EXHIBIT 99.1

RISK FACTORS

Readers
should carefully consider the risks and uncertainties described below before deciding
whether to invest in shares of our common stock.

Our
failure to successfully address the risks and uncertainties described below would have a
material adverse effect on our business, financial condition and/or results of operations,
and the trading price of our common stock may decline and investors may lose all or part
of their investment. We cannot assure you that we will successfully address these risks or
other unknown risks that may affect our business.

All of our revenues and income are
expected to be derived from the Bruce Hotel and Casino.

We
anticipate that all of our revenue and income, if any, will be derived from the operations
of the Bruce Hotel & Casino. We have no other source of operating revenue. We
anticipate that results of operations at the Bruce Hotel & Casino will be lower than
historical periods because the gaming casino has been closed for remodeling since March
2005 and is not expected to reopen until the fourth quarter of 2005 or first quarter of
2006.

We have no experience in the
hospitality industry

Prior
to our acquisition of Kubuk we were in the business of exploring mineral properties. We
have no prior experience in the hospitality or gaming industry. We will rely on the
experience and expertise of Tom Liu, our new Chief Executive Officer, and our newly
appointed board of directors in the management of the Bruce Hotel & Casino. Mr. Liu
has limited experience in managing a public company.

We are subject to extensive
regulation from gaming authorities that could adversely affect us.

As
owners and operators of gaming facilities, we are subject to extensive regulation.
Governmental authorities require us and our subsidiaries to demonstrate suitability to
obtain and retain various licenses and require that we have registrations, permits and
approvals to conduct gaming operations. The regulatory authorities in Peru may limit,
condition, suspend or revoke a license to conduct gaming operations or prevent us from
owning the securities of any of our gaming subsidiaries. We may also be deemed responsible
for the acts and conduct of our employees. Substantial fines or forfeiture of assets for
violations of gaming laws or regulations may be levied against us, our subsidiaries and
the persons involved. The suspension or revocation of any of our licenses or the levy on
us or our subsidiaries of a substantial fine would have a material adverse effect on our
business.

To
date, the Bruce Hotel & Casino has demonstrated suitability to obtain and have
obtained all governmental licenses, registrations, permits and approvals necessary for us
to operate our existing gaming facilities. However, like all gaming operators, we must
periodically apply to renew our gaming license. We cannot assure you that we will be able
to obtain such renewals. In addition, if we expand our gaming operations as planned to
increase the number of tables and slot machines, we will have to meet suitability
requirements and obtain additional licenses, registrations, permits and approvals from
gaming and non-gaming authorities. Accordingly, the regulation and timing of installation
and operation of gaming tables and machines may be delayed or restricted.

The availability and cost of
financing could have an adverse effect on business.

We
intend to finance our current and future expansion and renovation projects primarily with
cash flow from operations and equity or debt financings. If we are unable to finance our
current or future expansion projects, we will have to adopt one or more alternatives, such
as reducing or delaying planned expansion, development and renovation projects as well as
capital expenditures, selling assets, securing debt financing, or obtaining additional
equity financing or joint venture partners. These sources of funds may not be sufficient
to finance our expansion, and other financing may not be available on acceptable terms, in
a timely manner or at all. If we are unable to secure additional financing, we could be
forced to limit or suspend expansion, development and renovation projects, which may
adversely affect our business, financial condition and results of operations.

---

Changes in the regulatory environment
could adversely impact our results of operation be restricting or preventing parts or all
of our operations..

From
time to time, legislators and special interest groups have proposed legislation that would
expand, restrict or prevent gaming operations. In addition, from time to time, certain
anti-gaming groups may propose referenda that, if adopted, would limit our ability to
continue to operate in those jurisdictions in which such referenda are adopted. Any
expansion of gaming or restriction on or prohibition of our gaming operations could have a
material adverse effect on our operating results.

We are subject to the possibility of
an increase in gaming taxes, which would increase our costs.

Taxing
authorities raise a significant amount of revenue through taxes and fees on gaming
activities. We believe that the prospect of significant revenue is one of the primary
reasons that jurisdictions permit legalized gaming. As a result, gaming companies are
typically subject to significant taxes and fees in addition to normal federal and local
income taxes, and such taxes and fees are subject to increase at any time. We pay
substantial taxes and fees with respect to our operations. From time to time, federal and
local legislators and officials have proposed changes in tax laws, or in the
administration of such laws, affecting the gaming industry. In addition, poor economic
conditions could intensify the efforts of state and local governments to raise revenues
through increases in gaming taxes. It is not possible to determine with certainty the
likelihood of changes in tax laws or in the administration of such laws. Such changes, if
adopted, could have a material adverse effect on our business, financial condition and
results of operations.

We are subject to non-gaming
regulation that could adversely affect us.

We
are subject to a variety of other local rules and regulations, including zoning,
environmental, construction and land-use laws and regulations governing the serving of
alcoholic beverages. We must maintain a hotel license to operate our hotel and a liquor
license to serve alcoholic beverages. The loss of these licenses would have a material
adverse impact on our revenues and results of operations. Penalties can be imposed against
us if we fail to comply with these regulations. The imposition of a substantial penalty or
the loss of service of a gaming facility for a significant period of time would have a
material adverse affect on our business.

We intend to make substantial
investments in renovating, expanding and improving the Bruce Hotel & Casino.

We
intend to raise approximately $25 million to fund the expansion, renovation and
modernization of the Bruce Hotel & Casino. The gaming casino in the Bruce Hotel &
Casino has been closed since March 2005 for remodeling and renovation, the first stage of
our renovation project. We estimate that we will be required to raise approximately $5
million to complete the renovation and reopen the gaming casino. Our ability to generate
sufficient revenue to earn a profit is dependent on our ability to raise the necessary
funds to complete the renovation and to open our casino. We are in the process of seeking
capital to complete the renovation, but have no firm commitments at this time.

Our
ability to benefit from our investments will depend on many factors, including:

| |  |  | our
ability to successfully complete the renovations;
| | - |  | -----------------------------------------------------

| |  |  | our
ability to successfully integrate the expanded operations;
| | - |  | --------------------------------------------------------------

| |  |  | our
ability to attract and retain competent management and employees;
| | - |  | ---------------------------------------------------------------------

| |  |  | our
ability to secure the licenses, permits and approvals; and
| | - |  | --------------------------------------------------------------

| |  |  | the
availability of adequate financing on acceptable terms.
| | - |  | -----------------------------------------------------------

Many
of these factors are beyond our control. Therefore, we cannot be sure that we will be able
to recover our investments in the expansion, renovation and modernization of the Bruce
Hotel & Casino.

We may experience construction delays
during our expansion project.

We
currently are engaged in a substantial renovation project to improve our gaming casino. We
also are evaluating other expansion opportunities at the Bruce Hotel & Casino. The
anticipated costs and construction periods are based upon budgets, conceptual design
documents and construction schedule estimates prepared by us in consultation with our
architects and contractors.

Construction
projects entail significant risks, which can substantially increase costs or delay
completion of a project. Such risks include shortages of materials or skilled labor,
unforeseen engineering, environmental or geological problems, work stoppages, weather
interference and unanticipated cost increases. Most of these factors are beyond our
control. In addition, difficulties or delays in obtaining any of the requisite licenses,
permits or authorizations from regulatory authorities can increase the cost or delay the

---

completion of an expansion or
development. Significant budget overruns or delays with respect to expansion and
development projects could adversely affect our results of operations.

If our key personnel leave us, our
business will be significantly adversely affected.

Our
continued success will depend, among other things, on the efforts and skills of a few key
executive officers and the experience of our property managers as well as our ability to
attract and retain additional highly qualified personnel with gaming industry experience
and qualifications to obtain the requisite licenses. We do not maintain key
man life insurance for any of our employees. There is no assurance that we would be
able to attract and hire suitable replacements for any of our key employees. We need
qualified executives, managers and skilled employees with gaming industry experience to
continue to successfully operate our business. We believe a shortage of skilled labor in
the gaming industry may make it increasingly difficult and expensive to attract and retain
qualified employees. We expect that increased competition in the gaming industry will
intensify this problem.

Inclement weather and other
conditions could seriously disrupt our business, financial condition and results of
operations.

Our
business is seasonal and inclement weather conditions could affect the number of visitors
to our hotel and casino. Our facilities are subject to risks including loss of service due
to casualty, mechanical failure, extended or extraordinary maintenance, flood, hurricane
or other severe weather.

Reduced
patronage and the loss of service for any period of time could adversely affect our
results of operations. We do not maintain business interruption insurance to compensate us
if our hotel and casino experience a closure.

Access
to a number of our facilities may also be affected by road conditions, such as
construction and traffic.

Energy and fuel price increases may
adversely affect our costs of operations and our revenues

Our
casino properties use significant amounts of electricity, natural gas and other forms of
energy. While no shortages of energy have been experienced, substantial increases in the
cost of electricity in the Peru will negatively affect our results of operations. In
addition, energy and fuel price increases in cities that constitute a significant source
of customers for our properties could result in a decline in disposable income of
potential customers and a corresponding decrease in visitation to our properties, which
would negatively impact our revenues. The extent of the impact is subject to the magnitude
and duration of the energy and fuel price increases, but this impact could be material.

A downturn in general economic
conditions may adversely affect our results of operations.

Our
business operations are subject to changes in international, national and local economic
conditions, including changes in the economy related to future security alerts in
connection with threatened or actual terrorist attacks in the United States, Spain and
London, and related to the war with Iraq, which may affect our customers willingness
to travel. A recession or downturn in the general economy, or in a region constituting a
significant source of customers for our properties, could result in fewer customers
visiting our properties, which would adversely affect our results of operations.

Our success depends on visitors from
the Peoples Republic of China and changes to regulations related to tourism may
adversely affect our results of operations.

Approximately
70% of the guests at the Bruce Hotel & Casino during the year ended December 31, 2004,
were tourist from the Peoples Republic of China. We target tourist from the
Peoples Republic of China through our marketing programs. In 2003 the government of
the Peoples Republic of China ceased issuing work passports to its citizens and in
doing so made it a requirement to secure a visa to travel to the Republic of Peru. The
visa requirement significantly curtailed the number of travelers from the Peoples
Republic of China to the Republic of Peru and the financial results of the Bruce Hotel and
Casino suffered from reduced hotel occupancy and reduced casino gaming revenues. In 2004,
the Chinese government signed an agreement with the Republic of Peru adding Peru to its
list of Approved Destination Status, permitting Chinese to travel more easily in Peru in
organized group. If the Chinese government should change this policy and restrict travel
to the Republic of Peru or the Republic of Peru should impose restrictions on entry, these
changes would likely have a material adverse affect on our results of operations.

Our results of operations are subject
to foreign currency exchange fluctuations between the U.S. dollar and nuevo sol (PEN), the
currency of Peru.

Our
functional currency is the U.S. dollar. All of our expected revenue and expenses from the
operation of the Bruce Hotel & Casino are expected to be in nuevo sol (PEN), the
currency of Peru. Recently, the value of the U.S. dollar has declined compared to the PEN,
and we expect that the exchange rate will fluctuate in the future. As a result, we may
experience losses or declines in our

---

gross profit margins as a result of
fluctuations in the foreign currency exchange rates. At the present time, we do not hedge
our foreign currency exchange risks.

| | Risks
Related to Peru
| | ---------------------

Our
ownership of Peruvian companies and operation involves certain considerations not
typically associated with ownership of U.S. companies, including those discussed below,
and therefore should be considered more speculative than investment in the U.S.

Political and economic situation has
historically been unstable

During
the past several decades, Peru has had a history of political instability that included
military coups d tat and different governmental regimes with changing policies. Past
governments have frequently played an interventionist role in the nations economy
and social structure. Among other things, past governments have imposed controls on
prices, exchange rates, local and foreign investment and international trade, have
restricted the ability of companies to dismiss employees and have expropriated private
sector assets.

Following
the resignation of the former president, Alberto Fujimori (1990-2000), after revelations
of corruption, the president of Congress, Valentin Paniagua, became interim president in
November 2000. In 2001 Mr Paniagua oversaw free and fair presidential and congressional
elections, and transferred power to the newly elected president, Alejandro Toledo of Peru
Posible, on July 28, 2005. Since 2001, under President Toledo, Peru has pursued an
ambitious program to re-establish democracy, following a decade of increasingly
authoritarian rule and rampant corruption under the former Fujimori government, and is
promoting a market-based economy that will benefit all citizens. Toledo is also devolving
more power to the provinces. A weak congressional position and extremely low levels of
popularity since 2002 have ensured that Mr Toledos position as president has been
fragile throughout, and his leadership of government ineffectual at times.

Inflation
as measured by the Lima consumer price index has decreased from 7,650% in 1990 to 39.5% in
1993 to 1.79% in the period from January to May 2005, which is lower than the inflation
rate for the same period in the previous year (3.18%). Perus gross domestic product,
or GDP, grew by 4.8% during 2004, compared to 4.0% in 2003. In April 2005, GDP increased
by 6.4%, as compared to the GDP in April 2004, which grew 3.4% as compared to the GDP in
April 2003. This rise in GDP growth was largely a result of growth in the non-primary
sector, mainly the non-primary manufacturing and construction sectors, which increased
9.3% and 10.6%, respectively, between May 2004 and April 2005.

Notwithstanding
the progress achieved in restructuring Perus political institutions and revitalizing
the economy, there can be no assurance that President Toledos government, or any
successor government, can sustain the progress achieved. In addition, it is possible that
Toledos support could be eroded as a result of certain effects of current programs.
For example, privatizations may result in layoffs due to the reduction in the work force
of privatized companies. As in the case of all foreign investments, our investments in
Peru could in the future be adversely affected by increases in taxes or by political,
economic or diplomatic developments.

Our business and the tourism industry
may be subject to terrorism and other threats

Peru
experienced significant terrorist activity in the 1980s and early 1990s, during which
period anti-government groups escalated their acts of violence against the government, the
private sector and Peruvian residents. The Companys operations have not been
directly affected by the terrorist activity.

There
has been substantial progress in suppressing terrorist activity since 1990, in part as a
result of the arrest of the leaders and approximately 2,000 members of the two principal
terrorist groups. Notwithstanding the success achieved during Fujimoris regime, Peru
during President Toledos rule has been swamped with a wave of social protests
coupled with an increase in domestic guerilla terrorism activities. In June 2003,
President Toledo was forced to declare a state of emergency to handle these issues. There
can be no assurance that the progress achieved in combating terrorist activity can be
sustained.

Currency fluctuations may have a
negative impact on our results of operations

Our
income in Peru is denominated in Nuevos Soles, and substantially all of our income from
casino and gaming operation will be received or realized in Nuevos Soles. However, we will
be required to compute and distribute our income in U.S. dollars, and the computation of
income will be made on the date of our receipt at the currency exchange rate in effect on
that date. Accordingly, changes in the value of the Nuevo Sol against the U.S. dollar will
result in corresponding changes in the U.S. dollar value of our assets denominated in
Nuevos Soles and will change the U.S. dollar value of income and gains derived in Nuevos
Soles. It is possible that the value of the Nuevo Sol could fall relative to the U.S.
dollar between receipt of income and our distributions or date of accounting. In addition,
assuming new proceeds are raised from future offerings, if the value of the Nuevo Sol
falls relative to the U.S. dollar

---

between the time we incurs expenses
in U.S. dollars (i.e., contracting for capital improvements or purchase of equipment) and
the time expenses are paid, the amount of Nuevos Soles required to be converted into U.S.
dollars in order to pay expenses will be greater than the equivalent amount in Nuevos
Soles of such expenses at the time they were incurred.

In
September 1991, the Nuevo Sol replaced the inti as the official currency of Peru. In
February 1985, the inti had replaced the original Sol. Between 1978 and 1985, the Sol was
gradually devalued through a crawling-peg system of mini-devaluations. Multiple exchange
rates were utilized in the late 1980s in an attempt to favor manufacturing exports but
were abandoned in 1990 in favor of a single-rate system.

The following table shows the nuevo
sol/U.S. dollar exchange rate for the dates and periods indicated.

Exchange Rates
(S/. per US$)

|                                                                  | Exchange Rates(1)
(S/. per US$)
|----------------------------------------------------------------- | -------------------------------
|
|                                                                  |                                
|2001                                                              |                                
|2002                                                              |                                
|2003                                                              |                                
|2004                                                              |                                
|2005                                                              |                                
|(1)    Official rates offered by banks.Source: Peru Central Bank. |                                

The
Central Bank of Peru has a history of adopting a policy of non-intervention in the
exchange rate market, however, Since 2003, the Central Bank has conducted regular
interventions in the foreign exchange market in order to reduce volatility in the value
of Peru's currency against the U.S. dollar and to meet the demand for Nuevo Soles caused
by pension funds and commercial banks restructuring their portfolio to include more
assets denominated in Nuevo Soles as compared to foreign currency. The reduced volatility
has enabled the Central Bank to increase its international reserves.

Peru has been subject to high levels
of inflation in the past

Peru
 historically  has experienced very  substantial,  and in some periods  extremely high
and variable,  rates of inflation. Annual  inflation,  as measured by consumer price
index ("CPI),  averaged 29.2% during the 1970s,  accelerated in the 1980s and reached
7,500% in 1990.  The  economic  and  monetary  program  that the  government  implemented
 during  the early  1990s  achieved a drastic reduction in inflation.  CPI during 2003
demonstrated  relative stability,  with an average inflation rate of 2.3%, as compared to
0.2% for 2002 and 2.0% for 2001.  This record has served to foster confidence in the
stability of the Peruvian currency.

The
consumer price index, or CPI,  increased 3.5% during 2004. This rise in prices reflected
supply shocks,  including  significant increases in the  international  prices of
petroleum,  wheat and soya oil as well as in the prices of some domestic  foodstuffs such
as rice and sugar,  caused by the drought in the northern coast of Peru and  restrictions
of imports;  these factors  together account for 2.5 percentage  points of annual
 inflation.  These factors were partially  attenuated by an  appreciation of Peru's
 currency.  In the period  from  January to May 2005,  the annual  inflation  rate was
1.79%,  lower than the  inflation  rate for the same  period in the previous year (3.18%).

---

Inflation
 and rapid  changes in  inflation  rates have had and may  continue to have  significant
 effects  both on the  Peruvian economy and on the Peruvian  securities and foreign
 exchange  markets.  There can be no assurance that the  government's  economic and
monetary reform measures will be any more successful than previous programs in reducing
inflation in the long term.

Since
we operate our primary business in Peru, we may be adversely affected by high inflation
levels.

Exchange controls implemented by
Peru may affect our ability to exchange Nuevo Sol for U.S. dollars

Prior
to 1991, Peru exercised  control over the foreign  exchange markets by imposing  multiple
 exchange rates and placing restrictions on the possession and use of foreign
 currencies.  In 1991, the Fujimori  administration  eliminated all foreign  exchange
controls and the exchange rates were unified.  Currently,  foreign  exchange rates are
 determined by market  conditions,  with regular operations by the Central Bank in the
foreign  exchange market in order to reduce  volatility in the value of Peru's  currency
 against the U.S.  dollar.  There can be no  guarantee,  however,  that  limits on our
 ability  to remit  profits  will not be  imposed  in the future.  Furthermore,  if Peru
were to reinstitute  exchange control and if we were to issue promissory notes to raise
or borrow funds, our ability to service debt could be adversely  affected.  There can be
no assurance  that the Peruvian  government  will  continue its current policy of
permitting currency transfers and conversions without restriction.

Availability of information on our
competitors in Peru

Although
Peruvian generally accepted accounting,  auditing and financial reporting standards and
practices are similar in some respects to those employed in the United States,  they are
not equivalent and differ  significantly in certain  fundamental areas, most notably the
treatment of inflation  accounting.  Moreover,  equity research and public information on
businesses and individuals is not as common in Peru as it is in the United States.  As a
consequence,  fewer research  reports are available on Peruvian  hospitality and gaming
operation than on similar U.S. operation.

Enforceability of judgments
under Peruvian law may be difficult

Substantially
 all of our assets are located in Peru and are held by the  subsidiaries in Peru. In the
event that investors were to obtain a judgment in the United States  against us, Kubuk
 International  Inc.,  Kubuk  Investment  SAC or Kubuk Gaming SAC and seek to enforce
 such  judgment  in Peru,  the  investor's  ability to enforce the  judgment in Peru
would be subject to Peruvian  laws regarding  enforcement of foreign  judgments.  In
general,  Peruvian law provides that a judgment of a competent  court outside of Peru
would be recognized  and could be enforced  against the assets of the debtor in Peru,
 subject to the following  statutory  limitations set forth in the Peruvian civil code:
(i) the judgment must not resolve  matters for which  exclusive  jurisdiction  of
Peruvian courts applies (i.e.,  disputes  relating to real estate located in Peru);  (ii)
the competence of the foreign court which issued the judgment must be recognized by
Peruvian  conflict of laws rules;  (iii) the party against whom the judgment was obtained
must have been properly served in connection  with the foreign  proceedings;  (iv) the
judgment of the foreign court must be a final  judgment,  not subject to any further
appeal; (v) no pending  proceedings may exist in Peru among the same parties and on the
same subject;  (vi) the judgment by the foreign court cannot be in violation of public
 policy;  and (vii) the foreign court must grant  reciprocal  treatment to judgments
issued by  Peruvian  courts.  Moreover,  there can be no  assurance  that a judgment
 rendered  against  us in the  United  States in a bankruptcy-related  action  would be
 enforceable  against the assets of our  subsidiaries  in Peru or that a Peruvian  court
would not assert jurisdiction in a bankruptcy proceeding.

Risks Related to Securities

New legislation, including the
Sarbanes-Oxley Act of 2002, may make it difficult for us to retain or attract officers
and directors.

We
may be unable to attract and retain qualified  officers,  directors and members of board
committees required to provide for our  effective  management  as a result of the  recent
 and  currently  proposed  changes  in the rules and  regulations  which  govern
publicly-held  companies.  Sarbanes-Oxley  Act of 2002 has resulted in a series of rules
and regulations by the Securities and Exchange Commission that increase  responsibilities
 and liabilities of directors and executive officers.  The perceived increased personal
risk associated with these recent changes may deter qualified individuals from accepting
these roles.

While we believe we have adequate
internal control over financial reporting, we are required to evaluate our internal
controls under Section 404 of the Sarbanes-Oxley Act of 2002. Any adverse results from
such evaluation could result in a loss of investor confidence in our financial reports
and have an adverse effect on the price of our shares of common stock.

Pursuant
to  Section 404  of the  Sarbanes-Oxley  Act of 2002, we expect that beginning with our
annual report on Form 10-KSB for the fiscal year ended  December  31,  2006,  we will be
required to furnish a report by  management  on our  internal  control over financial
 reporting.  Such report will contain among other matters,  an assessment of the
 effectiveness  of our internal control over financial  reporting,  including a statement
as to whether or not our internal  control over  financial  reporting is  effective.
 This assessment  must include  disclosure of any material  weaknesses in our internal
 control over  financial  reporting  identified by our management.  Such report  must
also  contain a statement  that our  auditors  have  issued an  attestation  report on
our  management's assessment of such internal  controls.  Public Company  Accounting
 Oversight Board Auditing  Standard No. 2 provides the  professional standards and
related performance  guidance for auditors to attest to, and report on, our management's
 assessment of the effectiveness of internal control over financial reporting under
Section 404.

While
we  believe  our  internal  control  over  financial  reporting  is  effective,  we are
still  compiling  the system and processing  documentation  and performing the evaluation
needed to comply with  Section 404,  which is both costly and challenging.  We cannot be
certain that we will be able to complete our evaluation,  testing and any required
 remediation in a timely  fashion.  During the evaluation and testing process,  if we
identify one or more material  weaknesses in our internal control over financial
 reporting, we will be unable to assert  that such  internal  control is  effective.  If
we are unable to assert  that our  internal  control  over financial  reporting is
effective  as of December  31, 2006 (or if our  auditors are unable to attest that our
 management's  report is fairly  stated or they are unable to  express  an  opinion on
the  effectiveness  of our  internal  controls),  we could lose  investor confidence in
the accuracy and completeness of our financial reports, which would have a material
adverse effect on our stock price.

Failure
 to comply  with the new rules may make it more  difficult  for us to obtain  certain
 types of  insurance,  including director  and  officer  liability  insurance,  and we
may be  forced  to  accept  reduced  policy  limits  and  coverage  and/or  incur
substantially  higher costs to obtain the same or similar  coverage.  The impact of these
events could also make it more  difficult for us to  attract  and retain  qualified
 persons to serve on our board of  directors,  on  committees  of our board of
 directors,  or as executive officers.

You may lose your entire investment
in our shares.

An
investment in our common stock is highly speculative and may result in the loss of your
entire  investment.  Only investors who are  experienced  investors  in high risk
 investments  and who can afford to lose  their  entire  investment  should  consider  an
investment in us.

There is only a limited trading
market for our securities.

Our
common stock is quoted for trading on the National  Association of Securities  Dealers
 over-the-counter  bulletin  board, and there is  currently  only a limited  trading
 market for our common  stock.  There can be no assurance  that an active  market will
develop or be sustained.  The lack of an active public  market for our common stock could
have a material  adverse  effect on the price and liquidity of the common shares.

Our officers and directors
beneficially own approximately 65.7% of our issued and outstanding common stock, which
may limit your ability to influence corporate matters.

As
 of November 11,  2005,  Tom Liu, our Chief  Executive  Officer,  beneficially  owned
 7,213,439  shares of our common stock (approximately  33.6%);  David Liu, Tom Liu's
father,  beneficially owned 4,823,121 shares of our common stock  (approximately  22.4%);
Guo Xiu Yan, Tom Liu's mother,  owned 1,807,913  shares of common stock  (approximately
 8.43%);  and our other officers and directors, collectively,  as a group,  beneficially
owned 5,405,525 shares of our common stock  (approximately  25.19%).  These shareholders
could control the outcome of any  corporate  transaction  or other matter  submitted to
our  shareholders  for approval,  including  mergers, consolidations  and the sale of all
or  substantially  all of our  assets,  and also could  prevent or cause a change in
 control.  The interests of these shareholders may conflict with the interests of our
other shareholders.

Third
parties may be discouraged from making a tender offer or bid to acquire us because of
this concentration of ownership.

Broker-dealers may be discouraged
from effecting transactions in our common shares because they are considered a penny
stock and are subject to the penny stock rules.

Rules
15g-1 through 15g-9  promulgated  under the Exchange Act impose sales  practice and
disclosure  requirements  on certain brokers-dealers who engage in certain  transactions
 involving a "penny stock." Subject to certain exceptions,  a penny stock generally
includes  any  non-NASDAQ  equity  security  that has a market  price of less than $5.00
per share.  Our  shares are  considered  penny stock.  The additional sales practice and
disclosure  requirements  imposed upon  brokers-dealers  may discourage  broker-dealers
 from effecting  transactions in our shares,  which could severely limit the market
liquidity of the shares and impede the sale of our shares in the secondary market.

---

A
 broker-dealer  selling penny stock to anyone other than an established  customer or
"accredited  investor,"  generally,  an individual  with net worth in excess of
 $1,000,000  or an annual  income  exceeding  $200,000,  or $300,000  together  with his
or her spouse,  must make a special  suitability  determination  for the purchaser  and
must receive the  purchaser's  written  consent to the transaction prior to sale,  unless
the  broker-dealer or the transaction is otherwise exempt. In addition,  the penny stock
regulations require the broker-dealer to deliver,  prior to any transaction  involving a
penny stock, a disclosure  schedule prepared by the United States  Securities  and
 Exchange  Commission  relating to the penny stock  market,  unless the  broker-dealer
 or the  transaction  is otherwise  exempt.  A  broker-dealer  is also  required  to
 disclose  commissions  payable  to the  broker-dealer  and the  registered
representative  and current quotations for the securities.  Finally, a broker-dealer is
required to send monthly statements  disclosing recent  price  information  with respect
to the penny stock held in a customer's  account and  information  with respect to the
limited market in penny stocks.

Trading on the OTC Bulletin Board
may be sporadic because it is not a stock exchange, and stockholders may have difficulty
reselling their shares.

Our
common stock is quoted on the OTC  Bulletin  Board.  Trading in stock  quoted on the OTC
Bulletin  Board is often thin and characterized by wide fluctuations in trading prices,
 due to many factors that may have little to do with the company's  operations or
business prospects.  Moreover,  the OTC Bulletin Board is not a stock exchange,  and
trading of securities on the OTC Bulletin Board is often  more  sporadic  than the
 trading  of  securities  listed on a  quotation  system  like  Nasdaq or a stock
 exchange  like AMEX. Accordingly, you may have difficulty reselling any of the stock you
purchase.

In the event that your investment in
our shares is for the purpose of deriving dividend income or in expectation of an
increase in market price of our shares from the declaration and payment of dividends,
your investment will be compromised because we do not intend to pay dividends.

We
have never paid a dividend  to our  shareholders,  and we intend to retain our cash for
the  continued  development  of our business.  We do not  intend  to pay cash  dividends
 on our  common  stock in the  foreseeable  future.  As a result,  your  return on
investment will be solely determined by your ability to sell your shares in a secondary
market.

---