice Esformes converted $11,960 of
      convertible promissory notes and $2,988 of accrued interest into 53,385 shares
      of our common stock at the conversion price of $0.28 per share.





On
      January 17 and February 16, 2006, we sold 0.86 and 2.14 units of
      convertible promissory notes at $28,000 per unit, respectively, to Top Loyal
      Development Ltd. and obtained gross proceeds of $84,000. In connection with
      these two transactions, Top Loyal Development, by exercising the warrants
      attached to the convertible notes, was able to purchase up to 300,000 shares
      of
      our common stock at a price of $0.38 per share. We relied upon
      Section 4(2) of the Securities Act of 1933 for the exemption from
      registration for these sales.





On
      June
      23, 2005, we issued 1,000,000 shares of our common stock to Tsang Man Hung
      Veon
      in exchange for $300,000. No broker was involved and no discounts or commissions
      were paid in connection with these transactions. The securities were issued
      to
      an accredited investor in a private transaction, without registration in
      reliance on the exemptions provided by Sections 3(b) and 4(2) of the Securities
      Act.




On
      January 4, 2005 and February 2, 2005, we issued $88,180 and $50,000,
      respectively, in Convertible Promissory Notes to Top Loyal Development, Ltd.
      The
      notes carried an interest rate of 8% per annum and the principal and interest
      were payable in full on or before March 31, 2006. The notes were
      convertible in full at the option of the holder at any time into shares of
      our
      common stock at $0.28 per share in principal and accrued interest. Attached
      to
      the notes were Class A Common Stock Purchase Warrants to purchase up to 493,499
      shares of our common stock at an exercise price of $0.38 per share. These
      warrants were exercisable at any time through and including March 31, 2006.
      No
      broker was involved and no discounts or commissions were paid in connection
      with
      these transactions. The securities were issued to an accredited investor in
      a
      private transaction, without registration in reliance on the exemptions provided
      by Sections 3(b) and 4(2) of the Securities Act.




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





*You
      should read the following discussion and analysis in conjunction with our
      financial statements and the accompanying notes thereto included elsewhere
      in
      this report. We have reclassified certain prior year amounts to conform to
      the
      current year presentation with no effect on previously reported net income
      (loss) or shareholders’ equity.*





*The
      following discussion and analysis contains certain financial predictions,
      forecasts and projections, which constitute "forward-looking statements" within
      the meaning of the federal securities laws. Actual results could differ
      materially from those financial predictions, forecasts and projections and
      there
      can be no assurance that we will achieve such financial predictions, forecasts
      and projections. Factors that might cause such a difference include, but are
      not
      limited to, those discussed under “risk factors” contained in our Form 8-K/A
      filed with the Securities and Exchange Commission on November 15, 2004. Given
      these uncertainties, readers are cautioned not to place undue reliance on such
      forward-looking statements. We disclaim any obligation to update any such
      factors or to announce publicly the results of any revisions of the
      forward-looking statements contained or incorporated by reference herein to
      reflect future events or developments.*





**General**





During
      2005, and for the three months ended March 31, 2006, we owned 85% Weifang Fuhua
      Amusement Park (the “Park”) in the City of Weifang in China’s eastern Shandong
      Province. The Park is strategically located near the center of the City of
      Weifang and is available to the city’s approximately 8,000,000 residents and
      Shandong Province’s approximately 100,000,000 residents. We held our equity
      interest in the Park through Weifang Fuhua Amusement Park Co., Ltd., a Chinese
      joint venture organized in 1991. Weifang Neo-Luck (Group) Corporation, a Chinese
      corporation owned by the Weifang State Asset Administration Bureau, held the
      remaining 15% interest.





Park
      business was seasonal and, therefore, we generated a majority of our revenues
      in
      the second and third calendar quarters while we incurred operating expenses
      throughout the year, particularly in the first and third calendar quarters.
      We
      historically incurred a net loss for the first and fourth calendar quarters
      of
      each year.




5




With
      the
      understanding that an additional Disney Theme Park may be built in Shanghai,
      we
      felt that the attractiveness of the Park to visitors may decrease in the future.
      Attendance at the Park during the winter of 2005 was much lower than expected,
      and we incurred an increase in advertising expenses and utility expenses.
      Because future operating profits of the Park may not have meet original
      expectations, our board of directors believed that we should sell the current
      investment and use the proceeds to invest in other businesses. We explored
      the
      opportunity to sell our equity interest in Weifang Fuhua for more than a month
      and entered into a Share Purchase Agreement with Beijing Maidashi Investment
      Co., Ltd. on January 31, 2006, to sell our interest in Weifang Fuhua in exchange
      for $10 million cash plus assumption by Beijing Maidashi of all outstanding
      debts of Weifang Fuhua.





After
      entering into the Share Purchase Agreement with Beijing Maidashi, we believed
      that we would not have any cash flow from Weifang Fuhua and that we would not
      have any significant continued involvement in its amusement park business.
      Therefore, we had discontinued operations.





In
      accordance with paragraph 46 of SFAS No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets,” we adjusted the presentation format of the
      consolidated balance sheet at December 31, 2005, the consolidated statements
      of
      operations and comprehensive loss and cash flows for the twelve months ended
      December 31, 2005 to conform the presentation of the consolidated financial
      statements for the twelve months ended December 31, 2006.




**Critical
      Accounting Policies**





In
      response to the SEC’s Release No. 33-8040, “Cautionary Advice Regarding
      Disclosure about Critical Accounting Policies,” we identified the most critical
      accounting principles upon which its financial status depends. We determined
      that those critical accounting principles are related to the use of estimates,
      impairment of long-lived assets, revenue recognition, and income taxes. We
      state
      these accounting policies in the relevant sections in this management’s
      discussion and analysis, including the Recently Issued Accounting Pronouncements
      discussed below.





Use
      of
      Estimates





We
      have
      prepared our consolidated financial statements in accordance with accounting
      principles generally accepted in the United States of America. The preparation
      of the financial statements requires management 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. Among the more significant estimates included in these
      financial statements are the estimated valuation allowance for deferred income
      tax assets. Actual results could differ materially from those
      estimates.





Long-Lived
      Assets





Statement
      of Financial Accounting Standards No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets” (SFAS No. 144) requires that long-lived assets be
      reviewed for impairment whenever events or changes in circumstances indicate
      that the carrying amount of an asset may not be recoverable through the
      estimated undiscounted cash flows expected to result from the use and eventual
      disposition of the assets. Whenever any such impairment exists, we will
      recognize an impairment loss for the amount by which the carrying value exceeds
      the fair value.





Income
      Taxes





We
      account for income taxes in accordance with Statement of Financial Accounting
      Standards No 109, “Accounting for Income Taxes” (SFAS No. 109). SFAS No. 109
      requires an entity to recognize deferred tax liabilities and assets. We
      recognize deferred tax liabilities and assets for the future tax consequence
      attributable to the difference between the tax bases of assets and liabilities
      and their reported amounts in the financial statements. We measure deferred
      tax
      assets and liabilities using the enacted tax rate expected to apply to taxable
      income in the years in which we expect to recover or settle those temporary
      differences. We recognize the effect of a change in tax rates on deferred tax
      assets and liabilities in the period that included the enactment
      date.





For
      United States income tax purposes, we have not accounted for taxes on
      undistributed earnings. It was not practicable to estimate the amount of
      additional tax that might be payable on foreign earnings if they were remitted
      as dividends, were loaned to us, or if we should sell our interest in Weifang
      Fuhua Amusement Park Co., Ltd. However, we believe that United States foreign
      tax credits and any net operating loss carry-forward available to us would
      substantially eliminate any detrimental tax effects.




6




Share-Based
      Payments





We
      adopted Statement of Financial Accounting Standards No. 123(R): “Share-Based
      Payments” (SFAS No.123R) effective January 1, 2006. SFAS No. 123R amends
      existing accounting pronouncements for share-based payment transactions in
      which
      an enterprise receives employee and certain non-employee services in exchange
      for (a) equity instruments of the enterprise or (b) liabilities that
      are based on the fair value of the enterprise’s equity instruments or that may
      be settled by the issuance of such equity instruments. SFAS No. 123R generally
      requires such transactions be accounted for using a fair-value-based method.
      We
      have never issued any stock options to any employees. We have issued only stock
      warrants in connection with issuing convertible notes before and after January
      1, 2006. All of the outstanding stock warrants were accounted for using a
      fair-value-based method in accordance with SFAS No. 123, which was consistent
      with requirements under SFAS No. 123R.





**Results
      of Operations**





***Comparison
      of Twelve Months Ended December 31, 2006 and 2005***





Revenue





In
      accordance with SFAS No. 144, we presented the entire statement of operations
      of
      Fuhua for the months ended December 31, 2006 in the line item of loss from
      discontinued operations. We discussed and analyzed the loss from discontinued
      operations focusing on the operating results of Fuhua. We presented statement
      of
      operations for the twelve months ended December 31, 2005 in the same format
      for
      comparison purposes. However, our statements of operations and comprehensive
      loss for the twelve months ended December 31, 2005 and 2006 have still presented
      the consolidated operating results just in a different format without changing
      any substance. Accordingly, our management discussion and analysis has focused
      on the continued operation in the U.S.





General
      and Administrative Expenses





The
      general and administrative expenses for the twelve months ended December 31,
      2006 was $544,000, a increase of approximately $30,000, or 6%, compared to
      approximately $514,000 for the same period of the prior year. The increase
      was
      primarily attributable to not incurring an executive compensation expense of
      approximately $129,000 in the twelve months ended December 31, 2006, which
      we
      incurred in the same period of the prior year offset by the increase in the
      rental and travel related expenses incurred by our China office.





Depreciation
      and Amortization





During
      the twelve months ended December 31, 2006, we did not have any depreciation
      expense as all of our fixed assets in the U.S. were fully depreciated. Compared
      to the amount of $905 in the same period of the prior year, the change was
      immaterial.





Operating
      Loss





The
      operating loss for the twelve months ended December 31, 2006 was approximately
      $544,000, a increase of $30,000 compared to the operating loss of $515,000
      for
      the same period of the prior year. The decrease was due mainly to a decrease
      of
      $29,000 in general and administrative expense during the twelve months ended
      December 31, 2006.





Interest
      Expenses





Due
      to
      the change of presentation format of the statements of operations in accordance
      with SFAS No. 144, the line item of interest expense presented interest expense
      incurred for the U.S. only. For the twelve months ended December 31, 2006,
      interest expense was approximately $120,000, a decrease of approximately
      $360,000, or 75%, compared to approximately $480,000 for the same period of
      the
      prior year. The decrease was due primarily to a decrease in non-cash interest
      expenses resulting from the amortization of discounts to convertible notes
      and
      deferred loan commission.




7




Foreign
      Exchange Gain





Due
      to
      the Chinese RMB appreciation, for the twelve months ended December 31, 2006,
      we
      incurred approximately $274,000 foreign exchange gain, which was not incurred
      on
      US basis during the same period in the prior year.





Income
      Tax Provision





Due
      to
      the change of presentation format of the statements of operations in accordance
      with SFAS No. 144, the line item of income tax provision presented tax
      information for the U.S. only. The income tax provision in the U.S. was $800
      and
      $800 for the twelve months ended December 31, 2006 and 2005,
      respectively.





Loss
      from Continuing Operations





Loss
      from
      continuing operations for the twelve months ended December 31, 2006 was
      approximately $819,000, a decrease of approximately $178,000 compared to a
      loss
      of approximately $997,000 for the same period of the prior year. The decrease
      was due mainly to the decrease of approximately $360,000 in interest expense
      during the twelve months ended December 31, 2006.





Loss
      from Discontinued Operations





Loss
      from
      discontinued operations for the twelve months ended December 31, 2006 was
      approximately $437,000 compared to the loss of approximately $9,046,000 for
      the
      same period of the prior year.





The
      reason for the loss from discontinued operations was due mainly to a decrease
      in
      Weifang Fuhua’s revenue by approximately $2.2 million for the twelve months
      ended December 31, 2006, compared to revenue of approximately $14.9 million
      for
      the same period of the prior year; see Note 2 for details.





Loss
      on Disposal of Discontinued Operations





Loss
      on
      disposal of discontinued operations was approximately $3.747 million for the
      twelve months ended December 31, 2006. There are two components of the loss
      on
      disposal of discontinued operations.





First,
      we
      incurred disposal expense of approximately $153,000 for the twelve months ended
      December 31, 2006 whereas we did not have the same type of expense in the same
      period of the prior year. We incurred disposal expenses totaling $125,000 in
      the
      U.S., which related mainly to legal services for drafting the Share Purchase
      Agreement and valuation service in connection with the sale transaction.
      Disposal expense incurred in China totaled $28,000, which related mainly to
      identifying potential buyers, business consulting, legal advice, valuation
      advice, and rental of a temporary office space.





Second,
      in accordance with EITF 01-5, when an entity that has committed to a plan that
      will cause the currency translation adjustment for an equity method investment
      or a consolidated investment in a foreign entity to be reclassified to earnings,
      it should include the currency translation adjustment as part of carrying amount
      of the investment when evaluating that investment for impairment. We complied
      with this provision and determined an impairment of approximately $3.747 million
      as part of loss on disposal of discontinued operations. We did not have the
      same
      type of impairment for the same period of the prior year.





Net
      Loss





We
      reported a net loss of approximately $5 million for the twelve months ended
      December 31, 2006, a decrease of approximately $5.04 million compared to net
      loss of approximately $10,040,000 for the same period of the prior year. The
      decrease in net loss was primarily attributable to an decrease in loss from
      discontinued operations of $8,609,000, offset by the increase in loss from
      disposal of discontinued operations of $3.747 million.




8




Loss
      Per Share





The
      loss
      per share for the twelve months ended December 31, 2006 was $0.08 compared
      to a
      loss per share of $0.16 for the same period of the prior year. The loss per
      share for the continuing operations was $0.01, compared to loss per share of
      $0.02 for the same period of the prior year. The loss per share from
      discontinued operations was $0.06 compared to the loss per share of $0.14 from
      discontinued operations for the same period of the prior year. The increase
      in
      loss per share from discontinued operations was as a result of the loss from
      our
      discontinued operations, and loss on disposal of discontinued operations
      incurred during the twelve months ended December 31, 2006.





**Liquidity
      and Capital Resources**





In
      accordance with SFAS No. 144, we changed the presentation format of our
      consolidated balance sheet by inserting the line items of short-term assets,
      long-term assets, short-term liabilities, and long-term liabilities, including
      minority interest in the discontinued operations, on our consolidated balance
      sheet as of December 31, 2005 and December 31, 2006. Accordingly, we also
      changed the presentation format of our statements of cash flows for the year
      ended December 31, 2005 and 2006 for comparison purposes. In line with the
      change of presentation format, our discussion and analysis on liquidity and
      capital resources are focusing on the cash flows incurred in continuing
      operations.





As
      of
      December 31, 2006, we had cash of $10,259,000, compared to cash of approximately
      $755,000 as of December 31, 2005. We had a working capital of approximately
      $9.27 million on December 31, 2006, compared to a negative working capital
      of
      $5.85 million at December 31, 2005. The increase in working capital was mainly
      a
      result of the decrease in the short-term liabilities in discontinued
      operations.





Net
      cash
      provided by continued operating activities was approximately $196,000 for the
      twelve months ended December 31, 2006, an increase of approximately $886,000
      compared to approximately $690,000 cash used in continued operating activities
      for the same period of the prior year. The increase of $886,000 in cash provided
      by continued operating activities was mainly attributed to (1) the change in
      non-cash interest expense of $62,000 between two periods (amortization of
      discounts to convertible notes, representing a negative change), (2) the changes
      in operating assets and liabilities by $876,000 (representing a positive
      change), in addition to the negative change of $25,000 from amortization on
      non-cash interest (amortization of deferred offering costs) between the two
      periods, and (3) the stock compensation expense of $80,000 for the same period
      of the prior year where we did not have such expense in the twelve months ended
      December 31, 2006.





The
      change in other receivables from the twelve months ended December 31, 2006
      and
      the same period in the prior year was approximately $176,000, which was mainly
      due to collection of advances to employees for travel purposes and an advance
      to
      a law firm which was supposed to handle certain general corporate matters in
      the
      first quarter of 2006. The change in accounts payable between the twelve months
      ended December 31, 2006 and the same period in the prior year was approximately
      $59,000, which was mainly due to the increase in accounts payables related
      to
      professional services incurred in the twelve months ended December 31, 2006.
      The
      decrease in accrued liabilities for the twelve months ended December 31, 2006
      and the same period in the prior year was approximately $628,000, which was
      mainly due to the fact that we did not accrue many of the same accrued
      liabilities incurred in the twelve months ended December 31, 2005 did not occur
      in the twelve months ended December 31, 2006, such as accrued professional
      fee
      and interest related to shareholder’s loan and convertible notes.





The
      change in cash provided by operating activities - discontinued operations for
      the twelve months ended December 31, 2006 and the same period in the prior
      year
      was approximately $4.2 million, reflecting Weifang’s Fuhua’s normal course of
      business operation for both years.





Cash
      provided by investing activities - discontinued operations was approximately
      $8.763 million for the twelve months ended December 31, 2006, which presented
      the cash received for the sale of our interest in Weifang Fuhua. Cash of $4.932
      million used in the investing activities - discontinued operations in the same
      period of the prior year reflected the fact that we accelerated the construction
      of the Water Palace at the Park in the twelve months ended December 31, 2005
      in
      order to open the Water Palace in that quarter.




9




Net
      cash
      provided by continued financing activities was $84,000 for the twelve months
      ended December 31, 2006, derived from the issuance convertible notes in the
      U.S.
      This represented a decrease of approximately $2,000 compared to the prior year.
      We issued 1 million shares of common stock at $0.30 per share and received
      proceeds of $300,000 during the prior year and received proceeds of $394,000
      by
      issuing convertible notes. We repaid to related party approximately $21,000
      in
      the prior year, whereas we did not have such a repayment in the twelve months
      ended December 31, 2006.





The
      cash
      of approximately $586,000 used in financing activities - discontinued operations
      in the twelve months ended December 31, 2005 reflected cash proceeds borrowed
      from Neo-Luck for the purpose of paying contractors involved **** in
      the
      construction of the Water Palace. We had no such borrowing in the twelve months
      ended December 31, 2006.





**Quantitative
      and Qualitative Risk**





Risk
      of Changes in Exchange Rates





Our
      reporting currency is the US dollar. However, substantially all of our cash
      balance is denominated in Chinese RMB. In July 2005, China reformed its exchange
      rate control by establishing a managed floating exchange rate system based
      on
      market supply and demand with reference to a basket of currencies. RMB is no
      longer pegged to the US dollars and the exchange rates between RMB and the
      US
      dollars will have certain fluctuations. Accordingly, if the RMB depreciates
      relative to the US dollars, our cash balance expressed in US dollars on our
      financial statements will decline. In addition, there are very limited hedging
      transactions available in China to reduce our exposure to exchange rate
      fluctuations. In contrast, if RMB appreciates relative to the US dollars, our
      cash balance expressed in US dollars on our financial statements will increase.
      While we may decide to enter into hedging transactions in the future, the
      availability and effectiveness of these hedges may be limited and we may not
      be
      able to successfully hedge our exposure, if at all. In addition, our currency
      exchange losses may be magnified by PRC exchange control regulations that
      restrict our ability to convert RMB into US dollars.




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





Please
      refer to Financial Statements on pages F-1 to F-21.





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





Effective
      August 2, 2006, the Company dismissed BDO Shanghai Zhonghua ("BDO"), as its
      independent registered public accounting firm. BDO's report on our financial
      statements for each of the years ended December 31, 2005 and December 31, 2004
      did not contain an adverse opinion or disclaimer of opinion, nor were such
      reports modified as to uncertainty, audit scope or accounting principles. Our
      Board of Directors approved the dismissal by written consent dated as of August
      2, 2006.





In
      connection with the audit for the year ended December 31, 2005 and the
      subsequent interim period through the date of dismissal, there were no
      disagreements with BDO on any matter of accounting principles or practices,
      financial statement disclosure, or auditing scope or procedure, which
      disagreement(s), if not resolved to the satisfaction of BDO, would have caused
      it to make references to the subject matter of the disagreement(s) in connection
      with its reports on the financial statements for such years. Additionally,
      during that time period, there were no reportable events, as defined by
      Regulation S-B Item 304 (a)(1)(iv).





On
      August
      2, 2006, our Board of Directors approved the engagement of Simon & Edward,
      LLP ("Simon & Edward") as our independent registered public accounting firm.
      Simon & Edward will act as our independent registered public accounting firm
      for the fiscal year ending December 31, 2006.




10




During
      the two most recent fiscal years and the interim period preceding the
      appointment of Simon & Edward, we have not consulted Simon & Edward
      regarding either (i) the application of the accounting principles to a specified
      transaction, either completed or proposed; or the type of audit opinion that
      might be rendered on our financial statements, and neither a written report
      nor
      oral advice was provided to us that Simon & Edward concluded was an
      important factor that we considered in reaching a decision as to the accounting,
      auditing or financial reporting issue; or (ii) any matter that was either the
      subject of a disagreement or a reportable event, as defined in Regulation S-B,
      Item 304(a)(1)(iv).





We
      have
      provided BDO with a copy of the disclosures we are making herein in response
      to
      Item 304 of Regulation S-B.





We
      have
      requested that BDO furnish us with a letter addressed to the Commission stating
      whether BDO agrees with our statements, and if not, stating the respects in
      which BDO did not agree. A copy of the letter from BDO, dated August 2, 2006,
      is
      incorporated by reference to this Form 10-KSB as an exhibit.





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





Based
      on
      the evaluation of our Chief Executive Officer and Chief Financial Officer of
      our
      disclosure controls and procedures as of December 31, 2006, it has been
      concluded that the disclosure controls and procedures are effective for the
      purposes contemplated by Rule 13a-15(e) promulgated by the Securities and
      Exchange Commission. There have been no significant changes to our internal
      controls or in other factors that could significantly affect these controls
      subsequent to December 31, 2006.





**PART
      III**





**Item
              9.**
            **Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange Act.**





**Directors
      and Executive Officers**




The
      following table sets forth our current directors and executive officers as
      of
      March 31, 2007:




**Name**
              **Position**
              **Age**Stanley
                  Wu
              Chairman
                  of the Board, Chief Executive Officer, President
              73Leliang
                  Zhang
              Chief
                  Financial Officer, Director
              36James
                  Reskin
              Director
              48


**Stanley
      Wu,** Chairman
      of the Board, Chief Executive Officer, and President. Mr. Wu became our
      Chairman, CEO, and President effective June 9, 2006. Mr. Wu has served as a
      director of the Company from December 19, 2003 to present. He previously served
      as our President and Chief Executive Officer from December 19, 2003 to March
      15,
      2004. Mr. Wu is the founder and Chairman of the Jimswood Group of companies
      in
      California, which have holdings and joint venture interests in Japan, China,
      Mexico and the United States.





**Leliang
      Zhang** ,
      Director and Chief Financial Officer. Mr. Zhang was appointed director and
      CFO
      of the Company on December 1, 2005. Mr. Zhang served as Controller of Oriental
      Intra-Asia (China) Entertainment Co. since June 2004. He also served as
      Controller of Shandong Baorui Company from December 2002 to May 2004 and Manager
      of the Finance Department of Weifang Yuanfei Hotel from September 1997 to
      November 2002.




11




**James
      Reskin** ,
      Director. Mr.
      Reskin has served as director of the Company since September 28, 2004. He was
      also the Company’s President and Chief Executive Officer from March 15, 2004 to
      September 28, 2004. In addition to practicing law in his own firm, James A.
      Reskin & Associates, since 1986, Mr. Reskin provides consulting services to
      small businesses as a founding partner of Practical Business Concepts, LLC.
      He
      served as president and later CEO of FullCircle Registry, Inc. (OTCBB: FLCR)
      until March 2003.




**Family
      Relationships**





None
      of
      the above officers or directors are related to any other.





**Legal
      Proceedings**





None
      of
      the officers or directors have, during the past 5 years,:




(a)
              Had
                  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;
 
 (b)
              Been
                  convicted in a criminal proceeding or subject to a pending criminal
                  proceeding;
 
 (c)
              Been
                  subject to any order, judgment, or decree, not subsequently reversed,
                  suspended or vacated, of any court of competent jurisdiction, permanently
                  or temporarily enjoining, barring, suspending or otherwise limiting
                  his
                  involvement in any type of business, securities, futures, commodities
                  or
                  banking activities; and
  (d)
              Been
                  found by a court of competent jurisdiction (in a civil action),
                  the
                  Securities and Exchange Commission or the Commodity Futures Trading
                  Commission to have violated a federal or state securities or commodities
                  law, and the judgment has not been reversed, suspended, or
                  vacated.


**Audit
      Committee Financial Expert**





Our
      Board
      of Directors functions as our audit committee. Leliang Zhang, our Chief
      Financial Officer and one of our Directors, has extensive experience in
      accounting and financial matters but is not proficient in generally accepted
      accounting principles in the United States. We are actively recruiting a
      financial expert to serve on our Board of Directors.





**Compensation
      Committee**





Our
      Board
      of directors functions as our compensation committee.





**Compliance
      with Section 16(a) of the Exchange Act**





Section
      16(a) of the Exchange Act requires our directors, certain officers and persons
      who own more than ten percent (10%) of our outstanding common stock to file
      with
      the Securities and Exchange Commission reports of changes in ownership of our
      common stock held by such persons. Each of Stanley Wu, Xiaofang Ji, Leliang
      Zhang and James Reskin failed to timely file a Form 3 on February 7, 2006,
      when
      we filed Form 8-A registering our common stock pursuant to Section 12(g) of
      the
      Exchange Act. We informed the reporting persons of their filing obligations.
      Stanley Wu, Xiaofang Ji, and Leliang Zhang each filed a late Form 3 on April
      21,
      2006.





**Code
      of Ethics**





A
      copy of
      our Code of Ethics and Business Conduct is attached as Exhibit 14 to our Annual
      Report on Form 10-KSB for the fiscal year ended December 31, 2004, as filed
      on
      March 31, 2005.




12




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





The
      following table summarizes all compensation recorded by us in the last completed
      fiscal year for our principal executive officer, each other executive officer
      serving as such whose annual compensation exceeded $100,000 and up to two
      additional individuals for whom disclosure would have been made in this table
      but for the fact that the individual was not serving as an executive officer
      of
      our company at December 31, 2006. The value attributable to any option awards
      is
      computed in accordance with FAS 123R.





**Summary
      Compensation Table**





Name
                and Principal Position
            
            Salary
              ($)
            
            Bonus
              ($)
            
            Stock
                Awards
              ($)
            
            Option
                Awards
              ($)
            
            Non-Equity
                Incentive Plan Comp-ensation ($)
            
            Non-qualified
                Deferred Comp-ensation Earnings ($)
            
            All
                Other Comp-ensation
              ($)
            
            Total
                ($)Stanley
                Wu,
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            **0**CEO
                and PresidentLeliang
                Zhang,
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            **0**CFOXiaofang
                Ji,
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            **0**Former
                CEO




**Outstanding
      Equity Awards at Fiscal Year End**





The
      following outstanding equity awards disclosure reflects all compensation under
      option awards and stock awards earned by or paid to an executive officer
      outstanding as of the end of the fiscal year ended December 31, 2006.




OPTION
                AWARDS
            
            STOCK
                AWARDSName
            
            Number
                of Securities Underlying Unexercised Options (#)
              Exercisable
            
            Number
                of Securities Underlying Unexercised Options (#)
              Exercisable
            
            Equity
                Incentive Plan Awards: Number of Securities Underlying Un-exercised
                Unearned Options (#)
            
            Option
                Exercise Price ($)
            
            Option
                Expiration Date
            
            Number
                of Shares or Units of Stock That Have Not Vested (#)
            
            Market
                Value of Shares or Units of Stock That Have Not Vested ($)
            
            Equity
                Incentive Plan Awards: Number of Unearned Shares, Units or Other
                Rights
                That Have Not Vested (#)
            
            Equity
                Incentive Plan Awards: Market or Payout Value of Unearned Shares,
                Units or
                Other Rights That Have Not Vested (#)Stanley
                Wu
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            N/A
            
            
            0
            
            
            N/A
            
            
            0
            
            
            0Leliang
                Zhang
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            N/A
            
            
            0
            
            
            N/A
            
            
            0
            
            
            0Xingming
                Zhang
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            N/A
            
            
            0
            
            
            N/A
            
            
            0
            
            
            0Joseph
                Visconti
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            N/A
            
            
            0
            
            
            N/A
            
            
            0
            
            
            0Duo
                Wang
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            N/A
            
            
            0
            
            
            N/A
            
            
            0
            
            
            0Xiaofang
                Ji
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            N/A
            
            
            0
            
            
            N/A
            
            
            0
            
            
            0




13




**Director
      Compensation**





In
      2006,
      members of our Board of Directors did not receive any compensation for their
      services as directors.





**Employment
      Agreements, Director Agreements, Termination Provisions, or Change-in-Control
      Provisions**





We
      currently do not have any employment agreements or director agreements with
      any
      of our officers and directors.





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





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




**Plan
                Category**
            
            **Number
                of****securities to be**
              **issued
                upon****exercises
                of**
              **outstanding options,
                warrants, and rights**
            
            **Weighted-average exercise**
              **price of outstanding options,
                warrants, and rights**
            
            **Number of****securities****available for****future
                plan****issuance**Equity
                compensation plans approved by security holders
            
            
            0
            
            
            N/A
            
            
            0Equity
                compensation plans not approved by security holders
            
            
            3,200,000
                (1
            )
            $
            0.35
            
            
            0Total


(1)
      Effective as of August 2, 2004, we issued to each of J. Stephen & Company,
      Inc. and CCC Interests Limited a Stock Purchase Warrant to purchase 1,600,000
      shares of our common stock at $0.35 per share.





**Security
      Ownership of Certain Beneficial Owners and Management**





As
      used
      in this section, the term beneficial ownership with respect to a security is
      defined by Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
      as
      consisting of sole or shared voting power (including the power to vote or direct
      the vote) and / or sole or shared investment power (including the power to
      dispose of or direct the disposition of) with respect of security through any
      contract, arrangement, understanding, or relationship or otherwise, subject
      to
      community property laws where applicable.





The
      following table sets forth the beneficial ownership of our common stock, as
      of
      April 11, 2007, of (i) persons who own more than five percent of our common
      stock (ii) our named executive officers, and (iii) our current directors and
      executive officers as a group:





**Title
                of class**
            **Name
                and address**
              **of
                beneficial owner (2)**
            **Amount
                and nature of beneficial owner**
            **Percent
                of class (1)**Common
                Stock, $.001 par value
            Weicheng
                International Inc.
              1111
                Corporate Center Rd.
              Suite
                203B
              Monterey
                Park, CA 91754
            39,530,400
            60.44%Common
                Stock, $.001 par value
            Foster
                Growth Ltd.
              PO
                Box 957
              Tortola,
                BVI
            4,131,302
            6.32%Common
                Stock, $.001 par value
            Stanley
                Wu
              184
                S. Trish Ct.
              Anaheim
                Hills, CA 92808
            1,562,700
                (3)
            2.39%Common
                Stock, $.001 par value
            Leliang
                Zhang
            No
                shares
            0%Common
                Stock, $.001 par value
            James
                Reskin
              5809
                Britany Valley Road
              Louisville,
                KY 40222
            96,835
                (4)
            0.15%Common
                Stock, $.001 par value
            Directors
                and executive officers as a group (3 in total)
            1,659,535
            2.54%




14




(1)
      The
      number of outstanding shares of common stock of Intra-Asia Entertainment is
      based upon 65,399,583 shares as of April 11, 2007. Unless
      otherwise noted, all of the shares shown are held by individuals or entities
      possessing sole voting and investment power with respect to such shares. Shares
      not outstanding but deemed beneficially owned by virtue of the right of a person
      or member of a group to acquire them within 60 days of April 11, 2007, are
      treated as outstanding only when determining the amount and percentage owned
      by
      such individual or group.





(2) The
      address of each executive officer and director of the Company is 1111
      Corporate Center Road, Suite 203B Monterey Park, CA 91754 .





(3)
      Mr.
      Wu beneficially owns 1,562,700 shares through his wife, Jenny T. Wu, who owns
      812,080 shares, and his sons, Christopher and Davisson Wu, who own 450,620
      and
      300,000 shares, respectively.





(4)
      Mr.
      Reskin beneficially owns 93,110 shares directly and 3,725 shares through
      Marmaduke Capital Partners, LLC, a Kentucky limited liability company, of which
      Mr. Reskin is managing member and owns more than 10% of the total membership
      units. Mr. Reskin also owns less than 1% of Fullcircle Registry, Inc., a
      publicly-traded company that owns 186,220 shares of our common stock. Mr. Reskin
      is not an affiliate of Fullcircle Registry, Inc. and therefore is not deemed
      to
      be a beneficial owner of any shares of our common stock by virtue of being
      a
      stockholder in Fullcircle Registry, Inc.





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





**Related
      Party Transactions**





None.





**Director
      Independence**





One
      of
      our directors, James Reskin, is an independent director as that term is defined
      under NASDAQ Rule 4200(a)(15).




15




**Item
              13.**
            **Exhibits.**





**EXHIBITS**





**Exhibit**
              **Number**
            
            **Description**2.1
            
            Agreement
                and Plan of Reorganization among R&R Ranching, Inc. and GloTech
                Industries, Inc., dated March 26, 2003 (1)2.2
            
            Agreement
                and Plan of Reorganization among Intra-Asia Entertainment Corporation
                and
                Intra-Asia Entertainment Corporation (Delaware), dated December 19,
                2003
                (2)2.4
            
            Addendum
                to Agreement and Plan of Reorganization among Intra-Asia Entertainment
                Corporation and Intra-Asia Entertainment Corporation (Delaware),
                dated
                September 30, 2004 (2)2.5
            
            Share
                Purchase Agreement among Intra-Asia Entertainment Corporation (Delaware)
                and Beijing Maidashi Investment Co., Ltd., dated January 31, 2006
                (3)2.6
            
            Mutual
                Release among Intra-Asia Entertainment Corporation (Delaware), Weifang
                Fuhua Amusement Park Co., Ltd., and Beijing Maidashi Investmetn Co.,
                Ltd.,
                dated January 31, 2006 *3.1
            
            Amended
                and Restated Articles of Incorporation of Intra-Asia Entertainment
                Corporation dated December 19, 2003 (4)3.2
            
            Bylaws
                of Intra-Asia Entertainment Corporation (5)10.1
            
            Settlement
                Agreement and Mutual Release *14.1
            
            Code
                of Ethics and Business Conduct (4)16.1
            
            Letter
                on change in certifying accountant (6)21.1
            
            Subsidiaries
                of the Company *31.1
            
            Section
                302 Certification by the Company’s Chief Executive Officer
                *31.2
            
            Section
                302 Certification by the Company’s Chief Financial Officer
                *32.1
            
            Section
                906 Certification by the Company’s Chief Executive Officer
                *32.2
            
            Section
                906 Certification by the Company’s Chief Financial Officer
                *





*
      Filed
      herein


(1)
            Incorporated
                by reference from the Registrant’s Current Report on Form 8-K filed on
                April 7, 2003.


(2)
            Incorporated
                by reference from the Registrant’s Quarterly Report on Form 10-QSB filed
                on December 14, 2004.


(3)
            Incorporated
                by reference from the Registrant’s Annual Report on Form 10-KSB filed on
                April 17, 2006.


(4)
            Incorporated
                by reference from the Registrant’s Annual Report on Form 10-KSB filed on
                March 31, 2005.


(5)
            Incorporated
                by reference from the Registrant’s Registration Statement on Form SB-2
                filed on March 30, 1999.


(6)
            Incorporated
                by reference from the Registrant’s Current Report on Form 8-K filed on
                August 8, 2006.





16





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





**Audit
      Fees**


The
      aggregate fees billed for the year ending December 31, 2006 for professional
      services rendered by Simon & Edward, LLP for the audit of our annual
      financial statements and review of the financial statements included in our Form
      10-KSB were $34,951.





The
      aggregate fees billed for the years ending December 31, 2006 and 2005 for
      professional services rendered by BDO Shanghai Zhonghua for the audit of our
      annual financial statements and review of the financial statements included
      in
      our Form 10-QSBs and Form 10-KSB for 2005 were $28,000 and $117,500,
      respectively.





**Audit-Related
      Fees**


There
      were no additional audit-related fees billed for the year ending December 31,
      2006 for professional services rendered by Simon & Edward.





There
      were no additional audit-related fees billed for the year ending December 31,
      2005 for professional services rendered by BDO Shanghai Zhonghua.





**Tax
      Fees**


The
      aggregate fees billed for the year ending December 31, 2006 for professional
      services rendered by Peter Tang, CPA for tax compliance, tax advice, and tax
      planning were $3,000.





**All
      Other Fees**


There
      were no other fees billed for the year ending December 31, 2006 for professional
      services rendered.





There
      were no other fees billed for the year ending December 31, 2005 for professional
      services rendered.




17




**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.




INTRA-ASIA
                ENTERTAINMENT CORPORATIONDated:
                April 17, 2007
            By:
            /s/ Stanley
              WuStanley
                Wu, Chief Executive Officer, Chairman of the Board, and
                President




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


Signature
            
            Title
            
            Date/s/
                Stanley Wu
            
            Chief
                Executive Officer (Principal Executive
            
            April
                17, 2007Stanley
                Wu
            
            Officer),
                Chairman of the Board, and President/s/
                Leliang Zhang
            
            Chief
                Financial Officer and Director
            
            April
                17, 2007Leliang
                Zhang
            
            (Principal
                Financial Officer andPrincipal
                Accounting Officer)/s/
                James Reskin
            
            Director
            
            April
                17, 2007James
                Reskin




18











***INTRA-ASIA
      ENTERTAINMENT CORPORATION AND***


***SUBSIDIARIES***





FINANCIAL
      STATEMENTS FOR THE YEARS ENDED


DECEMBER
      31, 2006 AND 2005 AND


REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


















**TABLE
      OF CONTENTS**




**Report
                of Independent Registered Public Accounting Firm**
            **F-1****Consolidated
                Balance Sheets**
            **F-3****Consolidated
                Statements of Operations and Comprehensive Loss**
            **F-4****Consolidated
                Statements of Stockholders' Equity**
            **F-5****Consolidated
                Statements of Cash Flows**
            **F-6****Notes
                to Consolidated Financial Statements**
            **F-7
                - F21**













REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







To
      the
      Board of Directors and


Intra-Asia
      Entertainment Corporation





Gentlemen:





We
      have
      audited the accompanying consolidated balance sheet of Intra-Asia Entertainment
      Corporation and subsidiaries (the “Company”) as of December 31, 2006, and the
      related consolidated statements of operations, stockholders’ equity, and cash
      flows for the year then ended. These financial statements are the responsibility
      of the Company’s management. Our responsibility is to express an opinion on
      these financial statements based on our audit. The financial statements as
      of
      and for the year ended December 31, 2005 before the reclassification discussed
      in Note 2 to the financial statements, were audited by other auditors whose
      report, dated March 31, 2006, expressed an unqualified opinion on those
      statements.





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. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, such consolidated financial statements present fairly, in all material
      respects, the financial positions of the Company as of December 31, 2006, and
      the results of its operations and its cash flows for the year then ended, in
      conformity with accounting principles generally accepted in the United States
      of
      America.







Simon
      & Edward, LLP





City
      of
      Industry, California


April
      5,
      2007





F-1




**Report
      of Independent Registered Public Accounting Firm**





The
      Board
      of Directors


Intra-Asia
      Entertainment Corporation








We
      have
      audited the accompanying consolidated balance sheets of Intra-Asia Entertainment
      Corporation (the “Company”) as of December 31, 2004 and 2005 and the
      related consolidated statements of income and comprehensive income,
      stockholders’ equity and cash flows for the years then ended. These financial
      statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audits included consideration of internal control
      over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      presentation of the financial statements. We believe that our audits provide
      a
      reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Intra-Asia Entertainment
      Corporation, as of December 31, 2004 and 2005 and the results of its
      operations and its cash flows for the years then ended, in conformity with
      accounting principles generally accepted in the United States of America.







BDO
      Shanghai Zhonghua





Shanghai,
      PRC


March
      31,
      2006





F-2




**INTRA-ASIA
      ENTERTAINMENT CORPORATION AND SUBSIDIARIES**


**BALANCE
      SHEETS**


**DECEMBER
      31, 2006 AND 2005**




**December
                  31,****2006**
              
              **2005****(As
                  Adjusted)****ASSETS**Current
                  assets:Cash
              
              $
              10,258,654
              
              $
              5,416Other
                  receivables
              
              
              27,233
              
              
              133,334Amounts
                  due from a related party
              
              
              -
              
              
              386,054Short-term
                  assets - discontinued operation (Note 2)
              
              
              -
              
              
              1,759,741Total
                  current assets
              
              
              10,285,887
              
              
              2,284,545Long-term
                  assets - discontinued operation (Note 2)
              
              
              -
              
              
              30,415,942Deferred
                  loan commission
              
              
              -
              
              
              13,267Total
                  assets
              
              $
              10,285,887
              
              $
              32,713,754**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**Current
                  liabilities:Accounts
                  payable
              
              $
              205,941
              
              $
              49,001Other
                  payable
              
              
              164,248
              
              
              -Accrued
                  liabilities
              
              
              626,697
              
              
              198,773Convertible
                  notes - current
              
              
              21,000
              
              
              511,453Short-term
                  liabilities - discontinued operation (Note 2)
              
              
              -
              
              
              7,380,272Total
                  current liabilities
              
              
              1,017,886
              
              
              8,139,499Long-term
                  liabilities - discontinued operation (Note 2)
              
              
              -
              
              
              14,569,529Total
                  liabilities
              
              
              1,017,886
              
              
              22,709,028Stockholders'
                  equity (deficit):Preferred
                  stock, par value $0.001 per share, 10,000,000 shares authorized
                  and 0
                  shares issued and outstanding
              
              
              -
              
              
              -Common
                  stock, par value $0.001 per share, 150,000,000 shares authorized,
                  65,399,382 and 64,182,283 shares issued and outstanding
              
              
              65,399
              
              
              64,182Additional
                  paid-in capital
              
              
              21,694,786
              
              
              21,310,816Accumulated
                  deficit
              
              
              (12,565,386
              )
              
              (7,561,773
              )Accumulated
                  other comprehensive income (loss) - translation
                  adjustments
              
              
              73,202
              
              
              (3,808,499
              )Total
                  stockholders' equity
              
              
              9,268,001
              
              
              10,004,726Total
                  liabilities and stockholders' equity
              
              $
              10,285,887
              
              $
              32,713,754




See
      accompanying notes to consolidated financial
      statements.




F-3


**INTRA-ASIA
      ENTERTAINMENT CORPORATION AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**


**YEARS
      ENDED DECEMBER 31, 2006 AND 2005**





**Year
                Ended December 31,****2006**
            
            **2005****(As
                Adjusted)**Revenue
            
            $
            -
            
            $
            -Expenses:General
                and administrative
            
            
            544,347
            
            
            513,874Depreciation
                and amortization
            
            
            -
            
            
            905Total
                expenses
            
            
            544,347
            
            
            514,779Loss
                from operations
            
            
            (544,347
            )
            
            (514,779
            )Interest
                expense
            
            
            (121,717
            )
            
            (481,723
            )Foreign
                exchange gain
            
            
            274,223
            
            
            -Other
                loss
            
            
            (426,602
            )
            
            -Loss
                before income taxes
            
            
            (818,443
            )
            
            (996,502
            )Income
                taxes
            
            
            800
            
            
            800Loss
                from continuing operation
            
            
            (819,243
            )
            
            (997,302
            )Loss
                from discontinued operation (Note 2)
            
            
            (437,065
            )
            
            (9,045,778
            )Loss
                on disposal of discontinued operation (Note 2)
            
            
            (3,747,305
            )
            
            -Net
                loss
            
            $
            (5,003,613
            )
            $
            (10,043,080
            )Weighted
                average shares of outstanding - basic
            
            
            64,666,574
            
            
            63,375,583Weighted
                average shares of outstanding- diluted
            
            
            64,666,574
            
            
            63,375,583Loss
                per share - basic and diluted
            
            $
            (0.08
            )
            $
            (0.16
            )Continuing
                operations - basic and diluted
            
            $
            (0.01
            )
            $
            (0.02
            )Discontinued
                operation - basic and diluted
            
            $
            (0.06
            )
            $
            (0.14
            )Comprehensive
                loss:Net
                loss
            
            $
            (5,003,613
            )
            $
            (10,043,080
            )Translation
                adjustments
            
            
            3,881,701
            
            
            383,948Total
                comprehensive loss
            
            $
            (1,121,912
            )
            $
            (9,659,132
            )




See
      accompanying notes to consolidated financial statements.




F-4




**INTRA-ASIA
      ENTERTAINMENT CORPORATION AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY**


**YEARS
      ENDED DECEMBER 31, 2006 AND 2005**




Shares
              
              Amount
              
              Additional
                  Paid-In Capital
              
              Retained
                  Earnings (Accumulated Deficits)
              
              Accumulated
                  Other Comprehensive Loss
              
              Total
                  Stockholders' EquityBalance,
                  December 31, 2004
              
              
              61,782,218
              
              $
              61,782
              
              $
              20,028,401
              
              $
              2,481,307
              
              $
              (4,192,447
              )
              $
              18,379,043Conversion
                  of principal of notes payable
              
              
              1,283,036
              
              
              1,283
              
              
              613,167
              
              
              -
              
              
              -
              
              
              614,450Conversion
                  of accrued interest
              
              
              117,029
              
              
              117
              
              
              53,463
              
              
              -
              
              
              -
              
              
              53,580Liability
                  assumed by CEO
              
              
              -
              
              
              -
              
              
              26,870
              
              
              -
              
              
              -
              
              
              26,870Donation
                  received by Fuhua (85% interest)
              
              
              -
              
              
              -
              
              
              8,571
              
              
              -
              
              
              -
              
              
              8,571Issuance
                  of common shares
              
              
              1,000,000
              
              
              1,000
              
              
              379,000
              
              
              -
              
              
              -
              
              
              380,000Forgiveness
                  of liability
              
              
              -
              
              
              -
              
              
              2,851
              
              
              -
              
              
              -
              
              
              2,851Beneficial
                    conversion features on convertible notes
              
              
              -
              
              
              -
              
              
              99,837
              
              
              -
              
              
              -
              
              
              99,837Deemed
                    interest due to warrants issued related to convertible notes
                    payable
              
              
              -
              
              
              -
              
              
              98,656
              
              
              -
              
              
              -
              
              
              98,656Translation
                  adjustments
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              383,948
              
              
              383,948Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (10,043,080
              )
              
              -
              
              
              (10,043,080
              )Balance,
                  December 31, 2005
              
              
              64,182,283
              
              
              64,182
              
              
              21,310,816
              
              
              (7,561,773
              )
              
              (3,808,499
              )
              
              10,004,726Conversion
                  of principal notes payable
              
              
              1,005,664
              
              
              1,006
              
              
              280,580
              
              
              -
              
              
              -
              
              
              281,586Conversion
                  of accrued interest
              
              
              211,435
              
              
              211
              
              
              58,990
              
              
              -
              
              
              -
              
              
              59,201Beneficial
                    conversion features on convertible notes
              
              
              -
              
              
              -
              
              
              40,200
              
              
              -
              
              
              -
              
              
              40,200Deemed
                    interest due to warrants issued related to convertible notes
                    payable
              
              
              -
              
              
              -
              
              
              4,200
              
              
              -
              
              
              -
              
              
              4,200Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (5,003,613
              )
              
              -
              
              
              (5,003,613
              )Translation
                  adjustments
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              3,881,701
              
              
              3,881,701Balance,
                  December 31, 2006
              
              
              65,399,382
              
              $
              65,399
              
              $
              21,694,786
              
              $
              (12,565,386
              )
              $
              73,202
              
              $
              9,268,001




See
      accompanying notes to consolidated financial statements.




F-5




**INTRA-ASIA
      ENTERTAINMENT CORPORATION AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**YEARS
      ENDED DECEMBER 31, 2006 AND 2005**




**Year
                Ended December 31,****2006**
            
            **2005****(As
                Adjusted)**Cash
                flows from operating activities:Net
                loss
            
            $
            (5,003,613
            )
            $
            (10,043,080
            )Adjustments
                to reconcile net loss to net cashprovided
                by operating activities:Investment
                loss
            
            
            -
            
            
            9,045,777Depreciation
            
            
            -
            
            
            905Amortization
                of deferred offering cost
            
            
            21,667
            
            
            46,817Amortization
                of discounts to convertible notes
            
            
            140,574
            
            
            202,843Stock
                compensation
            
            
            -
            
            
            80,000Loss
                from discontinued operation (Note 2)
            
            
            437,065
            
            
            -Loss
                on disposal of discontinued operation (Note 2)
            
            
            3,747,305
            
            
            -Changes
                in assets and liabilities (excluding discontinued
                operation):Other
                receivables
            
            
            74,814
            
            
            (100,711
            )Accounts
                payable
            
            
            7,420
            
            
            (65,922
            )Accrued
                liabilities
            
            
            770,921
            
            
            143,340Cash
                provided by operating activities - discontinued operation
            
            
            431,595
            
            
            4,623,447Net
                cash provided by operating activities
            
            
            627,748
            
            
            3,933,416Cash
                flows from investing activities:Decrease
                in advanced from buyers
            
            
            (189,674
            )
            
            -Proceeds
                from sale of financial assets - discontinued operation
            
            
            10,036,781
            
            
            -Cash
                used in investing activities - discontinued operation
            
            
            (1,084,178
            )
            
            (4,931,537
            )Net
                cash provided by (used in) investing activities
            
            
            8,762,929
            
            
            (4,931,537
            )Cash
                flows from financing activities:Proceeds
                from issuing convertible notes
            
            
            84,000
            
            
            393,566Proceeds
                from issuing common shares
            
            
            -
            
            
            300,000Repayment
                of payable - related party
            
            
            -
            
            
            (21,301
            )Cash
                used in financing activities - discontinued operation
            
            
            -
            
            
            (586,001
            )Net
                cash provided by financing activities
            
            
            84,000
            
            
            86,264Effect
                of change in exchange rates on cash
            
            
            29,068
            
            
            830,544Net
                increase in cash and cash equivalents
            
            
            9,503,745
            
            
            (81,313
            )Cash
                and cash equivalents, beginning of period - discontinued
                operation
            
            
            749,493
            
            
            825,312Cash
                and cash equivalents, beginning of period
            
            
            5,416
            
            
            10,910Cash
                and cash equivalents, end of period
            
            $
            10,258,654
            
            $
            754,909Components
                of cash and cash equivalents, end of periodFrom
                discontinued operation
            
            
            -
            
            
            749,493From
                continuing operations
            
            
            10,258,654
            
            
            5,416Supplemental
                disclosure of cash flow information:Cash
                paid during the year for:Interest
            
            $
            -
            
            $
            778,392Income
                taxes
            
            $
            800
            
            $
            619,888




See
      accompanying notes to consolidated financial statements.





F-6




**INTRA-ASIA
      ENTERTAINMENT CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED DECEMBER 31, 2006 AND 2005**








**NOTE
      1 --** **GENERAL
      AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





**Organization
      and Basis of Presentation**





Intra-Asia
      Entertainment Corporation (the
      "Company" and "Intra-Asia") was incorporated in the State of Delaware on
      July 18, 1997 for the purpose of holding a majority interest in Weifang
      Fuhua Amusement Park Co., Ltd. ("Fuhua") and acquiring and developing amusement
      parks in the People's Republic of China ("PRC"). Fuhua is located in Weifang,
      Shandong Province, PRC. Fuhua owns and operates an amusement park with a total
      of 21 rides and attractions, four restaurants and six retail and souvenir
      stores.





On
      April
      3, 2006, the Company sold its 85% interest in Weifang Fuhua Amusement Park
      Co.,
      Ltd (Fuhua) by entered into a supplementary agreement with Beijing Maidashi
      Investment Co., Ltd (the Buyer) with respect to the transfer and acceptance
      agreement entered on March 25, 2006 to acknowledge that the control of
      Fuhua Amusement Park Co., Ltd. has been officially taken over by the Buyer
      based
      on the fact that the full amount of consideration of $10 million has been
      received by the Company, the application of changing ownership signed by both
      parties has been filed with a relevant government agency, and the share
      certificate of Fuhua has been surrendered to the Buyer on that day.





Under
      the
      provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of
      Long-Lived Assets” (FAS 144), the financial results of Fuhua are classified as
      discontinued operations in the accompanying Consolidated Statements of Earnings
      for all periods presented.





On
      May 4,
      2004, the Company incorporated and owned 100% of Intra-Asia Entertainment (Asia
      Pacific) Limited (“Intra-Asia Samoa”), a Samoan company. On May 15, 2004, the
      Company incorporated and owned 100% of Intra-Asia Entertainment (China) Limited
      (“Intra-Asia Hong Kong”), a Chinese company. Intra-Asia Samoa and Intra-Asia
      Hong Kong owns 40% and 60% of Oriental Intra-Asia Entertainment (China) Limited
      (“Intra-Asia China”), respectively. Intra-Asia China’s current business plan is
      to engage in investing in other company or companies in China.





The
      consolidated financial statements include the accounts of Intra-Asia
      Entertainment Corporation, it's wholly owned subsidiaries Intra-Asia
      Entertainment (Asia Pacific) Limited and Intra-Asia Entertainment (China)
      Limited, its indirectly wholly owned subsidiary Oriental Intra-Asia
      Entertainment (China) Limited, and its majority owned subsidiary, Weifang Fuhua
      Amusement Park Co., Ltd (discontinued operations). All material intercompany
      accounts, transactions and profits have been eliminated in
      consolidation.





F-7




**NOTE
      1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)**





**Use
      of Estimates**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management 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. Among the more significant estimates included
      in
      these financial statements are the estimated valuation allowance for deferred
      income tax assets. Actual results could differ materially from those
      estimates.




**Cash
      Equivalents**





The
      Company classifies all highly liquid investments purchase with a maturity of
      three months or less as cash equivalents.





**Inventory**




Inventory
      is stated at the lower of cost or market and primarily consists of products
      for
      retail, including merchandise, food and miscellaneous supplies which include
      repair parts for rides and attractions.





**Depreciation
      and Amortization**





Computers
      and other equipment are stated at the acquisition cost and depreciation expense
      is determined using the straight-line method over the shorter of the estimated
      useful lives of the assets or the remaining term of the joint venture as
      follows:





Computers
            3
                to 5 yearsOther
                equipment
            5
                years




Maintenance
      and repairs are charged directly to expense as incurred. When an item is retired
      or otherwise disposed of, the cost and applicable accumulated depreciation
      are
      removed and the resulting gain or loss is recognized and reflected as an item
      before operating income (loss). Property and equipment were fully depreciated
      at
      December 31, 2006.





**Long-Lived
      Assets**





The
      Company adopted the provisions of SFAS No. 144 which requires that
      long-lived assets be reviewed for impairment whenever events or changes in
      circumstances indicate that the carrying amount of an asset may not be
      recoverable through the estimated undiscounted cash flows expected to result
      from the use and eventual disposition of the assets. Whenever any such
      impairment exists, an impairment loss will be recognized for the amount by
      which
      the carrying value exceeds the fair value.





F-8




**NOTE
      1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)**





**Fair
      Value of Financial Instruments**




The
      carrying amount of cash, other receivables, accounts payable and accrued
      liabilities are reasonable estimates of their fair value because of the short
      maturity of these items. The carrying amounts of the Company's bank loans
      approximate fair value because the interest rates on these loans are subject
      to
      change with market interest rates. Due from related parties does not bear any
      interest and its carrying amount is reasonable estimates of its fair value
      as
      the imputed interest is immaterial.





**Revenue
      Recognition**




The
      Company recognizes revenue from the sale of admission tickets when the customers
      actually visited the park. The proceeds from admission tickets that are sold
      but
      not used are accounted for as deferred revenue.




The
      Company sells memberships for its indoor water park. The membership fees are
      for
      five types of membership: one year, three years, and three types of lifetime
      memberships. The Company recognizes the deferred revenue in accordance with
      the
      membership terms on a straight-line basis. Regarding the lifetime memberships,
      the Company believes that a period of ten years is expected to be the customer
      relationship, for revenue recognition purposes.





**Income
      Taxes**




The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards No 109, "Accounting for Income Taxes" ("SFAS No. 109").
      SFAS No. 109 requires an entity to recognize deferred tax liabilities and
      assets. Deferred tax assets and liabilities are recognized for the future tax
      consequence attributable to the difference between the tax bases of assets
      and
      liabilities and their reported amounts in the financial statements. Deferred
      tax
      assets and liabilities are measured using the enacted tax rate 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 income in the period that included the
      enactment date.




Fuhua
      is
      subject to PRC tax laws and the tax rate is 33% on taxable income. Since its
      inception, Fuhua has filed its tax returns with Weifang Neo-Luck (Group)
      Corporation (“Neo-Luck”), the 15% shareholder of the Company, under an informal
      tax-sharing arrangement whereby the Company computed its income tax on a
      separate-company basis and remitted its tax payments directly to Neo-Luck.
      In
      1999, Fuhua entered into a formal tax-sharing agreement with Neo-Luck. Pursuant
      to the executed tax-sharing agreement, Neo-Luck will indemnify the Company
      for
      any tax liability to the tax authority if there are any disputes over Fuhua's
      tax filing position





For
      U.S.
      income tax purposes, no provision has been made for U.S. taxes on undistributed
      earnings of Fuhua. It was not practicable to estimate the amount of additional
      tax that might be payable on the foreign earnings if they were remitted as
      dividends, were lent to the Company, or if the Company should sell its stock
      in
      Fuhua. However, the Company believes that U.S. foreign tax credits and net
      operating loss carry-forward available would substantially eliminate any
      additional tax effects.





F-9




**NOTE
      1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)**





**Deferred
      Offering Cost**





The
      Company accounts for offering costs incurred in private placements as deferred
      expense and amortizes it over the economic life of these convertible notes.
      In
      accordance with APB No. 14, the Company accounts for the fair value of
      warrants and beneficial conversion feature resulting from issuing convertible
      notes as discounts to these convertible notes and amortizes the discounts over
      the economic life of these convertible notes.





**Share-Based
      Payments**





The
      Company adopted Statement of Financial Accounting Standards No 123(R),
“Share-Based Payments” (“SFAS No. 123R”) effective January 1, 2006.
      SFAS No. 123R amends existing accounting pronouncements for share-based
      payment transactions in which an enterprise receives employee and certain
      non-employee services in exchange for (a) equity instruments of the
      enterprise or (b) liabilities that are based on the fair value of the
      enterprise’s equity instruments or that may be settled by the issuance of such
      equity instruments. SFAS No. 123R generally requires such transactions be
      accounted for using a fair-value-based method. The Company has never issued
      any
      stock options to any employees. The Company has issued only stock warrants
      in
      connection with issuing convertible notes before and after January 1, 2006.
      All of the outstanding stock warrants were accounted for using a
      fair-value-based method in accordance with SFAS No. 123, which was
      consistent with requirements under SFAS No. 123R.





**Foreign
      Currency Translation and Transactions**




The
      Renminbi ("RMB"), the national currency of the PRC, is the primary currency
      of
      the economic environment in which the operations of Fuhua are conducted. The
      Company uses the United States dollar ("U.S. dollars") for financial reporting
      purposes.




The
      Company translates Fuhua's assets and liabilities into U.S. dollars using the
      rate of exchange prevailing at the balance sheet date, and the statement of
      income is translated at average rates during the reporting period. Adjustments
      resulting from the translation of Fuhua's financial statements from RMB into
      U.S. dollars are recorded in stockholders' equity as part of accumulated
      comprehensive loss - translation adjustments. Gains or losses resulting from
      transactions in currencies other than RMB are reflected in income for the
      reporting period.





**New
      Accounting Pronouncements**





In
      July
      2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in
      Income Taxes ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in
      income taxes recognized in an enterprise’s financial statements in accordance
      with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes
      a
      recognition threshold and measurement attribute for the financial statement
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. This Interpretation also provides guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure, and transition. This Interpretation is effective for fiscal years
      beginning after December 15, 2006, with earlier adoption permitted. The impact
      of FIN 48 had no effect on the Company’s financial statements.




F-10




**NOTE
      1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)**





**New
      Accounting Pronouncements (Continued)**





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      (SFAS) No. 157, Fair Value Measurement, which provides guidance for applying
      the
      definition of fair value to various accounting pronouncements. SFAS 157 is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007. The Company is currently evaluating the provisions of SFAS
      157.





In
      September 2006, the FASB also issued SFAS No. 158, Employers' Accounting for
      Defined Benefit Pension and Other Postretirement Plans. SFAS 158 amends SFAS
      87,
      88, 106, and 132R, and requires employers to recognize the overfunded or
      underfunded status of defined benefit postretirement plans as an asset or
      liability in its statement of financial position. The impact of SFAS 158 had
      no
      effect on the Company’s financial statements.





In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin 108 ("SAB 108"), considering the Effect of Prior Year Misstatements
      when Quantifying Misstatements in the Current Year Financial Statements, that
      addresses how uncorrected errors in previous years should be considered when
      quantifying errors in the current year financial statements. SAB 108 is
      effective for fiscal years ending November 15, 2006 and, upon adoption,
      companies are allowed to record the effects as a cumulative-effect adjustment
      to
      retained earnings. The impact of SAB 108 had no effect on the Company’s
      financial statements.




**NOTE
      2 -- DISCONTINUED OPERATIONS**





On
      April
      3, 2006, the Company closed the previously announced sales of its 85% interest
      in Weifang Fuhua Amusement Park Co., Ltd (Fuhua) by entered into a supplementary
      agreement with Beijing Maidashi Investment Co., Ltd. (the Buyer) with respect
      to
      the transfer and acceptance agreement entered on March 25, 2006 to
      acknowledge that the control of Fuqua Amusement Park Co., Ltd. has been
      officially taken over by the Buyer based on the fact that the full amount of
      consideration of $10 million has been received by the Company, the application
      of changing ownership signed by both parties has been filed with a relevant
      government agency, and the share certificate of Fuhua has been surrendered
      to
      the Buyer on that day.





Under
      the
      provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of
      Long-Lived Assets” (FAS 144), the financial results of Fuhua are classified as
      discontinued operations in the accompanying Consolidated Statements of Earnings
      for all periods presented.





Operating
      results of the discontinued operations which excluded loss on disposal and
      minority interest were as follows:





F-11




**NOTE
      2 -- DISCONTINUED OPERATIONS (Continued)**




**Year
                Ended December 31,****2006**
            
            **2005**Net
                sales
            
            $
            2,158,659
            
            $
            14,581,532Total
                revenues
            
            
            2,201,506
            
            
            14,581,532Pretax
                Income (loss)
            
            
            (514,194
            )
            
            (10,022,202
            )85%
                interest in income (loss)
            
            $
            (437,065
            )
            $
            (9,045,777
            )




As
      of
      December 31, 2006, the Company incurred disposal expenses totaling $125,000
      in
      the U.S. related mainly to the legal advice, drafting sales agreement, and
      valuation advice in connection with this disposal. In addition, the Company
      incurred disposal expense totaling $27,893 in China related mainly to
      identifying potential buyers, business consulting, legal advice, valuation
      advice, and rental for occupying an office space for the temporary
      purpose.





As
      of
      December 31, 2005, assets and liabilities of the Company’s discontinued
      operations were classified as held for sales in the accompanying Consolidated
      Balance Sheet under the following captions: Short-term assets- discontinued
      operation, Long-term assets- discontinued operation, short-term liabilities-
      discontinued operation, and Long-term liabilities- discontinued operation.
      The
      discontinued assets and liabilities at December 31, 2005 were composed of as
      follows:





F-12




**NOTE
      2 -- DISCONTINUED OPERATIONS (Continued)**


**December
                  31, 2005**Short-term
                  assets — discontinued operationCash
              
              $
              749,493Trade
                  receivables
              
              
              491,694Other
                  receivables
              
              
              336,849Inventories
              
              
              181,705Total
              
              
              1,759,741Long-term
                  assets — discontinued operationProperty,
                  plant and equipments
              
              
              30,415,942Total
                  assets — discontinued operation
              
              $
              32,175,683Short-term
                  liabilities — discontinued operationShort-term
                  bank loans
              
              $
              161,965Long-term
                  bank loans — current portion
              
              
              4,270,726Accounts
                  payable
              
              
              1,596,429Accrued
                  liabilities
              
              
              407,883Staff
                  bonus and welfare fund
              
              
              140,253Payable
                  to related party
              
              
              803,016Total
              
              
              7,380,272Long-term
                  liabilities — discontinued portionLong-term
                  bank loans
              
              
              9,976,926Shareholder’s
                  loan — Neo-Luck
              
              
              2,788,035Minority
                  interest — 15% interest in Fuhua
              
              
              1,804,568Total
                  liabilities — discontinued liabilities
              
              
              14,569,529Total
                  liabilities — discontinued operation
              
              $
              21,949,80185%
                  of interest in Fuhua
              
              $
              10,225,882


F-13


**NOTE
      2 -- DISCONTINUED OPERATIONS (Continued)**





The
      Company assessed the loss on disposal of discontinued operation as
      follows:


Carrying
                  value of investment in Fuhua at April 3, 2006 without considering
                  the
                  amount of translation adjustment on the Company’s book
              $
                  9,855,432Translation
                  adjustment on the Company’s book to be considered per EITF 01-5 for
                  assessing impairment purpose
              3,738,980Carrying
                  value of investment to be disposed of for impairment assessment
                  purpose
              13,594,412Proceeds
                  expected to receive
              10,000,000Estimated
                  impairment loss, which reduced the carrying value of long-term
                  assets —
                  discontinued operation
              $
                  3,594,412Disposal
                  expense
              152,893Loss
                  on disposal of discontinued operation
              $3,747,305




Based
      on
      the above assessment, the impairment was used to reduce the carrying value
      of
      long-term assets in discontinued operation presented at April 3, 2006. As result
      of the above accounting treatment, a corresponding amount of currency
      translation adjustment on the Company’s book was reclassified as part of
      carrying value of investment in Fuhua to determine the loss on disposal.




**NOTE
      3 -- CONVERTIBLE NOTES**





**Convertible
      Notes Issued in 2006**





On
      January 17 and February 16, 2006, the Company sold additional 0.86 and
      2.14 units of convertible promissory notes at $28,000 per unit, respectively,
      to
      Top Loyal Development Ltd. and obtained gross proceeds of $84,000 in the
      aggregate. In connection with these two transactions, Top Loyal Development,
      by
      exercising the warrants attached to the convertible notes, could purchase up
      to
      300,000 shares of the Company’s stock at a price of $0.38 per share any time
      from the issuing date until March 31, 2006. The Company estimated the fair
      value of the warrants attached to the promissory notes at $4,714 by using
      Black-Scholes option pricing model. In accordance with EITF 00-27, the Company
      allocated the fair value of $4,200 to the warrants issued and the fair value
      of
      $79,800 to the convertible notes in accordance with relative fair value method.
      Based on the fair value of $79,800, the Company recognized the beneficial
      conversion feature of $40,200 in accordance with the market price of the
      Company’s common stock on each issuing date. Consequently, the convertible notes
      of $84,000 had a total discount of $44,400. As the outstanding convertible
      notes
      matured on March 31, 2006, the total discount of $44,400 was recognized as
      part of interest expense for the year ended December 31, 2006.




F-14




**NOTE
      3 -- CONVERTIBLE NOTES (Continued)**





**Convertible
      Notes Issued in 2005**




In
      the
      quarter ended June 30, 2005, the Company sold a total of 8.5 units of
      convertible promissory notes to a Hong Kong investor and obtained gross proceeds
      of $238,180. These notes carry an interest rate of 8% per annum and the
      principal and interest are payable in full on or before March 31, 2006. The
      notes are convertible in full at the option of the holder at any time into
      shares of the Company's common stock at $0.28 per share in principal and accrued
      interest and attached to the notes are warrants to purchase up to 850,642 shares
      of the Company's stock at an exercise price of $0.38 per share. These warrants
      are exercisable any time through and including March 31, 2006. The Company
      bears
      10% of the selling cost. Based on the above terms and in accordance with EITF
      00-27, firstly the Company estimated the fair value of the warrant attached
      to
      the promissory note at $100,616 by using Black-Scholes model; secondly, by
      using
      the relative fair value method, the Company allocated the fair value of $68,636
      to the warrants issued; and thirdly, the Company recognized the beneficial
      conversion feature of $56,357. Consequently, the convertible notes of $238,180
      had a total discount of $124,993.




On
      July 5
      and December 5, 2005, the Company sold additional 1.8 and 0.8 units of
      convertible promissory notes, respectively, to Top Loyal Development Ltd. and
      obtained gross proceeds of $73,500. In connection with these two transactions,
      Top Loyal Development, by exercising the warrants attached to the convertible
      notes may purchase up to 262,500 shares of the Company's stock at a price of
      $0.38 per share. The Company estimated the fair value of the warrants attached
      to the promissory notes at $51,982 by using Black-Scholes model. The Company
      allocated the fair value of $30,020 to the warrants issued and recognized the
      beneficial conversion feature of $43,480. Consequently, the convertible notes
      of
      $73,500 had a total discount of $73,500.




For
      the
      year ended December 31, 2005, the amortization of warrants and benefit
      conversion feature for all of the outstanding convertible notes were $137,404
      and $147,245, respectively. For the year ended December 31, 2005, the
      amortization of deferred offering cost was $77,985. As of December 31, 2006,
      all
      of the outstanding balance of warrant and beneficial conversion feature will
      be
      fully amortized with the maturity of associate convertible notes.




NOTE
      4 --
      EQUITY TRANSACTIONS





**Transactions
      in 2006**





On
      February 22, 2006, $11,960 of convertible promissory notes and $2,988 of
      accrued interest were converted into 53,385 shares of the Company’s common
      stock, per the request of the note holders, at the conversion price of $0.28
      per
      share.





F-15




**NOTE
      4 -- EQUITY TRANSACTIONS (Continued)**





**Transactions
      in 2006 (Continued)**





On
      July
      28, 2006, $269,626 of convertible promissory notes and $56,214 of accrued
      interest were converted into 1,163,714 shares of the Company’s common stock, per
      the request of the note holders, at the conversion price of $0.28 per share.
      The
      transaction is pursuant to a signed agreement dated April 1, 2006 with Top
      Loyal
      Investment Co., Ltd. (which invested in the Company’s convertible notes),
      Neo-Luck Group, and Weifang Fuhua Amusement Park Co., Ltd. Pursuant to the
      signed agreement, the Company transferred its right to receive the amount of
      approximately $386,054 from Neo-Luck to Top Loyal and reduce the outstanding
      convertible notes by the same amount accordingly. Pursuant to the signed
      agreement, Top Loyal will collect cash payment of $386,054 directly from Fuhua
      and convert the remaining outstanding principal of $269,626 and the accrued
      interest of $56,214 as of March 31, 2006 into 1,163,714 shares of the
      Company’s common stock at $0.28 per share, which was specified in the original
      convertible note subscription agreement. Pursuant to the signed agreement,
      the
      Company will not be obligated to repay Top Loyal the approximate amount of
      $386,054 if Neo-Luck and/or Fuhua ultimately does not pay this amount to Top
      Loyal.





**Transactions
      in 2005**




During
      2005, convertible notes payable totaling $614,450 were converted into 1,283,036
      shares of common stock at an average conversion price of approximately $0.48
      per
      share.




During
      2005, the accrued interest totaling $53,580 related to the aforementioned
      convertible notes payable converted was converted into 117,029 shares of common
      stock at an average conversion price of approximately $0.46 per
      share.




During
      2005, the beneficial conversion feature related to convertible notes payable
      issued in 2005 totaled $99,837.




During
      2005, the deemed interest related to warrants issued in connection with the
      convertible notes payable issued in 2005 totaled $98,656.




On
      February 3, 2005, the Company's Chief Executive Officer assumed a liability
      of
      $26,870 owed to a former auditor of GloTech Industries, Inc. (predecessor to
      Intra-Asia Entertainment Corporation, a Nevada corporation). As a result, the
      Company reclassified the $26,870 liability into additional paid-in
      capital.




During
      2005, Fuhua received donations of approximately $10,083, of which 15% was
      attributed to minority interest and 85% (approximately $8,571) was attributed
      to
      the Company.




In
      April
      2005, a former shareholder of GloTech Industries, Inc repaid a liability of
      $2,851 owed to the Company's current counsel. As a result, the Company
      reclassified the liability of $2,851 into additional paid-in
      capital.




On
      June
      23, 2005, the Company issued 1 million shares of its common stock at $0.30
      per
      share and received proceeds of $300,000. On the date of the issuance, the market
      price of the Company's common stock was $0.38 per share. Accordingly, the
      Company recorded stock compensation of $80,000.




F-16




**NOTE
      4 -- EQUITY TRANSACTIONS (Continued)**





**Transactions
      in 2005 (Continued)**





As
      of
      December 31, 2005, the Company had outstanding warrants totaling 5,388,115
      with
      an average exercise price of $0.36 per share.




**NOTE
      5 -- SHARE-BASED PAYMENTS**





Effective
      January 1, 2006, the Company adopted the fair value recognition provisions
      of SFAS No. 123R. The Company recognized the share-based compensation cost
      based on the grant-date fair value estimated in accordance with the new
      provisions of SFAS No. 123R. The Company issued warrants, in aggregate, to
      purchase 85,714 and 214,286 shares of the Company’s common stock in connection
      with issuing convertible notes on January 17 and February 16, 2006,
      respectively, with an exercise price of $0.38 per share. These warrants expired
      on March 31, 2006 pursuant to the convertible note agreement. First, the
      Company used Black-Scholes option pricing model to determine the fair value
      of
      the stock warrants on the grant date. The fair value of stock warrants for
      85,714 shares was at $0.03 per share resulting in a share-based compensation
      totaling $2,571. The fair value of stock warrants of 214,286 shares was at
      $0.01
      per share resulting in a share-based compensation totaling $2,143. Second,
      the
      Company allocated the fair value of $4,200, instead of $4,714, to the warrants
      and the fair value of $79,800 to the convertible note in accordance with
      relative fair value method. Because the outstanding convertible notes matured
      on
      March 31, 2006, the aggregate $4,200 was recognized as non-cash interest
      expense for the year ended December 31, 2006.





**Assumptions**





The
      fair
      value for the share-based awards was estimated using the Black-Scholes option
      pricing model with the assumptions listed below:




**December
                31,****2006**
            
            **2005**Expected
                volatility
            
            
            124.82
            %
            
            141.12
                - 152.79
            %Weighted
                average volatility
            
            
            124.82
            %
            
            141.12
                - 152.79
            %Expected
                life (years)
            
            
            0.14
            
            
            0.74
                - 1.24Risk
                free interest rate
            
            
            4.44
            %
            
            2.82
                - 3.55
            %




The
      expected volatilities are based on the historical volatility of the Company’s
      stock. The observation is made on a weekly basis. The period of observation
      covered was from January 17, 2005 to February 16, 2006. The expected
      terms of stock warrants are based on the remaining contractual life of stock
      warrants outstanding as these stock warrants vested immediately.





F-17




**NOTE
      5 -- SHARE-BASED PAYMENTS (Continued)**





**Assumptions
      (Continued)**





A
      summary
      of stock warrants for the year ended December 31, 2006 is presented as
      follows:




**Stock Warrants**
            
            **Shares**
            
            **Weighted-
                Average Exercise Price**
            
            **Weighted-Average
                Remaining Contractual Term (Months)**
            
            **Aggregate
                Intrinsic Value at Reporting Date**Outstanding
                at January 1, 2006
            
            
            5,388,114
            
            $
            0.36
            
            
            17.70
            
            $
            **—**Granted
            
            
            300,000
            
            
            0.38
            
            
            **—**Exercised
            
            
            **—**Forfeited
                or expired
            
            
            (2,416,714
            )
            
            0.38Outstanding
                at December 31, 2006
            
            
            3,271,400
            
            
            0.35
            
            
            30.77
            
            $
            **—**Exercisable
                at December 31, 2006
            
            
            3,271,400
            
            $
            0.35
            
            
            30.77
            
            $
            **—**




NOTE
      6 --
      INCOME TAXES




The
      income tax provision was as follows:


Year
                    Ended December 31,Current
                
                2006
                
                2005Domestic:Federal
                
                $
                -
                
                $
                -State
                
                
                800
                
                
                800Foreign:China
                
                
                -
                
                
                619,888$
                800
                
                $
                620,688




Fuhua
      was
      subject to taxation under the laws of the PRC based on a tax rate of 33% (30%
      for the central government and 3% for the local government). Income tax expense
      in Fuhua consists primarily of statutory central and local income taxes of
      the
      PRC. Intra-Asia is subject to the federal and state tax laws of the United
      States of America. Intra-Asia recognized the minimum California income tax
      of
      $800 for the years ended December 31, 2006 and 2005 based on California income
      tax laws.




F-18




**NOTE
      6 -- INCOME TAXES (Continued)**





The
      difference between the effective income tax rate and the expected federal
      statutory rate was as follows:




Year
                Ended December 31,2006
            
            2005Federal
                statutory rate, net of state benefit
            
            
            (31.0
            )%
            
            (31.0
            )%State
                taxes
            
            
            (8.8
            )
            
            (8.8
            )Foreign
                income tax rate impact
            
            
            (33.0
            )
            
            (33.0
            )Permanent
                difference
            
            
            35.0
            
            
            72.7Other
            
            
            -
            
            
            2.2Change
                in valuation allowance
            
            
            37.8
            
            
            3.5Effective
                income tax rate
            
            
            -
            %
            
            5.6
            %




At
      December 31, 2006, Intra-Asia had net operating loss carryforwards of
      approximately $3.17 million for federal income tax purpose and approximately
      $2.93 million for state income tax purposes. For federal income tax purposes,
      the net operating loss will expire at various periods through 2026.




Net
      deferred tax assets consist of the following:




December
                  31,2006
              
              2005Net
                  operating loss carryforward
              
              $
              1,240,000
              
              $
              1,109,000Deferred
                  tax liabilities
              
              
              -
              
              
              (19,000
              )1,240,000
              
              
              1,090,000Valuation
                  allowance
              
              
              (1,240,000
              )
              
              (1,090,000
              )Net
                  deferred tax assets
              
              $
              -
              
              $
              -


In
      assessing the realizability of deferred tax assets, management considers whether
      it is more likely than not that some portion or all of the deferred tax assets
      will not be realized. The ultimate realization of deferred tax assets is
      dependent upon the generation of future taxable income during the periods in
      which those net operating losses become deductible. Based upon the business
      nature of the U.S. operations at December 31, 2006 and 2005, management has
      concluded that it is uncertain whether Intra-Asia will realize the benefits
      of
      these deferred tax assets. Consequently, the Company has provided a full
      valuation allowance against the gross deferred tax assets.




F-19




**NOTE
      7 -- LOSS PER SHARE**





The
      Company adopted Statement of Financial Accounting Standards
      (SFAS) No. 128, “Earnings per Share” ** (“SFAS No. 128”).
      Basic Earnings per Share (“EPS”) are computed by dividing net loss available to
      common shareholders (numerator) by the weighted average number of common
      shares outstanding (denominator) during the period. Diluted EPS gives
      effect to all dilutive potential common shares outstanding during a period.
      In
      computing diluted EPS, the average price for the period is used in determining
      the number of shares assumed to be purchased from the exercise of stock
      warrants. Stock warrants to purchase 3,271,400 shares with an exercise prices
      ranging from $0.35 to $0.38 per share were outstanding as of December 31, 2006.
      No warrants were included in the determination of potential common shares
      equivalents because the average market prices per share of the Company’s common
      stock for the year ended December 31, 2006 was lower than the weighted average
      exercise price. Therefore, these warrants were anti-dilutive.




**NOTE
      8 -- RELATED PARTY TRANSACTIONS**





Lease




The
      Company leases its facility from Weicheng International, Inc., a shareholder,
      under an operating lease agreement that currently is under month-to-month terms.
      The base rent is $1,500 per month. Rent expense under this lease agreement
      amounted to $18,000 for the year ended December 31, 2006.




F-20




**NOTE
      9 -- SUPPLEMENTARY INFORMATION ABOUT CASH FLOWS**




**Year
                  Ended Ended December 31,****2006**
              
              **2005****Non-cash Transactions**Common
                  stock
              
              $
              1,207
              
              $
              1,160Additional
                  paid-in capital
              
              
              336,593
              
              
              578,840Convertible
                  notes
              
              
              (281,586
              )
              
              (580,000
              )Additional
                  paid-in capital
              
              
              44,400
              
              
              124,993Discounts
                  to convertible notes
              
              
              (44,400
              )
              
              (124,993
              )Additional
                  paid-in capital
              
              
              -
              
              
              6,507Investment
                  in Fuhua
              
              
              -
              
              
              (6,507
              )Common
                  stock
              
              
              10
              
              
              95Additional
                  paid-in capital
              
              
              2,977
              
              
              47,205Accrued
                  interest converted into common shares
              
              
              (59,201
              )
              
              (47,300
              )Due
                  from related party
              
              
              386,054
              
              
              -Convertible
                  notes
              
              
              (386,054
              )
              
              -


******




F-21